株探米国株
英語
エドガーで原本を確認する
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number: 001-13561
EPR PROPERTIES
(Exact name of registrant as specified in its charter)
Maryland   43-1790877
(State or other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification No.)
909 Walnut Street, Suite 200
Kansas City, Missouri   64106
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (816) 472-1700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common shares, par value $0.01 per share EPR New York Stock Exchange
5.75% Series C cumulative convertible preferred shares, par value $0.01 per share EPR PrC New York Stock Exchange
9.00% Series E cumulative convertible preferred shares, par value $0.01 per share EPR PrE New York Stock Exchange
5.75% Series G cumulative redeemable preferred shares, par value $0.01 per share EPR PrG New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  ☒    No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes   ☐    No  ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒
The aggregate market value of the common shares of beneficial interest (“common shares”) of the registrant held by non-affiliates, based on the closing price on the last business day of the registrant’s most recently completed second fiscal quarter, as reported on the New York Stock Exchange, was $3,541,869,209.
At February 28, 2024, there were 75,680,966 common shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for the 2024 Annual Meeting of Shareholders to be filed with the Commission pursuant to Regulation 14A are incorporated by reference in Part III of this Annual Report on Form 10-K.


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 capital resources and liquidity, our expected pursuit of growth opportunities, our expected cash flows, the performance of our customers, our expected cash collections and our results of operations and financial condition. 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,” “pipeline,” “estimates,” “offers,” “plans,” “would” or other similar expressions or other comparable terms or discussions of strategy, plans or intentions in this Annual Report on Form 10-K.

Forward-looking statements necessarily are dependent on assumptions, data or methods that may be incorrect or imprecise. 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 "Summary Risk Factors" below and Item 1A - "Risk Factors" in this Annual Report on Form 10-K.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K or the date of any document incorporated by reference herein. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except as required by law, we do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Annual Report on Form 10-K.

SUMMARY RISK FACTORS

Our business is subject to varying degrees of risk and uncertainty. You should carefully review and consider the full discussion of our risk factors in Item 1A - “Risk Factors” in this Annual Report on Form 10-K. If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected. Set forth below is a summary list of the principal risk factors relating to our business:

•Global economic uncertainty, disruptions in financial markets, and generally weakening economic conditions;
•Risks associated with COVID-19, or the future outbreak of any additional variants of COVID-19 or other highly infectious or contagious diseases;
•The impact of inflation on our customers and our results of operations;
•Reduction in discretionary spending by consumers;
•Covenants in our debt instruments that limit our ability to take certain actions;
•Adverse changes in our credit ratings;
•Rising interest rates;
•Defaults in the performance of lease terms by our tenants;
•Defaults by our customers and counterparties on their obligations owed to us;
•A borrower's bankruptcy or default;
•Risks associated with sales or divestitures of properties;
•Our ability to renew maturing leases on terms comparable to prior leases and/or our ability to locate substitute lessees for these properties on economically favorable terms or at all;
•Risks of operating in the experiential real estate industry (including the impact of labor strikes on the production, supply or theatrical release of motion pictures to our theatre tenants);
•Our ability to compete effectively;
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•Risks associated with three tenants representing a substantial portion of our lease revenues;
•The ability of our build-to-suit tenants to achieve sufficient operating results within expected time-frames and therefore have capacity to pay their agreed-upon rent;
•Risks associated with our dependence on third-party managers to operate certain of our properties;
•Risks associated with our level of indebtedness;
•Risks associated with use of leverage to acquire properties;
•Financing arrangements that require lump-sum payments;
•Our ability to raise capital;
•The concentration of our investment portfolio;
•Our continued qualification as a real estate investment trust for U.S. federal income tax purposes and related tax matters;
•The ability of our subsidiaries to satisfy their obligations;
•Financing arrangements that expose us to funding and completion risks;
•Our reliance on a limited number of employees, the loss of which could harm operations;
•Risks associated with the employment of personnel by managers of certain of our properties;
•Risks associated with the gaming industry;
•Risks associated with gaming and other regulatory authorities;
•Delays or prohibitions of transfers of gaming properties due to required regulatory approvals;
•Risks associated with security breaches and other disruptions;
•Changes in accounting standards that may adversely affect our financial statements;
•Fluctuations in the value of real estate income and investments;
•Risks relating to real estate ownership, leasing and development, including local conditions such as an oversupply of space or a reduction in demand for real estate in the area, competition from other available space, whether tenants and users such as customers of our tenants consider a property attractive, changes in real estate taxes and other expenses, changes in market rental rates, the timing and costs associated with property improvements and rentals, changes in taxation or zoning laws or other governmental regulation, whether we are able to pass some or all of any increased operating costs through to tenants or other customers, and how well we manage our properties;
•Our ability to secure adequate insurance and risk of potential uninsured losses, including from natural disasters;
•Risks involved in joint ventures;
•Risks in leasing multi-tenant properties;
•Risks associated with litigation that could negatively impact our financial condition, cash flows, results of operations and the trading price of our shares;
•A failure to comply with the Americans with Disabilities Act or other laws;
•Risks of environmental liability;
•Risks associated with the relatively illiquid nature of our real estate investments;
•Risks with owning assets in foreign countries;
•Risks associated with owning, operating or financing properties for which the tenants', mortgagors' or our operations may be impacted by weather conditions, climate change and natural disasters;
•Risks associated with the development, redevelopment and expansion of properties and the acquisition of other real estate related companies;
•Our ability to pay dividends in cash or at current rates;
•Risks associated with the impact of inflation or market interest rates on the value of our shares;
•Fluctuations in the market prices for our shares;
•Certain limits on changes in control imposed under law and by our Declaration of Trust and Bylaws;
•Policy changes obtained without the approval of our shareholders;
•Equity issuances that could dilute the value of our shares;
•Future offerings of debt or equity securities, which may rank senior to our common shares;
•Risks associated with changes in foreign exchange rates; and
•Changes in laws and regulations, including tax laws and regulations.

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Market and Industry Data
This Annual Report on Form 10-K contains market and industry data and forecasts that have been obtained from publicly available information, various industry publications, and other published industry sources. We have not independently verified the information from third party sources and cannot make any representation as to the accuracy or completeness of such information. None of the reports and other materials of third-party sources referred to in this Annual Report on Form 10-K were prepared for use in, or in connection with, this Annual Report on Form 10-K.
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TABLE OF CONTENTS
 
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Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.
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PART I

Item 1. Business

General

EPR Properties (“we,” “us,” “our,” “EPR” or the “Company”) was formed on August 22, 1997 as a self-administered Maryland real estate investment trust (“REIT”), and an initial public offering of our common shares of beneficial interest (“common shares”) was completed on November 18, 1997. Since that time, we have been a leading net lease investor in experiential real estate, venues that create value by facilitating out of home leisure and recreation experiences where consumers choose to spend their discretionary time and money. We focus our underwriting of experiential property investments on key industry and property cash flow criteria, as well as the credit metrics of our tenants and customers.

We believe that our position is further supported by the fact that our customers offer popular and affordable entertainment and social outlet options, particularly through our theatres, eat & play and cultural venues. Additionally, we believe we benefit from our regional destinations (experiential lodging, ski, attractions and gaming properties), which are drive-to locations that do not require air travel.

The Company remains focused on future growth targeted in experiential property types. Experiential properties have proven to be an enduring sector of the real estate industry and we believe our strategy of diversified growth, industry relationships and the knowledge of our management team, provide us with a distinct competitive advantage. This strategy aligns with the long-term consumer trends of the growing experiential economy and offers the potential for higher growth, increased diversification and better yields. Our Education portfolio, consisting of early childhood education centers and private schools, continues as a legacy investment and provides additional geographic and property diversity. It is our intention to ultimately dispose of our Education portfolio over time.

During 2021 and 2020, the COVID-19 pandemic severely impacted experiential real estate properties because such properties involve congregate social activity and discretionary spending. Subsequent to this, our non-theatre properties demonstrated strong recovery and stabilization from the impacts of the pandemic with overall rent coverage for 2023 above the 2019 pre-pandemic level. Our theatre customers were more severely impacted by the COVID-19 pandemic and have seen a slower recovery than our non-theatre customers due primarily to changes in the timing of film releases, labor disputes, production delays and experimentation with streaming. Going forward, we intend to significantly reduce our investments in theatres, thereby increasing the diversity of our experiential property types. We expect this to occur as we limit new investments in theatres, grow other target experiential property types and pursue opportunistic dispositions of theatre properties.

Subsequent to 2021, REITS have generally experienced heightened risks and volatility due to the impact of inflation, including rising interest rates. As a result, negative pressure in financial and capital markets has increased the cost of capital. Until capital costs improve, we expect that our levels of investment spending will be limited in the near-term and that these investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice. As a result, we intend to continue to be more selective in our investment spending until such time as economic conditions and our cost of capital improve.

As of December 31, 2023, our total assets were approximately $5.7 billion (after accumulated depreciation of approximately $1.4 billion) with properties located in 44 states, Ontario and Quebec, Canada. Our investments are generally structured as long-term triple-net leases that require tenants to pay substantially all expenses associated with the operation and maintenance of the property, or as long-term mortgages with economics similar to our triple-net lease structure.

Our total investments (a non-GAAP financial measure) were approximately $6.8 billion at December 31, 2023. See Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - 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, 2023 and 2022.
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We group our investments into two reportable segments: Experiential and Education. As of December 31, 2023, our Experiential investments comprised $6.3 billion, or 93%, and our Education investments comprised $0.5 billion, or 7%, of our total investments. A more detailed description of the property types included within these segments is provided below.

Although we are primarily a long-term investor, we may sell assets if we believe that it is in the best interest of our shareholders or pursuant to contractual rights of our tenants or our customers.

Experiential

As of December 31, 2023, our Experiential portfolio (excluding property under development and undeveloped land inventory) consisted of the following property types (owned or financed):
•166 theatre properties;
•58 eat & play properties (including seven theatres located in entertainment districts);
•23 attraction properties;
•11 ski properties;
•seven experiential lodging properties;
•20 fitness & wellness properties;
•one gaming property; and
•three cultural properties.

As of December 31, 2023, our owned Experiential real estate portfolio consisted of approximately 19.8 million square feet, which includes 0.6 million square feet of properties we intend to sell. Our Experiential portfolio, excluding the properties we intend to sell, was 99% leased and included $131.3 million in property under development and $20.2 million in undeveloped land inventory.

Theatres
A significant portion of our Experiential portfolio consists of modern megaplex theatres. During 2023, the theatre industry continued its recovery from the COVID-19 pandemic supported by a wide range of box office hits including Barbie, The Super Mario Bros. Movie, Spider Man - Across the Spider Verse and Oppenheimer. Additionally, Taylor Swift: The Eras Tour and Renaissance: A Film by Beyoncé grossed a combined $8.9 billion in North American box office revenues during 2023, creating an opportunity for alternative content for our theatre tenants. Total North American box office revenues for 2023 were up approximately 21% over 2022. While the industry continues to demonstrate significant resilience driven by consumer demand, the recently resolved writers' and actors' strikes created production delays, which have impacted the release timing of future titles. Separately, theatre food and beverage revenues have notably increased as compared to 2019, contributing to improved theatre rent coverage levels, which are approaching pre-COVID levels.

During the period of COVID-19 pandemic-response restrictions on theatre operations, certain studios choose to experiment with hybrid content release strategies in support of their direct-to-consumer streaming services. Results of such various release experiments demonstrated the significant economic and strategic importance of theatrical exhibition and studios have broadly returned to exclusive theatrical releases for a period of approximately 45 days (versus the previous window of approximately 75 days), which is when most of a film's box office revenue is earned.

Two theatre customers continue to be on a cash-basis for revenue recognition purposes due to the ongoing uncertainty, including American Multi-Cinema, Inc. ("AMC"). We have experienced vacancies at certain theatre properties and have sold many of these properties. The remaining vacant properties are currently in the process of being sold or we are managing these theatres through a third-party manager. As theatre customers continue to be impacted by the pandemic and the related issues discussed above, we will evaluate the best strategy for any future vacancies on a property by property basis.
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The modern megaplex theatre provides a greatly enhanced audio and visual experience for patrons. Additionally, national and local exhibitors have made significant strides to further enhance the customer experience. These enhancements include reserved, luxury seating and expanded food and beverage offerings, such as the addition of alcohol and more efficient point of sale systems. The evolution of the theatre industry over the last 20 years from the sloped floor theatre to the megaplex stadium theatre to the expanded amenity theatre has demonstrated that exhibitors and their landlords are willing to make investments in their theatres to take the customer experience to the next level.

Moviegoing has been a dominant out-of-home entertainment option for decades, with over 1.2 billion tickets sold in North America during 2019 (prior to the pandemic) according to the Motion Picture Association (MPA) 2019 Theme Report. We believe that the evolution in theatres and enhanced customer experience will continue to bring customers back to enjoy film exhibition. While consumers have the option of watching streaming content at home, data has shown that theatre exhibition and streaming options have successfully coexisted. In fact, a survey published by EY (The Relationship Between Movie Theater Attendance and Streaming Behavior - February, 2020) illustrated that the most frequent moviegoers also spend the most time streaming. This is in part likely due to the fact that the majority of content streamed in-home is series-based content.

We intend to significantly reduce our investments in theatres in the future and further diversify our other experiential property types. We expect this to occur as we limit new investments in theatres, grow other target experiential property types and pursue opportunistic dispositions of theatre properties.

As of December 31, 2023, our owned theatre properties were leased to 17 different leading theatre operators. A significant portion of our total revenue was from AMC and Regal. For the year ended December 31, 2023, approximately $94.7 million, or 13.4%, and $103.7 million, or 14.7%, of the Company's total revenue was from AMC and Regal, respectively.

Eat & Play
The emergence of the "eatertainment" category has inspired an increasing number of successful concepts that appeal to consumers by providing high-quality food and entertainment options all at one location. Our eat & play portfolio includes golf entertainment complexes, entertainment districts and family entertainment centers.

Our golf entertainment complexes combine golf with entertainment, competition and food and beverage service, and are leased to, or we have mortgage receivables from, Topgolf USA ("Topgolf"). By combining interactive entertainment with high-quality food and beverage and a long-lived recreational activity, Topgolf provides an innovative, enjoyable and repeatable customer experience. We expect to continue to pursue select opportunities related to golf entertainment complexes. A significant portion of our total revenue was from Topgolf, which totaled approximately $98.0 million, or 13.9%, of the Company's total revenue for the year ended December 31, 2023.

We also continue to seek opportunities for the acquisition, financing or development of entertainment districts. Entertainment districts are restaurant, retail and other entertainment venues typically anchored by a megaplex theatre. The opportunity to capitalize on the traffic generated by our existing market-dominant theatres to create entertainment districts not only strengthens the execution of the megaplex theatre, but adds diversity to our tenant and asset base. This broad selection of entertainment options creates a convenient and engaging experience for consumers who want to park their cars only once, and experience different forms of entertainment. We have and will continue to evaluate our existing portfolio for additional development of entertainment, retail and restaurant density, and we will also continue to evaluate the purchase or financing of existing entertainment districts that demonstrate strong financial performance and meet our quality standards. The leasing and property management requirements of our entertainment districts are generally met using third-party professional service providers.

Our family entertainment center operators offer a variety of entertainment options including bowling, bocce ball and karting. We will continue to seek opportunities for the acquisition, financing or development of such properties that leverage our expertise in this area.

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Attractions
Our attractions portfolio consists primarily of waterparks and amusement parks, each of which draw a diverse segment of customers. These properties offer themed experiences designed to appeal to all ages while remaining accessible in both cost and proximity.

Our attraction operators continue to deliver innovative and compelling attractions along with high standards of service, making our attractions a day of fun that is accessible for families, teens, locals and tourists. As the attractions industry continues to evolve, innovative technologies and concepts are redefining the attractions experience.

Our attraction properties are leased to, or we have mortgage notes receivable from, seven different operators. We expect to continue to pursue opportunities in this area.

Ski
Our ski portfolio provides a sustainable advantage for the experience-oriented consumer, providing outdoor entertainment in the winter and, in some cases, year-round. All the ski properties that serve as collateral for our mortgage notes in this area, as well as our three owned properties, offer snowmaking capabilities and provide a variety of terrains and vertical drop options. We believe that the primary appeal of our ski properties lies in the convenient and reliable experience consumers can expect. Given that all of our ski properties are located near major metropolitan areas, they offer skiing, snowboarding and other activities without the expense, travel, or lengthy preparations of remote ski resorts. Furthermore, advanced snowmaking capabilities increase the reliability of the experience during the winter versus other ski properties without such capabilities. These properties are leased to, or we have mortgage notes receivable from, three different operators. We expect to continue to pursue opportunities in this area.

Experiential Lodging
Experiential lodging meets the needs of consumers by providing a convenient, central location that combines high-quality lodging amenities with entertainment, recreation and leisure activities. The appeal of these properties attracts multiple generations at once. By offering more than the standard lodging destination, these properties provide an added incentive as consumers opt for distinctive, curated experiences. Our investments in experiential lodging are structured using triple-net leases and mortgage notes, and we currently operate five properties (all of which are included in unconsolidated joint ventures) through traditional REIT lodging structures. In the traditional REIT lodging structure, we hold qualified lodging facilities under the REIT and we separately hold the operations of the facilities in taxable REIT subsidiaries ("TRSs"), which are facilitated by management agreements with eligible independent contractors. We expect to continue to pursue opportunities for investments in experiential lodging.

Fitness & Wellness
The increased focus on holistic wellness has become a driving force within the fitness and wellness industry. From relaxing spas to intense spin classes, consumers are seeking an expanded set of offerings delivered across a variety of boutique fitness centers, larger fitness centers and resort spas. By allowing consumers to focus on their individual interests and goals in a community setting, operators gain loyalty and retention which are essential elements in the ongoing success of fitness and wellness facilities. Industry leaders remain at the forefront by offering personalization within congregate settings. Our tenants make it their goal to motivate, educate, and help consumers look and feel better.

We will continue to seek opportunities for the acquisition, financing or development of other experiential properties that leverage our expertise in this area.

Gaming
Our gaming portfolio is strategically focused on casino resorts and hotels leased to leading operators with a strong regulatory track record that seek to drive consumer loyalty and value through quality customer experiences, superior service, world-class affinity programs and continuous innovation on and off the gaming floor. Additionally, we target casino resorts and hotels that provide a wide array of experiential offerings outside of lodging and state-of-the-art gaming.
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Through live entertainment, various recreational opportunities, dining options and night clubs, the combination of amenities appeals to a broader demographic.

As of December 31, 2023, our investment in gaming consisted of land under ground lease related to the Resorts World Catskills casino and resort project in Sullivan County, New York. Our ground lease tenant has invested in excess of $930.0 million in the construction of the casino and resort project, and the casino first opened for business in February 2018. We will continue to pursue opportunities for investment in gaming under triple-net lease structures or mortgages.

Cultural
Our cultural investments seek to engage consumers and create memorable experiences and are evolving to offer immersive and interactive exhibits that encourage repeat visits. Combining an opportunity to experience animals, art or history with a congregate social experience, cultural venues, such as zoos, aquariums and museums, are reemerging as an entertainment option. As appreciation for the importance of leisure time is growing, cultural venues are broadening their appeal to reach a variety of customers.

Desiring to be a preeminent provider of location-based experiences, several trends have developed among cultural venues. Many are utilizing new technology, personalizing the guest experience and implementing an element of play that was previously absent. In making new investments in this property type, we will continue to identify the locations and tenants that execute well on these trends and have a history of strong attendance. City Museum in St. Louis is one of our properties and is a great example of an emerging category called “artainment,” which is an art display that invites guests to interact and explore.

We believe that demand for cultural activities will continue to build, and we expect to continue to pursue opportunities in this area.

Education

As of December 31, 2023, our Education segment consisted of the following property types (owned or financed):
•61 early childhood education center properties; and
•nine private school properties.

As of December 31, 2023, our owned Education real estate portfolio consisted of approximately 1.3 million square feet, which includes 39 thousand square feet of properties we intend to sell. The Education portfolio, excluding the properties we intend to sell, was 100% leased.

Our private schools provide an alternative to meet the significant demand for high-quality education in the United States. As educational choice remains a priority for parents, private schools provide yet another option for maximizing the educational experience.

Our investment in early childhood education centers recognizes the growing demand for quality early childhood education facilities that offer the best educational experience in a competitive market.

As discussed above, our growth going forward will be focused on experiential properties and therefore we do not expect to seek additional opportunities for education properties.

Business Objectives and Strategies

Our vision is to continue to build the premier diversified experiential REIT. We focus on real estate venues that create value by facilitating out of home leisure and recreation experiences where consumers choose to spend their discretionary time and money. These are properties that make up the social infrastructure of society.

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Our long-term primary business objective is to enhance shareholder value by achieving predictable and increasing Funds From Operations As Adjusted ("FFOAA") and dividends per share (See Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures - Funds From Operations (FFO), Funds From Operations As Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO)” for a discussion of FFOAA, which is a non-GAAP financial measure). 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 throughout most economic cycles. We intend to achieve this objective by continuing to execute the Growth Strategies, Operating Strategies and Capitalization Strategies described below.

Growth Strategies

Our strategic growth is focused on acquiring or developing a high-quality, diversified portfolio of experiential real estate venues that create value by facilitating out of home leisure and recreation experiences where consumers choose to spend their discretionary time and money. We may also pursue opportunities to provide mortgage financing for these investments in certain situations where this structure is more advantageous than owning the underlying real estate.

Our focus on experiential properties is consistent with our strategic organizational design, which is structured around building a center of knowledge and strong operating competencies in the experiential real estate market. Retention and building of this knowledge depth creates a competitive advantage allowing us to more quickly identify key market trends.

To this end, we deliberately apply information and our ingenuity to identify properties that represent potential logical extensions within each of our existing experiential property types, or potential future additional experiential property types. As part of our strategic planning and portfolio management process, we assess new opportunities against the following underwriting principles:

    Industry
•Experiential Alignment
•Proven Business Model
•Enduring Value
•Addressable Opportunity
    Property
•Location Quality
•Competitive Position
•Location Rent Coverage
•Cash Flow Durability
    Tenant
•Demonstrated Success
•Commitment
•Reputable Management
•Solid Credit Quality

We believe that our over 25 years of experience and knowledge in the experiential real estate market gives us the opportunity to be the dominant player in this area. Additionally, we have tenant and borrower relationships that provide us with access to investment opportunities.

The pandemic impeded our growth during 2020 and 2021 while we focused on addressing challenges brought on by the pandemic including monitoring customer status, working with customers to help ensure long-term stability and assisting customers in establishing re-opening plans. During 2022, we returned to growth as our customers' businesses continued to recover. More recently, rising interest rates, inflation and the challenging economic environment, along with a theatre customer's bankruptcy, have increased our cost of capital, which has negatively impacted our ability to make investments in the near-term. Accordingly, we intend to be more selective in making investments and acquisitions until such time as economic conditions improve and our cost of capital returns to acceptable levels.
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Operating Strategies

Lease Risk Minimization
To avoid initial lease-up risks and produce a predictable income stream, we typically acquire or develop single-tenant properties that are leased under long-term leases. We believe our willingness to make long-term investments in properties offers our tenants financial flexibility and allows tenants to allocate capital to their core businesses. Although we will continue to emphasize single-tenant properties, we have acquired or developed, and may continue to acquire or develop, multi-tenant properties we believe add shareholder value.

Lease Structure
We have structured our leasing arrangements to achieve a positive spread between our cost of capital and the rents paid by our tenants. We typically structure leases on a triple-net basis under which the tenants bear the principal portion of the financial and operational responsibility for the properties. During each lease term and any renewal periods, the leases typically provide for periodic increases in rent and/or percentage rent based upon a percentage of the tenant’s gross sales over a pre-determined level. In our multi-tenant property leases and some of our theatre leases, we generally require the tenant to pay a common area maintenance (“CAM”) charge to defray its pro rata share of insurance, taxes and maintenance costs.

Mortgage Structure
We have structured our mortgages to achieve economics similar to our triple-net lease structure with a positive spread between our cost of capital and the interest paid by our tenants. During each mortgage term and any renewal periods, the notes typically provide for periodic increases in interest and/or participating features based upon a percentage of the tenant’s gross sales over a pre-determined level.

Traditional REIT Lodging Structure
In certain limited instances, we have utilized traditional REIT lodging structures, where we hold qualified lodging facilities under the REIT and we separately hold the operations of the facilities in TRSs, which are facilitated by management agreements with eligible independent contractors. However, we currently anticipate migrating some of what we hold in such structures to more traditional net lease or mortgage arrangements over time.

Development and Redevelopment
We intend to continue developing properties and redeveloping existing properties that are consistent with our growth strategies. We generally do not begin development of a single-tenant property without a signed lease providing for rental payments that are commensurate with our level of capital investment. In the case of a multi-tenant development, we generally require a significant amount of the development to be pre-leased prior to construction to minimize lease-up risks. In addition, to minimize overhead costs and to provide the greatest amount of flexibility, we generally outsource construction management to third-party firms.

We believe our build-to-suit development program is a competitive advantage. First, we believe our strong relationships with our tenants and developers drive new investment opportunities that are often exclusive to us, rather than bid broadly, and with our deep knowledge of their businesses, we believe we are a value-added partner in the underwriting of each new investment. Second, we offer financing from start to finish for a build-to-suit project such that there is no need for a tenant to seek separate construction and permanent financing, which we believe makes us a more attractive partner. Third, we are actively developing strong relationships with tenants in the experiential sector leading to multiple investments without strict investment portfolio allocations. Finally, multiple investments with the same tenant allows us in most cases to include cross-default provisions in our lease or financing contracts, meaning a default in an obligation to us at one location is a default under all obligations with that tenant.
We will also investigate opportunities to redevelop certain of our existing properties. We may redevelop properties in conjunction with a lease renewal or new tenant, or we may redevelop properties that have more earnings potential due to the redevelopment.
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Additionally, certain of our properties have excess land where we will proactively seek opportunities to further develop.
Tenant and Customer Relationships
We intend to continue developing and maintaining long-term working relationships with experiential operators and developers by providing capital for multiple properties on a regional, national and international basis, thereby creating efficiency and value for both the operators and the Company.

Portfolio Diversification
We will endeavor to further diversify our asset base by property type, geographic location and customer. In pursuing this diversification strategy, we will target experiential business operators that we view as leaders in their property types and have the ability to compete effectively and perform under their agreements with the Company.

Dispositions
We will consider discretionary property dispositions for reasons such as under performance, vacancies, opportunistically taking advantage of an above-market offer, reducing exposure related to a certain tenant, property type or geographic area, or creating price awareness of a certain property type.

Capitalization Strategies

Debt and Equity Financing
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, a non-GAAP measure (see Item 7 – “Management’s Discussion and Analysis of Financial Condition - Non-GAAP Financial Measures" for definitions and reconciliations). We also seek to maintain conservative interest, fixed charge, debt service coverage and net debt to gross asset ratios.

We rely primarily on an unsecured debt structure. In the future, while we may obtain secured debt from time to time or assume secured debt financing obligations in acquisitions, we intend to issue primarily unsecured debt securities to satisfy our debt financing needs. We believe this strategy increases our access to capital and permits us to more efficiently match available debt and equity financing to our ongoing capital requirements.

Our sources of equity financing consist of the issuance of common shares as well as the issuance of preferred shares (including convertible preferred shares). In addition to larger underwritten registered public offerings of both common and preferred shares, we have also offered shares pursuant to registered public offerings through the direct share purchase component of our Dividend Reinvestment and Direct Share Purchase Plan (“DSP Plan”). While such offerings are generally smaller than a typical underwritten public offering, issuing common shares under the direct share purchase component of our DSP Plan allows us to access capital on a more frequent basis in a cost-effective manner.

We expect to opportunistically access the equity markets in the future and, depending primarily on the size and timing of our equity capital needs, may continue to issue shares under the direct share purchase component of our DSP Plan. Furthermore, we may issue shares in connection with acquisitions in the future.

Joint Ventures
We will examine and may pursue potential additional joint venture opportunities with institutional investors or developers if the investments to which they relate meet our guiding principles discussed above. We may employ higher leverage in joint ventures and be more inclined to use secured financing at the property level.

Payment of Regular Dividends
We expect to continue paying dividend distributions to our common shareholders monthly (as opposed to quarterly). We expect to continue paying dividend distributions to our preferred shareholders quarterly. Our Series C cumulative convertible preferred shares (“Series C preferred shares”) have a dividend rate of 5.75%, our Series E cumulative convertible preferred shares (“Series E preferred shares”) have a dividend rate of 9.00% and our Series G cumulative redeemable preferred shares ("Series G preferred shares") have a dividend rate of 5.75%.
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Among the factors the Company’s board of trustees (“Board of Trustees”) considers in setting the common share dividend rate are the applicable REIT tax rules and regulations that apply to dividends, the Company’s results of operations, including FFO and FFOAA per share, and the Company’s Cash Available for Distribution (defined as net cash flow available for distribution after payment of operating expenses, debt service, preferred dividends and other obligations).

Competition

We compete for real estate financing opportunities with other companies that invest in real estate, as well as traditional financial sources such as banks and insurance companies. REITs have financed, and may continue to seek to finance, experiential and other specialty properties as new properties are developed or become available for acquisition.

Human Capital

Our strategy is specializing in investments in select enduring experiential properties in the real estate industry, and our people are vital to our success in executing on this strategy. As a human-capital intensive business, the long-term success of our firm depends on our people. Our Senior Vice President, Human Resources and Administration works in conjunction with our Executive Vice President and General Counsel, who reports directly to our Chief Executive Officer, to develop and oversee our human capital management objectives, programs and initiatives. In addition, our Board of Trustees is actively involved in our human capital management in its oversight of our long-term strategy and through its Compensation and Human Capital Committee and engagement with management. Our management regularly reports to the Compensation and Human Capital Committee regarding management's human capital objectives, programs and initiatives.

Our key human capital objectives are to attract, retain and develop the highest quality talent to ensure that we have the right talent, in the right place, at the right time. To achieve these objectives, our human capital programs are designed to develop talent to prepare them for critical roles and leadership positions for the future; reward and support employees through competitive pay, benefits, and perquisite programs; enhance our culture through efforts aimed at making the workplace more engaging and inclusive; acquire talent and facilitate internal talent mobility to create a high-performing, diverse workforce; and evolve and invest in technology, tools, and resources to enable employees at work. As of December 31, 2023, we had 55 full-time employees.

Examples of key programs and initiatives that are focused to attract, develop and retain our diverse workforce include:

•Employee Engagement. We use Gallup to measure employee engagement through a survey administered annually. This helps us to understand the overall level of engagement of our associates. By focusing on engagement, we gather valuable information needed to engage and retain the most talented associates.

•Development. We provide opportunities for our associates to learn and thrive as professionals, including educational reimbursement, mentorship, executive coaching and ongoing professional development. Annually, EPR hosts leadership development sessions for all levels of our organization. In 2023, we hosted and facilitated a two-part training session titled "It's Your Career, Own It."

•Diversity, Equity, Inclusion and Belonging ("DEIB"). Our DEIB objectives are to ensure our culture is evolving and inclusive and to build teams that reflect the life experiences of our customers and the ultimate consumers of our customers’ services. Specific steps we have taken to address our commitment to DEIB include:
▪Continuing DEIB Council meetings to drive DEIB initiatives;
▪Refining a Diversity Statement articulating our commitment to building an inclusive and diverse environment as follows:
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"At EPR Properties, people are the heart of our business. We invest in properties to create experiences for all people. We advocate and strive for a culture that recognizes and believes in diversity, equity, inclusion and belonging."
▪Development of a vision statement outlining long-term goals and our aspirations for the future as follows:
"Build a dedicated and engaged workforce by nurturing a culture that promotes innovation and teamwork. This environment will fuel business growth and enable employees to reach their highest potential while being true to their authentic selves."
▪Continuing partnership with CEO Action for Diversity & Inclusion Network to drive measurable action and meaningful change in advancing diversity, equity and inclusion in the workplace.
▪Enhanced focus on development of a candidate pipeline consisting of a diverse talent pool through our EPR Internship program;
▪Hosting DEIB learning opportunities with external experts in 2023; and
▪Active involvement in diverse communities through partnerships, sponsorships and attending/participating in conferences with diverse organizations.

•Compensation and Benefits. Our benefits include competitive base pay, performance-based restricted stock awards and a 401(k) with a robust company match. We support our employees’ physical and mental health through paid parental leave, industry-leading health care benefits, unlimited sick leave, flexible paid time off and employee assistance programs. In addition, we offer yearly wellness reimbursements, an on-site fitness center and fully stocked kitchens.

•Community & Social Impact. Giving back is one of our core values. We demonstrate this through our charitable giving program, EPR Impact, a key cornerstone of our social responsibility. Through a number of employees actively engaged in nonprofits and our commitment to donating to and sponsoring charitable causes and events, we are fortunate to partner with amazing organizations both locally and nationally. As a benefit to employees, EPR Impact’s annual budget includes a pool of funds to support employee-directed contributions to nonprofit organizations where an employee is personally involved. Additionally, EPR will match employee contributions annually up to a given amount for contributions from their personal funds to nonprofit organizations that meet the criteria of the program.

Regulation

To maintain our status as a REIT for federal income tax purposes, we must distribute to our shareholders at least 90% of our taxable income for a calendar year, as well as satisfy certain assets, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. In addition, we are subject to numerous federal, state and local laws and regulations applicable to owners of real property. For instance, under federal, state and local environmental laws, we may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under our properties, as well as certain other potential costs relating to hazardous or toxic substances (including government fines and penalties and damages for injuries to persons and adjacent property). These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or disposal of those substances. In addition, most of our properties must comply with the Americans with Disabilities Act ("ADA"). The ADA requires that public accommodations reasonably accommodate individuals with disabilities and that new construction or alterations be made to commercial facilities to conform to accessibility guidelines. The ownership, operation, and management of our gaming facilities are also subject to pervasive regulation. These gaming regulations impact our gaming tenants and persons associated with our gaming facilities, which in many jurisdictions include us as the landlord and owner of the real estate.

Our properties are also subject to various other federal, state and local regulatory requirements. We do not know whether existing requirements will change or whether compliance with future requirements will involve significant unanticipated expenditures. Although these expenditures would be the responsibility of our tenants in most cases and for our managers to oversee at our properties, if these tenants or managers fail to perform these obligations, we may be required to do so. For additional information regarding regulations applicable to our business, and risks associated with our failure to comply with such regulations, see Item 1A – "Risk Factors" in this Annual Report on Form 10-K.
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Principal Executive Offices

The Company’s principal executive offices are located at 909 Walnut Street, Suite 200, Kansas City, Missouri 64106; telephone (816) 472-1700.

Materials Available on Our Website

Our internet website address is www.eprkc.com. We make available, free of charge, through our website copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “Commission” or “SEC”). You may also view our Code of Business Conduct and Ethics, Company Governance Guidelines, Independence Standards for Trustees and the charters of our Audit, Nominating/Company Governance, Finance and Compensation and Human Capital Committees on our website. Copies of these documents are also available in print to any person who requests them. We do not intend for information contained in our website to be part of this Annual Report on Form 10-K.

Item 1A. Risk Factors
There are many risks and uncertainties that can affect our current or future business, operating results, financial condition or share price. The following discussion describes important factors that could adversely affect our current or future business, operating results, financial condition or share price. This discussion includes a number of forward-looking statements. See "Cautionary Statement Concerning Forward-Looking Statements."

Risks That May Impact Our Financial Condition or Performance

Global economic uncertainty, disruptions in the financial markets, rising interest rates and inflation, and the challenging economic environment may impair our ability to refinance existing obligations or obtain new financing for acquisition or development of properties.
There exists a high level of global economic challenges and uncertainty, including uncertainty regarding interest rates, inflationary pressures, geopolitical conflicts and the residual effects of the COVID-19 pandemic after its subsidence, all of which have contributed to volatility in the global financial markets and caused general negative performance of the real estate sector. REITs are generally experiencing heightened risks and uncertainties resulting from current challenging economic conditions, including significant volatility and negative pressure in financial and capital markets, increased cost of capital, high inflation and other risks and uncertainties, and our business has been more acutely affected by these risks.

We rely in part on debt financing to finance our investments and development. To the extent that turmoil in the financial markets continues or intensifies, it has the potential to adversely affect our ability to refinance our existing obligations as they mature or obtain new financing for acquisition or development of properties and adversely affect the value of our investments. If we are unable to refinance existing indebtedness on attractive terms at its maturity, we may be forced to dispose of some of our assets. Uncertain economic conditions and disruptions in the financial markets could also result in a substantial decrease in the value of our investments, which could also make it more difficult to refinance existing obligations or obtain new financing. In addition, these factors may make it more difficult for us to sell properties or may adversely affect the price we receive for properties that we do sell, as prospective buyers may experience increased costs of capital or difficulties in obtaining capital. These events in the credit markets may have an adverse effect on other financial markets in the U.S., which may make it more difficult or costly for us to raise capital through the issuance of our common shares or preferred shares. In addition, disruptions in global financial markets may have other adverse effects on us, our tenants, our borrowers or the economy in general.

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Although we intend to continue making future investments, we expect that our levels of investment spending will be limited in the near term due to elevated costs of capital, and that these investments will be funded primarily from cash on hand, cash from operations, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice. As a result, we intend to be more selective in making future investments and acquisitions until such time as economic conditions improve and our cost of capital returns to acceptable levels.

The COVID-19 pandemic, or the future outbreak of any other highly infectious or contagious diseases, has and could continue to materially and adversely impact or cause disruption to, our performance, financial condition, results of operations and cash flows.
The COVID-19 pandemic severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. In response to the COVID-19 pandemic, many jurisdictions within the United States and abroad instituted health and safety measures, including quarantines, mandated business and school closures and travel restrictions. As a result, the COVID-19 pandemic severely impacted experiential real estate properties given that such properties involve congregate social activity and discretionary consumer spending. The COVID-19 pandemic also negatively impacted consumer preferences and demand for certain experiential industries, such as theatres, and it remains unclear if or when these changes in preferences and demand will return to a pre-pandemic state as the residual effects of the pandemic subside. The ultimate extent of the impacts of the COVID-19 pandemic or any other highly infectious or contagious diseases to our operations and those of our tenants and borrowers will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

Inflation could adversely impact our customers and our results of operations.
Inflation, both real or anticipated as well as any resulting governmental policies, could adversely affect the economy and the costs of labor, goods and services to our tenants or borrowers. Our long-term leases and loans typically contain provisions such as rent escalators, percentage rent or participating interest, designed to mitigate the adverse impact of inflation. However, these provisions may have limited effectiveness at mitigating the risk of high levels of inflation due to contractual limits on escalation, which exist on substantially all of our escalation provisions and the uncertainty that percentage rent and participating interest provisions will capture the impact of such inflation through higher revenues realized at the applicable properties. Many of our leases are triple-net and typically require the tenant to pay all property operating expenses and, therefore, increases in property-level expenses at our leased properties generally do not directly affect us. However, increased operating costs resulting from inflation could have an adverse impact on our tenants and borrowers if increases in their operating expenses exceed increases in their revenue, which may adversely affect our tenants’ or borrowers' ability to pay rent or other obligations owed to us. An increase in our customers' expenses and a failure of their revenues to increase at least with inflation could adversely impact our customers' and our financial condition and our results of operations.

Additionally, a portion of our leases are not triple-net leases, which exposes us to the risk of potential common area maintenance expense slippage, which may occur when the actual cost of taxes, insurance and maintenance at the property exceeds the reimbursements paid by tenants. To the extent any of these leases contain fixed expense reimbursement provisions or limitations, we may be subject to increases in costs resulting from inflation that are not fully passed through to tenants, which could adversely impact our financial condition and our results of our operations.

Some of our investments are managed through a third-party manager. When we manage properties through a third-party manager, we rely on the performance of our properties and the ability of the properties' managers to increase revenues to keep pace with inflation, which may be limited by competitive pressures. An increase in our expenses at these properties and a failure of our revenues to increase at least with inflation could adversely impact our financial condition and our results of operations.

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Most of our customers, consisting primarily of tenants and borrowers, operate properties in market segments that depend upon discretionary spending by consumers. Any continued reduction in discretionary spending by consumers within the market segments in which our customers or potential customers operate could adversely affect such customers' operations and, in turn, reduce the demand for our properties or financing solutions.
Most of our portfolio is leased to or financed with customers operating service or retail businesses on our property locations. Many of these customers operate services or businesses that are dependent upon consumer experiences. The success of most of these businesses depends on the willingness or ability of consumers to use their discretionary income to purchase our customers' products or services. A downturn in the economy, or a trend to not want to go "out of home" could cause consumers in each of our property types to reduce their discretionary spending within the market segments in which our customers or potential customers operate, which could adversely affect such customers' operations and, in turn, reduce the demand for our properties or financing solutions. The reduced economic activity that initially resulted from the COVID-19 pandemic significantly reduced and impeded consumer discretionary spending, which severely impacted experiential real estate properties, including those of our customers, and, although consumer discretionary spending is recovering, it is unclear whether residual effects of the COVID-19 pandemic or the current challenging and uncertain economic environment will negatively impact future consumer preferences regarding congregate activities.

Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities.
Our unsecured revolving credit facility, senior notes and other loans that we may obtain in the future contain certain cross-default provisions as well as customary restrictions, requirements and other limitations on our ability to incur indebtedness, including covenants involving our maximum total debt to total asset value; maximum permitted investments; minimum tangible net worth; maximum secured debt to total asset value; maximum unsecured debt to eligible unencumbered properties; minimum unsecured interest coverage; and minimum fixed charge coverage. Our ability to borrow under our unsecured revolving credit facility is also subject to compliance with certain other covenants. We also have senior notes issued in a private placement transaction that are subject to certain covenants. In addition, some of our properties, including those held in joint ventures, are subject to mortgages that contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable property or to discontinue insurance coverage.

The current challenging and uncertain economic environment could negatively impact our future compliance with financial covenants of our credit facility and other debt agreements and result in a default and potentially an acceleration of indebtedness. Under those circumstances, other sources of capital may not be available to us or be available only on unattractive terms. Additionally, our ability to satisfy current or prospective lenders' insurance requirements may be adversely affected if lenders generally insist upon greater insurance coverage than is available to us in the marketplace or on commercially reasonable terms.

We rely on debt financing, including borrowings under our unsecured revolving credit facility, issuances of debt securities and debt secured by individual properties, to finance our acquisition and development activities and for working capital. If we are unable to obtain financing from these or other sources, or to refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected. We are also currently experiencing elevated costs of capital, which negatively impacts our ability to make investments in the near term. The ultimate extent to which the residual effects of the COVID-19 pandemic and the current challenging economic environment impacts our ability to comply with existing financial covenants and obtain financing will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence.

Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable terms, if at all, and negatively impact the market price of our securities, including our common shares.
The credit ratings of our senior unsecured debt and preferred equity securities are based on our operating performance, liquidity and leverage ratios, overall financial position and other factors employed by the credit rating agencies in their rating analysis of us. Our credit ratings can affect the amount and type of capital we can access, as well as the terms and costs of any financings we may obtain. There can be no assurance that we will be able to maintain our current credit ratings, particularly in light of the residual effects of the COVID-19 pandemic and any effects of the current challenging economic environment.
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In the event that our current credit ratings deteriorate, we would likely incur a higher cost of capital and it may be more difficult or expensive to obtain additional financing or refinance existing obligations and commitments. Also, downgrades in our credit ratings would trigger additional costs or other potentially negative consequences under our current and future credit facilities and future debt instruments.

Rising interest rates and future increases will likely increase interest cost on new debt and could materially adversely impact our ability to refinance existing debt, sell assets and limit our acquisition and development activities.
The U.S. Federal Reserve has raised the benchmark interest rate multiple times beginning in 2022, and there can be no assurances that the rate will not further increase in the future. As interest rates have increased, so has our interest costs for any new debt and any additional increases could further increase these costs. This increased cost has made the financing of any acquisition and development activity costlier, and may lower future earnings. Rising interest rates, or the continuation of existing rates into the future, could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. In addition, higher interest rates could decrease the amount third parties are willing to pay for our assets, thereby limiting our ability to reposition our portfolio efficiently in response to changes in economic or other conditions.

We depend on leasing space to tenants on economically favorable terms and collecting rent from our tenants, who may not be able to pay.
At any time, a tenant may experience a downturn in its business that may weaken its financial condition. Similarly, a general decline in the economy may result in a decline in demand for space at our commercial properties. Our financial results depend significantly on leasing space at our properties to tenants on economically favorable terms. In addition, because a majority of our income comes from leasing real property, our income, funds available to pay indebtedness and funds available for distribution to our shareholders or share repurchases will decrease if a significant number of our tenants cannot pay their rent or if we are not able to maintain our levels of occupancy on favorable terms. If our tenants cannot pay their rent or we are not able to maintain our levels of occupancy on favorable terms, there is also a risk that the fair value of the underlying property will be considered less than its carrying value and we may have to take a charge against earnings. In addition, if a tenant does not pay its rent, we might not be able to enforce our rights as landlord without significant delays and substantial legal costs.

A tenant becoming bankrupt or insolvent could diminish or eliminate the income we expect from that tenant's leases. If a tenant becomes insolvent or bankrupt, we cannot be sure that we could promptly recover the premises from the tenant or from a trustee or debtor-in-possession in a bankruptcy proceeding relating to the tenant. On the other hand, a bankruptcy court might authorize the tenant to terminate its leases with us. If that happens, our claim against the bankrupt tenant for unpaid future rent would be subject to statutory limitations that might be substantially less than the remaining rent owed under the leases. In addition, any claim we have for unpaid past rent would likely not be paid in full and we would take a charge against earnings for any accrued straight-line rent receivable related to the leases. We have experienced material customer bankruptcies in the past. Specifically, in September 2022, Cineworld Group, plc, Regal Entertainment Group and our other Regal theatre tenants (collectively, “Regal”) filed for protection under Chapter 11 of the U.S. Bankruptcy Code. At the time of its bankruptcy filing, Regal leased 57 theatres from us pursuant to two master leases and 28 single property leases. Regal emerged from the Chapter 11 bankruptcy cases in July 2023. As a result of the bankruptcy, we entered into a new master lease with Regal for 41 of these properties, took back 16 properties from Regal and agreed to hold a significant amount of deferred rent owed by Regal in abeyance with a remaining portion discharged in bankruptcy. There can be no assurances that our tenants will not become bankrupt or insolvent in the future.

The reduced economic activity initially resulting from the COVID-19 pandemic severely impacted our tenants' businesses, financial condition and liquidity and caused most of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations during this time. Some of our tenants have not fully recovered from these impacts. The ultimate extent to which the COVID-19 pandemic, as well as generally challenging and uncertain economic conditions, impacts the operations of our tenants will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence.
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We could be adversely affected by a borrower's bankruptcy or default.
If a borrower becomes bankrupt or insolvent or defaults under its loan, that could force us to declare a default and foreclose on any available collateral. As a result, future interest income recognition related to the applicable note receivable could be significantly reduced or eliminated. There is also a risk that the fair value of the collateral, if any, will be less than the carrying value of the note and accrued interest receivable at the time of a foreclosure and we may have to take a charge against earnings. If a property serves as collateral for a note, we may experience costs and delays in recovering the property in foreclosure or finding a substitute operator for the property. If a mortgage we hold is subordinated to senior financing secured by the property, our recovery would be limited to any amount remaining after satisfaction of all amounts due to the holder of the senior financing. In addition, to protect our subordinated investment, we may desire to refinance any senior financing. However, there is no assurance that such refinancing would be available or, if it were to be available, that the terms would be attractive. We experienced borrower defaults and bankruptcies resulting from the reduced economic activity that initially resulted from the COVID-19 pandemic, and we may experience future defaults and bankruptcies, the breadth of which will depend upon the scope, severity and duration of the future events and circumstances heightening default and bankruptcy risks.

The ultimate extent to which the COVID-19 pandemic and challenging and uncertain economic conditions impacts the operations of our borrowers will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence.

We may sell or divest different properties or assets after an evaluation of our portfolio of businesses. Such sales or divestitures could affect our costs, revenues, results of operations, financial condition and liquidity.
From time to time, we may evaluate our properties and may, as a result, sell or attempt to sell, divest, or spin-off different properties or assets, subject, if applicable, to the terms of lease agreements. For example, Regal surrendered to us 16 properties formerly leased to Regal in connection with Regal's emergence from bankruptcy. We have entered into management agreements for five of the surrendered properties and plan to sell the remaining 11 properties and deploy the proceeds to acquire non-theatre experiential properties. As of December 31, 2023, we have sold two of the remaining 11 surrendered properties. Future sales or divestitures could affect our costs, revenues, results of operations, financial condition, liquidity and our ability to comply with applicable financial covenants. Divestitures have inherent risks, including possible delays in closing transactions, potential difficulties in obtaining regulatory approvals, receiving lower-than-expected sales proceeds for the divested assets, and potential post-closing claims for indemnification. In addition, economic conditions, such as high inflation or rising interest rates, and relatively illiquid real estate markets may result in fewer potential bidders and unsuccessful sales efforts with respect to potential sales or divestitures.

We are exposed to the credit risk of our customers and counterparties and their failure to meet their financial obligations could adversely affect our business.
Our business is subject to credit risk. There is a risk that a customer or counterparty will fail to meet its obligations when due. Customers and counterparties that owe us money may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. Although we have procedures for reviewing credit exposures to specific customers and counterparties to address present credit concerns, default risk may arise from events or circumstances that are difficult to detect or foresee. Some of our risk management methods depend upon the evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible by us. That information may not, in all cases, be accurate, complete, up-to-date or properly evaluated. In addition, concerns about, or a default by, one customer or counterparty could lead to significant liquidity problems, losses or defaults by other customers or counterparties, which in turn could adversely affect us. We experienced customer rent deferral requests and defaults resulting from the reduced economic activity that initially resulted from the COVID-19 pandemic, and we may experience future rent deferral requests or defaults, the breadth of which will depend upon the scope, severity and duration of the future events and circumstances heightening credit risks. We may be materially and adversely affected in the event of a significant default by our customers and counterparties.


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From time to time, the base terms of some of our leases will expire and there is no assurance that such leases will be renewed at existing lease terms, at otherwise economically favorable terms or at all.
From time to time, the base terms of some of our leases with our tenants will expire. These tenants have and may continue to seek rent or other concessions from us, including requiring us to modify the properties in order to renew their leases. There is no guarantee that we will be able to renew these leases at existing lease terms, at otherwise economically favorable terms or at all. In addition, if we fail to renew these leases, there can be no assurances that we will be able to locate substitute tenants for such properties or enter into leases with these substitute tenants on economically favorable terms.

Operating risks in the experiential real estate industry may affect the ability of our customers to perform under their leases or mortgages.
The ability of our customers to operate successfully in the experiential real estate industry and remain current on their obligations depends on a number of factors, including, with respect to theatres, the availability and popularity of motion pictures, the performance of those pictures in tenants' markets, the allocation of popular pictures to tenants, the release window (the time that elapses from the date of a motion picture's theatrical release to the date it is available on other mediums) and the terms on which the motion pictures are licensed. In addition, motion picture production is highly dependent on labor that is subject to various collective bargaining agreements. The Writers Guild of America strike of 2023 halted motion picture production and may delay or otherwise affect the supply of certain motion pictures. The Screen Actors Guild strike of 2023 also had a similar effect on the production and supply of motion pictures. Studios are party to collective bargaining agreements with a number of other labor unions, and failure to reach timely agreements or renewals of existing agreements or future strikes or labor disruptions may further affect the production, supply and theatrical release of motion pictures. Neither we nor our customers control the operations of studios or motion picture distributors. During the COVID-19 pandemic, motion picture distributors increasingly relied upon content streaming as a method of delivering products and continue to do so for certain film releases. There can be no assurances that motion picture distributors will continue to rely on theatres as the primary means of distributing first-run films and motion picture distributors have, and may in the future, consider alternative film delivery methods. In addition, in August 2020, a U.S. District Court granted the U.S. Department of Justice's request to terminate the Paramount Consent Decrees, which prohibit movie studios from owning theatres or utilizing "block booking," a practice whereby movie studios sell multiple films as a package to theatres, in addition to other restrictions. There can be no assurances as to the effects of this regulatory action or whether this regulatory action will materially adversely affect our theatre customers' operations and, in turn, their ability to perform under their leases.

Our other experiential customers are exposed to the risk of adverse economic conditions that can affect experiential activities. Eat & play, ski, attraction, experiential lodging, gaming, fitness & wellness and cultural properties are discretionary activities that can entail a relatively high cost of participation and may be adversely affected by an economic slowdown or recession. Economic conditions, including increasing interest rates and inflation, high unemployment and erosion of consumer confidence, may potentially have negative effects on our customers and on their results of operations. The reduced economic activity initially resulting from the COVID-19 pandemic severely impacted our customers' businesses, financial condition and liquidity, and certain of our customers continue to be impacted by residual effects of the pandemic. The ultimate extent to which the COVID-19 pandemic and the generally challenging and uncertain economic environment impacts the operations of our customers will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence. We cannot predict what impact these uncertainties may have on overall guest visitation, guest spending or other related trends and the ultimate impact it will have on our customers’ operations and, in turn, their ability to perform under their respective leases or mortgages.

Real estate is a competitive business.
We operate in the highly competitive real estate industry. We compete with a large number of real estate property investors and developers including traded and non-traded public REITS, private equity investors, sovereign funds, institutional investment funds and other investors, some of whom are significantly larger and have greater resources, access to capital and lower costs of capital or different investment parameters. Some of these investors may be willing to accept lower returns on their investments or have greater financial resources or a lower cost of capital than we do, a greater ability to borrow funds to acquire properties and the ability to accept more risk than we prudently manage.
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This competition may increase the demand for the types of properties in which we typically invest and, therefore, reduce the number of suitable acquisition opportunities available to us and increase the prices paid for such acquisition properties. This competition will increase if investments in real estate become more attractive relative to other types of investment. Accordingly, competition for the acquisition of real property could materially and adversely affect us.

Principal factors of competition are rent or interest charged, attractiveness of location, the quality of the property and breadth and quality of services provided. If our competitors offer space at rental or interest rates below the rates we are currently charging our customers, we may lose potential customers, and we may be pressured to reduce our rental or interest rates below those we currently charge in order to retain customers when our customers’ leases or mortgages expire. Our success depends upon, among other factors, trends of the national and local economies, financial condition and operating results of current and prospective customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends.

Three customers represent a significant portion of our total revenues.
Regal, Topgolf and AMC represent a significant portion of our total revenue. For the year ended December 31, 2023, total revenues of approximately $103.7 million or 14.7% were from Regal, approximately $98.0 million or 13.9% were from Topgolf and approximately $94.7 million or 13.4% were from AMC. Though each are experiencing recovery, the COVID-19 pandemic severely impacted these customers' businesses, financial condition and liquidity, and the residual effects of the pandemic and generally challenging and uncertain economic environment continue to negatively impact these customers' businesses, financial condition and liquidity.

We have diversified and expect to continue to diversify our real estate portfolio by entering into lease transactions or financing arrangements with a number of other tenants or borrowers. If for any reason AMC, Topgolf, and/or Regal failed to perform under their lease or mortgage obligations for a significant period of time, or under any modified lease or mortgage obligations, we could be required to reduce or suspend our shareholder dividends or share repurchases and may not have sufficient funds to support operations or service our debt until substitute customers are obtained. If that happened, we cannot predict when or whether we could obtain substitute quality customers on acceptable terms.

Properties we develop may not achieve sufficient operating results within expected timeframes and therefore the tenant or borrowers may not be able to pay their agreed upon rent or interest, and managed properties may not be able to operate profitably, which could adversely affect our financial results.
A significant portion of our investments include build-to-suit projects. When construction is completed, these projects may require some period of time to achieve targeted operating results. For properties leased or financed, we may provide our tenants or borrowers with lease or financing terms that are more favorable to them during this timeframe. Tenants and borrowers that fail to achieve targeted operating results within expected timeframes may be unable to pay their obligations pursuant to the agreed upon lease or financing terms or at all. If we are required to restructure lease or financing terms or take other action with respect to the applicable property, our financial results may be impacted by lower revenues, recording an impairment or provision for loan loss or writing off rental or interest amounts. Additionally, if we have entered into a management agreement to operate a property we have developed, the project may not be able to achieve targeted operating results, which may impact our financial results by lowering income or recording an impairment loss.

We have entered into management agreements to operate certain of our properties and we could be adversely affected if such managers do not manage these properties successfully.
To maintain our status as a REIT, we are generally not permitted to directly operate our properties. As a result, from time to time, we enter into management agreements with third-party managers to operate certain properties. In the past, this practice has been most frequent with our experiential lodging properties. However, as a result of the impact of the COVID-19 pandemic, a generally challenging and uncertain economic environment and Regal's bankruptcy, we have also begun managing a limited number of theatres formerly operated by our tenants and may manage a greater number in the future if customer defaults or bankruptcies result in our taking back properties. For managed properties, our ability to direct and control how our properties are operated is less than if we were able to manage these properties directly. Under the terms of our management agreements, our participation in operating decisions relating to these properties is generally limited to certain matters.
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We do not supervise any of these managers or their personnel on a day-to-day basis. We cannot provide any assurances that the managers will manage our properties in a manner that is consistent with their respective obligations under the applicable management agreement or our obligations under any franchise agreements. We could be materially and adversely affected if any of our managers fail to effectively manage revenues and expenses, provide quality services and amenities, or otherwise fail to manage our properties in our best interests, and we may be financially responsible for the actions and inactions of the managers. In certain situations, we may terminate the management agreement. However, we can provide no assurances that we could identify a replacement manager, or that the replacement manager will manage our property successfully. A failure by our third-party managers to successfully manage our properties could lead to an increase in our operating expenses or decrease in our revenue, or both.

Our indebtedness may affect our ability to operate our business and may have a material adverse effect on our financial condition and results of operations.
We have a significant amount of indebtedness. As of December 31, 2023, we had total debt outstanding of approximately $2.8 billion. Our indebtedness could have important consequences, such as:

•limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes;
•limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service debt;
•limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions;
•restricting us from making strategic acquisitions, developing properties or pursuing business opportunities;
•restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness;
•exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our debt instruments that could have a material adverse effect on our business, financial condition and operating results;
•increasing our vulnerability to a downturn in general economic conditions or in pricing of our investments;
•negatively impacting our credit ratings; and
•limiting our ability to react to changing market conditions in our industry and in our customers’ industries.

In addition to our debt service obligations, our operations require substantial investments on a continuing basis. Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund capital and non-capital expenditures necessary to meet our remaining commitments on existing projects and maintain the condition of our assets, as well as to provide capacity for the growth of our business, depends on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and financial, business, competitive, legal and other factors.

Subject to the restrictions in our unsecured revolving credit facility and the debt instruments governing our existing senior notes, we may incur significant additional indebtedness, including additional secured indebtedness. Although the terms of our unsecured revolving credit facility and the debt instruments governing our existing senior notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and additional indebtedness incurred in compliance with these restrictions could be significant. If new debt is added to our current debt levels, the risks described above could increase.

There are risks inherent in having indebtedness and using such indebtedness to fund acquisitions.
We currently use debt to fund portions of our operations and acquisitions. In a rising interest rate environment, the cost of our existing variable rate debt and any new debt will likely increase. We have used leverage to acquire properties and expect to continue to do so in the future. Although the use of leverage is common in the real estate industry, our use of debt exposes us to some risks. If a significant number of our customers fail to make their lease or interest payments for a significant period of time, the risk of which has been heightened as a result of the generally challenging and uncertain economic environment, and we do not have sufficient cash to pay principal and interest on the debt, we could default on our debt obligations. A small amount of our debt financing is secured by mortgages on our properties and we may enter into additional secured mortgage financing in the future.
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If we fail to meet our mortgage payments, the lenders could declare a default and foreclose on those properties. We expect that our levels of investment spending will be limited in the near term due to elevated costs of capital.

Most of our debt instruments contain balloon payments, which may adversely impact our financial performance and our ability to pay dividends.
Most of our financing arrangements require us to make a lump-sum or "balloon" payment at maturity. There can be no assurance that we will be able to refinance such debt on favorable terms or at all, especially in light of higher interest rates and other negative economic conditions. To the extent we cannot refinance such debt on favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates, either of which would have an adverse impact on our financial performance and ability to pay dividends to our shareholders.

Without new financing, our growth is limited.
As a REIT, we are required to distribute at least 90% of our taxable net income to shareholders in the form of dividends. Other than deciding to make these dividends in our common shares, we are limited in our ability to use internal capital to acquire properties and must continually raise new capital in order to continue to grow and diversify our investment portfolio. Our ability to raise new capital depends in part on factors beyond our control, including conditions in equity and credit markets, conditions in the industries in which our customers are engaged and the performance of real estate investment trusts generally, all of which have been negatively impacted by generally challenging and uncertain economic conditions and residual effects of the COVID-19 pandemic. We continually consider and evaluate a variety of potential transactions to raise additional capital, but we cannot assure that attractive alternatives will always be available to us, nor that our share price will increase or remain at a level that will permit us to continue to raise equity capital publicly or privately.

Our real estate investments are concentrated in experiential real estate properties and a significant portion of those investments are in megaplex theatre properties, making us more vulnerable economically than if our investments were more diversified.
We acquire, develop or finance experiential real estate properties. A significant portion of our investments are in megaplex theatre properties. Although we are subject to the general risks inherent in concentrating investments in real estate, the risks resulting from a lack of diversification become even greater as a result of investing primarily in experiential real estate properties. These risks are further heightened by the fact that a significant portion of our investments are in megaplex theatre properties. Although a downturn in the real estate industry could significantly adversely affect the value of our properties, a downturn in the experiential real estate industry could compound this adverse effect. These adverse effects could be more pronounced than if we diversified our investments to a greater degree outside of experiential real estate properties or, more particularly, outside of megaplex theatre properties. Megaplex theatres have not fully recovered from the negative impacts of the COVID-19 pandemic. In addition, megaplex theatre properties depend on regular production and availability of motion pictures, which the Writers Guild of America and Screen Actors Guild strikes of 2023 severely disrupted. As a result, we are subject to more risk associated with megaplex theatres than if we had more diversified investments.

If we fail to qualify as a REIT, we would be taxed as a corporation, which would substantially reduce funds available for payment of dividends to our shareholders.
If we fail to qualify as a REIT for U.S. federal income tax purposes, we will be taxed as a corporation. We are organized to and believe we qualify as a REIT, and intend to operate in a manner that will allow us to continue to qualify as a REIT. However, we cannot provide any assurance that we have always qualified and will remain qualified in the future. This is because qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), on which there are only limited judicial and administrative interpretations, and depends on facts and circumstances not entirely within our control, including requirements relating to the sources of our gross income. Even a technical or inadvertent violation could jeopardize our REIT qualification. Rents received or accrued by us from our tenants may not be treated as qualifying income for purposes of these requirements if the leases are not respected as true leases or qualified financing arrangements for U.S. federal income tax purposes and instead are treated as service contracts, joint ventures or some other type of arrangement.
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If some or all of our leases are not respected as true leases or qualified financing arrangements for U.S. federal income tax purposes and are not otherwise treated as generating qualifying REIT income, we may fail to qualify to be taxed as a REIT. Furthermore, our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we may not obtain independent appraisals. In addition, future legislation, new regulations, administrative interpretations or court decisions may significantly change the tax laws, the application of the tax laws to our qualification as a REIT or the U.S. federal income tax consequences of that qualification.

If we were to fail to qualify as a REIT in any taxable year (including any prior taxable year for which the statute of limitations remains open), we would face tax consequences that could substantially reduce the funds available for the service of our debt and payment of dividends:

•we would not be allowed a deduction for dividends paid to shareholders in computing our taxable income and would be subject to federal income tax at regular corporate rates;
•we could be subject to increased state and local taxes;
•unless we are entitled to relief under statutory provisions, we could not elect to be treated as a REIT for four taxable years following the year in which we were disqualified; and
•we could be subject to tax penalties and interest.

In addition, if we fail to qualify as a REIT, we will no longer be required to pay dividends. As a result of these factors, our failure to qualify as a REIT could adversely affect the market price for our shares.

Even if we remain qualified for taxation as a REIT under the Internal Revenue Code, we may face other tax liabilities that reduce our funds available for payment of dividends to our shareholders or the repurchase of shares.
Even if we remain qualified for taxation as a REIT under the Internal Revenue Code, we may be subject to federal, state and local taxes on our income and assets, including taxes on any undistributed income, excise taxes, state or local income, property and transfer taxes, and other taxes. Also, some jurisdictions may in the future limit or eliminate favorable income tax deductions, including the dividends paid deduction, which could increase our income tax expense. In addition, in order to meet the requirements for qualification and taxation as a REIT under the Internal Revenue Code, prevent the recognition of particular types of non-cash income, or avert the imposition of a 100% tax that applies to specified gains derived by a REIT from dealer property or inventory, we may hold or dispose of some of our assets and conduct some of our operations through our taxable REIT subsidiaries ("TRSs") or other subsidiary corporations that will be subject to corporate level income tax at regular rates. In addition, while we intend that our transactions with our TRSs will be conducted on arm's length bases, we may be subject to a 100% excise tax on a transaction that the Internal Revenue Service ("IRS") or a court determines was not conducted at arm's length. Any of these taxes would decrease cash available for distribution to our shareholders or the repurchase of shares under our share repurchase program.

Distribution requirements imposed by law limit our flexibility.
To maintain our status as a REIT for federal income tax purposes, we are generally required to distribute to our shareholders at least 90% of our taxable income for that calendar year. Our taxable income is determined without regard to any deduction for dividends paid and by excluding net capital gains. To the extent that we satisfy the distribution requirement but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of (i) 85% of our ordinary income for that year, (ii) 95% of our capital gain net income for that year and (iii) 100% of our undistributed taxable income from prior years. We intend to continue to make distributions to our shareholders to comply with the distribution requirements of the Internal Revenue Code and to reduce exposure to federal income and nondeductible excise taxes. Differences in timing between the receipt of income and the payment of expenses in determining our taxable income and the effect of required debt amortization payments could require us to borrow funds on a short-term basis in order to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT.

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If arrangements involving our TRSs fail to comply as intended with the REIT qualification and taxation rules, we may fail to qualify for taxation as a REIT under the Internal Revenue Code or be subject to significant penalty taxes.
We lease some of our experiential lodging properties to our TRSs pursuant to arrangements that, under the Internal Revenue Code, are intended to qualify the rents we receive from our TRSs as income that satisfies the REIT gross income tests. We also intend that our transactions with our TRSs be conducted on arm's length bases so that we and our TRSs will not be subject to penalty taxes under the Internal Revenue Code applicable to mispriced transactions. While relief provisions can sometimes excuse REIT gross income test failures, significant penalty taxes may still be imposed.

For our TRS arrangements to comply as intended with the REIT qualification and taxation rules under the Internal Revenue Code, a number of requirements must be satisfied, including:

•our TRSs may not directly or indirectly operate or manage a lodging facility, other than through an eligible independent contractor, as defined by the Internal Revenue Code;
•the leases to our TRSs must be respected as true leases for federal income tax purposes and not as service contracts, partnerships, joint ventures, financings or other types of arrangements;
•the leased properties must constitute qualified lodging facilities (including customary amenities and facilities) under the Internal Revenue Code;
•our leased properties must be managed and operated on behalf of the TRSs by independent contractors who are less than 35% affiliated with us and who are actively engaged (or have affiliates so engaged) in the trade or business of managing and operating qualified lodging facilities for persons unrelated to us; and
•the rental and other terms of the leases must be arm's length.

We cannot be sure that the IRS or a court will agree with our assessment that our TRS arrangements comply as intended with REIT qualification and taxation rules. If arrangements involving our TRSs fail to comply as we intended, we may fail to qualify for taxation as a REIT under the Internal Revenue Code or be subject to significant penalty taxes.

We may depend on distributions from our direct and indirect subsidiaries to service our debt, pay dividends to our shareholders and repurchase shares. The creditors of these subsidiaries, and our direct creditors, are entitled to amounts payable to them before we pay any dividends to our shareholders or repurchase shares.
Substantially all of our assets are held through our subsidiaries. We depend on these subsidiaries for substantially all of our cash flow from operations. The creditors of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary's obligations to them, when due and payable, before distributions may be made by that subsidiary to us. In addition, our creditors, whether secured or unsecured, are entitled to amounts payable to them before we may pay any dividends to our shareholders or repurchase shares under our share repurchase program. Thus, our ability to service our debt obligations, pay dividends to holders of our common and preferred shares and repurchase shares depends on our subsidiaries' ability first to satisfy their obligations to their creditors and then to pay distributions to us and our ability to satisfy our obligations to our direct creditors. Our subsidiaries are separate and distinct legal entities and have no obligations, other than limited guaranties of certain of our debt, to make funds available to us.

Our development financing arrangements expose us to funding and completion risks.
Our ability to meet our construction financing obligations that we have undertaken or may in the future enter into depends on our ability to obtain equity or debt financing in the required amounts. There is no assurance we can obtain this financing or that the financing rates available will ensure a spread between our cost of capital and the rent or interest payable to us under the related leases or mortgage notes receivable. As a result, we could fail to meet our construction financing obligations or decide to cease such funding, which, in turn, could result in failed projects and penalties, each of which could have a material adverse impact on our results of operations and business.

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We have a limited number of employees and loss of personnel could harm our operations and adversely affect the value of our shares.
We had 55 full-time employees as of December 31, 2023 and, therefore, the impact we may feel from the loss of an employee may be greater than the impact such a loss would have on a larger organization. We are particularly dependent on the efforts of our senior leadership team. While we believe that we could find replacements for our personnel, the loss of their services could harm our operations and adversely affect the value of our shares.

We are subject to risks associated with the employment of personnel by managers of certain of our properties.
Managers of certain of our properties are responsible for hiring and maintaining the labor force at each of these properties. Although we do not directly employ or manage employees at these properties, we are subject to many of the costs and risks associated with such labor force, including but not limited to risks associated with that certain union contract binding the manager of our Kartrite Resort and Indoor Waterpark. From time to time, the operations of our properties that are managed by third parties may be disrupted as a result of strikes, lockouts, public demonstrations or other negative actions and publicity. We may also incur increased legal costs and indirect labor costs as a result of contract disputes and other events. The resolution of labor disputes or renegotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules.

We may in the future have greater dependence upon the gaming industry and may be susceptible to the risks associated with it, which could materially and adversely affect our business, financial condition, liquidity, results of operations and prospects.
As a landlord of gaming facilities or secured creditor to gaming operators, we may be impacted by the risks associated with the gaming industry. Therefore, so long as we make investments in gaming-related assets, our success is dependent on the gaming industry, which could be adversely affected by economic conditions in general, changes in consumer trends and preferences and other factors over which we and our tenants have no control, such as the residual effects of the COVID-19 pandemic and other similar health crises, labor shortages, travel restrictions, supply chain disruptions and generally challenging and uncertain economic conditions. A component of the rent under our gaming facility lease agreements may be based, over time, on the performance of the gaming facilities operated by our tenants on our properties and any decline in the operating results of our gaming tenants could be material and adverse to our business, financial condition, liquidity, results of operations and prospects.

The gaming industry is characterized by a high degree of competition among a large number of participants, including riverboat casinos, dockside casinos, land-based casinos, video lottery, sweepstakes and poker machines not located in casinos, Native American gaming, internet lotteries and other internet wagering gaming services and, in a broader sense, gaming operators face competition from all manner of leisure and entertainment activities. Gaming competition is intense in most of the markets where our facilities are located. Recently, there has been additional significant competition in the gaming industry as a result of the upgrading or expansion of facilities by existing market participants, the entrance of new gaming participants into a market, internet gaming and legislative changes. As competing properties and new markets are opened, we may be negatively impacted. Additionally, decreases in discretionary consumer spending brought about by weakened general economic conditions such as, but not limited to, higher interest rates, high inflation, lackluster recoveries from recessions, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, cultural and demographic changes and increased stock market volatility may negatively impact our revenues and operating cash flows.

We and our tenants face extensive regulation from gaming and other regulatory authorities with respect to our gaming properties.
The ownership, operation, and management of gaming facilities are subject to pervasive regulation. These gaming regulations impact our gaming tenants and persons associated with our gaming facilities, which in many jurisdictions include us as the landlord and owner of the real estate. Certain gaming authorities in the jurisdictions in which we hold properties may require us and/or our affiliates to maintain a license as a key business entity or supplier because of our status as landlord. Gaming authorities also retain great discretion to require us to be found suitable as a landlord, and certain of our shareholders, officers and trustees may be required to be found suitable as well.

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In many jurisdictions, gaming laws can require certain of our shareholders to file an application, be investigated, and qualify or have his, her or its suitability determined by gaming authorities. Gaming authorities have very broad discretion in determining whether an applicant should be deemed suitable. Subject to certain administrative proceeding requirements, the gaming regulators have the authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by the gaming authorities.

Gaming authorities may conduct investigations into the conduct or associations of our trustees, officers, key employees or investors to ensure compliance with applicable standards. If we are required to be found suitable and are found suitable as a landlord, we will be registered as a public company with the gaming authorities and will be subject to disciplinary action if, after we receive notice that a person is unsuitable to be a shareholder or to have any other relationship with us, we:

•pay that person any distribution or interest upon any of our voting securities;
•allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person;
•pay remuneration in any form to that person for services rendered or otherwise; or
•fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities, including, if necessary, the immediate purchase of the voting securities for cash at fair market value.

Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gaming company and, in some jurisdictions, non-voting securities, typically 5% of a publicly-traded company, to report the acquisition to gaming authorities, and gaming authorities may require such holders to apply for qualification, licensure or a finding of suitability, subject to limited exceptions for "institutional investors" that hold a company's voting securities for passive investment purposes only.

Required regulatory approvals can delay or prohibit transfers of our gaming properties, which could result in periods in which we are unable to receive rent for such properties.
The tenant of our gaming property is (and any future tenants of our gaming properties will be) a gaming operator required to be licensed under applicable law. If our gaming facility lease agreement, or any such future lease agreements we enter into, are terminated (which could be required by a regulatory agency) or expire, any new tenant must be licensed and receive other regulatory approvals to operate our properties as gaming facilities. Any delay in, or inability of, the new tenant to receive required licenses and other regulatory approvals from the applicable state and county government agencies to operate the properties as gaming facilities may prolong the period during which we are unable to collect the applicable rent. Further, in the event that our gaming facility lease agreement or future lease agreements are terminated or expire and a new tenant is not licensed or fails to receive other regulatory approvals, the properties may not be operated as gaming facilities and we will not be able to collect the applicable rent. Moreover, we may be unable to transfer or sell the affected properties as gaming facilities, which could materially and adversely affect our business, financial condition, liquidity, results of operations and prospects.

We face risks associated with security breaches through cyber-attacks, cyber-intrusions or otherwise, as well as other significant disruptions of our information technology ("IT") networks and related systems.
We face risks associated with security breaches, whether through cyber-attacks or cyber-intrusions over the internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our IT networks and related systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber-intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. These risks are further heightened by factors such as developments in artificial intelligence, increased remote working and geopolitical turmoil. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations, including the increase in remote access and operations due to the residual impact of the COVID-19 pandemic reshaping traditional working dynamics. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
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A security breach or other significant disruption involving our IT networks and related systems could disrupt the proper functioning of our networks and systems; result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines; result in our inability to monitor our compliance with the rules and regulations regarding our qualification as a REIT; result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information of ours or others, which could be used to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes; require significant management attention and resources to remedy any damages that result; subject us to claims for breach of contract, damages, credits, penalties or termination of certain agreements; or damage our reputation among our tenants and investors generally. Any or all of the foregoing could have a material adverse effect on our financial condition, results of operations, cash flow and ability to make distributions with respect to, and the market price of, our common stock. We may also incur losses in connection with security breaches that exceed coverage limits under our cyber insurance policies. Our service providers, tenants, managers of our properties and other customers and their business partners are exposed to similar risks and the occurrence of a security breach or other disruption with respect to their information technology and infrastructure could, in turn, have a material adverse impact on our results of operations and business.

Changes in accounting standards issued by the Financial Accounting Standards Board ("FASB") or other standard-setting bodies may adversely affect our business.
Our financial statements are subject to the application of U.S. GAAP, which is periodically revised and/or expanded. From time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the FASB and the SEC. It is possible that accounting standards we are required to adopt may require changes to the current accounting treatment that we apply to our consolidated financial statements and may require us to make significant changes to our systems. Changes in accounting standards could result in a material adverse impact on our business, financial condition and results of operations.

Risks That Apply to Our Real Estate Business

Real estate income and the value of real estate investments fluctuate due to various factors.
The value of real estate fluctuates depending on conditions in the general economy and the real estate business. These conditions may also limit our revenues and available cash. Valuations and appraisals of our assets are estimates of fair value and may not necessarily correspond to realizable value. The rents, interest and other payments we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of the factors that affect the value of our real estate. If our revenues decline, we generally would expect to have less cash available to pay our indebtedness, distribute to our shareholders and effect share repurchases. In addition, some of our unreimbursed costs of owning real estate may not decline when the related rents decline.

The factors that affect the value of our real estate include, among other things:

•international, national, regional and local economic conditions;
•consequences of any armed conflict involving, or terrorist attack against, the United States or Canada;
•the threat of domestic terrorism or pandemic or other illness outbreaks (such as COVID-19 or variants thereof), which could cause consumers to avoid congregate settings;
•our ability or the ability of our tenants or managers to secure adequate insurance;
•natural disasters, such as earthquakes, hurricanes and floods, which could exceed the aggregate limits of insurance coverage;
•local conditions such as an oversupply of space or lodging properties or a reduction in demand for real estate in the area;
•competition from other available space or, in the case of our experiential lodging properties, competition from other lodging properties or alternative lodging options in our markets;
•whether tenants and users such as customers of our tenants consider a property attractive;
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•the financial condition of our tenants, borrowers and managers, including the extent of bankruptcies or defaults;
•higher levels of inflation;
•whether we are able to pass some or all of any increased operating costs through to tenants or other customers;
•how well we manage our properties or how well the managers of properties manage those properties;
•in the case of our experiential lodging properties, dependence on demand from business and leisure travelers, which may fluctuate and be seasonal;
•fluctuations in interest rates;
•changes in real estate taxes and other expenses;
•changes in market rental rates;
•the timing and costs associated with property improvements and rentals;
•changes in taxation or zoning laws;
•government regulation;
•availability of financing on acceptable terms or at all and the costs of such financing;
•potential liability under environmental or other laws or regulations; and
•general competitive factors.

The rents, interest and other payments we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of these factors. If our revenues decline, we generally would expect to have less cash available to pay our indebtedness and distribute to our shareholders. In addition, some of our unreimbursed costs of owning real estate may not decline when the related rents decline.

There are risks associated with owning and leasing real estate.
Although our lease terms in most cases, obligate the tenants to bear substantially all of the costs of operating the properties and our managers to manage such costs, investing in real estate involves a number of risks, including:

•the risk that tenants will not perform under their leases or that managers will not perform under their management agreements, reducing our income from such leases or properties under such management;
•we may not always be able to lease properties at favorable rates or certain tenants may require significant capital expenditures by us to conform existing properties to their requirements;
•we may not always be able to sell a property when we desire to do so at a favorable price; and
•changes in tax, zoning or other laws could make properties less attractive or less profitable.

If a tenant fails to perform on its lease covenants or a manager fails to perform on its management covenants, that would not excuse us from meeting any debt obligation secured by the property and could require us to fund reserves in favor of our lenders, thereby reducing funds available for payment of dividends. We cannot be assured that tenants or managers will elect to renew their leases or management agreements when the terms expire. If a tenant or manager does not renew its lease or agreement or if a tenant or a manager defaults on its lease or management obligations, there is no assurance we could obtain a substitute tenant or manager on acceptable terms. If we cannot obtain another quality tenant or manager, we may be required to modify the property for a different use, which may involve a significant capital expenditure and a delay in re-leasing the property or obtaining a new manager. In addition, tenants or managers sought concessions or other modifications to existing leases and management agreements as a result of the reduced economic activity that initially resulted from the COVID-19 pandemic.

Some potential losses are not covered by insurance.
Our leases with tenants, financing arrangements with borrowers and agreements with managers of our properties require the customers and managers to carry comprehensive liability, casualty, workers' compensation, extended coverage and rental loss insurance on our properties, as applicable. We believe the required coverage is of the type, and amount, customarily obtained by an owner of similar properties. We believe all of our properties are adequately insured. However, we are exposed to risks that the insurance coverage levels required under our leases with tenants, financing arrangements with borrowers and agreements with managers of our properties may be inadequate, and these risks may be increased as we expand our portfolio into experiential properties that may present more risk of loss as compared to properties in our existing portfolio.
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In addition, there are some types of losses, such as pandemics, catastrophic acts of nature, acts of war or riots, for which we, our customers or managers of our properties cannot obtain insurance at an acceptable cost or at all. If there is an uninsured loss or a loss in excess of insurance limits, we could lose both the revenues generated by the affected property and the capital we have invested in the property. We would, however, remain obligated to repay any mortgage indebtedness or other obligations related to the property. In addition, the cost of insurance protection against terrorist acts has risen dramatically over the years. There can be no assurance our customers or managers of our properties will be able to obtain terrorism insurance coverage, as applicable, or that any coverage they do obtain will adequately protect our properties against loss from terrorist attack.

Joint ventures may limit flexibility with jointly owned investments.
We may continue to acquire or develop properties in joint ventures with third parties when those transactions appear desirable. We would not own the entire interest in any property acquired by a joint venture. Our participation in joint ventures subjects us to risks, including but not limited to, the following risks that:

•we may need our partner(s)' consent for major decisions regarding a joint venture property;
•our joint venture partners may have different objectives than us regarding the appropriate timing and terms of any sale or refinancing of a property, its operation or, if applicable, the commencement of development activities;
•our joint venture partners may be structured differently than us for tax purposes and this could create conflicts of interest, including with respect to our compliance with the REIT requirements, and our REIT status could be jeopardized if any of our joint ventures do not operate in compliance with REIT requirements;
•our joint venture partners may have competing interests in our markets that could create conflicts of interest;
•our joint venture partners may default on their obligations, which could necessitate that we fulfill their obligations ourselves;
•our joint ventures may be unable to repay any amounts that we may loan to them;
•our joint venture agreements may contain provisions limiting the liquidity of our interest for sale or sale of the entire asset;
•as the general partner or managing member of a joint venture, we could be generally liable under applicable law for the debts and obligations of the venture, and we may not be entitled to contribution or indemnification from our partners; and
•our joint venture agreements may contain provisions that allow our partners to remove us as the general partner or managing member for cause, and this could result in liability for us to our partners under the governing agreement of the joint venture.

If we have a dispute with a joint venture partner, we may feel it necessary or become obligated to acquire the partner's interest in the venture. However, we cannot ensure that the price we would have to pay or the timing of the acquisition would be favorable to us. If we are invested in a joint venture in which control over significant decisions is shared, the assets and financial results of the joint venture may not be reportable by us on a consolidated basis. To the extent we have commitments to, or on behalf of, or are dependent on, any such "off-balance sheet" arrangements, or if those arrangements or their properties or leases are subject to material contingencies, our liquidity, financial condition and operating results could be adversely affected by those commitments or off-balance sheet arrangements.

Our multi-tenant properties expose us to additional risks.
Our entertainment districts in Colorado, New York, California, and Ontario, Canada, and similar properties we may seek to acquire or develop in the future, involve risks not typically encountered in the purchase and lease-back of real estate properties that are operated by a single tenant. The ownership or development of multi-tenant retail centers could expose us to the risk that a sufficient number of suitable tenants may not be found to enable the centers to operate profitably and provide a return to us. This risk may be compounded by the failure of existing tenants to satisfy their obligations due to various factors, including economic downturns or inflation. These risks, in turn, could cause a material adverse impact to our results of operations and business.
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Retail centers are also subject to tenant turnover and fluctuations in occupancy rates, which could affect our operating results. Multi-tenant retail centers also expose us to the risk of potential common area maintenance expense slippage which may occur when the actual cost of taxes, insurance and maintenance at the property exceeds the common area maintenance fees paid by tenants.

We may from time to time be subject to litigation that could negatively impact our financial condition, cash flows, results of operations and the trading price of our shares.
We may from time to time be a defendant in lawsuits and regulatory proceedings relating to our business or properties. Such litigation and proceedings may result in defense costs, settlements, fines, or judgments against us, some of which may not be covered by insurance. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. An unfavorable outcome may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if exceeding insurance coverage, could adversely impact our financial condition, cash flows, results of operations and the trading price of our shares. Additionally, certain proceedings or the resolution of certain proceedings may affect the availability or cost of some of our insurance coverage, exposing us to increased risks for which we may be uninsured.

Failure to comply with the Americans with Disabilities Act and other laws could result in substantial costs.
Most of our properties must comply with the ADA. The ADA requires that public accommodations reasonably accommodate individuals with disabilities and that new construction or alterations be made to commercial facilities to conform to accessibility guidelines. Failure to comply with the ADA can result in injunctions, fines, damage awards to private parties and additional capital expenditures to remedy noncompliance. Our leases with tenants, financing arrangement with borrowers and agreements with managers of our properties require them to comply with the ADA.

Our properties are also subject to various other federal, state and local regulatory requirements. We do not know whether existing requirements will change or whether compliance with future requirements will involve significant unanticipated expenditures. Although these expenditures would be the responsibility of our customers in most cases, if these customers fail to perform these obligations, we may be required to do so.

Potential liability for environmental contamination could result in substantial costs.
Under federal, state and local environmental laws, we may be required to investigate and clean up any release of hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or actual responsibility, simply because of our current or past ownership of the real estate. If unidentified environmental problems arise, we may have to make substantial payments, which could adversely affect our cash flow and our ability to service our debt and pay dividends to our shareholders. This is because:

•as owner, we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination;
•the law may impose clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination;
•even if more than one person is responsible for the contamination, each person who shares legal liability under environmental laws may be held responsible for all of the clean-up costs; and
•governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs.

These costs could be substantial and in extreme cases could exceed the value of the contaminated property. The presence of hazardous substances or petroleum products or the failure to properly remediate contamination may adversely affect our ability to borrow against, sell or lease an affected property. In addition, some environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination. Most of our loan agreements require the Company or a subsidiary to indemnify the lender against environmental liabilities. Our leases with tenants and agreements with managers of our properties require them to operate the properties in compliance with environmental laws and to indemnify us against environmental liability arising from the operation of the properties.
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We believe all of our properties are in material compliance with environmental laws. However, we could be subject to strict liability under environmental laws because we own the properties. There is also a risk that tenants and borrowers may not satisfy their environmental compliance and indemnification obligations under the leases or other agreements. Any of these events could substantially increase our cost of operations, require us to fund environmental indemnities in favor of our lenders, limit the amount we could borrow under our unsecured revolving credit facility and reduce our ability to service our debt and pay dividends to shareholders.

We are exposed to the potential impacts of future climate change and climate-change related risks.
We are exposed to potential physical risks from possible future changes in climate. We have significant investments in coastal markets, many of which are being targeted for future growth. Those coastal markets have historically experienced severe weather events, such as severe storms and prolonged drought, as well as other natural catastrophes such as wildfires and floods. If the frequency of extreme weather and other natural events increases due to climate change, our exposure to these events could increase. We may also be adversely impacted as a real estate owner, operator and developer in the future by stricter energy and water efficiency standards, water access for our properties or greenhouse gas regulations. Climate change may also have indirect negative effects on our business by increasing the cost of, or decreasing the availability of, property insurance on terms we find acceptable and increasing the cost of energy and building materials.

Compliance with new laws or regulations and investor expectations relating to climate change and climate change disclosure, including compliance with securities law disclosure requirements, voluntary compliance with independent rating systems and “green” building codes, may require us or our customers to make improvements to our existing properties or result in increased operating costs, thereby impacting the financial condition of our customers and their ability to meet their lease or debt obligations. We cannot give any assurance that other such conditions do not exist or may not arise in the future. The potential impacts of future climate change on our real estate properties could adversely affect our ability to lease, develop or sell such properties. If we are unable to comply with laws and regulations on climate change or implement effective sustainability strategies, our reputation among our customers and investors may be damaged and we may incur fines and/or penalties.

Real estate investments are relatively illiquid.
We may desire to sell properties in the future because of changes in market conditions, poor tenant performance or default of any mortgage we hold, or to avail ourselves of other opportunities. We may also be required to sell a property in the future to meet debt obligations or avoid a default. Specialty real estate projects such as our investments cannot always be sold quickly, and we cannot assure you that we could always obtain a favorable price. In addition, the Internal Revenue Code limits our ability to sell our properties. We may be required to invest in the restoration or modification of a property before we can sell it. The inability to respond promptly to changes in the performance of our property portfolio could adversely affect our financial condition and ability to service our debt, pay dividends to our shareholders and effect share repurchases.

There are risks in owning assets outside the United States.
Our properties in Canada, investments in China and future investments in other international markets we may enter are subject to the risks normally associated with international operations. The value of our current international portfolio and any other properties we purchase in non-U.S. jurisdictions may be affected by factors specific to the laws and business practices of such jurisdictions. The laws and business practices of foreign jurisdictions may expose us to risks that are different from and in addition to those commonly found in the United States, including, but not limited to, the following: (i) the burden of complying with non-U.S. laws including land use and zoning laws or more stringent environmental laws; (ii) existing or new laws relating to the foreign ownership of real property and laws restricting our ability to repatriate earnings and cash into the United States; (iii) the potential for expropriation; (iv) adverse effects of changes in the exchange rate between U.S. dollars and foreign currencies in which revenue is generated at our properties outside the United States; (v) imposition of adverse or confiscatory taxes, changes in real estate and other tax rates or laws and changes in other operating expenses in such foreign jurisdictions; (vi) possible challenges to the anticipated tax treatment of our revenue and our properties; (vii) the potential difficulty of enforcing rights and obligations in other countries; and (viii) our more limited experience and expertise in foreign countries relative to our experience and expertise in the United States. Non-U.S. real estate and tax laws are complex and subject to change, and we cannot assure you we will always be in compliance with those laws or that compliance will not expose us to additional expense.
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We may also be subject to fluctuations in real estate values or markets or the economy as a whole of non-U.S. jurisdictions we enter, which may adversely affect our international investments.

There are risks in owning or financing properties for which the tenant's, borrower's, or our operations may be impacted by weather conditions, climate change and natural disasters.
We have acquired and financed ski properties and expect to do so in the future. The operators of these properties, our tenants or borrowers, are dependent upon the operations of the properties to pay their rents and service their loans. The ski property operator's ability to attract visitors is influenced by weather conditions and climate change in general, each of which may impact the amount of snowfall during the ski season. Adverse weather conditions may discourage visitors from participating in outdoor activities. In addition, unseasonably warm weather may result in inadequate natural snowfall, which increases the cost of snowmaking, and could render snowmaking wholly or partially ineffective in maintaining quality skiing conditions and attracting visitors. Excessive natural snowfall may materially increase the costs incurred for grooming trails and may also make it difficult for visitors to obtain access to ski properties. We also own and finance attractions that would also be subject to risks relating to weather conditions such as in the case of waterparks and amusement parks, including excessive rainfall or unseasonable temperatures. Prolonged periods of adverse weather conditions, or the occurrence of such conditions during peak visitation periods, could have a material adverse effect on the operator's financial results and could impair the ability of the operator to make rental or other payments or service our loans.

A severe natural disaster, such as a forest fire and floods, may interrupt the operations of an operator, damage our properties, reduce the number of guests who visit the properties in affected areas or negatively impact an operator's revenue and profitability. Damage to our properties could take a long time to repair and there is no guarantee that we would have adequate insurance to cover the costs of repair and recoup lost profits. Furthermore, such a disaster may interrupt or impede access to our affected properties or require evacuations and may cause visits to our affected properties to decrease for an indefinite period. The ability of our operators to attract visitors to our experiential lodging properties is also influenced by the aesthetics and natural beauty of the outdoor environment where these resorts are located. A severe forest fire, flood or other severe impacts from naturally occurring events could negatively impact the natural beauty of our resort properties and have a long-term negative impact on an operator's overall guest visitation as it could take several years for the environment to recover.

We face risks associated with the development, redevelopment and expansion of properties and the acquisition of other real estate related companies.
We may develop, redevelop or expand new or existing properties or acquire other real estate related companies, and these activities are subject to various risks. We may not be successful in pursuing such development or acquisition opportunities. In addition, newly developed or redeveloped/expanded properties or newly acquired companies may not perform as well as expected. We are subject to other risks in connection with any such development or acquisition activities, including the following:

•we may not succeed in completing developments or consummating desired acquisitions on time;
•we may face competition in pursuing development or acquisition opportunities, which could increase our costs;
•we may encounter difficulties and incur substantial expenses in integrating acquired properties into our operations and systems and, in any event, the integration may require a substantial amount of time on the part of both our management and employees and therefore divert their attention from other aspects of our business;
•we may undertake developments or acquisitions in new markets or industries where we do not have the same level of market knowledge, which may expose us to unanticipated risks in those markets and industries to which we are unable to effectively respond, such as an inability to attract qualified personnel with knowledge of such markets and industries;
•we may incur construction costs in connection with developments, which may be higher than projected, potentially making the project unfeasible or unprofitable;
•we may incur unanticipated capital expenditures in order to maintain or improve acquired properties;
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•we may be unable to obtain zoning, occupancy or other governmental approvals;
•we may experience delays in receiving rental payments for developments that are not completed on time;
•our developments or acquisitions may not be profitable;
•we may need the consent of third parties such as anchor tenants, mortgage lenders and joint venture partners, and those consents may be withheld;
•we may incur adverse tax consequences if we fail to qualify as a REIT for U.S. federal income tax purposes following an acquisition;
•we may be subject to risks associated with providing mortgage financing to third parties in connection with transactions, including any default under such mortgage financing;
•we may face litigation or other claims in connection with, or as a result of, acquisitions, including claims from terminated employees, tenants, former stockholders or other third parties;
•the market price of our common shares, preferred shares and debt securities may decline, particularly if we do not achieve the perceived benefits of any acquisition as rapidly or to the extent anticipated by securities or industry analysts or if the effect of an acquisition on our financial condition, results of operations and cash flows is not consistent with the expectations of these analysts;
•we may issue shares in connection with acquisitions resulting in dilution to our existing shareholders; and
•we may assume debt or other liabilities in connection with acquisitions.

In addition, there is no assurance that planned third-party financing related to development and acquisition opportunities will be provided on a timely basis or at all, thus increasing the risk that such opportunities are delayed or fail to be completed as originally contemplated. We may also abandon development or acquisition opportunities that we have begun pursuing and consequently fail to recover expenses already incurred and have devoted management time to a matter not consummated. In some cases, we may agree to lease or other financing terms for a development project in advance of completing and funding the project, in which case we are exposed to the risk of an increase in our cost of capital during the interim period leading up to the funding, which can reduce, eliminate or result in a negative spread between our cost of capital and the payments we expect to receive from the project. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or companies, some of which we may not be aware at the time of acquisition. In addition, development of our existing properties presents similar risks. If a development or acquisition is unsuccessful, either because it is not meeting our expectations or was not completed according to our plans, we could lose our investment in the development or acquisition.

Risks That May Affect the Market Price of Our Shares

We cannot assure you we will continue paying cash dividends at current rates.
Our dividend policy is determined by our Board of Trustees. Our ability to pay dividends on our common shares or to pay dividends on our preferred shares at their stated rates depends on a number of factors, including our liquidity, our financial condition and results of future operations, the performance of lease and mortgage terms by our tenants and customers, our ability to acquire, finance and lease additional properties at attractive rates, and provisions in our loan covenants. In response to the financial impact of the reduced economic activity that initially resulted from the COVID-19 pandemic, we temporarily suspended our monthly cash dividends to common shareholders in 2020. Although we reinstituted this dividend in 2021, there can be no assurances that we will maintain or increase any future common share dividend rate, and the market price of our common shares and possibly our preferred shares could be adversely affected if we fail to maintain or increase such rate. Furthermore, if the Board of Trustees decides to pay dividends on our common shares partially or substantially all in common shares, that could have an adverse effect on the market price of our common shares and possibly our preferred shares.

Market interest rates may have an effect on the value of our shares.
One of the factors that investors may consider in deciding whether to buy or sell our common shares or preferred shares is our dividend rate as a percentage of our share price, relative to market interest rates. If market interest rates increase, prospective investors may desire a higher dividend rate on our common shares or seek securities paying higher dividends or interest. Higher interest rates would also likely increase our future borrowing costs and potentially decrease funds available for distribution, which could have an adverse effect on the market price of our common shares and possibly our preferred shares.
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Inflation may have an effect on the value of our shares.
One of the factors that investors may consider is deciding whether to buy or sell our common shares or preferred shares is our ability to increase rent or interest income on existing leases and loans in the event of significant inflation. Our long-term leases and loans typically contain provisions such as rent or interest escalators and percentage rent or percentage interest designed to mitigate the adverse impact of inflation. However, in periods of significant inflation, the impact of these provisions may be limited due to fixed escalators, rent or interest caps and percentage rent or interest breakpoints, potentially resulting in below-market lease rates or loan terms. Accordingly, if inflation increases significantly, prospective investors may desire to invest in a company that can increase revenue without such contractual limitations, which could impact the market value of our shares.

Broad market fluctuations could negatively impact the market price of our shares.
The stock market has experienced extreme price and volume fluctuations in recent years as a result of the COVID-19 pandemic and generally challenging and uncertain economic conditions. Such volatility has affected the market price of the common equity of many companies, including companies in industries similar or related to ours. These broad market fluctuations could reduce the market price of our shares. Furthermore, our operating results and prospects may be below the expectations of public market analysts and investors or may be lower than those of companies with comparable market capitalization. Either of these factors could lead to a material decline in the market price of our shares.

Market prices for our shares may be affected by perceptions about the financial health or share value of our tenants, borrowers and managers or the performance of REIT stocks generally.
To the extent any of our customers or their competitors report losses, slower earnings growth, take charges against earnings or enter bankruptcy proceedings, the market price for our shares could be adversely affected. Specifically, the reduced economic activity resulting from the COVID-19 pandemic severely impacted our customers' businesses, financial condition and liquidity and also resulted in one of our largest tenants declaring bankruptcy, which adversely affected the market price for our shares. The market price for our shares could also be affected by any weakness in the performance of REIT stocks generally or weakness in any of the sectors in which our customers operate, any of which may be adversely affected by generally challenging and uncertain economic conditions.

Limits on changes in control may discourage takeover attempts, which may be beneficial to our shareholders.
There are a number of provisions in our Declaration of Trust and Bylaws and under Maryland law and agreements we have with others, any of which could make it more difficult for a party to make a tender offer for our shares or complete a takeover of the Company that is not approved by our Board of Trustees. These include:

•a limit on beneficial ownership of our shares, which acts as a defense against a hostile takeover or acquisition of a significant or controlling interest, in addition to preserving our REIT status;
•the ability of the Board of Trustees to issue preferred or common shares, to reclassify preferred or common shares, and to increase the amount of our authorized preferred or common shares, without shareholder approval;
•limits on the ability of shareholders to remove trustees without cause;
•requirements for advance notice of shareholder proposals at shareholder meetings;
•provisions of Maryland law restricting business combinations and control share acquisitions not approved by the Board of Trustees and unsolicited takeovers;
•provisions of Maryland law protecting corporations (and by extension REITs) against unsolicited takeovers by limiting the duties of the trustees in unsolicited takeover situations;
•provisions in Maryland law providing that the trustees are not subject to any higher duty or greater scrutiny than that applied to any other director under Maryland law in transactions relating to the acquisition or potential acquisition of control;
•provisions of Maryland law creating a statutory presumption that an act of the trustees satisfies the applicable standards of conduct for trustees under Maryland law;
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•provisions in loan or joint venture agreements putting the Company in default upon a change in control; and
•provisions of our compensation arrangements with our employees calling for severance compensation and vesting of equity compensation upon termination of employment upon a change in control or certain events of the employees' termination of service.

Any or all of these provisions could delay or prevent a change in control of the Company, even if the change was in our shareholders' interest or offered a greater return to our shareholders.

We may change our policies without obtaining the approval of our shareholders.
Our operating and financial policies, including our policies with respect to acquiring or financing real estate or other companies, growth, operations, indebtedness, capitalization and dividends, are exclusively determined by our Board of Trustees. Accordingly, our shareholders do not control these policies.

Dilution could affect the value of our shares.
Our future growth will depend in part on our ability to raise additional capital. If we raise additional capital through the issuance of equity securities, the interests of holders of our common shares could be diluted. Likewise, our Board of Trustees is authorized to cause us to issue preferred shares in one or more series, the holders of which would be entitled to dividends and voting and other rights as our Board of Trustees determines, and which could be senior to or convertible into our common shares. Accordingly, an issuance by us of preferred shares could be dilutive to or otherwise adversely affect the interests of holders of our common shares. As of December 31, 2023, our Series C preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4252 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $58.80 per common share (subject to adjustment in certain events). Additionally, as of December 31, 2023, our Series E preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4826 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $51.80 per common share (subject to adjustment in certain events). Under certain circumstances in connection with a change in control of the Company, holders of our Series G preferred shares may elect to convert some or all of their Series G preferred shares into a number of our common shares per Series G preferred share equal to the lesser of (a) the $25.00 per share liquidation preference, plus accrued and unpaid dividends divided by the market value of our common shares or (b) 0.7389 shares. Depending upon the number of Series C, Series E and Series G preferred shares being converted at one time, a conversion of Series C, Series E and Series G preferred shares could be dilutive to or otherwise adversely affect the interests of holders of our common shares. In addition, we may issue a significant amount of equity securities in connection with acquisitions or investments, with or without seeking shareholder approval, which could result in significant dilution to our existing shareholders.

Future offerings of debt or equity securities, which may rank senior to our common shares, may adversely affect the market price of our common shares.
If we decide to issue debt securities in the future, which would rank senior to our common shares, it is likely that they will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any equity securities or convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common shares and may result in dilution to owners of our common shares. We and, indirectly, our shareholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our common shares will bear the risk of our future offerings reducing the market price of our common shares and diluting the value of their shareholdings in us.

Changes in foreign currency exchange rates may have an impact on the value of our shares.
The functional currency for our Canadian operations is CAD. As a result, our future operating results could be affected by fluctuations in the USD-CAD exchange rate, which in turn could affect our share price. We have attempted to mitigate our exposure to Canadian currency exchange risk by entering into foreign currency exchange contracts to hedge in part our exposure to exchange rate fluctuations.
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Foreign currency derivatives are subject to future risk of loss. We do not engage in purchasing foreign exchange contracts for speculative purposes.
Additionally, we may enter other international markets that pose similar currency fluctuation risks as described above.

We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our shares.
At any time, the U.S. federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be changed, possibly with retroactive effect. We cannot predict if or when any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective or whether any such law, regulation or interpretation may take effect retroactively. We and our shareholders could be adversely affected by any such change in, or any new, U.S. federal income tax law, regulation or administrative interpretation. Furthermore, any proposals seeking broader reform of U.S. federal income tax laws, if enacted, could change the federal income tax laws applicable to REITs, subject us to federal tax or reduce or eliminate the current deduction for dividends paid to our shareholders, any of which could negatively affect the market for our shares.

Item 1B. Unresolved Staff Comments

There are no unresolved comments from the staff of the SEC required to be disclosed herein as of the date of this Annual Report on Form 10-K.

Item 1C. Cybersecurity
The Company's Board of Trustees recognizes the critical importance of maintaining the trust and confidence of the Company's customers, business partners, employees and other stakeholders. The Board, in coordination with the Audit Committee, is actively involved in the oversight of the Company's risk management program, and cybersecurity represents an important component of the Company's overall approach to enterprise risk management ("ERM"). The Company's cyber risk management program is fully integrated into the Company's broader ERM program and includes cybersecurity policies, standards, processes and practices that are based on recognized frameworks and other applicable industry standards. In general, the Company seeks to address cybersecurity risks through a comprehensive, company-wide cyber risk program that is focused on preserving the confidentiality, security and availability of the information that the Company collects and stores by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

The Company's cyber risk management program is led by the Company's Vice President of Information Systems, whose team is responsible for leading company-wide cybersecurity strategy, policy, and processes while reporting directly to the Company's Chief Financial Officer. While the Board has ultimate oversight for the risk management process, the Audit Committee is responsible for overseeing the Company's policies and procedures for assessing and managing its exposure to risk, including cybersecurity risks. The Company's Vice President of Information Systems provides regular reports to the Audit Committee on any cyber risks and threats to the Company, assessments of the Company's security program and projects in progress to enhance the Company's security systems. The Company's Board of Trustees also receives periodic updates relating to the Company's cybersecurity programs and emerging cybersecurity threats as part of its general oversight duties. Pursuant to the Company's response plan, the Board and the Audit Committee will receive prompt and timely information regarding any material cybersecurity incidents.

The Company has a documented response plan to follow in the event a cybersecurity incident occurs. The plan details how to determine the scope and risk of an incident, incident response, communication of incident results and risks to all stakeholders and how to reduce the likelihood of an incident occurring or reoccurring. On an annual basis, the Company conducts a test of the cyber response plan in order to test its pre-planned actions, facilitate discussions regarding the plan’s effectiveness and identify useful strategies and tactics learned from the test. Additionally, the Company’s security program is supported by external third-party experts, including outside cybersecurity professionals at a security operations center and expert legal counsel specializing in information technology and cybersecurity.
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The Company's cyber risk management program includes processes for identifying and overseeing both internal cybersecurity risks and those presented by third parties, including vendors, service providers and other external users of the Company's systems, as well as the systems of third parties that could adversely impact the Company's business in the event of a cybersecurity incident affecting those third party systems.

In addition, the Company conducts frequent security awareness trainings for all employees, utilizes malware, antivirus, and spyware protections and has other protections in place for its network and users. The Company maintains robust end user and administrative user policies governing the use of Company technology. The Company also maintains cyber liability insurance coverage and performs regular vulnerability and penetration assessments.

The Company's Vice President of Information Systems has been with the Company for over 18 years and has overseen the Company's information systems, including its cyber risk management program, for the last five years. He is a member of the Global Information Assurance Certification Advisory ("GIAC") Board and has received various GIAC certifications in the areas of information security governance and technical controls focused on protecting, detecting and responding to cybersecurity issues. The Company's Chief Financial Officer has over 25 years of experience managing risks at the Company and at similar companies, including risks arising from cybersecurity threats.

As of the date of this report, the Company is not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including the Company's business strategy, results of operations or financial condition.

Item 2. Properties

As of December 31, 2023, our real estate portfolio consisted of investments in our Experiential and Education reportable segments. Except as otherwise noted, all of the real estate investments listed below are owned or ground leased directly by us.

The following table sets forth our owned properties (excludes properties under development, land held for development, properties owned by unconsolidated real estate joint ventures and properties securing our mortgage notes) listed by segment and property type, gross square footage (except for certain ski and attraction properties where such number is not meaningful), percentage leased and total rental revenue for the year ended December 31, 2023 (dollars in thousands). At certain properties included below, we are the tenant under third-party ground leases and have assumed responsibility for performing the obligations thereunder. However, pursuant to the facility leases, the tenants are generally responsible for performing substantially all of our obligations under the ground leases.

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Number of Properties Building Gross Square Footage Percentage Leased (5) Rental Revenue for the Year
Ended December 31, 2023		 % of Company's Rental Revenue
Experiential
Theatres (1) 166  11,396,543  100.0  % $ 284,018  46.1  %
Eat & Play (2) 53  5,081,986  95.3  % 167,985  27.4  %
Attractions (3) 21  1,001,169  100.0  % 66,066  10.7  %
Ski 3  330,508  100.0  % 25,358  4.1  %
Experiential Lodging 1  276,210  100.0  % 2,743  0.4  %
Fitness & Wellness 7  631,920  100.0  % 11,522  1.9  %
Gaming (4) 1  —  —  % 12,575  2.0  %
Cultural 3  512,768  100.0  % 7,448  1.2  %
Total Experiential 255  19,231,104  98.8  % $ 577,715  93.8  %
Education
Early Childhood Education Centers 59  1,014,576  100.0  % $ 28,024  4.5  %
Private Schools 9  292,362  100.0  % 10,400  1.7  %
Total Education 68  1,306,938  100.0  % $ 38,424  6.2  %
Total 323  20,538,042  98.8  % $ 616,139  100.0  %
(1) Includes seven properties operated by EPR through third-party managers. Revenue for these properties is included in other income in the consolidated statements of income and comprehensive income.
(2) Includes seven theatres located in entertainment districts.
(3) Includes one property operated by EPR through a third-party manager. Revenue for this property is included in other income in the consolidated statements of income and comprehensive income.
(4) Represents land under ground lease to a casino operator.
(5) Excludes properties we intend to sell.

The following table sets forth lease expirations regarding EPR’s owned portfolio as of December 31, 2023 excluding properties we operate, non-theatre tenant leases at entertainment districts and experiential lodging properties operated through a traditional REIT lodging structure (dollars in thousands):
Year Number of
Properties		 Square
Footage		 Rental Revenue for the Year
Ended December 31, 2023		 % of Company's Rental
Revenue
2024 3  217,572  $ 4,450  0.7  %
2025 3  95,328  3,407  0.6  %
2026 2  39,289  2,643  0.4  %
2027 4  314,699  22,559  3.7  %
2028 9  604,771  16,592  2.7  %
2029 11  594,572  17,845  2.9  %
2030 18  1,391,775  34,850  5.7  %
2031 8  407,049  10,884  1.8  %
2032 10  483,288  12,613  2.0  %
2033 7  320,563  10,203  1.7  %
2034 36  2,313,989  73,560  11.9  %
2035 30  2,442,798  75,314  12.2  %
2036 40  2,698,769  77,242  12.5  %
2037 29  1,631,637  61,311  10.0  %
2038 42  2,267,041  62,902  10.1  %
2039 3  145,083  5,411  0.9  %
2040 4  209,680  9,665  1.6  %
2041 30  805,130  18,608  3.0  %
2042 4  466,958  17,747  2.9  %
2043 7  123,497  18,602  3.0  %
Thereafter 2  50,073  1,822  0.3  %
302  17,623,561  $ 558,230  90.6  %
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Our owned properties are located in 40 states and the Canadian provinces of Ontario and Quebec. The following table sets forth certain information by state or province regarding our owned real estate portfolio as of December 31, 2023 (dollars in thousands):
Location Building (gross sq. ft.) Rental Revenue for the Year Ended
December 31, 2023		 % of Rental Revenue
Texas 2,949,257  $ 84,461  13.7  %
California 1,753,099  76,359  12.4  %
Florida 1,507,299  44,397  7.2  %
Ontario, Canada 1,204,639  33,917  5.5  %
Pennsylvania 1,013,568  32,149  5.2  %
Illinois 886,172  25,881  4.2  %
Ohio 814,269  16,460  2.7  %
Louisiana 809,615  17,430  2.7  %
Tennessee 711,643  18,487  3.0  %
New York 682,200  37,458  6.0  %
Colorado 660,411  19,712  3.2  %
North Carolina 631,137  24,390  4.0  %
Virginia 618,659  16,487  2.7  %
Missouri 566,890  6,830  1.1  %
Michigan 521,631  8,612  1.4  %
Georgia 516,315  14,922  2.4  %
Kansas 511,234  12,856  2.1  %
Arizona 465,755  14,121  2.3  %
Quebec, Canada 399,437  9,398  1.5  %
Indiana 392,998  8,337  1.4  %
New Jersey 392,930  7,986  1.3  %
Kentucky 365,971  8,100  1.3  %
South Carolina 349,388  11,245  1.8  %
Alabama 323,972  5,988  1.0  %
Oregon 201,532  4,698  0.8  %
Connecticut 185,074  3,830  0.6  %
Minnesota 181,764  5,652  0.9  %
Idaho 179,036  4,714  0.8  %
Maryland 177,856  4,954  0.8  %
Wisconsin 170,720  377  0.1  %
Arkansas 165,219  4,139  0.7  %
Mississippi 116,900  8,045  1.3  %
Massachusetts 111,166  1,020  0.2  %
Maine 107,000  1,083  0.2  %
New Hampshire 97,400  1,284  0.2  %
Iowa 93,755  1,402  0.2  %
Oklahoma 90,737  6,586  1.1  %
New Mexico 71,297  3,261  0.5  %
Nevada 50,426  2,368  0.4  %
Washington 47,004  3,035  0.5  %
Montana 44,650  1,092  0.2  %
Hawaii —  2,533  0.4  %
Nebraska (1) —  83  —  %
21,140,025  $ 616,139  100.0  %
(1) Property sold during the year ended December 31, 2021 and tenant continues to pay deferred rent to EPR.



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Office Location
Our executive office is located in Kansas City, Missouri and is leased from a third-party landlord. The lease has projected 2024 annual rent of approximately $958 thousand and is scheduled to expire on September 30, 2026, with two separate five-year extension options available.

Tenants and Leases
Our existing leases on real estate investments (on a consolidated basis - excluding unconsolidated joint venture properties) provide for aggregate annual minimum rental payments for 2024 of approximately $493.0 million (not including the impact of rent deferrals, ground lease payments for leases in which we are a sub-lessor, periodic rent escalations that are not fixed, percentage rent or straight-line rent). Our leases have remaining terms ranging from one year to 26 years. These leases may be extended for predetermined extension terms at the option of the tenants. Our leases are typically triple-net leases that require the tenant to pay substantially all expenses associated with the operation of the properties, including taxes, other governmental charges, insurance, utilities, service, maintenance and any ground lease payments.

Additionally, we are lessee in 51 operating ground leases as of December 31, 2023. Our tenants are generally sub-tenants under these ground leases and are responsible for paying rent under these agreements. Our sub-lessor operating ground leases provide for aggregate annual minimum rental payments for 2024 of approximately $25.8 million. Our ground leases have remaining terms ranging from one year to 43 years, most of which include one or more options to renew.

Property Acquisitions and Developments in 2023
Our property acquisitions and developments in 2023 consisted of spending on experiential properties. The percentage of total investment spending related to build-to-suit projects, including investment spending for mortgage notes on such projects, was approximately 36% in 2023. Many of our build-to-suit opportunities come to us from our existing strong relationships with property operators and developers, and we expect to continue to pursue these opportunities.

Item 3. Legal Proceedings
We are subject to certain claims and lawsuits in the ordinary course of business, the outcome of which cannot be determined at this time. In the opinion of management, any liability we might incur upon the resolution of these claims and lawsuits will not, in the aggregate, have a material adverse effect on our consolidated financial position or results of operations.

Item 4. Mine Safety Disclosures
Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common shares are listed on the New York Stock Exchange (“NYSE”) under the trading symbol “EPR.”

During the year ended December 31, 2023, the Company did not sell any unregistered equity securities.

On February 28, 2024, there were approximately 5,805 holders of record of our outstanding common shares.

Issuer Purchases of Equity Securities 
During the quarter ended December 31, 2023, the Company did not repurchase any of its equity securities.

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Dividends
We expect to continue paying dividends to our common and preferred shareholders in future periods. Our Series C preferred shares have a dividend rate of 5.75%, our Series E preferred shares have a dividend rate of 9.00% and our Series G preferred shares have a dividend rate of 5.75%. Among the factors the Company’s Board of Trustees considers in setting the common share dividend rate are the applicable REIT tax rules and regulations that apply to dividends, the Company’s results of operations, including FFO and FFOAA per share, and the Company’s Cash Available for Distribution (defined as net cash flow available for distribution after payment of operating expenses, debt service, preferred dividends and other obligations).

Share Performance Graph
The following graph compares the cumulative return on our common shares during the five-year period ended December 31, 2023, to the cumulative return on the MSCI U.S. REIT Index and the Russell 1000 Index for the same period. The comparisons assume an initial investment of $100 and the reinvestment of all dividends during the comparison period. Performance during the comparison period is not necessarily indicative of future performance.

2023 Performance Graph.jpg
Total Return Analysis            
  12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023
EPR Properties $ 100.00  $ 117.13  $ 56.12  $ 84.51  $ 72.16  $ 100.18 
MSCI U.S. REIT Index $ 100.00  $ 125.84  $ 116.31  $ 166.39  $ 125.61  $ 142.87 
Russell 1000 Index $ 100.00  $ 131.43  $ 158.98  $ 201.03  $ 162.58  $ 205.72 
Source: S&P Global Market Intelligence
The performance graph and related text are being furnished to and not filed with the SEC, and will not be deemed "soliciting material" or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate such information by reference into such a filing.
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Item 6. [Reserved]

Item 7. 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 2023 compared to fiscal year 2022 is presented below. A discussion regarding our financial condition and results of operations for fiscal year 2022 compared to fiscal year 2021 is incorporated herein by reference and can be found under Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 23, 2023.

Overview

Business
Our principal business objective is to enhance shareholder value by achieving predictable and increasing Funds From Operations As Adjusted ("FFOAA") and dividends per share. Our strategy is to focus on long-term investments in the Experiential sector that benefit from our depth of knowledge and relationships, and which we believe offer sustained performance throughout 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 also own certain experiential lodging assets structured using traditional REIT lodging structures as discussed in Item 1 - "Business."

It has been our strategy to structure leases and financings to ensure a positive spread between our cost of capital and the rentals or interest paid by our tenants. We have primarily acquired or developed new properties that are pre-leased to a single tenant or multi-tenant properties with a high occupancy rate. We have also entered into certain joint ventures and provided mortgage note financing. We intend to continue entering into some or all of these types of arrangements in the foreseeable future.

Historically, our primary challenges had been locating suitable properties, negotiating favorable lease or financing terms (on new or existing properties) and managing our portfolio as we continued to grow. We believe our management’s knowledge and industry relationships have facilitated opportunities for us to acquire, finance and lease properties. More recently, and as further discussed below, the challenging economic environment and a theatre tenant's bankruptcy have increased our cost of capital, which has negatively impacted our ability to make investments in the near-term. Our business is subject to a number of risks and uncertainties, including those described in Item 1A - “Risk Factors” of this report.

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As of December 31, 2023, our total assets were approximately $5.7 billion (after accumulated depreciation of approximately $1.4 billion) with properties located in 44 states and the provinces of Ontario and Quebec, Canada. Our total investments (a non-GAAP financial measure) were approximately $6.8 billion at December 31, 2023. 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, 2023 and 2022. We group our investments into two reportable segments, Experiential and Education. As of December 31, 2023, our Experiential investments comprised $6.3 billion, or 93%, and our Education investments comprised $0.5 billion, or 7%, of our total investments.

As of December 31, 2023, our Experiential segment consisted of the following property types (owned or financed):
•166 theatre properties;
•58 eat & play properties (including seven theatres located in entertainment districts);
•23 attraction properties;
•11 ski properties;
•seven experiential lodging properties;
•20 fitness & wellness properties;
•one gaming property; and
•three cultural properties.

As of December 31, 2023, our owned Experiential real estate portfolio consisted of approximately 19.8 million square feet, which includes 0.6 million square feet of properties we intend to sell. The Experiential portfolio, excluding the properties we intend to sell, was 99% leased and included $131.3 million in property under development and $20.2 million in undeveloped land inventory.

As of December 31, 2023, our Education segment consisted of the following property types (owned or financed):
•61 early childhood education center properties; and
•nine private school properties.

As of December 31, 2023, our owned Education real estate portfolio consisted of approximately 1.3 million square feet, which includes 39 thousand square feet of properties we intend to sell. The Education portfolio, excluding the properties we intend to sell, was 100% leased.

The combined owned portfolio consisted of 21.1 million square feet and was 99% leased excluding the 0.6 million square feet of properties we intend to sell.

Update on Continuing Impact of COVID-19 Pandemic
The COVID-19 pandemic severely impacted experiential real estate properties because such properties involve congregate social activity and discretionary spending. Our non-theatre properties have demonstrated strong recovery from the impacts of the pandemic. However, our theatre customers were more severely impacted by the COVID-19 pandemic and have seen a slower recovery than our non-theatre customers due primarily to changes in the timing of film releases, production delays and experimentation with streaming. We began recognizing revenue on a cash basis for American-Multi Cinema, Inc. ("AMC") at the end of the first quarter of 2020 and for our Regal Cinemas tenants, subsidiaries of Cineworld Group, plc, at the end of the third quarter of 2020. With the emergence of Regal Cinemas from bankruptcy (discussed below), we began recognizing revenue on an accrual basis for our Regal Cinemas tenants. Although the box office continues to recover post-pandemic, the recently resolved writers and actor's strikes have delayed the production, supply and theatrical lease of motion pictures thereby negatively affecting this recovery in the near-term. Going forward, we intend to further diversify our experiential property types and significantly reduce our exposure to theatres. We expect that to occur as we strictly limit new investments in theatres, grow other target experiential property types and pursue opportunistic dispositions of theatre property types.
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As of December 31, 2023, we collected all deferred receivables due from accrual basis tenants that were deferred due to the COVID-19 pandemic. Additionally, as of December 31, 2023, amounts due from customers that were not booked as receivables because the full amounts were not deemed probable of collection as a result of the COVID-19 pandemic totaled approximately $12.0 million. The amounts not booked as receivables remain obligations of the customers and will be recognized as revenue when any such amounts are received. See discussion below regarding changes to Regal Cinema's deferred amounts not booked as a receivable as a result of our comprehensive restructuring agreement with them, which became effective upon their emergence from bankruptcy. During the years ended December 31, 2023 and 2022, we collected $36.4 million and $17.7 million, respectively, in deferred rent and interest from cash basis customers and from customers for which the deferred payments were not previously recognized as revenue. These amounts include collections related to the Regal bankruptcy as further discussed below, including stub rent and pre-petition rent related to September of 2022 and property operating expense reimbursements. In addition, during the years ended December 31, 2023 and 2022, we collected $2.1 million and $24.2 million, respectively, of deferred rent and interest from accrual basis customers that reduced related accounts and interest receivable. The repayment terms for all of these deferments vary by customer.

Regal Update
On September 7, 2022, Cineworld Group, plc, Regal Entertainment Group and our other Regal theatre tenants (collectively, "Regal") filed for protection under Chapter 11 of the U.S. Bankruptcy Code (the "Code"). Prior to such filing date and continuing throughout the Chapter 11 bankruptcy cases, Regal leased 57 theatres from us pursuant to two master leases and 28 single property leases (the "Regal Leases"). As a result of the filing, Regal did not timely pay its rent or monthly deferral payment for September 2022, but subsequently paid portions of this amount, totaling approximately $4.0 million, pursuant to a bankruptcy court order upon emerging from bankruptcy. Regal resumed monthly rent and deferral payments for all Regal Leases commencing in October 2022 and continued making these payments through July 2023. Regal paid the remainder of the September 2022 rent as discussed below.

On June 27, 2023, we entered into a comprehensive restructuring agreement with Regal, evidenced by an Omnibus Lease Amendment Agreement (the "Omnibus Agreement"), anchored by a new master lease (the "Master Lease") for 41 of the 57 properties previously leased to Regal (the "Master Lease Properties"). On June 28, 2023, Regal’s Plan of Reorganization (the "Plan") was confirmed by the bankruptcy court. The Plan became effective on July 31, 2023 (the "Effective Date"), and Regal emerged from the Chapter 11 bankruptcy cases.

Pursuant to the Omnibus Agreement, the Master Lease and certain related agreements became effective upon the Effective Date. Material terms of the Omnibus Agreement, the Master Lease and related agreements include:

•Beginning on August 1, 2023, the total annual fixed rent for the Master Lease Properties ("Annual Base Rent") is now $65.0 million, escalating by 10% every five years. The Master Lease is a triple-net lease, and therefore, Annual Base Rent does not include taxes, insurance, utilities, common area maintenance and ground lease rent, for which Regal will be responsible for paying separately. Due to Regal's expected significantly improved credit profile, continuing box office recovery and Regal's payment history, among other factors, we began recognizing revenue related to the Master Lease on an accrual basis on the Effective Date.

•Pursuant to the Master Lease, Regal will also pay annual percentage rent ("Annual Percentage Rent") of 15% of annual gross sales exceeding $220.0 million and up to $270.0 million, and 12.5% of annual gross sales exceeding $270.0 million. These threshold amounts will increase every five years commensurate with escalations in Annual Base Rent.

•The Master Lease Properties have been divided into three tranches within the Master Lease, with the initial term of each tranche expiring annually on the 11th, 13th and 15th anniversaries from the Effective Date. Each tranche has three five-year renewal options. The average lease term for the Master Lease Properties as of the Effective Date increased by four years to 13 years.

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•We have agreed to reimburse Regal for 50% of certain revenue-enhancing premises renovations to the Master Lease Properties, up to a maximum reimbursement of $32.5 million, provided that (a) Regal is not in default of the Master Lease, (b) the maximum amount we will reimburse in any calendar year will not exceed $10.0 million, and (c) reimbursable expenses require our prior approval and must relate to a project mobilized and physically commenced during the first five years of the Master Lease term.

•On the Effective Date, Regal surrendered to the Company the remaining 16 properties not included in the Master Lease (the "Surrendered Properties"), together with all furniture, fixtures and equipment located at the Surrendered Properties. We have entered into management agreements under which Cinemark is managing four of the Surrendered Properties and Phoenix Theatres is managing one of the Surrendered Properties. We sold two of the remaining 11 Surrendered Properties during the year ended December 31, 2023. We plan to sell the remaining nine properties and deploy the proceeds to acquire non-theatre experiential properties. In conjunction with taking back the Surrendered Properties, we recorded a non-cash impairment charge on eight of these properties during the year ended December 31, 2023 of $42.4 million based on recently appraised values.

•As of July 31, 2023, Regal owed approximately $76.3 million of undiscounted deferred rent (the "Deferred Rent Balance"), of which the Deferred Rent Balance related to the Master Lease Properties was approximately $56.8 million ("Master Lease Deferred Rent Balance") and the Deferred Rent Balance related to the Surrendered Properties was approximately $19.5 million ("Surrendered Property Deferred Rent Balance"). Of the Master Lease Deferred Rent Balance, approximately $50.1 million will be held in abeyance and will be forgiven in its entirety if Regal has no uncured events of default prior to the 15th anniversary of the Effective Date, and the remaining portion of the Master Lease Deferred Rent Balance will be waived and forgiven. If Regal has an uncured event of default at any time prior to the 15th anniversary of the Effective Date, the Master Lease Deferred Rent Balance held in abeyance will become due and payable. The Surrendered Property Deferred Rent Balance was included in our claims for rejection damages in the Chapter 11 bankruptcy cases, which was treated as general unsecured claims for which no material recovery is expected. The deferred rent was not previously recognized as accounts receivable because payments from Regal were recognized on a cash-basis prior to the Effective Date of the Master Lease. The deferred rent related to the Master Lease Properties held in abeyance will not be recognized on the balance sheet because it is a contingent receivable only due in the event of a default and payment is not deemed probable.

•Regal provided us with a first lien security interest in all furniture, fixtures and equipment located at the Master Lease Properties. A parent entity of Regal provided us a guaranty of Regal’s obligations under the Master Lease.

•On or about the Effective Date, Regal paid us approximately $3.0 million representing the unpaid portion of post-petition September 2022 stub rent for all properties, and approximately $1.3 million representing the unpaid pre-petition September 2022 rent for the Master Lease Properties. Additionally, on or about the Effective Date, Regal reimbursed us $1.2 million for property operating expenses we paid on Regal's behalf.

Challenging Economic Environment
REITS are generally experiencing heightened risks and uncertainties resulting from current challenging economic conditions, including significant volatility and negative pressure in financial and capital markets, higher cost of capital, high inflation and other risks and uncertainties associated with the current economic environment. Our business has been more acutely affected by these risks and uncertainties because of Regal's bankruptcy. Although we intend to continue making future investments, we expect our levels of investment spending to be reduced in the near-term due to elevated costs of capital, and near-term investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice. As a result, we intend to continue to be more selective in making future investments and acquisitions until such time as economic conditions improve and our cost of capital improves.
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Operating Results
Our total revenue, net income available to common shareholders per diluted share and FFOAA per diluted share (a non-GAAP financial measure) are detailed below for the years ended December 31, 2023 and 2022 (dollars in millions, except per share information):
Year ended December 31,
2023 2022 Change
Total revenue $ 705.7  $ 658.0  7  %
Net income available to common shareholders per diluted share 1.97  2.03  (3) %
FFOAA per diluted share 5.18  4.69  10  %

The major factors impacting our results for the year ended December 31, 2023, as compared to the year ended December 31, 2022 were as follows:
•The increase in rental revenue due to an increase in contractual and deferred rental payments from cash basis tenants;
•The effect of property acquisitions and dispositions that occurred in 2023 and 2022;
•The decrease in other income of $9.1 million due to sale participation income received during the year ended December 31, 2022 and offsetting increases in other income and other expense related to operating properties;
•The decrease in interest expense due to an increase in capitalized interest and interest income on short-term investments; and
•The increase in general and administrative expense, impairment charges, loss on sale of real estate and loss from joint ventures offset by a decrease in transaction costs and provision (benefit) for credit losses, net.

For further detail 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 calculations 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 collectibility 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 estimates of impairment 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 will record a loss for the amount by which the carrying value of the asset exceeds its estimated fair value.
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The assumptions used to derive the estimated future cash flows for the undiscounted cash flow test are based on capitalization rates, anticipated future market rent and our anticipated hold period, which are all subjective. 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. 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 estimated undiscounted cash flows and lead to an impairment loss. The 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.

Generally, our acquisitions are considered asset acquisitions. If an acquisition is determined to be an asset acquisition, we allocate the purchase price and other related 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 estimates for market rent, capitalization rates and discount rates that are subjective and can be impacted by a lack of comparable transactions. Market rent assumptions, capitalization rates and discount rates used in the valuation of real estate can fluctuate based on economic and industry specific factors.

Collectibility of Lease Receivables
Our accounts receivable balance is comprised primarily of rents and operating cost recoveries due from tenants as well as accrued rental rate increases to be received over the life of the existing leases. We regularly evaluate the collectibility 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. We suspend revenue recognition when the collectibility of amounts due are no longer probable and record a direct write-off of the receivable to revenue.

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 or results decline, the anticipated collection of outstanding lease receivables may not be probable and could result in the suspension of revenue recognition and the write off of the lease receivable.

Collectibility 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 collectibility 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.
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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, that 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, 2023 and 2022 totaled $269.4 million and $402.5 million, respectively, and is detailed below (in thousands):
For the Year Ended December 31, 2023
Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures
Experiential:
Theatres $ 5,182  $ —  $ 5,182  $ —  $ —  $ — 
Eat & Play 24,048  20,750  2,192  —  1,106  — 
Attractions 28,384  —  3,669  —  24,715  — 
Ski 5,324  —  —  —  5,324  — 
Experiential Lodging 16,034  —  —  —  —  16,034 
Fitness & Wellness 184,370  45,632  3,286  53,144  82,308  — 
Cultural 6,086  —  6,086  —  —  — 
Total Experiential 269,428  66,382  20,415  53,144  113,453  16,034 
Education:
Total Education —  —  —  —  —  — 
Total Investment Spending $ 269,428  $ 66,382  $ 20,415  $ 53,144  $ 113,453  $ 16,034 

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For the Year Ended December 31, 2022
Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures
Experiential:
Theatres $ 622  $ 5  $ 617  $ —  $ —  $ — 
Eat & Play 24,747  23,151  1,596  —  —  — 
Attractions 145,026  —  2,261  142,765  —  — 
Ski 27,178  —  —  —  27,178  — 
Experiential Lodging 77,782  4,354  —  —  11,305  62,123 
Fitness & Wellness 127,057  44,090  6,358  19,858  56,751  — 
Cultural 107  —  107  —  —  — 
Total Experiential 402,519  71,600  10,939  162,623  95,234  62,123 
Education:
Total Education —  —  —  —  —  — 
Total Investment Spending $ 402,519  $ 71,600  $ 10,939  $ 162,623  $ 95,234  $ 62,123 

The above amounts include $3.6 million and $1.3 million in capitalized interest and $0.2 million and $0.7 million in capitalized other general and administrative direct project costs for the years ended December 31, 2023 and 2022, respectively. Excluded from the table above are $12.1 million and $4.3 million of maintenance capital expenditures and other spending for the years ended December 31, 2023 and 2022, respectively.

Dispositions
During the year ended December 31, 2023, we completed the sale of three vacant theatre properties, two operating theatre properties, one vacant eat & play property, four vacant early childhood education centers and a land parcel for net proceeds totaling $57.2 million. In connection with these sales, we recognized a combined loss on sale of $2.2 million. Additionally, during the year ended December 31, 2023, we, as lessee, terminated one ground lease that held one theatre property.

Subsequent to year-end, we completed the sale of two cultural properties for net proceeds of approximately $44.9 million and we expect to recognize a gain on sale of approximately $17.1 million during the three months ending March 31, 2024, in connection with this sale.

Impairment Charges
During the year ended December 31, 2023, we reassessed the holding period of the Regal Surrendered Properties not included in the Master Lease, four other theatre properties that are part of a workout with a smaller theatre tenant and two early childhood education center properties subject to lease terminations (one triggered by a casualty event). We determined that the estimated cash flows for eight of the Regal Surrendered Properties, two of the other theatre properties and two early childhood education center properties were not sufficient to recover the carrying values and estimated the fair value of the real estate investments of these properties using independent appraisals. Accordingly, we recognized impairment charges totaling $67.4 million for the year ended December 31, 2023.

Theatre Tenant Update
On July 17, 2023, Santikos Theaters, LLC acquired VSS-Southern Theatres ("Southern") through an asset purchase agreement. We have investments in ten theatre properties that were previously operated by Southern and located in six states. We continue to hold these investments and there are no structural changes to existing lease terms. In conjunction with the transaction, Southern paid its deferred rent receivable of $11.6 million in full, which was recognized as rental revenue during the year ended December 31, 2023.

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Results of Operations

Year ended December 31, 2023 compared to year ended December 31, 2022

Analysis of Revenue

The following table summarizes our total revenue (dollars in thousands):
Year Ended December 31, Change
2023 2022
Minimum rent (1) $ 570,549  $ 536,957  $ 33,592 
Percentage rent (2) 12,192  10,457  1,735 
Straight-line rent (3) 10,591  6,993  3,598 
Tenant reimbursements 21,285  19,849  1,436 
Other rental revenue 1,522  1,345  177 
Total Rental Revenue $ 616,139  $ 575,601  $ 40,538 
Other income (4) 45,947  47,382  (1,435)
Mortgage and other financing income (5) 43,582  35,048  8,534 
Total revenue $ 705,668  $ 658,031  $ 47,637 

(1) For the year ended December 31, 2023 compared to the year ended December 31, 2022, the increase in minimum rent resulted primarily from an increase of $18.6 million related to rental revenue on existing properties including improved collections of rent being recognized on a cash basis. In addition, there was an increase in minimum rent of $3.4 million related to lease termination fees recognized during the year ended December 31, 2023 and $12.1 million related to property acquisitions and developments completed in 2023 and 2022. This increase was partially offset by a decrease in rental revenue of $0.5 million from property dispositions.

During the year ended December 31, 2023, we renewed one lease agreement on approximately 62 thousand square feet, experienced a decrease of approximately 11.5% in rental rates and paid no leasing commissions with respect to this lease renewal.

(2) The increase in percentage rent (amounts above base rent) for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due primarily to higher percentage rent recognized from one ski property tenant, one cultural property tenant and one attraction property tenant. This increase was partially offset by lower percentage rent recognized from our gaming and golf entertainment tenants and one early childhood education center tenant having higher base rents in 2023 pursuant to a restructured lease.

(3) The increase in straight-line rent for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due primarily to recording straight-line rent receivables for Regal in connection with reestablishing accrual basis accounting on August 1, 2023. The increase related to Regal consisted of $2.1 million related to a ground lease where Regal is our subtenant and $2.3 million related to straight-line rent on the Master Lease that commenced on August 1, 2023. Partially offsetting this increase was a write-off of straight-line rent due from an early childhood education center tenant of $0.5 million.

(4) The decrease in other income for the year ended December 31, 2023 compared to the year ended December 31, 2022 related primarily to sale participation income of $9.1 million recognized during the year ended December 31, 2022. Partially offsetting this decrease was an increase in income from two theatre properties and the Kartrite Resort over the prior year and the addition of five new operating theatre properties, previously leased by Regal, during the year ended December 31, 2023.

(5) The increase in mortgage and other financing income during the year ended December 31, 2023 compared to the year ended December 31, 2022 related to income from additional investments on an existing mortgage note receivable and interest on new mortgage notes funded in 2023 and 2022. In addition, during the year ended December 2022, $1.5 million of accrued interest and fees receivable was written off against interest income related to one mortgage note receivable and two notes receivable.
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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
2023 2022
Property operating expense $ 57,478  $ 55,985  $ 1,493 
Other expense (1) 44,774  33,809  10,965 
General and administrative expense (2) 56,442  51,579  4,863 
Severance expense 547  —  547 
Transaction costs (3) 1,554  4,533  (2,979)
Provision (benefit) for credit losses, net (4) 878  10,816  (9,938)
Impairment charges (5) 67,366  27,349  40,017 
Depreciation and amortization (6) 168,033  163,652  4,381 
(Loss) gain on sale of real estate (7) (2,197) 651  (2,848)
Interest expense, net (8) 124,858  131,175  (6,317)
Equity in loss from joint ventures (9) 6,768  1,672  5,096 
Impairment charges on joint ventures —  647  (647)
Income tax expense 1,727  1,236  491 
Preferred dividend requirements 24,145  24,141  4 

(1) The increase in other expense for the year ended December 31, 2023 related primarily to an increase in operating expense from two theatre properties and the Kartrite resort compared to the year ended December 31, 2022 and the addition of five new operating theatre properties.

(2) The increase in general and administrative expense for the year ended December 31, 2023 compared to the year ended December 31, 2022 related primarily to an increase in payroll and benefit costs and an increase in professional fees, including those related to the comprehensive restructuring agreement with Regal.
(3) The decrease in transaction costs during the year ended December 31, 2023 compared to the year ended December 31, 2022 was due to a decrease in costs related to equity method investments and fewer terminated transactions.
(4) The change in provision (benefit) for credit losses, net for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due primarily to credit loss expense of $6.8 million related to one mortgage note receivable and $3.1 million related to two notes receivable recorded during the year ended December 31, 2022.

(5) Impairment charges recognized during the year ended December 31, 2023 related to eight Regal Surrendered Properties, two other theatre properties and two early childhood education center properties. Impairment charges recognized during the year ended December 31, 2022 related to five early education center properties and two theatre properties.

(6) The increase in depreciation and amortization expense for the year ended December 31, 2023 compared to the year ended December 31, 2022 resulted from acquisitions and developments completed in 2023 and 2022 and accelerated amortization of in-place leases related to Regal leases that were terminated. This was partially offset by property dispositions that occurred during 2023 and 2022.

(7) The loss on sale of real estate for the year ended December 31, 2023 related to the sale of three vacant theatres properties, two operating theatre properties, one vacant eat & play property, four vacant early childhood education centers and one land parcel. The gain on sale of real estate for the year ended December 31, 2022 related to the sale of three vacant theatre properties and one land parcel.
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(8) The decrease in interest expense, net, for the year ended December 31, 2023 compared to the year ended December 31, 2022 resulted primarily from an increase in interest income recognized on short-term investments and an increase in capitalized interest.
(9) The increase in equity in loss from joint ventures for the year ended December 31, 2023 compared to the year ended December 31, 2022 related primarily to government incentives received at our experiential lodging properties located in St. Petersburg, Florida during the year ended December 31, 2022. In addition, our joint ventures generally incurred higher depreciation expense and higher interest expense during the year ended December 31, 2023.

Liquidity and Capital Resources

Cash and cash equivalents were $78.1 million at December 31, 2023. In addition, we had restricted cash of $2.9 million at December 31, 2023, which related primarily to escrow deposits required for property management and debt agreements or held for potential acquisitions and redevelopments.

Mortgage Debt, Senior Notes, Unsecured Revolving Credit Facility and Unsecured Term Loan Facility
As of December 31, 2023, we had total debt outstanding of $2.8 billion of which 99% was unsecured.

At December 31, 2023, we had outstanding $2.5 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.

At December 31, 2023, we had no outstanding balance under our $1.0 billion unsecured revolving credit facility. Our unsecured revolving credit facility is governed by the terms of a Third Amended, Restated and Consolidated Credit Agreement, dated as of October 6, 2021 (the "Third Consolidated Credit Agreement"). The facility will mature on October 6, 2025. We have two options to extend the maturity date of the 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 facility provides for an initial maximum principal amount of borrowing availability of $1.0 billion with 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 1.30% (based on our unsecured debt ratings and with a SOFR floor of zero), which was 6.66% at December 31, 2023. Additionally, the facility fee on the revolving credit facility is 0.25%.

At December 31, 2023, we had outstanding $316.2 million of senior unsecured notes that were issued in a private placement transaction. The private placement notes were issued in two tranches with $136.6 million due August 22, 2024, and $179.6 million due August 22, 2026. At December 31, 2023, the interest rates for the private placement notes were 4.35% and 4.56% for the Series A notes due 2024 and the Series B notes due 2026, respectively.

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, stock repurchases and dividend distributions and require us to maintain a minimum consolidated tangible net worth and 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 debt instruments at December 31, 2023.

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.
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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. As discussed above, due to our current elevated cost of capital, we intend to fund our investments in the near-term primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice.

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,
2023 2022
Net cash provided by operating activities $ 447,094  $ 441,716 
Net cash used by investing activities (201,048) (351,585)
Net cash used by financing activities (275,695) (269,392)

Liquidity and material cash requirements at December 31, 2023 consisted primarily of maturities of debt. Contractual obligations as of December 31, 2023 are as follows (in thousands):
  Year ended December 31,
Contractual Obligations 2024 2025 2026 2027 2028 Thereafter Total
Long Term Debt Obligations $ 136,637  $ 300,000  $ 629,597  $ 450,000  $ 400,000  $ 924,995  $ 2,841,229 
Interest on Long Term Debt Obligations 120,728  106,773  99,595  62,020  39,558  64,882  493,556 
Operating Lease Obligation - Corporate Office 958  958  717  —  —  —  2,633 
Operating Ground Lease Obligations (1) 27,341  27,460  25,954  24,614  23,730  212,408  341,507 
Total $ 285,664  $ 435,191  $ 755,863  $ 536,634  $ 463,288  $ 1,202,285  $ 3,678,925 
(1) Our tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. As of December 31, 2023, rental revenue from two of our tenants, who are also sub-tenants under the ground leases, are being recognized on a cash basis. In most cases, the ground lease sub-tenants have continued to pay the rent under these ground leases, however, one of these properties does not currently have a sub-tenant. In the event the tenant fails to pay the ground lease rent or the property does not have sub-tenants, we would be primarily 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, 2023, we had 15 development projects with commitments to fund an aggregate of approximately $171.3 million, of which approximately $81.0 million is expected to be funded in 2024. 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 pre-determined rates upon completion of construction.

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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, 2023, we had five mortgage notes with commitments totaling approximately $104.7 million, of which approximately $59.3 million is expected to be funded in 2024. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.

In connection with construction of our development projects and related infrastructure, certain public agencies require posting of surety bonds to guarantee that our obligations will be satisfied. These bonds expire upon the completion of the improvements or infrastructure. As of December 31, 2023, we had three surety bonds outstanding totaling $2.1 million.

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 $136.6 million in scheduled debt payments due in 2024. 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, particularly in light of the impact of the challenging economic environment and our elevated cost of capital.

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 borrowings under our unsecured revolving credit facility as well as debt and equity financing alternatives or proceeds from asset dispositions. If we borrow the maximum amount available under our 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.

The challenging economic environment has increased our cost of capital, which has negatively impacted our ability to make investments in the near-term. As a result, we intend to continue to be more selective in making investments, acquisitions, utilizing cash on hand, excess cash flow and borrowings under our line of credit until such time as economic conditions improve and our cost of capital returns to acceptable levels.

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, as well as 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).

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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 income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from disposition of real estate 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 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), and the non-cash portion of mortgage and other financing income.

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 reconciles net income available to common shareholders, the most directly comparable GAAP measure, to FFO, FFOAA and AFFO including per share amounts for FFO and FFOAA, for the years ended December 31, 2023, 2022 and 2021 (unaudited, in thousands, except per share information):

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  Year ended December 31,
  2023 2022 2021
FFO:
Net income available to common shareholders of EPR Properties $ 148,901  $ 152,088  $ 74,472 
Loss (gain) on sale of real estate 2,197  (651) (17,881)
Impairment of real estate investments, net (1) 67,366  25,381  2,711 
Real estate depreciation and amortization 167,219  162,821  162,951 
Allocated share of joint venture depreciation 8,876  7,409  3,340 
Impairment charges on joint ventures (1) —  647  — 
FFO available to common shareholders of EPR Properties $ 394,559  $ 347,695  $ 225,593 
FFO available to common shareholders of EPR Properties $ 394,559  $ 347,695  $ 225,593 
Add: Preferred dividends for Series C preferred shares 7,752  7,752  — 
Add: Preferred dividends for Series E preferred shares 7,752  7,756  — 
Diluted FFO available to common shareholders of EPR Properties $ 410,063  $ 363,203  $ 225,593 
FFOAA:
FFO available to common shareholders of EPR Properties $ 394,559  $ 347,695  $ 225,593 
Severance expense 547  —  — 
Transaction costs 1,554  4,533  3,402 
Provision (benefit) for credit losses, net 878  10,816  (21,972)
Costs associated with loan refinancing or payoff —  —  25,451 
Impairment of operating lease right-of-use assets (1) —  1,968  — 
Sale participation income (included in other income) —  (9,134) — 
Gain on insurance recovery (included in other income) —  (552) (1,181)
Deferred income tax benefit (344) (169) — 
FFOAA available to common shareholders of EPR Properties $ 397,194  $ 355,157  $ 231,293 
FFOAA available to common shareholders of EPR Properties $ 397,194  $ 355,157  $ 231,293 
Add: Preferred dividends for Series C preferred shares 7,752  7,752  — 
Add: Preferred dividends for Series E preferred shares 7,752  7,756  — 
Diluted FFOAA available to common shareholders of EPR Properties $ 412,698  $ 370,665  $ 231,293 
AFFO:
FFOAA available to common shareholders of EPR Properties $ 397,194  $ 355,157  $ 231,293 
Non-real estate depreciation and amortization 814  831  819 
Deferred financing fees amortization 8,637  8,360  7,666 
Share-based compensation expense to management and trustees 17,512  16,666  14,903 
Amortization of above/below-market leases, net and tenant allowances (535) (355) (385)
Maintenance capital expenditures (2) (12,399) (4,545) (4,631)
Straight-lined rental revenue (10,591) (6,993) (5,664)
Straight-lined ground sublease expense 1,099  1,692  382 
Non-cash portion of mortgage and other financing income (1,088) (473) (446)
AFFO available to common shareholders of EPR Properties $ 400,643  $ 370,340  $ 243,937 
FFO per common share:
Basic $ 5.24  $ 4.64  $ 3.02 
Diluted 5.15  4.60  3.02 
FFOAA per common share:
Basic $ 5.28  $ 4.74  $ 3.09 
Diluted 5.18  4.69  3.09 
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  Year ended December 31,
  2023 2022 2021
Shares used for computation (in thousands):
Basic 75,260  74,967  74,755 
Diluted 75,715  75,043  74,756 
Weighted average shares outstanding-diluted EPS 75,715  75,043  74,756 
Effect of dilutive Series C preferred shares 2,283  2,250  — 
Effect of dilutive Series E preferred shares 1,663  1,664  — 
Adjusted weighted average shares outstanding - diluted Series C and Series E 79,661  78,957  74,756 
Other financial information:
Dividends per common share $ 3.300  $ 3.250  $ 1.500 
(1) Impairment charges recognized totaled $28.0 million for the year ended December 31, 2022, and was comprised of $25.4 million of impairments of real estate investments, $2.0 million of impairments of operating lease right-of-use assets and $0.6 million of impairments on joint ventures.
(2) 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, 2023 and 2022. 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.

The additional common shares that would result from the conversion of the 5.75% Series C cumulative convertible preferred shares and the 9.00% Series E cumulative convertible preferred shares for the year ended December 31, 2021, and the corresponding add-back of the preferred dividends declared on those shares are not included in the calculation of diluted FFO and FFOAA per share for those periods because the effect is anti-dilutive.

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 for 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 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.

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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, 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, 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):
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December 31,
2023 2022
Net Debt:
Debt $ 2,816,095  $ 2,810,111 
Deferred financing costs, net 25,134  31,118 
Cash and cash equivalents (78,079) (107,934)
Net Debt $ 2,763,150  $ 2,733,295 
Gross Assets:
Total Assets $ 5,700,885  $ 5,758,701 
Accumulated depreciation 1,435,683  1,302,640 
Cash and cash equivalents (78,079) (107,934)
Gross Assets $ 7,058,489  $ 6,953,407 
Debt to Total Assets Ratio 49  % 49  %
Net Debt to Gross Assets Ratio 39  % 39  %
Three Months Ended December 31,
2023 2022
EBITDAre and Adjusted EBITDAre:
Net income $ 45,529  $ 42,329 
Interest expense, net 30,337  31,879 
Income tax expense 667  86 
Depreciation and amortization 40,692  41,303 
Loss (gain) on sale of real estate 3,612  (347)
Impairment of real estate investments, net (1) 2,694  21,030 
Allocated share of joint venture depreciation 2,344  1,833 
Allocated share of joint venture interest expense 1,879  2,215 
EBITDAre $ 127,754  $ 140,328 
Sale participation income (2) —  (9,134)
Transaction costs 401  993 
Provision (benefit) for credit losses, net 1,285  1,369 
Impairment of operating lease right-of-use asset (1) —  1,968 
Adjusted EBITDAre $ 129,440  $ 135,524 
Adjusted EBITDAre (annualized) (3) $ 517,760  $ 542,096 
Net Debt to Adjusted EBITDAre Ratio 5.3  5.0 
(1) Impairment charges recognized during the three months ended December 31, 2022 totaled $23.0 million, which was comprised of $21.0 million of impairments of real estate investments and a $2.0 million impairment of an operating lease right-of-use asset.
(2) Included in other income in the consolidated statements of income and comprehensive income for the quarter. Other income includes the following:
Three Months Ended December 31,
2023 2022
Income from settlement of foreign currency swap contracts $ 243  $ 246 
Sale participation income —  9,134 
Operating income from operated properties 11,809  7,325 
Miscellaneous income 16  51 
Other income $ 12,068  $ 16,756 
(3) 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 adjustments for other items.

56

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 (including related accrued interest receivable), 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, 2023 December 31, 2022
Total assets $ 5,700,885  $ 5,758,701 
Operating lease right-of-use assets (186,628) (200,985)
Cash and cash equivalents (78,079) (107,934)
Restricted cash (2,902) (2,577)
Accounts receivable (63,655) (53,587)
Add: accumulated depreciation on real estate investments 1,435,683  1,302,640 
Add: accumulated amortization on intangible assets (1) 30,589  23,487 
Prepaid expenses and other current assets (1) (22,718) (33,559)
Total investments $ 6,813,175  $ 6,686,186 
Total Investments:
Real estate investments, net of accumulated depreciation $ 4,537,359  $ 4,714,136 
Add back accumulated depreciation on real estate investments 1,435,683  1,302,640 
Land held for development 20,168  20,168 
Property under development 131,265  76,029 
Mortgage notes and related accrued interest receivable 569,768  457,268 
Investment in joint ventures 49,754  52,964 
Intangible assets, gross (1) 65,299  60,109 
Notes receivable and related accrued interest receivable, net (1) 3,879  2,872 
Total investments $ 6,813,175  $ 6,686,186 
(1) Included in "Other assets" in the accompanying consolidated balance sheets. Other assets include the following:
December 31, 2023 December 31, 2022
Intangible assets, gross $ 65,299  $ 60,109 
Less: accumulated amortization on intangible assets (30,589) (23,487)
Notes receivable and related accrued interest receivable, net 3,879  2,872 
Prepaid expenses and other current assets 22,718  33,559 
Total other assets $ 61,307  $ 73,053 

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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks, primarily relating to potential losses due to changes in interest rates and foreign currency exchange rates. We seek to mitigate the effects of fluctuations in interest rates by matching the term of new investments with new long-term fixed rate borrowings whenever possible. As of December 31, 2023, we had a $1.0 billion unsecured revolving credit facility with no balance outstanding. We also had a $25.0 million bond that bears interest at a floating rate but has been fixed through an interest rate swap agreement.
As of December 31, 2023, we had a 65% investment interest in two unconsolidated real estate joint ventures related to two experiential lodging properties located in St. Petersburg Beach, Florida. At December 31, 2023, the joint ventures had a secured mortgage loan with an outstanding balance of $105.0 million.
57

The mortgage loan bears interest at SOFR plus 3.65%, with monthly interest payments required. The joint venture includes an interest rate cap agreement to limit the variable portion of the interest rate (SOFR) on this note to 3.5% from May 19, 2022 to June 1, 2024.
We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of such refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings are subject to contractual agreements or mortgages, which limit the amount of indebtedness we may incur. Accordingly, if we are unable to raise additional equity or borrow money due to these limitations or otherwise, our ability to make additional real estate investments may be limited.
The following table presents the principal amounts, weighted average interest rates, and other terms required by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes as of December 31 (including the impact of the interest rate swap agreements described below):
Expected Maturities (dollars in millions)
2024 2025 2026 2027 2028 Thereafter Total Estimated
Fair Value
December 31, 2022:
Fixed rate debt $136.6 $300.0 $629.6 $450.0 $400.0 $925.0 $2,841.2 $2,606.8
Average interest rate 4.35  % 4.50  % 4.70  % 4.50  % 4.95  % 3.65  % 4.32  % 6.56  %
Variable rate debt $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Average interest rate (as of December 31, 2023)
 —  % —  % —  % —  % —  % —  % —  % —  %
2023 2024 2025 2026 2027 Thereafter Total Estimated
Fair Value
December 31, 2022:
Fixed rate debt $ —  $136.6 $300.0 $629.6 $450.0 $1,325.0 $2,841.2 $2,413.6
Average interest rate —  % 4.35  % 4.50  % 4.70  % 4.50  % 4.04  % 4.32  % 7.88  %
Variable rate debt $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Average interest rate (as of December 31, 2022)
 —  % —  % —  % —  % —  % —  % —  % —  %

The fair value of our debt as of December 31, 2023 and 2022 is estimated by discounting the future cash flows of each instrument using current market rates and current market spreads.
We are exposed to foreign currency risk against our functional currency, the U.S. dollar ("USD"), on our six Canadian properties and the rents received from tenants of the properties are payable in the Canadian dollar ("CAD"). In order to hedge our CAD denominated cash flows and our net investment in our six Canadian properties, we entered into cross-currency swaps designated as cash flow hedges and foreign currency forwards designated as net investment hedges as further described below.

Cash Flow Hedges of Interest Rate Risk
In order to hedge our interest rate risk, we entered into an interest rate swap agreement on our variable rate secured bonds with a notional amount of $25.0 million. The interest rate cap agreement limits the variable portion of the interest rate (SOFR) on this bond to 2.5325% until September 30, 2026.

Cash Flow Hedges of Foreign Exchange Risk-Cross Currency Swaps
We entered into three USD-CAD cross-currency swaps that became effective July 1, 2022, mature on October 1, 2024, and have a total fixed original notional value of $150.0 million CAD and $118.7 million USD. The net effect of these swaps provides a fixed exchange rate of $1.26 CAD per USD on approximately $10.8 million annual CAD denominated cash flows.

We entered into two USD-CAD cross-currency swaps that became effective May 1, 2022, mature on October 1, 2024 and have a total fixed notional value of $200.0 million CAD and $156.0 million USD. The net effect of these swaps provides a fixed exchange rate of $1.28 CAD per USD on approximately $4.5 million of annual CAD denominated cash flows.
58


We entered into three USD-CAD cross-currency swaps that became effective June 1, 2022, mature on December 1, 2024 and have a total fixed notional value of $90.0 million CAD and $69.5 million USD. The net effect of these swaps provides a fixed exchange rate of $1.30 CAD per USD on approximately $8.1 million of annual CAD denominated cash flows.

Net Investment Hedges - Foreign Currency Forward Contracts
We entered into two forward contracts that became effective December 13, 2023 with a fixed notional value of $200.0 million CAD and $148.3 million USD with a settlement date of October 1, 2025. The exchange rate of these forward contracts is approximately $1.35 CAD per USD.

We entered into a forward contract that became effective December 13, 2023 with a fixed notional value of $90.0 million CAD and $66.8 million USD with a settlement date of December 1, 2025. The exchange rate of this forward contract is approximately $1.35 CAD per USD.

On December 13, 2023, we terminated our previous CAD to USD forward contracts in conjunction with entering into the new forward agreements described above. We received $10.0 million in connection with the settlement of the CAD to USD forward contracts.

For foreign currency derivatives designated as net investment hedges, the change in the fair value of the derivatives are reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated.

See Note 10 to the consolidated financial statements in this Annual Report on Form 10-K for additional information on our derivative financial instruments and hedging activities.
59


Item 8. Financial Statements and Supplementary Data
EPR Properties

Contents
 
Report of Independent Registered Public Accounting Firm
Audited Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation
60

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders
EPR Properties:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of EPR Properties and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
61

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of indicators real estate investments may not be recoverable
As discussed in Notes 2 and 3 to the consolidated financial statements, the real estate investments, net balance as of December 31, 2023 was $4.5 billion. The Company reviews a real estate investment for impairment whenever events or changes in circumstances indicate that the carrying value of the real estate investment may not be recoverable.

We identified the evaluation of indicators real estate investments may not be recoverable as a critical audit matter. There is a high degree of subjective judgement in evaluating the events or changes in circumstances that may indicate the carrying value of real estate investments may not be recoverable. In particular, the judgments regarding the expected period the Company will hold the real estate investments on the determination of the recoverability of the real estate investments required a higher degree of auditor judgment.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the Company’s process to identify and evaluate events or changes in circumstances that may indicate the carrying amount of real estate investments may not be recoverable, including controls related to determining the period the Company will hold the real estate investments. We inquired of Company officials and inspected documents such as meeting minutes of the Board of Trustees to evaluate the likelihood that a real estate investment would be sold prior to the estimated holding period.

Impairment of real estate investments
As discussed in Notes 2, 5, and 11 to the consolidated financial statements, the real estate investments, net balance as of December 31, 2023 was $4.5 billion. The Company reviews a property for impairment whenever events or changes in circumstances indicate that the carrying value of the property may not be recoverable. The Company recognized impairment charges of $67.4 million on real estate investments, which are the amounts that the carrying value of the assets exceeded the estimated fair value.

We identified the assessment of the fair values of real estate investments based on recent independent appraisals used to determine the impairment charges as a critical audit matter. There is a high degree of subjective auditor judgment in evaluating the relevance of market rents, capitalization rates, and discount rates used to determine the fair value of these assets.

62

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the determination of market rents, capitalization rates and discount rates. We involved valuation professionals with specialized skills and knowledge, who assisted in comparing the Company’s estimated assumptions of market rents, capitalization rates, and discount rates to a range of independently developed estimates based on publicly available industry data.

/s/ KPMG, LLP

We have served as the Company’s auditor since 2002.
Kansas City, Missouri
February 29, 2024
63


EPR PROPERTIES
Consolidated Balance Sheets
(Dollars in thousands except share data)
  December 31,
  2023 2022
Assets
Real estate investments, net of accumulated depreciation of $1,435,683 and $1,302,640 at December 31, 2023 and 2022, respectively
 $ 4,537,359  $ 4,714,136 
Land held for development 20,168  20,168 
Property under development 131,265  76,029 
Operating lease right-of-use assets 186,628  200,985 
Mortgage notes and related accrued interest receivable 569,768  457,268 
Investment in joint ventures 49,754  52,964 
Cash and cash equivalents 78,079  107,934 
Restricted cash 2,902  2,577 
Accounts receivable 63,655  53,587 
Other assets 61,307  73,053 
Total assets $ 5,700,885  $ 5,758,701 
Liabilities and Equity
Liabilities:
Accounts payable and accrued liabilities $ 94,927  $ 80,087 
Operating lease liabilities 226,961  241,407 
Common dividends payable 25,275  21,405 
Preferred dividends payable 6,032  6,033 
Unearned rents and interest 77,440  63,939 
Debt 2,816,095  2,810,111 
Total liabilities 3,246,730  3,222,982 
Equity:
Common Shares, $0.01 par value; 125,000,000 and 100,000,000 shares authorized at December 31, 2023 and 2022, respectively; and 82,964,231 and 82,545,501 shares issued at December 31, 2023 and 2022, respectively
 829  825 
Preferred Shares, $0.01 par value; 25,000,000 shares authorized:
5,392,916 Series C convertible shares issued at December 31, 2023 and 2022; liquidation preference of $134,822,900
 54  54 
3,445,980 and 3,447,381 Series E convertible shares issued at December 31, 2023 and 2022, respectively; liquidation preference of $86,149,500
 34  34 
6,000,000 Series G shares issued at December 31, 2023 and 2022; liquidation preference of $150,000,000
 60  60 
Additional paid-in-capital 3,924,467  3,899,732 
Treasury shares at cost: 7,631,725 and 7,520,227 common shares at December 31, 2023 and 2022, respectively
 (274,038) (269,751)
Accumulated other comprehensive income 3,296  1,897 
Distributions in excess of net income (1,200,547) (1,097,132)
Total equity $ 2,454,155  $ 2,535,719 
Total liabilities and equity $ 5,700,885  $ 5,758,701 
See accompanying notes to consolidated financial statements.
64


EPR PROPERTIES
Consolidated Statements of Income and Comprehensive Income
(Dollars in thousands except per share data)
  Year Ended December 31,
  2023 2022 2021
Rental revenue $ 616,139  $ 575,601  $ 478,882 
Other income 45,947  47,382  18,816 
Mortgage and other financing income 43,582  35,048  33,982 
Total revenue 705,668  658,031  531,680 
Property operating expense 57,478  55,985  56,739 
Other expense 44,774  33,809  21,741 
General and administrative expense 56,442  51,579  44,362 
Severance expense 547  —  — 
Transaction costs 1,554  4,533  3,402 
Provision (benefit) for credit losses, net 878  10,816  (21,972)
Impairment charges 67,366  27,349  2,711 
Depreciation and amortization 168,033  163,652  163,770 
Total operating expenses 397,072  347,723  270,753 
(Loss) gain on sale of real estate (2,197) 651  17,881 
Income from operations 306,399  310,959  278,808 
Costs associated with loan refinancing or payoff —  —  25,451 
Interest expense, net 124,858  131,175  148,095 
Equity in loss from joint ventures 6,768  1,672  5,059 
Impairment charges on joint ventures —  647  — 
Income before income taxes 174,773  177,465  100,203 
Income tax expense 1,727  1,236  1,597 
Net income 173,046  176,229  98,606 
Preferred dividend requirements 24,145  24,141  24,134 
Net income available to common shareholders of EPR Properties $ 148,901  $ 152,088  $ 74,472 
Net income available to common shareholders of EPR Properties per share:
Basic $ 1.98  $ 2.03  $ 1.00 
Diluted $ 1.97  $ 2.03  $ 1.00 
Shares used for computation (in thousands):
Basic 75,260  74,967  74,755 
Diluted 75,715  75,043  74,756 
Other comprehensive income:
Net income $ 173,046  $ 176,229  $ 98,606 
Foreign currency translation adjustment 6,851  (20,474) 633 
Unrealized (loss) gain on derivatives, net (5,452) 12,416  5,857 
Comprehensive income attributable to EPR Properties $ 174,445  $ 168,171  $ 105,096 
See accompanying notes to consolidated financial statements.
65


EPR PROPERTIES
Consolidated Statements of Changes in Equity
Years Ended December 31, 2023, 2022 and 2021
(Dollars in thousands)
  EPR Properties Shareholders’ Equity  
  Common Stock Preferred Stock Additional
paid-in capital		 Treasury
shares		 Accumulated
other
comprehensive
income		 Distributions
in excess of
net income		 Total
  Shares Par Shares Par
Balance at December 31, 2020 81,917,876  $ 819  14,841,431  $ 148  $ 3,857,632  $ (261,238) $ 216  $ (966,992) $ 2,630,585 
Restricted share units issued to Trustees 43,306  1  —  —  —  —  —  —  1 
Issuance of nonvested shares and performance shares, net of cancellations 246,562  2  —  —  3,474  (575) —  —  2,901 
Purchase of common shares for vesting —  —  —  —  —  (2,763) —  —  (2,763)
Share-based compensation expense —  —  —  —  14,903  —  —  —  14,903 
Foreign currency translation adjustment —  —  —  —  —  —  633  —  633 
Change in unrealized gain on derivatives, net —  —  —  —  —  —  5,857  —  5,857 
Loss reclassified from accumulated other comprehensive income into earnings from termination of interest rate swaps —  —  —  —  —  —  3,249  —  3,249 
Net income —  —  —  —  —  —  —  98,606  98,606 
Issuances of common shares 11,798  —  —  —  569  —  —  —  569 
Conversion of Series C Convertible Preferred shares to common shares 468  —  (1,134) —  —  —  —  —  — 
Stock option exercises, net 5,051  —  —  —  239  (241) —  —  (2)
Dividend equivalents accrued on performance shares —  —  —  —  —  —  —  (157) (157)
Dividends to common shareholders ($1.50 per share)
 —  —  —  —  —  —  —  (112,209) (112,209)
Dividends to Series C preferred shareholders ($1.4375 per share)
 —  —  —  —  —  —  —  (7,753) (7,753)
Dividends to Series E preferred shareholders ($2.25 per share)
 —  —  —  —  —  —  —  (7,756) (7,756)
Dividends to Series G preferred shareholders ($1.4375 per share)
 —  —  —  —  —  —  —  (8,625) (8,625)
Balance at December 31, 2021 82,225,061  $ 822  14,840,297  $ 148  $ 3,876,817  $ (264,817) $ 9,955  $ (1,004,886) $ 2,618,039 
Restricted share units issued to Trustees 41,399  —  —  —  —  —  —  —  — 
Issuance of nonvested shares and performance shares, net of cancellations 243,286  3  —  —  4,496  (83) —  —  4,416 
Purchase of common shares for vesting —  —  —  —  —  (4,257) —  —  (4,257)
Share-based compensation expense —  —  —  —  16,666  —  —  —  16,666 
Foreign currency translation adjustment —  —  —  —  —  —  (20,474) —  (20,474)
Change in unrealized gain on derivatives, net —  —  —  —  —  —  12,416  —  12,416 
Net income —  —  —  —  —  —  —  176,229  176,229 
Issuances of common shares 23,196  —  —  —  1,063  —  —  —  1,063 
Issuances of captive REIT preferred shares —  —  —  —  107  —  —  —  107 
Stock option exercises, net 12,559  —  —  —  583  (594) —  —  (11)
Dividend equivalents accrued on performance shares —  —  —  —  —  —  —  (579) (579)
Dividends to captive REIT preferred shareholders —  —  —  —  —  —  —  (6) (6)
Dividends to common shareholders ($3.25 per share)
 —  —  —  —  —  —  —  (243,757) (243,757)
Dividends to Series C preferred shareholders ($1.4375 per share)
 —  —  —  —  —  —  —  (7,752) (7,752)
Dividends to Series E preferred shareholders ($2.25 per share)
 —  —  —  —  —  —  —  (7,756) (7,756)
Dividends to Series G preferred shareholders ($1.4375 per share)
 —  —  —  —  —  —  —  (8,625) (8,625)
Balance at December 31, 2022 82,545,501  $ 825  14,840,297  $ 148  $ 3,899,732  $ (269,751) $ 1,897  $ (1,097,132) $ 2,535,719 
Continued on next page.
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EPR PROPERTIES
Consolidated Statements of Changes in Equity
Years Ended December 31, 2023, 2022 and 2021
(Dollars in thousands) (continued)
  EPR Properties Shareholders’ Equity  
  Common Stock Preferred Stock Additional
paid-in capital		 Treasury
shares		 Accumulated
other
comprehensive
income		 Distributions
in excess of
net income		 Total
  Shares Par Shares Par
Continued from previous page.
Balance at December 31, 2022 82,545,501  $ 825  14,840,297  $ 148  $ 3,899,732  $ (269,751) $ 1,897  $ (1,097,132) $ 2,535,719 
Restricted share units issued to Trustees 43,497  —  —  —  —  —  —  —  — 
Issuance of nonvested shares and performance shares, net of cancellations 352,090  4  —  —  5,960  (591) —  —  5,373 
Purchase of common shares for vesting —  —  —  —  —  (3,696) —  —  (3,696)
Share-based compensation expense —  —  —  —  17,512  —  —  —  17,512 
Share-based compensation included in severance expense —  —  —  —  304  —  —  —  304 
Foreign currency translation adjustment —  —  —  —  —  —  6,851  —  6,851 
Change in unrealized loss on derivatives, net —  —  —  —  —  —  (5,452) —  (5,452)
Net income —  —  —  —  —  —  —  173,046  173,046 
Issuances of common shares 22,469  —  —  —  959  —  —  —  959 
Conversion of Series E Convertible Preferred shares to common shares 674  —  (1,401) —  —  —  —  —  — 
Dividend equivalents accrued on performance shares —  —  —  —  —  —  —  (3,787) (3,787)
Dividends to captive REIT preferred shareholders —  —  —  —  —  —  —  (16) (16)
Dividends to common shareholders ($3.30 per share)
 —  —  —  —  —  —  —  (248,530) (248,530)
Dividends to Series C preferred shareholders ($1.4375 per share)
 —  —  —  —  —  —  —  (7,752) (7,752)
Dividends to Series E preferred shareholders ($2.25 per share)
 —  —  —  —  —  —  —  (7,752) (7,752)
Dividends to Series G preferred shareholders ($1.4375 per share)
 —  —  —  —  —  —  —  (8,624) (8,624)
Balance at December 31, 2023 82,964,231  $ 829  14,838,896  $ 148  $ 3,924,467  $ (274,038) $ 3,296  $ (1,200,547) $ 2,454,155 

See accompanying notes to consolidated financial statements.
67


EPR PROPERTIES
Consolidated Statements of Cash Flows
(Dollars in thousands)

  Year Ended December 31,
  2023 2022 2021
Operating activities:
Net income $ 173,046  $ 176,229  $ 98,606 
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment charges 67,366  27,349  2,711 
Impairment charges on joint ventures —  647  — 
Loss (gain) on sale of real estate 2,197  (651) (17,881)
Gain on insurance recovery —  (552) (1,181)
Deferred income tax benefit (344) (169) — 
Provision (benefit) for credit losses, net 878  10,816  (21,972)
Costs associated with loan refinancing or payoff —  —  25,451 
Equity in loss from joint ventures 6,768  1,672  5,059 
Distributions from joint ventures 1,300  780  90 
Depreciation and amortization 168,033  163,652  163,770 
Amortization of deferred financing costs 8,637  8,360  7,666 
Amortization of above/below market leases and tenant allowances, net (535) (355) (385)
Share-based compensation expense to management and Trustees 17,512  16,666  14,903 
Share-based compensation expense included in severance expense 304  —  — 
Change in assets and liabilities:
Operating lease assets and liabilities (6) 463  (551)
Mortgage notes accrued interest receivable (1,231) (500) 568 
Accounts receivable (10,091) 25,974  36,821 
Other assets (2,738) (473) (1,282)
Accounts payable and accrued liabilities 8,488  14,576  (8,653)
Unearned rents and interest 7,510  (2,768) 3,185 
Net cash provided by operating activities 447,094  441,716  306,925 
Investing activities:
Acquisition of and investments in real estate and other assets (60,703) (174,533) (56,556)
Proceeds from sale of real estate 57,160  10,965  96,137 
Investment in unconsolidated joint ventures (4,859) (26,088) (13,611)
Distributions from joint venture related to refinancing —  6,695  — 
Settlement of derivative 10,022  (3,830) — 
Investment in mortgage notes receivable (110,428) (95,234) (8,664)
Proceeds from mortgage notes receivable paydowns 552  1,749  8,242 
Investment in notes receivable (3,025) —  (4,379)
Proceeds from note receivable paydowns 1,386  701  8,816 
Proceeds from insurance recovery, net —  3,700  1,181 
Additions to properties under development (91,153) (75,710) (29,304)
Net cash (used) provided by investing activities (201,048) (351,585) 1,862 
Financing activities:
Proceeds from long-term debt facilities and senior unsecured notes —  —  400,000 
Principal payments on debt —  —  (1,288,765)
Deferred financing fees paid (369) (328) (15,212)
Costs associated with loan refinancing or payoff (cash portion) —  —  (22,865)
Net proceeds from issuance of common shares 615  758  460 
Impact of stock option exercises, net —  (11) (2)
Issuances of captive REIT preferred shares —  107  — 
Purchase of common shares for treasury for vesting (3,696) (4,257) (2,763)
Dividends paid to shareholders (272,245) (265,661) (117,531)
Net cash used by financing activities (275,695) (269,392) (1,046,678)
Effect of exchange rate changes on cash 119  (129) (218)
Net change in cash and cash equivalents and restricted cash (29,530) (179,390) (738,109)
Cash and cash equivalents and restricted cash at beginning of the year 110,511  289,901  1,028,010 
Cash and cash equivalents and restricted cash at end of the year $ 80,981  $ 110,511  $ 289,901 
Supplemental information continued on next page.
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EPR PROPERTIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
Continued from previous page.
  Year Ended December 31,
  2023 2022 2021
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents at beginning of the year $ 107,934  $ 288,822  $ 1,025,577 
Restricted cash at beginning of the year 2,577  1,079  2,433 
Cash and cash equivalents and restricted cash at beginning of the year $ 110,511  $ 289,901  $ 1,028,010 
Cash and cash equivalents at end of the year $ 78,079  $ 107,934  $ 288,822 
Restricted cash at end of the year 2,902  2,577  1,079 
Cash and cash equivalents and restricted cash at end of the year $ 80,981  $ 110,511  $ 289,901 
Supplemental schedule of non-cash activity:
Transfer of property under development to real estate investments $ 44,291  $ 41,872  $ 91,546 
Transfer of real estate investments to mortgage note $ 1,321  $ — 
Issuance of nonvested shares and restricted share units at fair value, including nonvested shares issued for payment of bonuses $ 25,277  $ 21,751  $ 21,921 
Operating lease right-of-use asset and related operating lease liability recorded for new ground lease $ —  $ 36,741  $ 33,355 
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 125,654  $ 125,808  $ 150,034 
Cash paid during the period for income taxes $ 1,495  $ 1,282  $ 1,466 
Interest cost capitalized $ 3,566  $ 1,286  $ 1,567 
Change in accrued capital expenditures $ 6,466  $ 896  $ 2,880 
See accompanying notes to consolidated financial statements.
69

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

1. Organization

Description of Business
EPR Properties (the Company) was formed on August 22, 1997 as a Maryland real estate investment trust (REIT), and an initial public offering of the Company's common shares of beneficial interest (common shares) was completed on November 18, 1997. Since that time, the Company has been a leading diversified experiential net lease REIT specializing in select enduring experiential properties. The Company's underwriting is centered on key industry and property cash flow criteria, as well as the credit metrics of the Company's tenants and customers. The Company’s properties are located in the United States (U.S.) and Canada.

2. Summary of Significant Accounting Policies

Principles of Consolidation
The consolidated financial statements include the accounts of EPR Properties and its subsidiaries, all of which are wholly owned.

Update on Continuing Impact of COVID-19 Pandemic
The COVID-19 pandemic severely impacted experiential real estate properties because such properties involve congregate social activity and discretionary spending. The Company's non-theatre properties have demonstrated strong recovery from the impacts of the pandemic. However, the Company's theatre customers were more severely impacted by the COVID-19 pandemic and have seen a slower recovery than its non-theatre customers due primarily to changes in the timing of film releases, production delays and experimentation with streaming. The Company began recognizing revenue on a cash basis for American-Multi Cinema, Inc. (AMC) at the end of the first quarter of 2020 and for its Regal (as defined below) tenants, at the end of the third quarter of 2020. With the emergence of Regal from bankruptcy (discussed below), the Company began recognizing revenue on an accrual basis for its Regal tenants. Although the box office continues to recover post-pandemic, the recently resolved writers and actor's strikes have delayed the production, supply and theatrical release of motion pictures thereby negatively affecting this recovery in the near-term.

As of December 31, 2023, the Company collected all deferred receivables from accrual basis tenants that were deferred due to the COVID-19 pandemic. Additionally, as of December 31, 2023, the Company had amounts due from customers that were not booked as receivables totaling approximately $12.0 million because the full amounts were not deemed probable of collection as a result of the COVID-19 pandemic. The amounts not booked as receivables remain obligations of the customers and will be recognized as revenue when any such amounts are received. See discussion below regarding changes to Regal Cinema's deferred amounts not booked as a receivable as a result of the Company's comprehensive restructuring agreement with them, which became effective upon their emergence from bankruptcy. During the years ended December 31, 2023 and 2022, the Company collected $36.4 million and $17.7 million, respectively, in deferred rent and interest from cash basis customers and from customers for which the deferred payments were not previously recognized as revenue. These amounts include collections related to the Regal bankruptcy as further discussed below, including stub rent and pre-petition rent related to September of 2022 and property operating expense reimbursements. In addition, during the years ended December 31, 2023 and 2022, the Company collected $2.1 million and $24.2 million, respectively, of deferred rent and interest from accrual basis customers that reduced related accounts and interest receivable. The repayment terms for all of these deferments vary by customer.

Regal Update
On September 7, 2022, Cineworld Group, plc, Regal Entertainment Group and the Company's other Regal theatre tenants (collectively, Regal) filed for protection under Chapter 11 of the U.S. Bankruptcy Code (the Code). Prior to such filing date and continuing throughout the Chapter 11 bankruptcy cases, Regal leased 57 theatres from the Company pursuant to two master leases and 28 single property leases (the Regal Leases). As a result of the filing, Regal did not timely pay its rent or monthly deferral payment for September 2022, but subsequently paid portions of this amount, totaling approximately $4.0 million, pursuant to a bankruptcy court order upon emerging from bankruptcy. Regal resumed monthly rent and deferral payments for all Regal Leases commencing in October 2022 and continued making these payments through July 2023.
70

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Regal paid the remainder of the September 2022 rent as discussed below.

On June 27, 2023, the Company entered into a comprehensive restructuring agreement with Regal, evidenced by an Omnibus Lease Amendment Agreement (the Omnibus Agreement), anchored by a new master lease (the Master Lease) for 41 of the 57 properties previously leased to Regal (the Master Lease Properties). On June 28, 2023, Regal’s Plan of Reorganization (the Plan) was confirmed by the bankruptcy court. The Plan became effective on July 31, 2023 (the Effective Date), and Regal emerged from the Chapter 11 bankruptcy cases.

Pursuant to the Omnibus Agreement, the Master Lease and certain related agreements became effective upon the Effective Date. Material terms of the Omnibus Agreement, the Master Lease and related agreements include:

•Beginning on August 1, 2023, the total annual fixed rent for the Master Lease Properties (Annual Base Rent) is now $65.0 million, escalating by 10% every five years. The Master Lease is a triple-net lease, and therefore, Annual Base Rent does not include taxes, insurance, utilities, common area maintenance and ground lease rent, for which Regal will be responsible for paying separately. Due to Regal's expected significantly improved credit profile, continuing box office recovery and Regal's payment history, among other factors, the Company began recognizing revenue related to the Master Lease on an accrual basis on the Effective Date.

•Pursuant to the Master Lease, Regal will also pay annual percentage rent (Annual Percentage Rent) of 15% of annual gross sales exceeding $220.0 million and up to $270.0 million, and 12.5% of annual gross sales exceeding $270.0 million. These threshold amounts will increase every five years commensurate with escalations in Annual Base Rent.

•The Master Lease Properties have been divided into three tranches within the Master Lease, with the initial term of each tranche expiring annually on the 11th, 13th and 15th anniversaries from the Effective Date. Each tranche has three five-year renewal options. The average lease term for the Master Lease Properties as of the Effective Date increased by four years to 13 years.

•The Company has agreed to reimburse Regal for 50% of certain revenue-enhancing premises renovations to the Master Lease Properties, up to a maximum reimbursement of $32.5 million, provided that (a) Regal is not in default of the Master Lease, (b) the maximum amount the Company will reimburse in any calendar year will not exceed $10.0 million, and (c) reimbursable expenses require prior approval of the Company and must relate to a project mobilized and physically commenced during the first five years of the Master Lease term.

•On the Effective Date, Regal surrendered to the Company the remaining 16 properties not included in the Master Lease (the Surrendered Properties), together with all furniture, fixtures and equipment located at the Surrendered Properties. The Company has entered into management agreements under which Cinemark is managing four of the Surrendered Properties and Phoenix Theatres is managing one of the Surrendered Properties. The Company sold two of the remaining 11 Surrendered Properties during the year ended December 31, 2023. The Company plans to sell the remaining nine properties and deploy the proceeds to acquire non-theatre experiential properties. In conjunction with taking back the Surrendered Properties, the Company recorded a non-cash impairment charge on eight of these properties during the year ended December 31, 2023 of $42.4 million based on recently appraised values.

•As of July 31, 2023, Regal owed approximately $76.3 million of undiscounted deferred rent (the Deferred Rent Balance), of which the Deferred Rent Balance related to the Master Lease Properties was approximately $56.8 million (Master Lease Deferred Rent Balance) and the Deferred Rent Balance related to the Surrendered Properties was approximately $19.5 million (Surrendered Property Deferred Rent Balance). Of the Master Lease Deferred Rent Balance, approximately $50.1 million will be held in abeyance and forgiven in its entirety if Regal has no uncured events of default prior to the 15th anniversary of the Effective Date, and the remaining portion of the Master Lease Deferred Rent Balance will be waived and forgiven. If Regal has an uncured event of default at any time prior to the 15th anniversary of the Effective Date, the Master Lease Deferred Rent Balance held in abeyance will become due. The Surrendered Property Deferred Rent Balance was included in the Company’s claims for rejection damages in the Chapter 11 bankruptcy cases, which was treated as general unsecured claims for which no material recovery is expected. The deferred rent was not previously recognized as accounts receivable by the Company because payments from Regal were recognized on a cash-basis prior to the Effective Date of the Master Lease. The deferred rent related to the Master Lease Properties held in abeyance will not be recognized on the balance sheet because it is a contingent receivable only due in the event of a default and payment is not deemed probable.
71

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

•Regal provided the Company with a first lien security interest in all furniture, fixtures and equipment located at the Master Lease Properties. A parent entity of Regal provided the Company a guaranty of Regal’s obligations under the Master Lease.

•On or about the Effective Date, Regal paid the Company approximately $3.0 million representing the unpaid portion of post-petition September 2022 stub rent for all properties, and approximately $1.3 million representing the unpaid pre-petition September 2022 rent for the Master Lease Properties. Additionally, on or about the Effective Date, Regal reimbursed the Company $1.2 million for property operating expenses paid by the Company on Regal's behalf.

Variable Interest Entities
The Company consolidates certain entities when it is deemed to be the primary beneficiary in a variable interest entity (VIE) in which it has a controlling financial interest in accordance with the consolidation guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The equity method of accounting is applied to entities in which the Company is not the primary beneficiary as defined in the FASB ASC Topic on Consolidation (Topic 810), but can exercise influence over the entity with respect to its operations and major decisions.

The Company’s variable interest in VIEs currently are in the form of equity ownership and loans provided by the Company to a VIE. The Company examines specific criteria and uses its judgment when determining if the Company is the primary beneficiary of a VIE. The primary beneficiary generally is defined as the party with the controlling financial interest. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. As of December 31, 2023 and 2022, the Company does not have any investments in consolidated VIEs.

Use of Estimates
Management of the Company has made estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP). Actual results could differ from those estimates.

Real Estate Investments
Real estate investments are carried at initial recorded value less accumulated depreciation. Costs incurred for the acquisition and development of the properties are capitalized. In addition, the Company capitalizes certain costs that relate to property under development including interest and a portion of internal legal personnel costs. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which generally are estimated to be 30 years to 40 years for buildings, three years to 25 years for furniture, fixtures and equipment and 10 years to 20 years for site improvements. Tenant improvements, including allowances, are depreciated over the shorter of the lease term or the estimated useful life and leasehold interests are depreciated over the useful life of the underlying ground lease.

Management reviews the Company's real estate investments, including operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying value of a property may not be recoverable, which is based on an estimate of undiscounted future cash flows expected to result from its use and eventual disposition.
72

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
If impairment exists due to the inability to recover the carrying value of the property, an impairment loss is recorded to the extent that the carrying value of the property exceeds its estimated fair value.

The Company evaluates the held-for-sale classification of its real estate as of the end of each quarter. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value less costs to sell. Assets are generally classified as held for sale once management has initiated an active program to market them for sale and it is probable the assets will be sold within one year. Occasionally, the Company will receive unsolicited offers from third parties to buy individual Company properties. Under these circumstances, the Company will classify the properties as held for sale when a sales contract is executed with no contingencies and the prospective buyer has funds at risk to ensure performance.

Real Estate Acquisitions
Upon acquisition of real estate properties, the Company evaluates the acquisition to determine if it is a business combination or an asset acquisition. If the acquisition is determined to be an asset acquisition, the Company records the purchase price and other related costs incurred to the acquired tangible assets and identified intangible assets and liabilities on a relative fair value basis. In addition, costs incurred for asset acquisitions including transaction costs, are capitalized.

If the acquisition is determined to be a business combination, the Company records the fair value of acquired tangible assets and identified intangible assets and liabilities as well as any noncontrolling interest. Acquisition-related costs in connection with business combinations are expensed as incurred and included in "Transaction costs" in the accompanying consolidated statements of income and comprehensive income.

In addition to acquisition-related costs in connection with business combinations, transaction costs include costs associated with terminated transactions, pre-opening costs and certain leasing and tenant transition costs. Transaction costs expensed totaled $1.6 million, $4.5 million and $3.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

For real estate acquisitions (asset acquisitions or business combinations), the fair value (or relative fair value in an asset acquisition) of the tangible assets is determined by valuing the property using recent independent appraisals or methods similar to those used by independent appraisers. Land is valued using the sales comparison approach, which uses available market data from recent comparable land sales as an input to estimate the fair value. Site improvements and tenant improvements are valued using the cost approach, which uses replacement cost data obtained from industry recognized guides less depreciation as an input to estimate the fair value. The building is valued either using the cost approach described above or a combination of the cost and the income approach. The income approach uses market leasing assumptions to estimate the fair value of the property as if vacant. The cost and income approaches are reconciled to arrive at an estimated building fair value.

Intangibles
The fair value of acquired in-place leases also includes management’s estimate, on a lease-by-lease basis, of the present value of the following amounts: (i) the value associated with avoiding the cost of originating the acquired in-place leases (i.e. the market cost to execute the leases, including leasing commissions, legal and other related costs); (ii) the value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed re-leasing period, (i.e. real estate taxes, insurance and other operating expenses); (iii) the value associated with lost rental revenue from existing leases during the assumed re-leasing period; and (iv) the value associated with avoided tenant improvement costs or other inducements to secure a tenant lease. These values are amortized over the lease term of the respective leases.
 
In determining the fair value of acquired above and below-market leases, the Company considers many factors. On a lease-by-lease basis, management considers the present value of the difference between the contractual amounts to be paid pursuant to the leases and management’s estimate of fair market lease rates. For above-market leases and below-market leases, management considers such differences over the lease terms. The capitalized above-market lease values are amortized as a reduction of rental income over the lease terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the lease terms of the respective leases.
73

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
The lease term includes the minimum base term plus any extension options that are reasonably certain to be exercised. Management considers several factors in determining the discount rate used in the present value calculations, including the credit risks associated with the respective tenants.

If debt is assumed in the acquisition, the determination of whether it is above or below-market is based upon a comparison of similar financing terms for similar real estate investments at the time of the acquisition.

In determining the fair value of tradenames, the Company historically uses the relief from royalty method, which estimates the fair value of hypothetical royalty income that could be generated if the intangible asset was licensed from an independent third-party.

In determining the fair value of a contract intangible, the Company considers the present value of the difference between the estimated "with" and "without" scenarios. The "with" scenario presents the contract in place and the "without" scenario incorporates the potential profits that may be lost over the period without the contract in place. The capitalized contract value is amortized over the estimated useful life of the underlying asset.

The excess of the cost of an acquired business (in a business combination) over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed is recorded as goodwill. Goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
Management of the Company reviews the carrying value of intangible assets for impairment on an annual basis.
Intangible assets and liabilities (included in "Other assets" and "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets) consist of the following at December 31 (in thousands):
2023 2022
Assets:
In-place leases, net of accumulated amortization of $26.6 million and $20.0 million, respectively
 $ 16,402  $ 17,769 
Above-market lease, net of accumulated amortization of $1.3 million and $1.3 million, respectively
 211  257 
Tradenames, net of accumulated amortization of $716 thousand and $583 thousand, respectively (1)
 8,447  8,580 
Contract value, net of accumulated amortization of $2.0 million and $1.6 million, respectively
 8,957  9,323 
Goodwill 693  693 
Total intangible assets, net $ 34,710  $ 36,622 
Liabilities:
Below-market lease, net of accumulated amortization of $3.1 million and $2.4 million, respectively
 $ 7,557  $ 7,741 
(1) At December 31, 2023 and 2022, $5.4 million in tradenames had indefinite lives and were not amortized.
Aggregate intangible amortization included in expense was $7.1 million, $3.3 million and $3.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. The net amount amortized as an increase to rental revenue for capitalized above and below-market lease intangibles was $0.5 million for the year ended December 31, 2023 and $0.4 million for both the years ended December 31, 2022 and 2021.
74

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Future amortization of in-place leases, net, above-market lease, net, tradenames, net, contract value, net and below-market lease, net at December 31, 2023 is as follows (in thousands):
In place leases Tradenames (1) Contract Value Above-market lease Below-market lease
Year:
2024 $ 1,724  $ 133  $ 365  $ 46  $ (418)
2025 1,689  133  365  46  (408)
2026 1,606  133  365  46  (324)
2027 1,600  133  365  46  (259)
2028 1,600  133  365  27  (259)
Thereafter 8,183  2,426  7,132  —  (5,889)
Total $ 16,402  $ 3,091  $ 8,957  $ 211  $ (7,557)
Weighted average amortization period (years) 13.2 24.3 24.5 4.6 28.8
(1) Excludes $5.4 million in tradenames with indefinite lives.

Deferred Financing Costs
Deferred financing costs are amortized over the terms of the related debt obligations or mortgage note receivable as applicable. Deferred financing costs of $25.1 million and $31.1 million as of December 31, 2023 and 2022, respectively, are shown as a reduction of debt. The deferred financing costs of $4.1 million and $6.4 million as of December 31, 2023 and 2022, respectively, related to the unsecured revolving credit facility are included in "Other assets" in the accompanying consolidated balance sheets.

Reportable Segments
The Company has two reportable operating segments: Experiential and Education. The Experiential segment includes the following property types: theatres, eat & play (including seven theatres located in entertainment districts), attractions, ski, experiential lodging, gaming, cultural and fitness & wellness. The Education segment includes the following property types: early childhood education centers and private schools. See Note 17 for financial information related to these reportable segments.

Rental Revenue
The Company leases real estate to its tenants under leases classified as operating leases. The Company's leases generally provide for rent escalations throughout the lease terms. Rents that are fixed are recognized on a straight-line basis over the lease term. Base rent escalations that include a variable component are recognized upon the occurrence of the specified event as defined in the Company's lease agreements. Many of the Company's leasing arrangements include options to extend the lease, which are not included in the minimum lease terms unless it is reasonably certain to be exercised. Straight-line rental revenue is subject to an evaluation for collectibility, and the Company records a direct write-off against rental revenue if collectibility of these future rents is not probable. The Company recognized straight-line write-offs of $0.7 million for the year ended December 31, 2023 and $0.2 million for both the years ended December 31, 2022 and 2021. Straight-line rental revenue, net of write-offs, was $10.6 million, $7.0 million and $5.7 million, for the years ended December 31, 2023, 2022 and 2021, respectively.

Most of the Company’s lease contracts are triple-net leases, which require the tenants to make payments directly to third parties for lessor costs (such as property taxes and insurance) associated with the properties. In accordance with Topic 842, the Company does not include these lessee payments to third parties in rental revenue or property operating expenses. In certain situations, the Company pays these lessor costs directly to third parties and the tenants reimburse the Company. In accordance with Topic 842, these payments are presented on a gross basis in rental revenue and property operating expense. During the years ended December 31, 2023, 2022 and 2021, the Company recognized $1.7 million, $2.6 million and $3.5 million, respectively, in tenant reimbursements related to the gross-up of these reimbursed expenses, which are included in rental revenue.

Certain of the Company's leases, particularly at its entertainment districts, require the tenants to make payments to the Company for property related expenses such as common area maintenance. The Company has elected to combine these non-lease components with the lease components in rental revenue.
75

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
For the years ended December 31, 2023, 2022 and 2021, the amounts due for non-lease components included in rental revenue totaled $19.6 million, $17.2 million and $15.2 million, respectively.

In addition, most of the Company's tenants are subject to additional rents (above base rents) if gross revenues of the properties exceed certain thresholds defined in the lease agreements (percentage rents). Percentage rents are recognized at the time when specific triggering events occur as provided by the lease agreement. Rental revenue included percentage rents of $12.2 million, $10.5 million and $14.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. Furthermore, due to the impact of the COVID-19 pandemic, certain of the Company's tenants paid a portion of base rent in 2022 and 2021 based on a percentage of gross revenue. This variable rent totaled $0.4 million and $16.2 million for the years ended December 31, 2022 and 2021, respectively.

Rental revenue included lease termination fees of approximately $3.4 million for the year ended December 31, 2023, relating to the early terminations of two leases by two tenants. No lease termination fees were received for the years ended December 31, 2022 and 2021.

The Company regularly evaluates the collectibility of its receivables on a lease-by-lease basis. The evaluation primarily consists of reviewing past due account balances and considering such factors as the credit quality of the Company's tenants, historical trends of the tenant, current economic conditions and changes in customer payment terms. When the collectibility of lease receivables or future lease payments are no longer probable, the Company records a direct write-off of the receivable to rental revenue and recognizes future rental revenue on a cash basis.

Property Sales
Sales of real estate properties are recognized when a contract exists and the purchaser has obtained control of the property. Gains on sales of properties are recognized in full in a partial sale of nonfinancial assets, to the extent control is not retained. Any noncontrolling interest retained by the seller would, accordingly, be measured at fair value.

The Company evaluates each sale or disposal transaction to determine if it meets the criteria to qualify as discontinued operations. A discontinued operation is a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on the Company's operations and financial results. If the sale or disposal transaction does not meet the criteria, the operations and related gain or loss on sale is included in income from continuing operations.

Mortgage Notes and Other Notes Receivable
Mortgage notes and other notes receivable, including related accrued interest receivable, consist of loans originated by the Company and the related accrued and unpaid interest income as of the balance sheet date. Mortgage notes and other notes receivable are initially recorded at the amount advanced to the borrower less allowance for credit loss. Interest income is recognized using the effective interest method over the estimated life of the note. Interest income includes both the stated interest and the amortization or accretion of premiums or discounts (if any).

In accordance with ASC Topic 326, Measurement of Credit Losses on Financial Instruments, the Company records allowance for credit loss to reflect that all mortgage notes and notes receivable have some inherent risk of loss regardless of credit quality, collateral, or other mitigating factors. While Topic 326 does not require any particular method for determining the reserves, it does specify that it should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, as well as reasonable and supportable forecasts for the term of each mortgage note or note receivable. The Company uses a forward-looking commercial real estate forecasting tool to estimate its current expected credit losses (CECL) for each of its mortgage notes and notes receivable on a loan-by-loan basis. The CECL allowance required by Topic 326 is a valuation account that is deducted from the related mortgage note or note receivable. Effective January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures.

76

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Certain of the Company’s mortgage notes and notes receivable include commitments to fund incremental amounts to its borrowers. These future funding commitments are also subject to the CECL model. The allowance related to future funding is recorded as a liability and is included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets.

As permitted under Topic 326, the Company made an accounting policy election to not measure an allowance for credit losses for accrued interest receivables related to its mortgage notes and notes receivable. Accordingly, if accrued interest receivable is deemed to be uncollectible, the Company will record any necessary write-offs as a reversal of interest income. During the year ended December 31, 2022, the Company wrote-off approximately $1.5 million of accrued interest and fees receivable against interest income related to one mortgage note receivable and two notes receivable. No such amounts were written-off for the years ended December 31, 2023 and 2021. As of December 31, 2023, the Company believes that all outstanding accrued interest is collectible.

In the event the Company has a past due mortgage note or note receivable and the Company determines it is collateral dependent, the Company measures expected credit losses based on the fair value of the collateral. As of December 31, 2023, the Company does not have any mortgage notes or notes receivable with past due principal balances. See Note 7 for further discussion of mortgage notes and notes receivable for which the Company elected to apply the collateral dependent practical expedient.

Mortgage and Other Financing Income
Certain of the Company's borrowers are subject to additional interest based on certain thresholds defined in the mortgage agreements (participating interest). Participating interest income is recognized at the time when specific triggering events occur as provided by the mortgage agreement. Participating interest income for the year ended December 31, 2023 related to one borrower and was $57 thousand. There was no participating interest income for the years ended December 31, 2022 and 2021.

Income Taxes
The Company has elected to be taxed as a REIT pursuant to Section 856(c) of the Internal Revenue Code. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. The Company intends to continue to qualify as a REIT and distribute substantially all of its taxable income to its shareholders.

The Company is subject to income tax in certain instances in both the U.S. and in certain foreign jurisdictions, as more fully described herein. The Company’s income tax expense includes deferred income tax expense or benefit, which represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. The Company evaluates the realizability of its deferred income tax assets and assesses the need for a valuation allowance for each jurisdiction for which it is subject to income tax. The realization of the deferred tax assets depends upon all positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets.

The Company owns certain real estate assets that are subject to income tax in Canada. At December 31, 2023, the net deferred tax assets related to the Company's Canadian operations totaled $25.9 million resulting from the temporary differences between income for financial reporting purposes and taxable income relating primarily to depreciation, capital improvements and straight-line rents. At December 31, 2023, it is more likely than not the Company will not generate sufficient taxable income to realize the net deferred tax assets related to the Company's Canadian operations as of December 31, 2023 totaling $25.4 million.

The Company has certain taxable REIT subsidiaries (TRSs), as permitted under the Internal Revenue Code, through which it conducts certain business activities and are subject to federal and state income taxes on their net taxable income. The Company uses four such TRS entities exclusively to hold the operational aspect of the traditional REIT lodging structure for five Experiential lodging properties that are facilitated by management agreements with eligible independent contractors. The real estate for these investments are held by the REIT either directly or through an investment in a joint venture and leased to the respective operations entity under a triple-net lease.
77

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Management has determined which of the real estate assets meets the requirements to be classified as qualified lodging facilities as required in a traditional REIT lodging structure and recognizes revenue on these structures accordingly for REIT testing purposes.

The Company also uses one such TRS entity to hold the operational aspect of five theatre assets, which are managed by third party property managers. The real estate for these assets is held by the REIT directly and leased to the respective operating TRS entity under a triple-net lease.

At December 31, 2023, the net deferred tax assets related to the Company's TRSs totaled $11.2 million, resulting from the temporary differences between income for financial reporting purposes and taxable income relate primarily to net operating loss carryovers and pre-opening cost amortization. At December 31, 2023, it is more likely than not that the Company will not generate sufficient taxable income to realize the net deferred tax assets related to the Company's TRSs as of December 31, 2023 totaling $11.2 million.

As of December 31, 2023 and 2022, the Canadian operations and the Company's TRSs had deferred tax assets included in "Other assets" in the accompanying consolidated balance sheets totaling approximately $41.7 million and $36.9 million, respectively, and deferred tax liabilities included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets totaling approximately $4.6 million and $4.1 million, respectively. At December 31, 2023 and 2022, the Company had valuation allowances offsetting the net deferred tax assets included in the accompanying consolidated balance sheets totaling $36.6 million and $32.6 million, respectively. The Company’s consolidated deferred tax position is summarized as follows at December 31 (in thousands):
2023 2022
Fixed assets $ 25,416  $ 22,788 
Net operating losses 11,296  10,093 
Start-up costs 2,301  2,185 
Other 2,698  1,826 
Total deferred tax assets $ 41,711  $ 36,892 
Capital improvements $ (2,786) $ (2,718)
Straight-line receivable (982) (962)
Other (805) (419)
Total deferred tax liabilities $ (4,573) $ (4,099)
Valuation allowance (36,613) (32,624)
Net deferred tax asset $ 525  $ 169 

Additionally, during the years ended December 31, 2023, 2022 and 2021, the Company recognized current income and withholding tax expense of $2.1 million, $1.4 million and $1.6 million, respectively, primarily related to certain state income taxes and foreign withholding tax. The table below details the current and deferred income tax benefit (expense) for the years ended December 31, 2023, 2022 and 2021 (in thousands):
2023 2022 2021
Current TRS income tax $ —  $ (137) $ — 
Current state income tax expense (240) (226) (505)
Current foreign income tax (513) (1) (4)
Current foreign withholding tax (1,318) (1,041) (1,088)
Deferred TRS income tax (expense) benefit —  —  — 
Deferred foreign withholding tax —  —  — 
Deferred income tax (expense) benefit 344  169  — 
Income tax benefit (expense) $ (1,727) $ (1,236) $ (1,597)

78

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
The Company's effective tax rate for the years ended December 31, 2023, 2022 and 2021 was 1.2%, 0.8% and 2.1%, respectively. The differences between the income tax expense calculated at the statutory U.S. federal income tax rates and the actual income tax expense recorded is mostly attributable to the dividends paid deduction available for REITs.

Furthermore, the Company qualified as a REIT and distributed the necessary amount of taxable income such that no current U.S. federal income taxes were due for the years ended December 31, 2023, 2022 and 2021. Accordingly, no provision for current U.S. federal income taxes was recorded for any of those years. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain provisions, it will be subject to federal and state income taxes at regular corporate rates (including any applicable alternative minimum tax for years prior to January 1, 2021) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income. Tax years 2020 through 2022 remain generally open to examination for U.S. federal income tax and state tax purposes and from 2018 through 2022 for Canadian income tax purposes.

The Company’s policy is to recognize interest and penalties as general and administrative expense. The Company did not recognize any interest and penalties in 2023, 2022 or 2021. The Company did not have any accrued interest and penalties at December 31, 2023, 2022 and 2021. Additionally, the Company did not have any unrecorded tax benefits as of December 31, 2023, 2022 and 2021.

Concentrations of Risk
Regal, Topgolf USA (Topgolf) and AMC represented a significant portion of the Company's total revenue for the years ended December 31, 2023, 2022 and 2021. The Company had higher revenue from Regal during the years ended December 31, 2023 and 2022 due to the payment of rent and the repayment of deferred rent due, both of which were recognized as rental revenue when received. The following is a summary of the Company's total revenue derived from rental or interest payments from Regal, Topgolf and AMC (dollars in thousands):
Year ended December 31,
2023 2022 2021
Total Revenue % of Company's Total Revenue Total Revenue % of Company's Total Revenue Total Revenue % of Company's Total Revenue
Regal $ 103,716  14.7  % $ 90,678  13.8  % $ 44,576  8.4  %
Topgolf 98,022  13.9  % 94,177  14.3  % 86,470  16.3  %
AMC 94,687  13.4  % 94,476  14.4  % 94,405  17.8  %

Cash Equivalents
Cash equivalents include bank demand deposits and other short-term investments.

Restricted Cash
Restricted cash represents cash held for escrow deposits required in connection with property management and debt agreements or held for potential acquisitions and redevelopments.
 
Share-Based Compensation
Share-based compensation to employees of the Company is granted pursuant to the Company's Annual Incentive Program and Long-Term Incentive Plan and share-based compensation to non-employee Trustees of the Company is granted pursuant to the Company's Trustee compensation program.

Share based compensation expense consists of amortization of nonvested share grants and share options issued to employees, and amortization of share units issued to non-employee Trustees for payment of their annual retainers. Share based compensation is included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income.

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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Nonvested Shares Issued to Employees
The Company grants nonvested shares to employees pursuant to both the Annual Incentive Program and the Long-Term Incentive Plan. The Company amortizes the expense related to the nonvested shares awarded to employees under the Long-Term Incentive Plan and the premium awarded under the nonvested share alternative of the Annual Incentive Program on a straight-line basis over the future vesting period (three years to four years).

Nonvested Performance Shares Issued to Employees
The Company awards performance shares to the Company's executive officers pursuant to the Long-Term Incentive Plan. The performance shares contain both a market condition and a performance condition. The Company amortizes the expense related to the performance shares over the future vesting period of three years.

Restricted Share Units Issued to Non-Employee Trustees
The Company issues restricted share units to non-employee Trustees for payment of their annual retainers under the Company's Trustee compensation program. The fair value of the share units granted was based on the share price at the date of grant. The share units vest upon the earlier of the day preceding the next annual meeting of shareholders or a change of control. The settlement date for the shares is selected by the non-employee Trustee, and ranges from one year from the grant date to upon termination of service. This expense is amortized by the Company on a straight-line basis over the year of service by the non-employee Trustees.

Share Options
Prior to 2022, share options were granted to employees pursuant to the Long-Term Incentive Plan. The fair value of share options granted is estimated at the date of grant using the Black-Scholes option pricing model. Share options granted to employees vest over a period of four years and share option expense for these options is recognized on a straight-line basis over the vesting period.

Foreign Currency Translation
The Company accounts for the operations of its Canadian properties in Canadian dollars. The assets and liabilities related to the Company’s Canadian properties and mortgage note are translated into U.S. dollars using the spot rates at the respective balance sheet dates; revenues and expenses are translated at average exchange rates. Resulting translation adjustments are recorded as a separate component of comprehensive income.

Derivative Instruments
The Company uses derivative instruments to reduce exposure to fluctuations in foreign currency exchange rates and variable interest rates.

The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as foreign currency risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. If hedge accounting is not applied, realized and unrealized gains or losses are reported in earnings.

The Company's policy is to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

80

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Impact of Recently Issued Accounting Standards
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 31, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact this guidance will have on the Company's financial statement disclosures.

3. Real Estate Investments

The following table summarizes the carrying amounts of real estate investments as of December 31, 2023 and 2022 (in thousands):
2023 2022
Buildings and improvements $ 4,609,050  $ 4,637,801 
Furniture, fixtures & equipment 115,596  115,677 
Land 1,219,943  1,236,358 
Leasehold interests 28,453  26,940 
5,973,042  6,016,776 
Accumulated depreciation (1,435,683) (1,302,640)
Total $ 4,537,359  $ 4,714,136 
Depreciation expense on real estate investments was $159.3 million, $158.8 million and $158.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

4. Investments and Dispositions

Acquisitions and Development

The Company's investment spending during the years ended December 31, 2023 and 2022 totaled $269.4 million and $402.5 million, respectively, and is detailed below (in thousands):
For the Year Ended December 31, 2023
Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures
Experiential:
Theatres $ 5,182  $ —  $ 5,182  $ —  $ —  $ — 
Eat & Play 24,048  20,750  2,192  —  1,106  — 
Attractions 28,384  —  3,669  —  24,715  — 
Ski 5,324  —  —  —  5,324  — 
Experiential Lodging 16,034  —  —  —  —  16,034 
Fitness & Wellness 184,370  45,632  3,286  53,144  82,308  — 
Cultural 6,086  —  6,086  —  —  — 
Total Experiential 269,428  66,382  20,415  53,144  113,453  16,034 
Education:
Total Education —  —  —  —  —  — 
Total Investment Spending $ 269,428  $ 66,382  $ 20,415  $ 53,144  $ 113,453  $ 16,034 

81

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
For the Year Ended December 31, 2022
Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures
Experiential:
Theatres $ 622  $ 5  $ 617  $ —  $ —  $ — 
Eat & Play 24,747  23,151  1,596  —  —  — 
Attractions 145,026  —  2,261  142,765  —  — 
Ski 27,178  —  —  —  27,178  — 
Experiential Lodging 77,782  4,354  —  —  11,305  62,123 
Fitness & Wellness 127,057  44,090  6,358  19,858  56,751  — 
Cultural 107  —  107  —  —  — 
Total Experiential 402,519  71,600  10,939  162,623  95,234  62,123 
Education:
Total Education —  —  —  —  —  — 
Total Investment Spending $ 402,519  $ 71,600  $ 10,939  $ 162,623  $ 95,234  $ 62,123 

Dispositions
During the year ended December 31, 2023, the Company completed the sale of three vacant theatre properties, two operating theatre properties, one vacant eat & play property, four vacant early childhood education centers and a land parcel for net proceeds totaling $57.2 million and recognized a net loss on sale of $2.2 million. Additionally, during the year ended December 31, 2023, the Company, as lessee, terminated one ground lease that held one theatre property.

Subsequent to year-end, the Company completed the sale of two cultural properties for net proceeds of approximately $44.9 million and expects to recognize a gain on sale of approximately $17.1 million during the three months ending March 31, 2024, in connection with this sale.

During the year ended December 31, 2022, the Company completed the sale of three vacant theatre properties and a land parcel for net proceeds of $11.0 million and recognized a combined gain on sale of $0.7 million.

Dispositions during the years ended December 31, 2023 and 2022 did not meet the criteria for discontinued operations reporting.

5. Impairment Charges

The Company reviews its properties for changes in circumstances that indicate that the carrying value of a property may not be recoverable based on an estimate of undiscounted future cash flows. During the year ended December 31, 2023, the Company reassessed the holding period of the Regal Surrendered Properties not included in the Master Lease, four other theatre properties that are part of a workout with a smaller theatre tenant and two early childhood education center properties subject to lease terminations (one triggered by a casualty event). The Company determined that the estimated cash flows for eight of the Regal Surrendered Properties, two of the other theatre properties and both of the early childhood education center properties were not sufficient to recover the carrying values and estimated the fair value of the real estate investments of these properties using independent appraisals. During the year ended December 31, 2023, the Company reduced the carrying value of the real estate investments, net to $39.2 million and recognized impairment charges of $67.4 million on real estate investments, which is the amount that the carrying values of the assets exceeded the estimated fair values.

During the year ended December 31, 2022, the Company reassessed the holding period of five early education properties subject to lease terminations, a vacant property that received an offer to purchase and two of the Regal theatre properties subject to a motion to reject leases.
82

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
One of these properties has an operating ground lease arrangement with right-of-use asset. The Company determined that the estimated cash flows were not sufficient to recover the carrying values. During the year ended December 31, 2022, the Company determined the estimated fair value of the real estate investments and right-of-use assets of these properties using independent appraisals and the purchase offer. The Company reduced the carrying value of the real estate investments, net to $38.4 million and the operating lease right-of-use asset to $7.0 million. The Company recognized impairment charges of $25.3 million on real estate investments and a $2.0 million impairment on the right-of-use asset, which is the amount that the carrying value of the assets exceeded the estimated fair value.

During the year ended December 31, 2022, the Company also recognized $0.6 million in other-than-temporary impairments related to its equity investments in joint ventures in two theatre projects located in China. See Note 8 for further details on these impairments.

During the year ended December 31, 2021, the Company received various offers to sell two of its vacant properties. As a result, the Company reassessed the expected holding periods of such properties and determined that the estimated cash flows were not sufficient to recover the carrying values of these properties. The Company estimated the fair value of these properties by taking into account these purchase offers. The Company reduced the carrying value of the real estate investments, net to $7.0 million. The Company recognized impairment charges of $2.7 million on the real estate investments, which is the amount that the carrying value of the assets exceeded the estimated fair value.

6. Accounts Receivable

The following table summarizes the carrying amounts of accounts receivable as of December 31, 2023 and 2022 (in thousands):
2023 2022
Receivable from tenants $ 7,298  $ 7,595 
Receivable from non-tenants 824  1,006 
Straight-line rent receivable 55,533  44,986 
Total $ 63,655  $ 53,587 

As of December 31, 2023, the Company collected all deferred receivables from accrual basis tenants that were deferred due to the COVID-19 pandemic. As of December 31, 2022, receivables from tenants included payments of approximately $2.1 million that were deferred due to the COVID-19 pandemic and determined to be collectible. Additionally, the Company has amounts due from tenants that were not booked as receivables totaling approximately $12.0 million at December 31, 2023 because the full amounts were not deemed probable of collection as a result of COVID-19 pandemic. While deferments for this and future periods delay rent payments, these deferments do not release tenants from the obligation to pay the deferred amounts in the future.

7. Investment in Mortgage Notes and Notes Receivable

The Company measures expected credit losses on its mortgage notes and notes receivable on an individual basis because its financial instruments do not have similar risk characteristics. The Company uses a forward-looking commercial real estate loss forecasting tool to estimate its current expected credit losses (CECL) for each of its mortgage notes and notes receivable on a loan-by-loan basis. As of December 31, 2023, the Company did not anticipate any prepayments; therefore, the contractual terms of its mortgage notes and notes receivable were used for the calculation of the expected credit losses. The Company updates the model inputs at each reporting period to reflect, if applicable, any newly originated loans, changes to specific information on existing loans and current macroeconomic conditions. The CECL allowance is a valuation account that is deducted from the related mortgage note or note receivable. Effective January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures.

83

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Certain of the Company’s mortgage notes and notes receivable include commitments to fund future incremental amounts to its borrowers. These future funding commitments are also subject to the CECL model. The allowance related to future funding is recorded as a liability and is included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets.

Investment in mortgage notes, including related accrued interest receivable, at December 31, 2023 and 2022 consists of the following (in thousands):
Year of Origination Interest Rate Maturity Date Periodic Payment Terms Outstanding principal amount of mortgage at December 31, 2023 Carrying amount as of December 31, Unfunded commitments
Description 2023 2022 December 31, 2023
Eat & play property Eugene, Oregon 2019 8.13  % 8/31/2024 Interest only $ 10,750  $ 10,417  $ 7,780  $ — 
Attraction property Powells Point, North Carolina 2019 7.75  % 6/30/2025 Interest only 29,378  29,200  29,227  — 
Fitness & wellness property Merriam, Kansas 2019 7.55  % 7/31/2029 Interest only 9,090  9,223  9,195  — 
Fitness & wellness property Omaha, Nebraska 2017 9.00  % 6/30/2030 Interest only 10,905  10,951  10,898  — 
Fitness & wellness property Omaha, Nebraska 2016 9.00  % 6/30/2030 Interest only 10,539  10,615  10,531  — 
Experiential lodging property Nashville, Tennessee 2019 6.99  % 9/30/2031 Interest only 70,000  71,187  70,576  — 
Ski property Girdwood, Alaska 2019 8.78  % 7/31/2032 Interest only 78,102  78,062  72,366  3,898 
Fitness & wellness properties Colorado and California 2022 7.15  % 1/10/2033 Interest only 59,034  59,207  56,911  5,516 
Eat & play property Austin, Texas 2012 11.31  % 6/1/2033 Principal & Interest-fully amortizing 9,701  9,701  10,253  — 
Eat & play property Dallas, Texas 2023 10.25  % 6/9/2033 Interest only 1,106  1,105  —  4,894 
Experiential lodging property Breaux Bridge, LA 2022 7.25  % 3/8/2034 Interest only 11,305  11,373  11,373  — 
Ski property West Dover and Wilmington, Vermont 2007 12.32  % 12/1/2034 Interest only 51,050  51,049  51,049  — 
Four ski properties Ohio and Pennsylvania 2007 11.41  % 12/1/2034 Interest only 37,562  37,495  37,529  — 
Ski property Chesterland, Ohio 2012 11.90  % 12/1/2034 Interest only 4,550  4,508  4,532  — 
Ski property Hunter, New York 2016 9.03  % 1/5/2036 Interest only 21,000  21,000  21,000  — 
Eat & play property Midvale, Utah 2015 10.25  % 5/31/2036 Interest only 17,505  17,505  17,505  — 
Eat & play property West Chester, Ohio 2015 9.75  % 8/1/2036 Interest only 18,068  18,067  18,066  — 
Fitness & wellness property Fort Collins, Colorado 2018 8.00  % 1/31/2038 Interest only 10,292  10,070  10,089  — 
Early childhood education center Lake Mary, Florida 2019 8.23  % 5/9/2039 Interest only 4,200  4,387  4,360  — 
Early childhood education center Lithia, Florida 2017 8.93  % 10/31/2039 Interest only 3,959  4,018  4,028  — 
Attraction property Frankenmuth, Michigan 2022 8.25  % 10/14/2042 Interest only 24,715  24,375  —  43,285 
Fitness & wellness properties Massachusetts and New York 2023 8.30  % 1/10/2044 Interest only 77,000  76,253  —  47,100 
$ 569,811  $ 569,768  $ 457,268  $ 104,693 

84

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
During the year ended December 31, 2023, the Company amended a mortgage note receivable and note receivable secured by an eat & play investment with one borrower. The modified loan agreement consolidated all of the borrower's obligations into one mortgage note agreement, including land that was previously ground leased to the borrower. The maturity date of this mortgage note receivable was modified to be August 31, 2024, and was previously June 17, 2039. In connection with the modification, the Company forgave approximately $7.8 million of principal. During the year ended December 31, 2022, the Company recorded an allowance for credit loss totaling $8.0 million for this mortgage note and note receivable, and the forgiveness of $7.8 million reduced the allowance for credit loss during the year ended December 31, 2023.The outstanding principal amount of this mortgage note receivable at December 31, 2023 was $10.8 million.

Although foreclosure was not deemed probable and the principal balance of the mortgage note receivable was not past due at December 31, 2023, based on the borrower's declining financial condition, the Company determined that the borrower continues to experience financial difficulty. The repayments are expected to be provided substantially through the sale or operation of the collateral, therefore, the Company elected to apply the collateral-dependent practical expedient. Expected credit losses are based on the fair value of the underlying collateral at the reporting date. The Company will continue to monitor and re-assess the borrower’s financial status at each reporting period and will continue to apply the practical expedient until the borrower is no longer experiencing financial difficulties or the repayment of the outstanding principal and interest is no longer in question. Income from this borrower is recognized on a cash basis. The Company received interest payments totaling $0.9 million from this borrower for the year ended December 31, 2023. During the year ended December 31, 2023, the borrower made all contractual interest payments according to the terms of the modified agreement. During the year ended December 31, 2022, the Company wrote-off $0.9 million in accrued interest receivables and fees to "Mortgage and other financing income" in the accompanying consolidated statements of income related to this mortgage note.

Investment in notes receivable, including related accrued interest receivable, was $3.9 million and $2.9 million at December 31, 2023 and 2022, respectively, and is included in "Other assets" in the accompanying consolidated balance sheets.

At December 31, 2023, two of the Company's notes receivable are considered collateral-dependent and expected credit losses are based on the fair value of the underlying collateral at the reporting date. The Company assessed the fair value of the collateral as of December 31, 2023 on these notes and the notes remain fully reserved with an allowance for credit loss totaling $7.6 million and $1.9 million, respectively, which represents the outstanding principal balance of the notes as of December 31, 2023. Income from these borrowers is recognized on a cash basis. During the year ended December 31, 2023 and 2022, the Company received principal payments totaling $0.7 million and $0.3 million, respectively, and cash basis interest payments totaling $0.7 million and $1.2 million, respectively, from one of these borrowers. During the year ended December 31, 2022, the Company wrote-off $0.6 million in accrued interest receivables and fees to "Mortgage and other financing income" in the accompanying consolidated statements of income related to one of these notes receivable.

At December 31, 2023, the Company's investment in one of the notes receivable was a variable interest investment and the underlying entity is a VIE. The Company is not the primary beneficiary of this VIE because the Company does not individually have the power to direct the activities that are most significant to the entity and accordingly, this investment is not consolidated. The Company's maximum exposure to loss associated with this VIE is limited to the Company's outstanding note receivable in the amount of $7.6 million, which is fully reserved in the allowance for credit losses at December 31, 2023.

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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
The following summarizes the activity within the allowance for credit losses related to mortgage notes, unfunded commitments and notes receivable for the years ended December 31, 2023 and 2022 (in thousands):
Mortgage notes receivable Unfunded commitments - mortgage notes receivable Notes receivable Unfunded commitments - notes receivable Total
Allowance for credit losses at December 31, 2021 $ 2,124  $ 76  $ 8,686  $ —  $ 10,886 
Provision (benefit) for credit losses, net 6,875  675  3,266  —  10,816 
Charge-offs —  —  —  —  — 
Recoveries —  —  —  —  — 
Allowance for credit losses at December 31, 2022 $ 8,999  $ 751  $ 11,952  $ —  $ 21,702 
Provision (benefit) for credit losses, net 2,428  321  (1,871) —  878 
Charge-offs (7,771) —  (394) —  (8,165)
Recoveries —  —  —  —  — 
Allowance for credit losses at December 31, 2023 $ 3,656  $ 1,072  $ 9,687  $ —  $ 14,415 

8. Unconsolidated Real Estate Joint Ventures

The following table summarizes our investment in unconsolidated joint ventures as of December 31, 2023 and 2022 (in thousands):
Investment as of December 31, (Loss) Income for the Year Ended December 31,
Property Type Location Ownership Interest 2023 2022 2023 2022
Experiential lodging St. Pete Beach, FL 65  % (1) $ 14,727  $ 18,712  $ (2,684) $ 292 
Experiential lodging Warrens, WI 95  % (2) 9,945  10,865  (919) (1,050)
Experiential lodging Breaux Bridge, LA 85  % (3) 18,996  17,080  (2,944) (719)
Experiential lodging Harrisville, PA 62  % (4) 6,086  6,307  (221) (134)
Theatres China various (5) —  —  —  (61)
$ 49,754  $ 52,964  $ (6,768) $ (1,672)

(1) The Company has equity investments in two unconsolidated real estate joint ventures, one that holds the investment in the real estate of the experiential lodging properties and the other that holds the lodging operations, which are facilitated by a management agreement. The joint venture that holds the real property has a secured mortgage loan of $105.0 million at December 31, 2023. The maturity date of this mortgage loan is May 18, 2025. The note can be extended for two additional one-year periods from the original maturity date upon the satisfaction of certain conditions. The mortgage loan bears interest at SOFR plus 3.65%, with monthly interest payments required. The joint venture has an interest rate cap agreement to limit the variable portion of the interest rate (SOFR) on this note to 3.5% from May 19, 2022 to June 1, 2024. The Company received distributions of $1.3 million from its investments in these joint ventures during the year ended December 31, 2023. On May 18, 2022, the joint venture that holds the real estate refinanced its secured mortgage loan, described above. In connection with this refinancing, during the year ended December 31, 2022, the Company received $6.7 million in distributions. In addition, the Company received $0.8 million in distributions from operations during the year ended December 31, 2022. The Company's accounting policy is to classify the distributions on its consolidated statement of cash flows using the nature of the distribution approach based on facts and circumstances surrounding the distributions.

(2) The Company has equity investments in two unconsolidated real estate joint ventures, one that holds the investment in the real estate of the experiential lodging property and the other that holds the lodging operations, which are facilitated by a management agreement. The joint venture that holds the real property has a secured mortgage loan of $22.4 million at December 31, 2023 that provides for additional draws of approximately $1.6 million to fund renovations.
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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
The maturity date of this mortgage loan is September 15, 2031. The loan bears interest at an annual fixed rate of 4.00% with monthly interest payments required. Additionally, the Company has guaranteed the completion of the renovations in the amount of approximately $14.2 million, with $1.7 million remaining to fund at December 31, 2023.

(3) The Company has equity investments in two unconsolidated real estate joint ventures, one that holds the investment in the real estate of the experiential lodging property and the other that holds the lodging operations, which are facilitated by a management agreement. The joint venture that holds the real estate property has a secured senior mortgage loan of $38.5 million at December 31, 2023. The maturity date of this mortgage loan is March 8, 2034. The mortgage loan bears interest at an annual fixed rate of 3.85% through April 7, 2025 and increases to 4.25% from April 8, 2025 through maturity. Monthly interest payments are required. Additionally, the Company provided a subordinated loan to the joint venture for $11.3 million with a maturity date of March 8, 2034. The mortgage loan bears interest at an annual fixed rate of 7.25% through the sixth anniversary and increases to SOFR plus 7.20% with a cap of 8.00%, through maturity.

(4) The Company has a 92% equity investment in two unconsolidated real estate joint ventures, that through subsequent joint ventures (described below), hold the investments in the real estate of the experiential lodging property and the lodging operations, which are facilitated by a management agreement. The Company's investment in these two unconsolidated real estate joint ventures were considered to be variable interest investments and the Company's investment in the joint venture that holds the lodging operations is a VIE. The Company is not the primary beneficiary of the VIE because the Company does not individually have the power to direct the activities that are most important to the joint venture and, accordingly, this investment is not consolidated. Other than the guarantee described below, the Company's maximum exposure to loss is limited to its initial investment, which was nominal.

The Company's investments in the two unconsolidated real estate joint ventures (representing 92% of each joint venture's equity) have a 67% equity interest in two separate consolidated joint ventures, one that holds the investments in the real estate of the experiential lodging property and the other that holds lodging operations, which are facilitated by a management agreement. The consolidated joint venture that holds the real estate property has a secured senior mortgage loan commitment of up to $22.5 million at December 31, 2023 in order to fund renovations, with $6.9 million outstanding at December 31, 2023. The maturity date of this mortgage loan is November 1, 2029. The mortgage loan bears interest at an annual fixed rate of 6.38% with monthly interest payments required. The Company has guaranteed $10.0 million in principal on the secured mortgage loan, and, upon completion of construction and achieving a specified debt service coverage ratio, the principal guarantee will be reduced to $5.0 million. The guarantee will be removed completely upon achievement of specified debt service coverage for three consecutive calculation periods. Additionally, the Company has guaranteed the completion of the renovations in the amount of approximately $13.9 million, with $9.6 million remaining to fund at December 31, 2023.

(5) The Company has equity investments in unconsolidated joint ventures for three theatre projects located in China, with ownership interests ranging from 30% to 49%. During the year ended December 31, 2022, the Company recognized $0.6 million in other-than-temporary impairment charges related to these equity investments. The Company determined that these investments had no fair value based primarily on discounted cash flow projections.

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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
9. Debt

Debt at December 31, 2023 and 2022 consists of the following (in thousands):
2023 2022
Senior unsecured notes payable, 4.35%, due August 22, 2024 (1)
 $ 136,637  $ 136,637 
Senior unsecured notes payable, 4.50%, due April 1, 2025 (2)
 300,000  300,000 
Unsecured revolving variable rate credit facility, SOFR + 1.30%, due October 6, 2025 (3)
 —  — 
Senior unsecured notes payable, 4.56%, due August 22, 2026 (1)
 179,597  179,597 
Senior unsecured notes payable, 4.75%, due December 15, 2026 (2)
 450,000  450,000 
Senior unsecured notes payable, 4.50%, due June 1, 2027 (2)
 450,000  450,000 
Senior unsecured notes payable, 4.95%, due April 15, 2028 (2)
 400,000  400,000 
Senior unsecured notes payable, 3.75%, due August 15, 2029 (2)
 500,000  500,000 
Senior unsecured notes payable, 3.60%, due November 15, 2031 (2)
 400,000  400,000 
Bonds payable, variable rate, fixed at 2.53% through September 30, 2026, due August 1, 2047 (4)
24,995  24,995 
Less: deferred financing costs, net (25,134) (31,118)
Total $ 2,816,095  $ 2,810,111 

(1) The amended Note Purchase Agreement, which governs the private placement notes, contains certain financial and other covenants that generally conform to the Company's unsecured revolving credit facility.

On January 14, 2022, the Company amended the Note Purchase Agreement to, among other things: (i) amend certain financial and other covenants and provisions in the existing Note Purchase Agreement to conform generally to the changes beneficial to the Company in the corresponding covenants and provisions contained in the Company's Third Amended, Restated and Consolidated Credit Agreement, dated October 6, 2021, and (ii) amend certain financial and other covenants and provisions in the existing Note Purchase Agreement to reflect the prior termination of the Covenant Relief Period and removal of related provisions.

(2) These notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the ratio of the Company’s debt to adjusted total assets to exceed 60%; (ii) a limitation on incurrence of any secured debt that would cause the ratio of the Company’s secured debt to adjusted total assets to exceed 40%; (iii) a limitation on incurrence of any debt that would cause the Company’s debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of the Company's total unencumbered assets such that they are not less than 150% of the Company’s outstanding unsecured debt.

(3) At December 31, 2023, the Company had no balance outstanding under its $1.0 billion unsecured revolving credit facility. On February 17, 2023, the Company amended its Third Consolidated Credit Agreement, which governs its unsecured revolving credit facility, to modify the interest rate from LIBOR to SOFR. The facility bears interest at a floating rate of SOFR plus 1.30% (with a SOFR floor of zero), which was 6.66% at December 31, 2023, and a facility fee of 0.25%. Interest is payable monthly. In addition, there is a $1.0 billion accordion feature under which the Company may increase the total maximum principal amount available by $1.0 billion, to a total of $2.0 billion, subject to lender consent. The Company has two options to extend the maturity date of the 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 facility contains financial covenants or restrictions that limit the Company's level of consolidated debt, secured debt, investment levels outside certain categories and dividend distribution and require the Company to maintain a minimum consolidated tangible net worth and meet certain coverage levels for fixed charges and debt service.

(4) The bonds have a variable interest rate that was approximately 5.48% at December 31, 2023. During the year ended December 31, 2022, the Company amended and restated its interest rate swap agreement on variable rate secured bonds with a notional amount of $25.0 million. This amendment changed the index rate from LIBOR to SOFR and extended the swap termination date by two years to September 30, 2026.
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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
The fixed rate of 1.3925% indexed to LIBOR was modified to 2.5325% indexed to SOFR. See Note 10 for further details.

Certain of the Company’s debt agreements contain customary restrictive covenants related to financial and operating performance and certain cross-default provisions. The Company was in compliance with all financial covenants under the Company's debt instruments at December 31, 2023.

Principal payments due on long-term debt obligations subsequent to December 31, 2023 (without consideration of any extensions) are as follows (in thousands):
  Amount
Year:
2024 $ 136,637 
2025 300,000 
2026 629,597 
2027 450,000 
2028 400,000 
Thereafter 924,995 
Less: deferred financing costs, net (25,134)
Total $ 2,816,095 

The Company capitalizes a portion of interest costs as a component of property under development. The following is a summary of interest expense, net, for the years ended December 31, 2023, 2022 and 2021 (in thousands):
2023 2022 2021
Interest on loans $ 122,968  $ 123,070  $ 138,805 
Amortization of deferred financing costs 8,637  8,360  7,666 
Credit facility and letter of credit fees 2,676  2,682  3,344 
Interest cost capitalized (3,566) (1,286) (1,567)
Interest income (5,857) (1,651) (153)
Interest expense, net $ 124,858  $ 131,175  $ 148,095 

10. Derivative Instruments

All derivatives are recognized at fair value in the consolidated balance sheets within the line items "Other assets" and "Accounts payable and accrued liabilities" as applicable. The Company has elected not to offset its derivative position for purposes of balance sheet presentation and disclosure. The Company had derivative assets of $1.3 million and $11.4 million at December 31, 2023 and 2022, respectively. The Company had derivative liabilities of $4.9 million at December 31, 2023 and no derivative liabilities at December 31, 2022. The Company has neither posted nor received collateral with its derivative counterparties as of December 31, 2023 and 2022. See Note 11 for disclosures relating to the fair value of the derivative instruments.

Risk Management Objective of Using Derivatives
The Company is exposed to certain risk arising from both its business operations and economic conditions, including the effect of changes in foreign currency exchange rates on foreign currency transactions and interest rates on its SOFR based borrowings. The Company manages this risk by following established risk management policies and procedures including the use of derivatives. The Company’s objective in using derivatives is to add stability to reported earnings and to manage its exposure to foreign exchange and interest rate movements or other identified risks. To accomplish this objective, the Company primarily uses interest rate swaps, cross-currency swaps and foreign currency forwards.

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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Cash Flow Hedges of Interest Rate Risk
The Company uses interest rate swaps as its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt or payment of variable-rate amounts from a counterparty, which results in the Company recording net interest expense that is fixed over the life of the agreements without exchange of the underlying notional amount.

During the year ended December 31, 2022, the Company amended and restated its interest rate swap agreement on its variable rate secured bonds with a notional amount of $25.0 million. This amendment changed the index rate from LIBOR to SOFR and extended the termination date by two years to September 30, 2026. The fixed rate of 1.3925% indexed to LIBOR was modified to 2.5325% indexed to SOFR. The Company used a strategy commonly referred to as blend and extend, which allows the asset position of the terminated interest rate swap agreement of approximately $1.4 million to be effectively blended into the new interest rate swap agreement. At December 31, 2023, the Company had only this interest rate swap agreement designated as a cash flow hedge of interest rate risk. The interest rate swap agreement outstanding as of December 31, 2023 is summarized below:

Fixed rate Notional Amount (in millions) Index Maturity
2.5325% $ 25.0  USD SOFR September 30, 2026

The change in the fair value of interest rate derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (AOCI) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of December 31, 2023, the Company estimates that during the twelve months ending December 31, 2024, $0.7 million of gains will be reclassified from AOCI to interest expense.

Cash Flow Hedges of Foreign Exchange Risk
The Company is exposed to foreign currency exchange risk against its functional currency, USD, on CAD denominated cash flow from its six Canadian properties. The Company uses cross-currency swaps to mitigate its exposure to fluctuations in the USD-CAD exchange rate on cash inflows associated with these properties, which should hedge a significant portion of the Company's expected CAD denominated cash flows. As of December 31, 2023, the Company had the following cross-currency swaps:
Fixed rate Notional Amount (in millions, CAD) Annual Cash Flow (in millions, CAD) Maturity
$1.26 CAD per USD
 $ 150.0  $ 10.8  October 1, 2024
$1.28 CAD per USD
 200.0  4.5  October 1, 2024
$1.30 CAD per USD
 90.0  8.1  December 1, 2024
$ 440.0  $ 23.4 

The change in the fair value of foreign currency derivatives designated and that qualify as cash flow hedges of foreign exchange risk is recorded in AOCI and reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. As of December 31, 2023, the Company estimates that during the twelve months ending December 31, 2024, $0.4 million of gains will be reclassified from AOCI to other income.

Net Investment Hedges
The Company is exposed to fluctuations in the USD-CAD exchange rate on its net investments in Canada. As such, the Company uses currency forward agreements to manage its exposure to changes in foreign exchange rates on certain of its foreign net investments. As of December 31, 2023, the Company had the following foreign currency forwards designated as net investment hedges:
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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Fixed rate Notional Amount (in millions, CAD) Maturity
$1.35 CAD per USD
 $ 200.0  October 1, 2025
$1.35 CAD per USD
 90.0  December 1, 2025
Total $ 290.0 

On December 13, 2023, the Company terminated its CAD to USD forward contracts in conjunction with entering into the new forward agreements described above. The Company received $10.0 million in connection with the settlement of the CAD to USD forward contracts, which continues to be reported in AOCI until the net investment is sold or liquidated.

The Company previously also used CAD to USD cross-currency swaps that were designated as net investment hedges. The cross-currency swaps included a monthly settlement feature to lock in an exchange rate of CAD to USD. On April 29, 2022, the Company terminated its CAD to USD cross-currency swaps in conjunction with entering into new agreements. The Company paid $3.8 million in connection with the settlement of the CAD to USD cross-currency swap agreements, which continues to be reported in AOCI until the net investment is sold or liquidated.

For qualifying foreign currency derivatives designated as net investment hedges, the change in the fair value of the derivatives are reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company's accounting policy election. The earnings recognition of excluded components are presented in other income.

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Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Below is a summary of the effect of derivative instruments on the consolidated statements of changes in equity and income for the years ended December 31, 2023, 2022 and 2021:

Effect of Derivative Instruments on the Consolidated Statements of Changes in Equity and Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021
(Dollars in thousands)
  Year Ended December 31,
Description 2023 2022 2021
Cash Flow Hedges
Interest Rate Swaps
Amount of (Loss) Gain Recognized in AOCI on Derivative $ (91) $ 1,539  $ (2,944)
Amount of Income (Expense) Reclassified from AOCI into Earnings (1) 648  96  (9,156)
Cross Currency Swaps
Amount of (Loss) Gain Recognized in AOCI on Derivative (260) 1,898  (99)
Amount of Income (Expense) Reclassified from AOCI into Earnings (2) 880  276  (262)
Net Investment Hedges
Cross Currency Swaps
Amount of Gain (Loss) Recognized in AOCI on Derivative —  665  (518)
Amount of Income Recognized in Earnings (2) (3) —  170  367 
Currency Forward Agreements
Amount of (Loss) Gain Recognized in AOCI on Derivative (3,573) 8,686  — 
Total
Amount of (Loss) Gain Recognized in AOCI on Derivative $ (3,924) $ 12,788  $ (3,561)
Amount of Income (Expense) Reclassified from AOCI into Earnings 1,528  372  (9,418)
Amount of Income Recognized in Earnings —  170  367 
Interest expense, net in accompanying consolidated statements of income and comprehensive income $ 124,858  $ 131,175  $ 148,095 
Other income in accompanying consolidated statements of income and comprehensive income $ 45,947  $ 47,382  $ 18,816 
(1)    Included in “Interest expense, net” in accompanying consolidated statements of income and comprehensive income except for a cash settlement of approximately $3.2 million for the year ended December 31, 2021, which is included in “Costs associated with loan refinancing or payoff” in accompanying consolidated statements of income and comprehensive income related to the termination of the interest rate swap agreements.
(2)    Included in "Other income" in the accompanying consolidated statements of income and comprehensive income.
(3)    Amounts represent derivative gains excluded from the effectiveness testing.

Credit-risk-related Contingent Features
The Company has an agreement with its interest rate derivative counterparty that contains a provision where if the Company defaults on any of its obligations for borrowed money or credit in an amount exceeding $50.0 million and such default is not waived or cured within a specified period of time, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its interest rate derivative obligations.

As of December 31, 2023, the fair value of the Company's derivatives in a liability position related to these agreements was $4.9 million. If the Company breached any of the contractual provisions of these derivative contracts, it would be required to settle its obligations under the agreements at their termination value of $5.0 million, after considering the right of offset. As of December 31, 2023, the Company had not posted any collateral related to these agreements and was not in breach of any provisions in these agreements.
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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

11. Fair Value Disclosures

The Company has certain financial instruments that are required to be measured under the FASB’s Fair Value Measurement guidance. The Company currently does not have any non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.

As a basis for considering market participant assumptions in fair value measurements, the FASB’s Fair Value Measurement guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Derivative Financial Instruments
The Company uses interest rate swaps, foreign currency forwards and cross currency swaps to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the FASB's fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives also use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. As of December 31, 2023, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives and therefore, has classified its derivatives as Level 2 within the fair value reporting hierarchy.

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Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
The table below presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022, aggregated by the level in the fair value hierarchy within which those measurements are classified and by derivative type.

Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2023 and 2022
(Dollars in thousands)
Description Quoted Prices in
Active Markets
for Identical
Assets (Level I)		 Significant
Other
Observable
Inputs (Level 2)		 Significant
Unobservable
Inputs (Level 3)		 Balance at
end of period
2023:
Cross Currency Swaps (1) $ —  $ 384  $ —  $ 384 
Currency Forward Agreements (2) $ —  $ (4,908) $ —  $ (4,908)
Interest Rate Swap Agreements (1) $ —  $ 876  $ —  $ 876 
2022:
Cross Currency Swaps (1) $ —  $ 1,523  $ —  $ 1,523 
Currency Forward Agreements (1) $ —  $ 8,686  $ —  $ 8,686 
Interest Rate Swap Agreements (1) $ —  $ 1,240  $ —  $ 1,240 
(1) Included in "Other assets" in the accompanying consolidated balance sheets.
(2) Included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets.

Non-recurring fair value measurements
The table below presents the Company's assets measured at fair value on a non-recurring basis as of December 31, 2023 and 2022, aggregated by the level in the fair value hierarchy within which those measurements fall.

Assets Measured at Fair Value on a Non-Recurring Basis at December 31, 2023 and 2022
(Dollars in thousands)
Description Quoted Prices in
Active Markets
for Identical
Assets (Level I)		 Significant
Other
Observable
Inputs (Level 2)		 Significant
Unobservable
Inputs (Level 3)		 Balance at
end of period
2023:
Real estate investments, net $ —  $ —  $ 39,150  $ 39,150 
2022:
Real estate investments, net $ —  $ 4,700  $ 33,670  $ 38,370 
Operating lease right-of-use asset —  —  7,006  7,006 
Mortgage notes and related accrued interest receivable —  —  7,780  7,780 
Investment in joint ventures —  —  —  — 
Other assets (1) —  —  1,316  1,316 
(1) Includes collateral dependent notes receivable, which are presented within "Other assets" in the accompanying consolidated balance sheets.

As further discussed in Note 5, during the year ended December 31, 2023, the Company recorded an impairment charge of $67.4 million related to real estate investments, net, on 12 properties. Management estimated the fair values of these investments taking into account various factors including independent appraisals, shortened hold periods and market conditions. The significant inputs and assumptions used in the real estate appraisals included market rents ranging from $4.50 per square foot to $20.00 per square foot, discount rates ranging from 8.50% to 11.50% and terminal capitalization rates ranging from 7.75% to 10.25%. Estimating future cash flows is highly subjective and estimates can differ materially from actual results. These measurements were classified within Level 3 of the fair value hierarchy because many of the assumptions were not observable.


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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

As further discussed in Note 5, during the year ended December 31, 2022, the Company recorded impairment charges of $27.3 million, of which $25.3 million related to real estate investments, net, and $2.0 million related to an operating lease right-of-use asset. Management estimated the fair value of these investments taking into account various factors including purchase offers, independent appraisals, shortened hold periods and current market conditions. The Company determined, based on the inputs, that its valuation of one of its properties with a purchase offer was classified as Level 2 of the fair value hierarchy and was measured at fair value. Six properties, one of which included an operating lease right-of-use asset, were measured at fair value using independent appraisals, which used discounted cash flow models. The significant inputs and assumptions used in the real estate appraisals included market rents, which ranged from $6 per square foot to $22 per square foot, discount rates, which ranged from 7.75% to 9.75% and terminal capitalization rates ranging from 7.00% to 8.75% for the properties not under ground lease. Significant inputs and assumptions used in the right-of-use asset appraisal included a market rate of $25 per square foot and a discount rate of 8.50%. These measurements were classified within Level 3 of the fair value hierarchy as many of the assumptions were not observable.

As further discussed in Note 7, during the year ended December 31, 2022, the Company recorded an allowance for credit losses totaling $8.0 million, consisting of $6.8 million related to one mortgage note and $1.2 million related to one note receivable, as a result of changes in the borrower's financial status. Management valued the mortgage note and note receivable based on the fair value of the underlying collateral determined using independent appraisals, which used discounted cash flow models. The significant inputs and assumptions used in the real estate appraisals included market rents of approximately $20 per square foot and a discount rate of 6.75%. These measurements were classified within Level 3 of the fair value hierarchy as many of the assumptions were not observable. Additionally, during the year ended December 31, 2022, the Company recorded an allowance for credit losses totaling $1.9 million related to one note receivable to fully reserve the outstanding principal balance, as a result of changes in the borrower's financial status. Management valued the note receivable based on the fair value of the underlying collateral, which was determined taking into account various factors including implied asset value changes based on current market conditions and review of the financial statements of the borrower and was classified within Level 3 of the fair value hierarchy.

Additionally, as further discussed in Note 8, during the year ended December 31, 2022, the Company recorded impairment charges of $0.6 million related to its investment in joint ventures. Management estimated the fair value of these investments, taking into account various factors including implied asset value changes based on discounted cash flow projections and current market conditions. The Company determined, based on the inputs, that its valuation of investment in joint ventures was classified within Level 3 of the fair value hierarchy as many of the assumptions were not observable.

Fair Value of Financial Instruments
The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instruments at December 31, 2023 and 2022:

Mortgage notes receivable and related accrued interest receivable:
The fair value of the Company’s mortgage notes and related accrued interest receivable is estimated by discounting the future cash flows of each instrument using current market rates. At December 31, 2023, the Company had a carrying value of $569.8 million in fixed rate mortgage notes receivable outstanding, including related accrued interest, with a weighted average interest rate of approximately 8.82%. The fixed rate mortgage notes bear interest at rates of 6.99% to 12.32%. Discounting the future cash flows for fixed rate mortgage notes receivable using rates of 7.15% to 10.25%, management estimates the fair value of the fixed rate mortgage notes receivable to be $611.2 million with an estimated weighted average market rate of 7.84% at December 31, 2023.

At December 31, 2022, the Company had a carrying value of $457.3 million in fixed rate mortgage notes receivable outstanding, including related accrued interest, with a weighted average interest rate of approximately 8.92%. The fixed rate mortgage notes bear interest at rates of 6.99% to 12.14%. Discounting the future cash flows for fixed rate mortgage notes receivable using rates of 7.15% to 10.00%, management estimates the fair value of the fixed rate mortgage notes receivable to be $500.0 million with an estimated weighted average market rate of 7.70% at December 31, 2022.
95

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

Derivative instruments:
Derivative instruments are carried at their fair value.

Debt instruments:
The fair value of the Company's debt is estimated by discounting the future cash flows of each instrument using current market rates. At December 31, 2023, the Company had a carrying value of $25.0 million in variable rate debt outstanding with an interest rate of approximately 5.48%. The carrying value of the variable rate debt outstanding approximates the fair value at December 31, 2023.

At December 31, 2022, the Company had a carrying value of $25.0 million in variable rate debt outstanding with an interest rate of approximately 4.43%. The carrying value of the variable rate debt outstanding approximates the fair value at December 31, 2022.

At both December 31, 2023 and 2022, the $25.0 million of variable rate debt outstanding, discussed above, had been effectively converted to a fixed rate by an interest rate swap agreement. See Note 10 for additional information related to the Company's interest rate swap agreement.

At December 31, 2023, the Company had a carrying value of $2.82 billion in fixed rate long-term debt outstanding with an average weighted interest rate of approximately 4.34%. Discounting the future cash flows for fixed rate debt using December 31, 2023 market rates of 6.46% to 6.70%, management estimates the fair value of the fixed rate debt to be approximately $2.58 billion with an estimated weighted average market rate of 6.60% at December 31, 2023.

At December 31, 2022, the Company had a carrying value of $2.82 billion in fixed rate long-term debt outstanding with an average weighted interest rate of approximately 4.34%. Discounting the future cash flows for fixed rate debt using December 31, 2022 market rates of 7.42% to 8.35%, management estimates the fair value of the fixed rate debt to be approximately $2.39 billion with an estimated weighted average market rate of 7.94% at December 31, 2022.

12. Common and Preferred Shares

On June 3, 2022, the Company filed a shelf registration statement with the SEC, which is effective for a term of three years. The securities covered by this registration statement include common shares, preferred shares, debt securities, depository shares, warrants and units. The Company may periodically offer one of more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplements, or other offering materials, at the time of any offering.

Additionally, on June 3, 2022, the Company filed a shelf registration statement with the SEC, which is effective for a term of three years, for its Dividend Reinvestment and Direct Share Purchase Plan (DSP Plan), which permits the issuance of up to 25,000,000 common shares.

Common Shares
The Company's Board declared cash dividends totaling $3.30 and $3.225 per common share for the years ended December 31, 2023 and 2022, respectively.

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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Of the total distributions calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid per common share for the years ended December 31, 2023 and 2022 are as follows:
Cash Distributions Per Share
2023 2022
Taxable ordinary income (1) $ 2.3248  $ 2.5906 
Return of capital 0.9752  0.6344 
Long-term capital gain —  — 
Totals
 $ 3.3000  $ 3.2250 
(1) Amounts qualify in their entirety as 199A distributions.

During the years ended December 31, 2023 and 2022, the Company issued an aggregate of 22,469 and 23,196 common shares under its DSP Plan for net proceeds of $1.0 million and $1.1 million, respectively.

Series C Convertible Preferred Shares
The Company has 5.4 million outstanding 5.75% Series C cumulative convertible preferred shares (Series C preferred shares). The Company will pay cumulative dividends on the Series C preferred shares from the date of original issuance in the amount of $1.4375 per share each year, which is equivalent to 5.75% of the $25 liquidation preference per share. Dividends on the Series C preferred shares are payable quarterly in arrears. The Company does not have the right to redeem the Series C preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series C preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2023, the Series C preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.4252 common shares per Series C preferred share, which is equivalent to a conversion price of $58.80 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividends per share exceeds a quarterly threshold of $0.6875.

Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series C preferred shares becoming convertible into shares of the public acquiring or surviving company.

The Company may, at its option, cause the Series C preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 135% of the then prevailing conversion price of the Series C preferred shares.

Owners of the Series C preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.

The Company's Board declared cash dividends totaling $1.4375 per Series C preferred share for each of the years ended December 31, 2023 and 2022. There were non-cash distributions associated with conversion adjustments of $0.2368 and $0.1735 per Series C preferred share for the years ended December 31, 2023 and 2022, respectively. The conversion adjustment provision entitles the shareholders of the Series C preferred shares, upon certain quarterly common share dividend thresholds being met, to receive additional common shares of the Company upon a conversion of the preferred shares into common shares. The increase in common shares to be received upon a conversion is a deemed distribution for federal income tax purposes.

97

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid and non-cash deemed distributions per Series C preferred share for the years ended December 31, 2023 and 2022 are as follows:
Cash Distributions per Share
2023 2022
Taxable ordinary income (1) $ 1.4375  $ 1.4375 
Return of capital —  — 
Long-term capital gain —  — 
Totals
 $ 1.4375  $ 1.4375 
(1) Amounts qualify in their entirety as 199A distributions.
Non-cash Distributions per Share
2023 2022
Taxable ordinary income (2) $ —  $ — 
Return of capital 0.2368  0.1735 
Long-term capital gain —  — 
Totals
 $ 0.2368  $ 0.1735 
(2) For the years ended December 31, 2023 and 2022, no amounts qualify as 199A distributions.

Series E Convertible Preferred Shares
The Company has 3.4 million outstanding 9.00% Series E cumulative convertible preferred shares (Series E preferred shares). The Company will pay cumulative dividends on the Series E preferred shares from the date of original issuance in the amount of $2.25 per share each year, which is equivalent to 9.00% of the $25 liquidation preference per share. Dividends on the Series E preferred shares are payable quarterly in arrears. The Company does not have the right to redeem the Series E preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series E preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2023, the Series E preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.4826 common shares per Series E preferred share, which is equivalent to a conversion price of $51.80 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividends per share exceeds a quarterly threshold of $0.84.

Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series E preferred shares becoming convertible into shares of the public acquiring or surviving company.

The Company may, at its option, cause the Series E preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 150% of the then prevailing conversion price of the Series E preferred shares.

Owners of the Series E preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.

The Company's Board declared cash dividends totaling $2.25 per Series E preferred share for each of the years ended December 31, 2023 and 2022. There were no non-cash distributions associated with conversion adjustments per Series E preferred share for both years ended December 31, 2023 and 2022. The conversion adjustment provision entitles the shareholders of the Series E preferred shares, upon certain quarterly common share dividend thresholds being met, to receive additional common shares of the Company upon a conversion of the preferred shares into common shares. The increase in common shares to be received upon a conversion is a deemed distribution for federal income tax purposes.
98

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid and non-cash deemed distributions per Series E preferred share for the years ended December 31, 2023 and 2022 are as follows:
Cash Distributions per Share
2023 2022
Taxable ordinary income (1) $ 2.2500  $ 2.2500 
Return of capital —  — 
Long-term capital gain —  — 
Totals
 $ 2.2500  $ 2.2500 
(1) Amounts qualify in their entirety as 199A distributions.

Series G Preferred Shares
The Company has 6.0 million outstanding 5.75% Series G cumulative redeemable preferred shares (Series G preferred shares). The Company will pay cumulative dividends on the Series G preferred shares from the date of original issuance in the amount of $1.4375 per share each year, which is equivalent to 5.75% of the $25.00 liquidation preference per share. Dividends on the Series G preferred shares are payable quarterly in arrears. The Company may, at its option, redeem the Series G preferred shares in whole at any time or in part from time to time by paying $25.00 per share, plus any accrued and unpaid dividends up to, but not including the date of redemption. The Series G preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. The Series G preferred shares are not convertible into any of the Company's securities, except under certain circumstances in connection with a change of control. Owners of the Series G preferred shares generally have no voting rights except under certain dividend defaults.

The Company's Board declared cash dividends totaling $1.4375 per Series G preferred share for each of the years ended December 31, 2023 and 2022. For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid per Series G preferred share for the years ended December 31, 2023 and 2022 are as follows:
Cash Distributions per Share
2023 2022
Taxable ordinary income (1) $ 1.4375  $ 1.4375 
Return of capital —  — 
Long-term capital gain —  — 
Totals
 $ 1.4375  $ 1.4375 
(1) Amounts qualify in their entirety as 199A distributions.

99

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
13. Earnings Per Share

The following table summarizes the Company’s computation of basic and diluted earnings per share (EPS) for the years ended December 31, 2023, 2022 and 2021 (amounts in thousands except per share information):
 
Year Ended December 31, 2023
  Income
(numerator)		 Shares
(denominator)		 Per Share
Amount
Basic EPS:
Net income $ 173,046 
Less: preferred dividend requirements (24,145)
Net income available to common shareholders $ 148,901  75,260  $ 1.98 
Diluted EPS:
Net income available to common shareholders $ 148,901  75,260 
Effect of dilutive securities:
Share options and performance shares —  455 
Net income available to common shareholders $ 148,901  75,715  $ 1.97 
 
Year Ended December 31, 2022
  Income
(numerator)		 Shares
(denominator)		 Per Share
Amount
Basic EPS:
Net income $ 176,229 
Less: preferred dividend requirements (24,141)
Net income available to common shareholders $ 152,088  74,967  $ 2.03 
Diluted EPS:
Net income available to common shareholders $ 152,088  74,967 
Effect of dilutive securities:
Share options and performance shares —  76 
Net income available to common shareholders $ 152,088  75,043  $ 2.03 
 
Year Ended December 31, 2021
  Income
(numerator)		 Shares
(denominator)		 Per Share
Amount
Basic EPS:
Net income $ 98,606 
Less: preferred dividend requirements (24,134)
Net income available to common shareholders $ 74,472  74,755  $ 1.00 
Diluted EPS:
Net income available to common shareholders $ 74,472  74,755 
Effect of dilutive securities:
Share options and performance shares —  1 
Net income available to common shareholders $ 74,472  74,756  $ 1.00 

The effect of the potential common shares from the conversion of the Company’s convertible preferred shares and from the exercise of share options are included in diluted earnings per share if the effect is dilutive. Potential common shares from the performance shares are included in diluted earnings per share upon the satisfaction of certain performance and market conditions. These conditions are evaluated at each reporting period and if the conditions have been satisfied during the reporting period, the number of contingently issuable shares are included in the computation of diluted earnings per share.

The following shares have been excluded from the calculation of diluted earnings per share because they are anti-dilutive, or in the case of contingently issuable performance shares, are not probable of issuance:
•The additional 2.3 million common shares for both the years ended December 31, 2023 and 2022 and 2.2 million common shares for year ended December 31, 2021 that would result from the conversion of the Company’s 5.75% Series C cumulative convertible preferred shares and the corresponding add-back of the preferred dividends declared on those shares.
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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
•The additional 1.7 million common shares that would result from the conversion of the Company’s 9.0% Series E cumulative convertible preferred shares and the corresponding add-back of the preferred dividends declared on those shares for the years ended December 31, 2023, 2022 and 2021.
•Outstanding options to purchase 81 thousand common shares at per share prices ranging from $44.44 to $76.63 for the year ended December 31 2023.
•Outstanding options to purchase 96 thousand common shares at per share prices ranging from $44.44 to $76.63 for the year ended December 31, 2022.
•Outstanding options to purchase 89 thousand common shares at per share prices ranging from $44.44 to $76.63 for the year ended December 31, 2021.
•The effect of 99 thousand contingently issuable performance shares granted during 2022 for the year ended December 31, 2022.
•The effect of 56 thousand contingently issuable performance shares granted during 2020 for the years ended December 31, 2022 and 2021.

14. Equity Incentive Plan

All grants of common shares and options to purchase common shares were issued under the Company's 2007 Equity Incentive Plan prior to May 12, 2016, and under the 2016 Equity Incentive Plan on and after May 12, 2016. Under the 2016 Equity Incentive Plan, an aggregate of 3,950,000 common shares, options to purchase common shares and restricted share units, subject to adjustment in the event of certain capital events, may be granted. Additionally, the 2020 Long Term Incentive Plan (2020 LTIP) is a sub-plan under the Company's 2016 Equity Incentive Plan. Under the 2020 LTIP, the Company awards performance shares and restricted shares to the Company's executive officers. At December 31, 2023, there were 1,551,906 shares available for grant under the 2016 Equity Incentive Plan.

Nonvested Shares
A summary of the Company’s nonvested share activity and related information is as follows:
Number of
shares		 Weighted avg. grant date
fair value		 Weighted avg.
life remaining
Outstanding at December 31, 2022
 503,912  $ 50.38 
Granted 352,090  42.23 
Vested (232,898) 53.92 
Forfeited (13,876) 45.18 
Outstanding at December 31, 2023
 609,228  $ 44.44  0.89
The holders of nonvested shares have voting rights and receive dividends from the date of grant. The fair value of the nonvested shares that vested was $8.7 million, $10.2 million, and $6.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Expense recognized related to nonvested shares and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $7.6 million, $7.9 million and $8.8 million for the years ended December 31, 2023, 2022 and 2021. At December 31, 2023, unamortized share-based compensation expense related to nonvested shares was $10.4 million and will be recognized in future periods as follows (in thousands):
  Amount
Year:
2024 $ 5,418 
2025 3,670 
2026 1,312 
Total $ 10,400 

101

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Nonvested Performance Shares
A summary of the Company's nonvested performance share activity and related information is as follows:
Number of
Performance Shares		 Weighted avg. grant date fair value (1)
Outstanding at December 31, 2022
 257,386  $ 72.10 
Granted 111,593  63.08 
Vested (2) (56,338) 65.66 
Forfeited —  — 
Outstanding at December 31, 2023
 312,641  $ 70.04 

(1) The grant date fair value was determined utilizing (i) a Monte Carlo simulation model to generate an estimate of the Company's future stock price over the three-year performance period for performance shares based on the Company's Total Shareholder Return (TSR) performance further described below and (ii) the Company's grant date fair value for performance shares based on the Company's Compounded Annual Growth Rate (CAGR) in AFFO per share over the three-year performance period.
(2) The performance conditions for the performance shares granted during the year ended December 31, 2020 were not achieved resulting in no pay-out.

The number of common shares issuable upon settlement of the performance shares granted during the years ended December 31, 2023, 2022 and 2021 will be based upon the Company's achievement level relative to the following performance measures at December 31, 2025, 2024 and 2023: 50% based upon the Company's TSR relative to the TSRs of the Company's peer group companies, 25% based upon the Company's TSR relative to the TSRs of companies in the MSCI US REIT Index and 25% based upon the Company's CAGR in AFFO per share over the three-year performance period. The Company's achievement level relative to the performance measures is assigned a specific payout percentage which is multiplied by a target number of performance shares.

The performance shares based on relative TSR performance have market conditions and are valued using a Monte Carlo simulation model on the grant date, which resulted in a grant date fair value of approximately $5.9 million, $6.0 million and $6.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. The estimated fair value is amortized to expense over the three-year vesting period, which ends on December 31, 2025, 2024 and 2023 for performance shares granted in 2023, 2022 and 2021, respectively. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the performance shares with a market condition for the years ended December 31, 2023, 2022 and 2021, respectively: risk-free interest rate of 4.4%, 1.7% and 0.2%, volatility factors in the expected market price of the Company's common shares of 52%, 71% and 69% and an expected life of approximately three years.

The performance shares based on growth in AFFO per share have a performance condition. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the closing price per share of the Company's common shares on the date of the grant multiplied by the number of awards expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost and any compensation cost previously recorded will be reversed. At December 31, 2023, achievement of the performance condition was deemed probable for the performance shares granted during the year ended December 31, 2023, 2022 and 2021, with an expected payout percentage of 55.3%, 200% and 200%, respectively, which resulted in a grant date fair value of approximately $0.7 million, $2.3 million and $2.3 million, respectively.

Expense recognized related to performance shares and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $7.9 million, $6.6 million and $3.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
At December 31, 2023, unamortized share-based compensation expense related to nonvested performance shares was $7.1 million and will be recognized in future periods as follows (in thousands):
  Amount
Year:
2024 $ 4,950 
2025 2,168 
Total $ 7,118 

The performance shares accrue dividend equivalents, which are paid only if common shares are issued upon settlement of the performance shares. During the years ended December 31, 2023 and 2022, the Company accrued dividend equivalents expected to be paid on earned awards of $3.8 million and $579 thousand, respectively. No dividend equivalents were paid for the years ended December 31, 2023 and 2022.

Restricted Share Units
A summary of the Company’s restricted share unit activity and related information is as follows:
Number of
Shares		 Weighted Average Grant Date Fair Value Weighted Average Life Remaining
Outstanding at December 31, 2022
 38,605  $ 50.77 
Granted 43,497  41.67 
Vested (40,054) 50.44 
Outstanding at December 31, 2023
 42,048  $ 41.67  0.42
The holders of restricted share units receive dividend equivalents from the date of grant. Total expense recognized related to shares issued to non-employee Trustees and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $1.9 million for the year ended December 31, 2023 and $2.2 million for both the years ended December 31, 2022 and 2021. At December 31, 2023, unamortized share-based compensation expense related to restricted share units was $730 thousand, which will be recognized in 2024.

Share Options
Share options have exercise prices equal to the fair market value of a common share at the date of grant. The options may be granted for any reasonable term, not to exceed 10 years. The Company generally issues new common shares upon option exercise. A summary of the Company’s share option activity and related information is as follows:
  Number of
shares		 Option price
per share		 Weighted avg.
exercise price
Outstanding at December 31, 2020 116,690  $ 44.62  —  $ 76.63  $ 56.36 
Exercised (5,051) 45.20  —  47.77  47.27 
Granted 1,838  44.44  —  44.44  44.44 
Forfeited/Expired (4,806) 45.20  —  61.79  51.42 
Outstanding at December 31, 2021 108,671  $ 44.44  —  $ 76.63  $ 56.79 
Exercised (12,559) 44.62  —  47.15  46.43 
Outstanding at December 31, 2022 96,112  $ 44.44  —  $ 76.63  $ 58.15 
Forfeited/Expired (14,921) 46.86  —  61.79  52.68 
Outstanding at December 31, 2023 81,191  $ 44.44  —  $ 76.63  $ 59.16 

The weighted average fair value of options granted was $20.34 during 2021. No options were granted during the year ended December 31, 2023 and 2022. The intrinsic value of stock options exercised was $62 thousand and $14 thousand during the years ended December 31, 2022 and 2021, respectively. No options were exercised during the year ended December 31, 2023.

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EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Expense recognized related to share options and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $12 thousand, $14 thousand and $17 thousand for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table summarizes outstanding and exercisable options at December 31, 2023:
Options outstanding Options exercisable
Exercise price range Options
outstanding		 Weighted avg. life remaining Weighted avg. exercise price Aggregate intrinsic value (in thousands) Options exercisable Weighted avg. life remaining Weighted avg. exercise price Aggregate intrinsic value (in thousands)
44.44 - 49.99
 1,838  7.1 920  7.1
50.00 - 59.99
 27,587  0.6 27,587  0.6
60.00 - 69.99
 47,610  2.6 46,888  2.3
70.00 - 76.63
 4,156  4.1 4,156  4.1
81,191  2.1 $ 59.16  $ 7  79,551  1.9 $ 59.23  $ 4 

15. Operating Leases

The Company’s real estate investments are leased under operating leases with remaining terms ranging from one year to 26 years. The Company adopted Topic 842 on January 1, 2019 and elected to not reassess its prior conclusions about lease classification. Accordingly, these arrangements continue to be classified as operating leases.

The following table summarizes the future minimum rentals on the Company's lessor and sub-lessor arrangements at December 31, 2023 (in thousands):
December 31, 2023
Operating leases Sub-lessor operating ground leases
  Amount (1) Amount (1) Total
Year:
2024 $ 493,021  $ 25,821  $ 518,842 
2025 489,356  25,958  515,314 
2026 488,516  24,400  512,916 
2027 471,138  23,874  495,012 
2028 461,884  23,060  484,944 
Thereafter 3,227,675  197,650  3,425,325 
Total $ 5,631,590  $ 320,763  $ 5,952,353 
(1) Included in rental revenue.

In addition to its lessor arrangements on its real estate investments, as of December 31, 2023 and 2022, the Company was lessee in 51 and 52 operating ground leases, respectively, as well as lessee in an operating lease of its executive office. The Company's tenants, who are generally sub-tenants under these ground leases, are responsible for paying the rent under these ground leases. As of December 31, 2023, rental revenue from two of the Company's tenants, who are also sub-tenants under the ground leases, is being recognized on a cash basis. In most cases, the ground lease sub-tenants have continued to pay the rent under these ground leases, however, one of these properties does not currently have a sub-tenant. In the event the tenant fails to pay the ground lease rent or if the property does not have sub-tenants, the Company is primarily responsible for the payment, assuming the Company does not sell or re-tenant the property. As of December 31, 2023, the ground lease arrangements have remaining terms ranging from one year to 43 years. Most of these leases include one or more options to renew. The Company assesses these options using a threshold of reasonably certain, which also includes an assessment of the term of the Company's tenants' leases. For leases where renewal is reasonably certain, those option periods are included within the lease term and also the measurement of the operating lease right-of-use asset and liability. The ground lease arrangements do not contain any residual value guarantees or any material restrictions.
104

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
As of December 31, 2023, the Company does not have any leases that have not commenced but that create significant rights and obligations.

The Company determines whether an arrangement is or includes a lease at contract inception. Operating lease right-of-use assets and liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. As the Company's leases do not provide an implicit rate, the Company used its incremental borrowing rate in determining the present value of lease payments. The incremental borrowing rate was adjusted for collateral based on the information available at adoption or the commencement date. Inputs to the calculation of the Company's incremental borrowing rate include its senior notes and their option adjusted credit spreads over comparable U.S. Treasury rates, adjusted to a collateralized basis by estimating the credit spread improvement that would result from an upgrade of one ratings classification.

The following table summarizes the future minimum lease payments under the ground lease obligations and the office lease at December 31, 2023, excluding contingent rent due under leases where the ground lease payment, or a portion thereof, is based on the level of the tenant's sales (in thousands):
December 31, 2023
  Ground Leases (1) Office lease (2)
Year:
2024 $ 27,341  $ 958 
2025 27,460  958 
2026 25,954  717 
2027 24,614  — 
2028 23,730  — 
Thereafter 212,408  — 
Total lease payments $ 341,507  $ 2,633 
Less: imputed interest 116,967  212 
Present value of lease liabilities $ 224,540  $ 2,421 
(1) Included in property operating expense.
(2) Included in general and administrative expense.

The following table summarizes the carrying amounts of the operating lease right-of-use assets and liabilities as of December 31, 2023 and 2022 (in thousands):
As of December 31,
Classification 2023 2022
Assets:
Operating ground lease assets Operating lease right-of-use assets $ 184,376  $ 198,009 
Office lease asset Operating lease right-of-use assets 2,252  2,976 
Total operating lease right-of-use assets $ 186,628  $ 200,985 
Sub-lessor straight-line rent receivable Accounts receivable 17,430  14,586 
Total leased assets $ 204,058  $ 215,571 
Liabilities:
Operating ground lease liabilities Operating lease liabilities $ 224,540  $ 238,200 
Office lease liability Operating lease liabilities 2,421  3,207 
Total lease liabilities $ 226,961  $ 241,407 

105

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
The following table summarizes rental revenue, including sublease arrangements and lease costs, including impairment charges on operating lease right-of-use assets for the years ended December 31, 2023, 2022 and 2021(in thousands):
Year ended December 31,
Classification 2023 2022 2021
Rental revenue
Operating leases Rental revenue $ 588,751  $ 551,383  $ 457,063 
Sublease income - operating ground leases Rental revenue 27,388  24,218  21,819 
Lease costs
Operating ground lease cost Property operating expense $ 26,290  $ 25,167  $ 22,863 
Operating office lease cost General and administrative expense 896  904  905 
Operating lease right-of-use asset impairment charges (1) Impairment charges —  1,968  — 

(1) During the year ended December 31, 2022, the Company recognized an impairment charge of $2.0 million. See Note 5 for the details on this impairment.

The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for arrangements where the Company is the lessee as of December 31, 2023 and 2022:
As of December 31,
2023 2022
Weighted-average remaining lease term in years
Operating ground leases 14.6 15.1
Operating office lease 2.8 3.8
Weighted-average discount rate
Operating ground leases 5.37  % 5.31  %
Operating office lease 6.04  % 6.04  %

16. Other Commitments and Contingencies

As of December 31, 2023, the Company had 15 development projects with commitments to fund an aggregate of approximately $171.3 million. The Company advances development costs in periodic draws. If the Company determines that construction is not being completed in accordance with the terms of the development agreement, it can discontinue funding construction draws. The Company has agreed to lease the properties to the operators at pre-determined rates upon completion of construction.

The Company has certain commitments related to its mortgage notes and notes receivable investments that it may be required to fund in the future. The Company is generally obligated to fund these commitments at the request of the borrower or upon the occurrence of events outside of its direct control. As of December 31, 2023, the Company had five mortgage notes with commitments totaling approximately $104.7 million. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.

In connection with construction of the Company's development projects and related infrastructure, certain public agencies require posting of surety bonds to guarantee that the Company's obligations are satisfied. These bonds expire upon the completion of the improvements or infrastructure. As of December 31, 2023, the Company had three surety bonds outstanding totaling $2.1 million.


106

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
17. Segment Information

The Company groups its investments into two reportable segments: Experiential and Education.

The financial information summarized below is presented by reportable segment (in thousands):
Balance Sheet Data:
As of December 31, 2023
Experiential Education Corporate/Unallocated Consolidated
Total Assets $ 5,189,831  $ 433,177  $ 77,877  $ 5,700,885 
As of December 31, 2022
Experiential Education Corporate/Unallocated Consolidated
Total Assets $ 5,164,710  $ 473,580  $ 120,411  $ 5,758,701 
Operating Data:
For the Year Ended December 31, 2023
Experiential Education Corporate/Unallocated Consolidated
Rental revenue $ 577,715  $ 38,424  $ —  $ 616,139 
Other income 45,112  1  834  45,947 
Mortgage and other financing income
 42,717  865  —  43,582 
Total revenue 665,544  39,290  834  705,668 
Property operating expense
 56,543  192  743  57,478 
Other expense 44,774  —  —  44,774 
Total investment expenses
 101,317  192  743  102,252 
Net operating income - before unallocated items 564,227  39,098  91  603,416 
Reconciliation to Consolidated Statements of Income and Comprehensive Income:
General and administrative expense (56,442)
Severance expense (547)
Transaction costs (1,554)
(Provision) benefit for credit losses, net (878)
Impairment charges (67,366)
Depreciation and amortization (168,033)
Loss on sale of real estate (2,197)
Interest expense, net (124,858)
Equity in loss from joint ventures (6,768)
Income tax expense (1,727)
Net income 173,046 
Preferred dividend requirements (24,145)
Net income available to common shareholders of EPR Properties $ 148,901 
107

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
For the Year Ended December 31, 2022
Experiential Education Corporate/Unallocated Consolidated
Rental revenue $ 535,382  $ 40,219  $ —  $ 575,601 
Other income 37,558  7,000  2,824  47,382 
Mortgage and other financing income 34,139  909  —  35,048 
Total revenue 607,079  48,128  2,824  658,031 
Property operating expense 55,499  (8) 494  55,985 
Other expense 33,984  —  (175) 33,809 
Total investment expenses 89,483  (8) 319  89,794 
Net operating income - before unallocated items 517,596  48,136  2,505  568,237 
Reconciliation to Consolidated Statements of Income and Comprehensive Income:
General and administrative expense (51,579)
Transaction costs (4,533)
(Provision) benefit for credit losses, net (10,816)
Impairment charges (27,349)
Depreciation and amortization (163,652)
Gain on sale of real estate 651 
Interest expense, net (131,175)
Equity in loss from joint ventures (1,672)
Impairment charges on joint ventures (647)
Income tax expense (1,236)
Net income 176,229 
Preferred dividend requirements (24,141)
Net income available to common shareholders of EPR Properties $ 152,088 
For the Year Ended December 31, 2021
Experiential Education Corporate/Unallocated Consolidated
Rental revenue $ 441,423  $ 37,459  $ —  $ 478,882 
Other income 18,416  —  400  18,816 
Mortgage and other financing income 32,980  1,002  —  33,982 
Total revenue 492,819  38,461  400  531,680 
Property operating expense 56,027  (109) 821  56,739 
Other expense 21,864  —  (123) 21,741 
Total investment expenses 77,891  (109) 698  78,480 
Net operating income - before unallocated items 414,928  38,570  (298) 453,200 
Reconciliation to Consolidated Statements of Income and Comprehensive Income:
General and administrative expense (44,362)
Transaction costs (3,402)
(Provision) benefit for credit losses, net 21,972 
Impairment charges (2,711)
Depreciation and amortization (163,770)
Gain on sale of real estate 17,881 
Costs associated with loan refinancing or payoff (25,451)
Interest expense, net (148,095)
Equity in loss from joint ventures (5,059)
Income tax expense (1,597)
Net income 98,606 
Preferred dividend requirements (24,134)
Net income available to common shareholders of EPR Properties $ 74,472 
108

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

EPR Properties
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2023
(Dollars in thousands)
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Theatres
Sugar Land, TX $ —  $ —  $ 19,100  $ 4,152  $ —  $ 23,252  $ 23,252  $ (13,410) 11/97 40 years
San Antonio, TX —  3,006  13,662  8,455  3,006  22,117  25,123  (12,140) 11/97 40 years
Columbus, OH —  —  12,685  1,133  —  13,818  13,818  (9,459) 11/97 28 years
San Diego, CA —  —  16,028  —  —  16,028  16,028  (10,218) 11/97 40 years
Ontario, CA —  5,521  19,449  7,130  5,521  26,579  32,100  (14,526) 11/97 40 years
Leawood, KS —  3,714  12,086  4,110  3,714  16,196  19,910  (8,816) 11/97 40 years
Houston, TX —  7,957  22,861  (1,455) 7,712  21,651  29,363  (14,057) 02/98 40 years
South Barrington, IL —  6,577  27,723  4,618  6,577  32,341  38,918  (19,412) 03/98 40 years
Mesquite, TX —  2,912  20,288  4,885  2,912  25,173  28,085  (14,973) 04/98 40 years
Hampton, VA —  3,822  24,678  4,510  3,822  29,188  33,010  (17,306) 06/98 40 years
Pompano Beach, FL —  6,771  9,899  10,984  6,771  20,883  27,654  (19,797) 08/98 24 years
Raleigh, NC —  2,919  5,559  3,492  2,919  9,051  11,970  (4,821) 08/98 40 years
Davie, FL —  2,000  13,000  11,512  2,000  24,512  26,512  (14,206) 11/98 40 years
Aliso Viejo, CA —  8,000  14,000  —  8,000  14,000  22,000  (8,750) 12/98 40 years
Boise, ID —  —  16,003  400  —  16,403  16,403  (10,086) 12/98 40 years
Cary, NC —  3,352  11,653  3,091  3,352  14,744  18,096  (7,960) 12/99 40 years
Tampa, FL —  6,000  12,809  1,452  6,000  14,261  20,261  (9,164) 06/99 40 years
Metairie, LA —  —  11,740  3,049  —  14,789  14,789  (7,139) 03/02 40 years
Harahan, LA —  5,264  14,820  —  5,264  14,820  20,084  (8,089) 03/02 40 years
Hammond, LA —  2,404  6,780  1,607  1,839  8,952  10,791  (4,059) 03/02 40 years
Houma, LA —  2,404  6,780  —  2,404  6,780  9,184  (3,701) 03/02 40 years
Harvey, LA —  4,378  12,330  3,735  4,266  16,177  20,443  (7,652) 03/02 40 years
Greenville, SC —  1,660  7,570  473  1,660  8,043  9,703  (4,253) 06/02 40 years
Sterling Heights, MI —  5,975  17,956  3,400  5,975  21,356  27,331  (13,051) 06/02 40 years
Olathe, KS —  4,000  15,935  2,558  3,042  19,451  22,493  (10,990) 06/02 40 years
Livonia, MI —  4,500  17,525  —  4,500  17,525  22,025  (9,383) 08/02 40 years
Alexandria, VA —  —  22,035  —  —  22,035  22,035  (11,706) 10/02 40 years
Little Rock, AR —  3,858  7,990  —  3,858  7,990  11,848  (4,211) 12/02 40 years
Macon, GA —  1,982  5,056  1,462  1,982  6,518  8,500  (2,776) 03/03 40 years
Lawrence, KS —  1,500  3,526  2,017  1,500  5,543  7,043  (2,363) 06/03 40 years
Columbia, SC —  1,000  10,534  339  1,000  10,873  11,873  (4,711) 11/03 40 years
Phoenix, AZ —  4,276  15,934  3,518  4,276  19,452  23,728  (8,755) 03/04 40 years
Hamilton, NJ —  4,869  18,143  20  4,869  18,163  23,032  (8,964) 03/04 40 years
Mesa, AZ —  4,446  16,565  3,263  4,446  19,828  24,274  (9,039) 03/04 40 years
Peoria, IL —  2,948  11,177  —  2,948  11,177  14,125  (5,426) 07/04 40 years
Lafayette, LA —  —  10,318  —  —  10,318  10,318  (5,024) 07/04 40 years
Hurst, TX —  5,000  11,729  1,015  5,000  12,744  17,744  (6,095) 11/04 40 years
Melbourne, FL —  3,817  8,830  320  3,817  9,150  12,967  (4,346) 12/04 40 years
D'Iberville, MS —  2,001  8,043  3,612  808  12,848  13,656  (5,460) 12/04 40 years
109

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Wilmington, NC —  1,650  7,047  3,033  1,650  10,080  11,730  (4,031) 02/05 40 years
Chattanooga, TN —  2,799  11,467  —  2,799  11,467  14,266  (5,399) 03/05 40 years
Conroe, TX —  1,836  8,230  2,304  1,836  10,534  12,370  (4,198) 06/05 40 years
Indianapolis, IN —  1,481  4,565  2,375  1,481  6,940  8,421  (2,702) 06/05 40 years
Hattiesburg, MS —  1,978  7,733  4,720  1,978  12,453  14,431  (5,111) 09/05 40 years
Arroyo Grande, CA —  2,641  3,810  —  2,641  3,810  6,451  (1,723) 12/05 40 years
Auburn, CA —  2,178  6,185  (65) 2,113  6,185  8,298  (2,796) 12/05 40 years
Fresno, CA —  7,600  11,613  2,894  7,600  14,507  22,107  (8,059) 12/05 40 years
Modesto, CA —  2,542  3,910  1,889  2,542  5,799  8,341  (2,217) 12/05 40 years
Columbia, MD —  —  12,204  —  —  12,204  12,204  (5,416) 03/06 40 years
Garland, TX —  8,028  14,825  —  8,028  14,825  22,853  (6,578) 03/06 40 years
Garner, NC —  1,305  6,899  —  1,305  6,899  8,204  (3,047) 04/06 40 years
Winston Salem, NC —  —  12,153  4,188  —  16,341  16,341  (6,681) 07/06 40 years
Huntsville, AL —  3,508  14,802  —  3,508  14,802  18,310  (6,414) 08/06 40 years
Pensacola, FL —  5,316  15,099  —  5,316  15,099  20,415  (6,417) 12/06 40 years
Slidell, LA 10,635  —  11,499  —  —  11,499  11,499  (4,887) 12/06 40 years
Panama City Beach, FL —  6,486  11,156  2,704  6,486  13,860  20,346  (5,047) 05/07 40 years
Kalispell, MT —  2,505  7,323  —  2,505  7,323  9,828  (2,990) 08/07 40 years
Greensboro, NC —  —  12,606  914  —  13,520  13,520  (9,262) 11/07 40 years
Glendora, CA —  —  10,588  —  —  10,588  10,588  (4,014) 10/08 40 years
Ypsilanti, MI —  4,716  227  2,817  4,716  3,044  7,760  (642) 12/09 40 years
Manchester, CT —  3,628  11,474  2,315  3,628  13,789  17,417  (4,384) 12/09 40 years
Centreville, VA —  3,628  1,769  —  3,628  1,769  5,397  (619) 12/09 40 years
Davenport, IA —  3,599  6,068  2,265  3,564  8,368  11,932  (2,574) 12/09 40 years
Fairfax, VA —  2,630  11,791  2,000  2,630  13,791  16,421  (4,518) 12/09 40 years
Flint, MI —  1,270  1,723  —  1,270  1,723  2,993  (603) 12/09 40 years
Hazlet, NJ —  3,719  4,716  —  3,719  4,716  8,435  (1,651) 12/09 40 years
Huber Heights, OH —  970  3,891  —  970  3,891  4,861  (1,362) 12/09 40 years
North Haven, CT —  5,442  1,061  2,000  3,458  5,045  8,503  (1,868) 12/09 40 years
Okolona, KY —  5,379  3,311  2,000  5,379  5,311  10,690  (1,477) 12/09 40 years
Voorhees, NJ —  1,723  9,614  —  1,723  9,614  11,337  (3,365) 12/09 40 years
Louisville, KY —  4,979  6,567  (1,046) 3,933  6,567  10,500  (2,298) 12/09 40 years
Beaver Creek, OH —  1,578  6,630  1,700  1,578  8,330  9,908  (2,602) 12/09 40 years
West Springfield, MA —  2,540  3,755  2,650  2,540  6,405  8,945  (1,736) 12/09 40 years
Cincinnati, OH —  1,361  1,741  —  635  2,467  3,102  (780) 12/09 40 years
Pasadena, TX —  2,951  10,684  1,759  2,951  12,443  15,394  (3,887) 06/10 40 years
Plano, TX —  1,052  1,968  —  1,052  1,968  3,020  (664) 06/10 40 years
McKinney, TX —  1,917  3,319  —  1,917  3,319  5,236  (1,120) 06/10 40 years
Mishawaka, IN —  2,399  5,454  1,383  2,399  6,837  9,236  (2,152) 06/10 40 years
Grand Prairie, TX —  1,873  3,245  2,104  1,873  5,349  7,222  (1,610) 06/10 40 years
Redding, CA —  2,044  4,500  1,177  2,044  5,677  7,721  (1,706) 06/10 40 years
Pueblo, CO —  2,238  5,162  1,265  2,238  6,427  8,665  (1,946) 06/10 40 years
Beaumont, TX —  1,065  11,669  1,644  1,065  13,313  14,378  (4,255) 06/10 40 years
Pflugerville, TX —  4,356  11,533  1,963  4,263  13,589  17,852  (4,282) 06/10 40 years
Houston, TX —  4,109  9,739  2,617  4,109  12,356  16,465  (3,667) 06/10 40 years
El Paso, TX —  4,598  13,207  2,296  4,598  15,503  20,101  (4,857) 06/10 40 years
110

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Colorado Springs, CO —  4,134  11,220  1,427  2,938  13,843  16,781  (4,299) 06/10 40 years
Hooksett, NH —  2,639  11,605  1,376  2,639  12,981  15,620  (3,940) 03/11 40 years
Saco, ME —  1,508  3,826  1,124  1,508  4,950  6,458  (1,397) 03/11 40 years
Merrimack, NH —  3,160  5,642  107  3,160  5,749  8,909  (1,838) 03/11 40 years
Westbrook, ME —  2,273  7,119  —  2,273  7,119  9,392  (2,284) 03/11 40 years
Twin Falls, ID —  —  4,783  —  —  4,783  4,783  (1,385) 04/11 40 years
Dallas, TX —  —  12,146  (3,911) —  8,235  8,235  (70) 03/12 n/a
Albuquerque, NM —  —  13,733  —  —  13,733  13,733  (3,462) 06/12 40 years
Austin, TX —  2,608  6,373  —  2,608  6,373  8,981  (1,660) 09/12 40 years
Champaign, IL —  —  9,381  125  —  9,506  9,506  (2,396) 09/12 40 years
Opelika, AL —  1,314  8,951  —  1,314  8,951  10,265  (2,126) 11/12 40 years
Gainesville, VA —  —  10,846  95  —  10,941  10,941  (2,751) 02/13 40 years
Lafayette, LA 14,360  —  12,728  1,438  —  14,166  14,166  (3,363) 08/13 40 years
Tuscaloosa, AL —  —  11,287  450  1,815  9,922  11,737  (2,430) 09/13 40 years
Tampa, FL —  1,700  23,483  3,648  1,579  27,252  28,831  (9,200) 10/13 40 years
Warrenville, IL —  14,000  17,318  (5,344) 8,270  17,704  25,974  (6,056) 10/13 40 years
San Francisco, CA —  2,077  12,914  —  2,077  12,914  14,991  (2,583) 08/13 40 years
Bedford, IN —  349  1,594  —  349  1,594  1,943  (460) 04/14 40 years
Seymour, IN —  1,028  2,291  (2,549) 288  482  770  (23) 04/14 11 years
Wilder, KY —  983  11,233  2,004  983  13,237  14,220  (3,226) 04/14 40 years
Bowling Green, KY —  1,241  10,222  —  1,241  10,222  11,463  (2,630) 04/14 40 years
New Albany, IN —  2,461  14,807  196  2,461  15,003  17,464  (3,753) 04/14 40 years
Clarksville, TN —  3,764  16,769  4,706  3,764  21,475  25,239  (4,976) 04/14 40 years
Williamsport, PA —  2,243  6,684  (8,518) 409  —  409  —  04/14 n/a
Noblesville, IN —  886  7,453  2,019  886  9,472  10,358  (2,263) 04/14 40 years
Moline, IL —  1,963  10,183  (9,368) 564  2,214  2,778  (68) 04/14 17 years
O'Fallon, MO —  1,046  7,342  (6,038) 371  1,979  2,350  (60) 04/14 17 years
McDonough, GA —  2,235  16,842  —  2,235  16,842  19,077  (4,285) 04/14 40 years
Sterling Heights, MI —  10,849  —  (3,712) 6,949  188  7,137  (183) 12/14 15 years
Virginia Beach, VA —  2,544  6,478  —  2,544  6,478  9,022  (1,430) 02/15 40 years
Yulee, FL —  1,036  6,934  —  1,036  6,934  7,970  (1,531) 02/15 40 years
Jacksonville, FL —  5,080  22,064  —  5,080  22,064  27,144  (7,568) 05/15 25 years
Denham Springs, LA —  —  5,093  4,162  —  9,255  9,255  (1,764) 05/15 40 years
Crystal Lake, IL —  2,980  13,521  568  2,980  14,089  17,069  (4,865) 07/15 25 years
Kennewick, WA —  2,484  4,901  —  2,484  4,901  7,385  (1,651) 06/16 25 years
Franklin, TN —  10,158  17,549  8,685  9,825  26,567  36,392  (8,117) 06/16 25 years
Mobile, AL —  2,116  16,657  —  2,116  16,657  18,773  (5,310) 06/16 25 years
El Paso, TX —  2,957  10,961  3,905  2,957  14,866  17,823  (4,494) 06/16 25 years
Edinburg, TX —  1,982  16,964  5,680  1,982  22,644  24,626  (6,749) 06/16 25 years
Hendersonville, TN —  2,784  8,034  4,245  2,784  12,279  15,063  (2,825) 07/16 30 years
Houston, TX —  965  10,002  —  965  10,002  10,967  (1,999) 10/16 40 years
Detroit, MI —  4,299  13,810  —  4,299  13,810  18,109  (3,299) 11/16 30 years
Fort Worth, TX —  —  11,385  —  —  11,385  11,385  (1,589) 02/17 40 years
Fort Wayne, IN —  1,926  11,054  —  1,926  11,054  12,980  (2,922) 05/17 27 years
Wichita, KS —  267  7,535  (6,312) 67  1,423  1,490  (88) 05/17 23 years
Wichita, KS —  3,132  23,270  —  3,132  23,270  26,402  (7,006) 05/17 23 years
111

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Richmond, TX —  7,251  36,535  728  7,251  37,263  44,514  (6,507) 08/17 40 years
Tomball, TX —  3,416  26,918  —  3,416  26,918  30,334  (4,646) 08/17 40 years
Cleveland, OH —  5,060  21,072  374  5,060  21,446  26,506  (6,255) 08/17 25 years
Little Rock, AR —  1,789  10,780  —  1,789  10,780  12,569  (1,826) 01/18 40 years
Conway, AR —  1,316  5,553  —  1,316  5,553  6,869  (1,179) 03/18 30 years
Lynbrook, NY —  1,753  28,400  —  1,753  28,400  30,153  (3,997) 06/18 40 years
Staten Island, NY —  —  12,479  (6,529) —  5,950  5,950  (169) 12/18 19 years
Beaumont, CA —  2,421  12,026  —  2,421  12,026  14,447  (935) 01/19 40 years
Brandywine, MD —  5,251  10,520  (10,971) 1,783  3,017  4,800  (31) 03/19 34 years
Cincinnati, OH —  2,831  11,430  (13,241) 1,020  —  1,020  —  03/19 35 years
Louisville, KY —  3,726  27,312  —  3,726  27,312  31,038  (3,581) 03/19 40 years
Riverview, FL —  2,339  15,901  —  2,339  15,901  18,240  (2,289) 03/19 37 years
Savoy, IL —  1,938  10,554  974  1,938  11,528  13,466  (2,862) 06/19 25 years
Dublin, CA —  15,662  25,496  —  15,662  25,496  41,158  (4,563) 06/19 30 years
Ontario, CA —  8,019  15,708  —  8,019  15,708  23,727  (3,346) 06/19 24 years
Columbia, SC —  7,009  17,318  —  7,009  17,318  24,327  (2,212) 06/19 40 years
Columbia, MD —  12,642  14,152  46  12,642  14,198  26,840  (2,387) 06/19 34 years
Charlotte, NC —  4,257  15,121  —  4,257  15,121  19,378  (2,269) 06/19 35 years
Foothill Ranch, CA —  7,653  14,090  32  7,653  14,122  21,775  (3,115) 06/19 29 years
Wilsonville, OR —  2,742  1,301  —  2,742  1,301  4,043  (444) 06/19 23 years
Raleigh, NC —  5,376  12,516  —  5,376  12,516  17,892  (2,347) 06/19 30 years
Gastonia, NC —  4,039  9,199  —  4,039  9,199  13,238  (1,758) 06/19 30 years
Port Richey, FL —  1,564  7,103  —  1,564  7,103  8,667  (1,735) 06/19 26 years
Hillsboro, OR —  3,392  5,697  —  3,392  5,697  9,089  (1,756) 06/19 23 years
Woodway, TX —  2,376  7,309  (4,885) 1,423  3,377  4,800  (123) 06/19 24 years
San Jacinto, CA —  1,960  5,073  —  1,960  5,073  7,033  (1,334) 06/19 23 years
Albany, OR —  2,049  3,920  —  2,049  3,920  5,969  (848) 06/19 30 years
Lake City, FL —  1,257  4,756  —  1,257  4,756  6,013  (1,055) 06/19 27 years
Anderson, SC —  1,554  3,948  —  1,554  3,948  5,502  (1,047) 06/19 24 years
New Hartford, NY —  946  11,985  (141) 946  11,844  12,790  (1,822) 10/19 31 years
Columbus, OH —  5,211  14,179  571  5,211  14,750  19,961  (2,479) 10/19 38 years
Kenner, LA —  5,299  14,000  —  5,299  14,000  19,299  (3,470) 10/19 34 years
Marana, AZ —  2,384  5,438  —  2,384  5,438  7,822  (1,166) 12/19 28 years
Bluffton, SC —  1,912  3,053  432  1,912  3,485  5,397  (756) 03/20 25 years
Cherry Hill, NJ —  5,038  9,206  —  5,038  9,206  14,244  (2,544) 03/20 25 years
Eat & Play
Westminster, CO —  12,055  29,914  25,533  10,848  56,654  67,502  (33,029) 06/99 40 years
New Rochelle, NY —  6,100  97,696  15,058  6,100  112,754  118,854  (57,794) 10/03 40 years
Kanata, ON —  10,044  36,630  32,802  9,527  69,949  79,476  (32,421) 03/04 40 years
Mississagua, ON —  9,221  17,593  22,195  11,501  37,508  49,009  (16,184) 03/04 40 years
Oakville, ON —  10,044  23,646  15,130  9,527  39,293  48,820  (18,191) 03/04 40 years
Whitby, ON —  10,202  21,960  32,451  12,431  52,182  64,613  (22,905) 03/04 40 years
Burbank, CA —  16,584  35,016  13,151  16,584  48,167  64,751  (20,688) 03/05 40 years
Northbrook, IL —  —  7,025  586  —  7,611  7,611  (2,307) 07/11 40 years
Allen, TX —  —  10,007  1,151  —  11,158  11,158  (4,493) 02/12 29 years
Dallas, TX —  —  10,007  1,771  —  11,778  11,778  (4,578) 02/12 30 years
112

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Jacksonville, FL —  4,510  5,061  4,748  4,510  9,809  14,319  (4,070) 02/12 30 years
Oakbrook, IL —  —  8,068  536  —  8,604  8,604  (2,380) 03/12 40 years
Houston, TX —  —  12,403  394  —  12,797  12,797  (3,725) 09/12 40 years
Colony, TX —  4,004  13,665  (240) 4,004  13,425  17,429  (3,356) 12/12 40 years
Alpharetta, GA —  5,608  16,616  (26) 5,582  16,616  22,198  (3,946) 05/13 40 years
Scottsdale, AZ —  —  16,942  —  —  16,942  16,942  (4,024) 06/13 40 years
Spring, TX —  4,928  14,522  —  4,928  14,522  19,450  (3,510) 07/13 40 years
Warrenville, IL —  —  6,469  9,625  2,906  13,188  16,094  (4,991) 10/13 40 years
San Antonio, TX —  —  15,976  79  —  16,055  16,055  (3,539) 12/13 40 years
Tampa, FL —  —  15,726  (67) —  15,659  15,659  (3,618) 02/14 40 years
Gilbert, AZ —  4,735  16,130  (267) 4,735  15,863  20,598  (3,569) 02/14 40 years
Overland Park, KS —  5,519  17,330  —  5,519  17,330  22,849  (3,676) 05/14 40 years
Centennial, CO —  3,013  19,106  403  3,013  19,509  22,522  (4,060) 06/14 40 years
Atlanta, GA —  8,143  17,289  —  8,143  17,289  25,432  (3,638) 06/14 40 years
Ashburn VA —  —  16,873  101  —  16,974  16,974  (3,527) 06/14 40 years
Naperville, IL —  8,824  20,279  (665) 8,824  19,614  28,438  (4,086) 08/14 40 years
Oklahoma City, OK —  3,086  16,421  (252) 3,086  16,169  19,255  (3,436) 09/14 40 years
Webster, TX —  5,631  17,732  799  5,210  18,952  24,162  (3,851) 11/14 40 years
Virginia Beach, VA —  6,948  18,715  (304) 6,348  19,011  25,359  (3,799) 12/14 40 years
Edison, NJ —  —  22,792  1,489  —  24,281  24,281  (4,240) 04/15 40 years
Jacksonville, FL —  6,732  21,823  (1,201) 6,732  20,622  27,354  (3,726) 09/15 40 years
Roseville, CA —  6,868  23,959  (1,928) 6,868  22,031  28,899  (4,021) 10/15 30 years
Portland, OR —  —  23,466  (541) —  22,925  22,925  (4,240) 11/15 40 years
Orlando, FL —  8,586  22,493  1,120  8,586  23,613  32,199  (3,984) 01/16 40 years
Marietta, GA —  3,116  11,872  —  3,116  11,872  14,988  (2,992) 02/16 35 years
Charlotte, NC —  4,676  21,422  (867) 4,676  20,555  25,231  (3,604) 04/16 40 years
Orlando, FL —  9,382  16,225  58  9,382  16,283  25,665  (2,544) 05/16 40 years
Fort Worth, TX —  4,674  17,537  —  4,674  17,537  22,211  (2,923) 08/16 40 years
Nashville, TN —  —  26,685  136  —  26,821  26,821  (4,396) 12/16 40 years
Dallas, TX —  3,318  7,835  4  3,318  7,839  11,157  (1,576) 12/16 40 years
San Antonio, TX —  6,502  15,338  (628) 6,502  14,710  21,212  (2,087) 08/17 40 years
Huntsville, AL —  53  17,595  (1,938) 53  15,657  15,710  (2,835) 08/17 40 years
El Paso, TX —  2,688  17,373  —  2,688  17,373  20,061  (3,151) 02/18 40 years
Pittsburgh, PA —  7,897  21,812  (1,039) 7,897  20,773  28,670  (3,035) 07/18 40 years
Philadelphia, PA —  5,484  25,211  97  5,484  25,308  30,792  (3,511) 12/18 40 years
Auburn Hills, MI —  4,219  27,704  (2,881) 4,219  24,823  29,042  (3,346) 12/18 40 years
Greenville, SC —  6,272  18,240  —  6,272  18,240  24,512  (2,936) 06/18 40 years
Thornton, CO —  5,419  23,635  —  5,419  23,635  29,054  (2,843) 09/18 40 years
Katy, TX —  5,210  16,247  232  3,431  18,258  21,689  (1,844) 06/19 40 years
Gwinnett, GA —  3,318  17,873  —  3,318  17,873  21,191  (1,830) 06/20 40 years
San Jose, CA —  —  26,752  —  —  26,752  26,752  (2,382) 03/21 40 years
Ontario, CA —  —  34,943  —  —  34,943  34,943  (2,354) 12/21 40 years
King of Prussia, PA —  —  35,196  —  —  35,196  35,196  (543) 02/22 40 years
113

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Ski
Bellfontaine, OH —  5,108  5,994  8,327  5,251  14,178  19,429  (6,354) 11/05 40 years
Tannersville, PA —  34,940  34,629  4,377  34,940  39,006  73,946  (21,218) 09/13 40 years
Northstar, CA —  56,005  106,644  —  56,005  106,644  162,649  (34,868) 04/17 40 years
Attractions
Kiamesha Lake, NY —  34,897  228,462  2,133  34,897  230,595  265,492  (50,673) 07/10 30 years
Tannersville, PA —  —  120,354  1,615  —  121,969  121,969  (25,615) 05/15 40 years
Denver, CO —  753  6,218  —  753  6,218  6,971  (1,434) 02/17 30 years
Fort Worth, TX —  824  7,066  —  824  7,066  7,890  (1,590) 03/17 30 years
Corfu, NY —  5,112  43,637  2,500  5,112  46,137  51,249  (13,931) 04/17 30 years
Oklahoma City, OK —  7,976  17,624  —  7,976  17,624  25,600  (4,892) 04/17 30 years
Hot Springs, AR —  3,351  4,967  —  3,351  4,967  8,318  (1,345) 04/17 30 years
Riviera Beach, FL —  17,450  29,713  —  17,450  29,713  47,163  (8,171) 04/17 30 years
Oklahoma City, OK —  1,423  18,097  —  1,423  18,097  19,520  (5,132) 04/17 30 years
Springs, TX —  18,776  31,402  —  18,776  31,402  50,178  (8,874) 04/17 30 years
Glendale, AZ —  —  20,514  2,969  —  23,483  23,483  (7,012) 04/17 30 years
Kapolei, HI —  —  8,351  1,542  —  9,893  9,893  (2,710) 04/17 30 years
Federal Way, WA —  —  13,949  (12,149) —  1,800  1,800  (684) 04/17 12 years
Colony, TX —  —  7,617  305  —  7,922  7,922  (4,912) 04/17 30 years
Garland, TX —  —  5,601  1,188  —  6,789  6,789  (3,383) 04/17 30 years
Santa Monica, CA —  —  13,874  15,717  —  29,591  29,591  (8,663) 04/17 30 years
Concord, CA —  —  9,808  5,787  —  15,595  15,595  (4,459) 04/17 30 years
Tampa, FL —  —  8,665  2,493  2,493  8,665  11,158  (1,829) 08/17 30 years
Fort Lauderdale, FL —  —  10,816  —  —  10,816  10,816  (2,223) 10/17 30 years
Valcartier, QC —  5,906  81,534  2,103  6,049  83,494  89,543  (6,290) 06/22 31 years
Ottawa, ON —  13,482  32,357  1,102  13,806  33,135  46,941  (3,208) 06/22 20 years
Experiential Lodging
Pigeon Forge, TN —  5,697  14,100  16,869  8,604  28,062  36,666  (2,444) 04/20 15 years
Fitness & Wellness
Olathe, KS —  2,417  16,878  —  2,417  16,878  19,295  (3,797) 03/17 30 years
Roseville, CA —  1,807  6,082  —  1,807  6,082  7,889  (1,465) 09/17 30 years
Fort Collins, CO —  2,043  5,769  —  2,043  5,769  7,812  (1,291) 01/18 30 years
Pagosa Springs, CO —  9,791  15,635  2,339  9,791  17,974  27,765  (4,304) 06/18 30 years
Chicago, IL —  4,501  13,461  —  4,501  13,461  17,962  (781) 02/22 40 years
Brooklyn, NY —  14,465  25,294  —  14,465  25,294  39,759  (561) 02/23 40 years
Belmont, CA —  3,923  4,720  —  3,923  4,720  8,643  —  12/23 30 years
Gaming
Kiamesha Lake, NY —  155,658  —  19,524  156,785  18,397  175,182  (2,291) 07/10 50 years
Cultural
St. Louis, MO —  5,481  41,951  —  5,481  41,951  47,432  (7,440) 12/18 40 years
Branson, MO —  1,847  7,599  —  1,847  7,599  9,446  (1,013) 05/19 40 years
Pigeon Forge, TN —  4,849  9,668  —  4,849  9,668  14,517  (1,304) 05/19 40 years
114

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Early Childhood Education Centers
Lake Pleasant, AZ —  986  3,524  902  986  4,426  5,412  (1,509) 03/13 30 years
Goodyear, AZ —  1,308  7,275  222  1,308  7,497  8,805  (2,636) 06/13 30 years
Oklahoma City, OK —  1,149  9,839  979  1,149  10,818  11,967  (3,441) 08/13 40 years
Coppell, TX —  1,547  10,168  (5,574) 1,075  5,066  6,141  —  09/13 30 years
Mesa, AZ —  762  6,987  1,501  762  8,488  9,250  (3,290) 01/14 30 years
Gilbert, AZ —  1,295  9,192  316  1,295  9,508  10,803  (3,062) 03/14 30 years
Cedar Park, TX —  1,520  10,500  418  1,278  11,160  12,438  (3,397) 07/14 30 years
Chicago, IL —  1,294  4,375  19  1,294  4,394  5,688  (1,051) 07/14 30 years
Centennial, CO —  1,249  10,771  (5,700) 814  5,506  6,320  (254) 08/14 30 years
McKinney, TX —  1,812  12,419  1,841  1,812  14,260  16,072  (4,340) 11/14 30 years
West Chester, OH —  1,807  12,913  455  1,807  13,368  15,175  (3,497) 07/15 30 years
Ellisville, MO —  2,465  15,063  —  2,465  15,063  17,528  (3,708) 07/15 30 years
Chanhassen, MN —  2,603  15,613  523  2,603  16,136  18,739  (4,032) 08/15 30 years
Maple Grove, MN —  3,743  14,927  561  3,743  15,488  19,231  (4,571) 08/15 30 years
Carmel, IN —  1,567  12,854  366  1,561  13,226  14,787  (3,502) 09/15 30 years
Fishers, IN —  1,226  13,144  700  1,226  13,844  15,070  (3,340) 12/15 30 years
Westerville, OH —  2,988  14,339  362  2,988  14,701  17,689  (3,949) 04/16 30 years
Las Vegas, NV —  1,476  14,422  (1,287) 1,476  13,135  14,611  (3,298) 06/16 30 years
Louisville, KY —  377  1,526  —  377  1,526  1,903  (377) 08/16 30 years
Louisville, KY —  216  1,006  —  216  1,006  1,222  (249) 08/16 30 years
Cheshire, CT —  420  3,650  —  420  3,650  4,070  (874) 11/16 30 years
Edina, MN —  1,235  5,493  (323) 1,235  5,170  6,405  (1,172) 11/16 30 years
Eagan, MN —  783  4,833  (286) 783  4,547  5,330  (1,158) 11/16 30 years
Louisville, KY —  481  2,050  —  481  2,050  2,531  (484) 12/16 30 years
Bala Cynwyd, PA —  1,785  3,759  —  1,785  3,759  5,544  (888) 12/16 30 years
Schaumburg, IL —  642  4,962  —  642  4,962  5,604  (1,093) 12/16 30 years
Kennesaw, GA —  690  844  —  690  844  1,534  (197) 01/17 30 years
Charlotte, NC —  1,200  2,557  —  1,200  2,557  3,757  (473) 01/17 35 years
Charlotte, NC —  2,501  2,079  —  2,501  2,079  4,580  (385) 01/17 35 years
Richardson, TX —  474  2,046  —  474  2,046  2,520  (396) 01/17 35 years
Frisco, TX —  999  3,064  —  999  3,064  4,063  (580) 01/17 35 years
Allen, TX —  910  3,719  —  910  3,719  4,629  (720) 01/17 35 years
Southlake, TX —  920  2,766  —  920  2,766  3,686  (534) 01/17 35 years
Lewis Center, OH —  410  4,285  (2,065) 270  2,360  2,630  (61) 01/17 20 years
Dublin, OH —  581  4,223  —  581  4,223  4,804  (755) 01/17 35 years
Plano, TX —  400  2,647  —  400  2,647  3,047  (523) 01/17 35 years
Carrollton, TX —  329  1,389  —  329  1,389  1,718  (282) 01/17 35 years
Davenport, FL —  3,000  5,877  —  3,000  5,877  8,877  (1,090) 01/17 35 years
Tallahassee, FL —  952  3,205  —  952  3,205  4,157  (632) 01/17 35 years
Sunrise, FL —  1,400  1,856  —  1,400  1,856  3,256  (354) 01/17 35 years
Chaska, MN —  328  6,140  —  328  6,140  6,468  (1,094) 01/17 35 years
Loretto, MN —  286  3,511  —  286  3,511  3,797  (646) 01/17 35 years
Minneapolis, MN —  920  3,700  —  920  3,700  4,620  (662) 01/17 35 years
Wayzata, MN —  810  1,962  —  810  1,962  2,772  (367) 01/17 35 years
115

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
    Initial cost Additions (Dispositions) (Impairments) Subsequent to acquisition Gross Amount at December 31, 2023      
Location Debt Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Land Buildings,
Equipment, Leasehold Interests &
Improvements		 Total Accumulated
depreciation		 Date
acquired		 Depreciation
life
Plymouth, MN —  1,563  4,905  —  1,563  4,905  6,468  (917) 01/17 35 years
Maple Grove, MN —  951  3,291  —  951  3,291  4,242  (604) 01/17 35 years
Chula Vista, CA —  210  2,186  —  210  2,186  2,396  (437) 01/17 35 years
Lincolnshire, IL —  1,006  4,799  —  1,006  4,799  5,805  (1,093) 02/17 30 years
New Berlin, WI —  368  1,704  —  368  1,704  2,072  (393) 02/17 30 years
Oak Creek, WI —  283  1,690  —  283  1,690  1,973  (390) 02/17 30 years
Minnetonka, MN —  911  4,833  659  931  5,472  6,403  (1,320) 03/17 30 years
Berlin, CT —  494  2,958  —  494  2,958  3,452  (648) 06/17 30 years
Portland, OR —  2,604  585  —  2,604  585  3,189  (118) 01/18 35 years
Orlando, FL —  955  4,273  —  955  4,273  5,228  (769) 02/18 35 years
McKinney, TX —  1,233  4,447  —  1,233  4,447  5,680  (753) 02/18 30 years
Fort Mill, SC —  629  3,957  —  629  3,957  4,586  (641) 09/18 35 years
Indian Land, SC —  907  3,784  —  907  3,784  4,691  (651) 09/18 35 years
Sicklerville, NJ —  694  1,876  —  694  1,876  2,570  (407) 06/19 30 years
Pennington, NJ —  1,018  2,284  —  1,018  2,284  3,302  (715) 08/19 24 years
Private Schools
Chicago, IL —  3,057  46,784  —  3,057  46,784  49,841  (9,942) 02/14 40 years
Cumming, GA —  500  6,892  —  500  6,892  7,392  (1,390) 01/17 35 years
Cumming, GA —  325  4,898  —  325  4,898  5,223  (1,016) 01/17 35 years
Henderson, NV —  1,400  6,914  —  1,400  6,914  8,314  (1,359) 01/17 35 years
Atlanta, GA —  2,001  5,989  —  2,001  5,989  7,990  (1,066) 01/17 35 years
Pearland, TX —  2,360  9,292  —  2,360  9,292  11,652  (1,752) 01/17 35 years
Pearland, TX —  372  2,568  —  372  2,568  2,940  (476) 01/17 35 years
Palm Harbor, FL —  1,490  1,400  —  1,490  1,400  2,890  (275) 01/17 35 years
Mason, OH —  975  11,243  —  975  11,243  12,218  (1,998) 01/17 35 years
Property under development —  131,265  —  —  131,265  —  131,265  —  n/a n/a
Land held for development —  20,168  —  —  20,168  —  20,168  —  n/a n/a
Senior unsecured notes payable 2,816,234  —  —  —  —  —  —  —  n/a n/a
Less: deferred financing costs, net (25,134) —  —  —  —  —  —  — 
Total $ 2,816,095  $ 1,390,733  $ 4,369,287  $ 364,455  $ 1,371,376  $ 4,753,099  $ 6,124,475  $ (1,435,683)
116

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021

EPR Properties
Schedule III - Real Estate and Accumulated Depreciation (continued)
Reconciliation
(Dollars in thousands)
December 31, 2023
Real Estate Investments:
Reconciliation:
Balance at beginning of the year $ 6,112,973 
Acquisition and development of real estate investments during the year 166,716 
Disposition of real estate investments during the year (68,550)
Impairment of real estate investments during the year (86,664)
Balance at close of year $ 6,124,475 
Accumulated Depreciation:
Reconciliation:
Balance at beginning of the year $ 1,302,640 
Depreciation during the year 161,662 
Disposition of real estate investments during the year (9,321)
Impairment of real estate investments during the year (19,298)
Balance at close of year $ 1,435,683 
See accompanying report of independent registered public accounting firm.
117

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures

Evaluation of disclosures controls and procedures
As of December 31, 2023, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Limitations on the effectiveness of controls
Our disclosure controls were designed to provide reasonable assurance that the controls and procedures would meet their objectives. Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable assurance of achieving the designed control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusions of two or more people, or by management override of the control. Because of the inherent limitations in a cost-effective, maturing control system, misstatements due to error or fraud may occur and not be detected.

Change in internal controls
There have not been any changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control–Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2023. KPMG LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has issued a report on the effectiveness of our internal control over financial reporting, which is included in Item 8.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, errors or fraud. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of or compliance with the policies or procedures may deteriorate.

118

EPR PROPERTIES
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
Item 9B. Other Information
During the three months ended December 31, 2023, no "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K, was adopted or terminated by any trustee or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance
The Company’s definitive Proxy Statement for its Annual Meeting of Shareholders to be held on May 29, 2024 (the “Proxy Statement”), will contain under the captions “Election of Trustees”, “Company Governance”, “Executive Officers” and "Delinquent Section 16(a) Reports" the information required by Item 10 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

We have adopted a Code of Business Conduct and Ethics that applies to our Chief Executive Officer, Chief Financial Officer, and all other officers, employees and trustees. The Code of Business Conduct and Ethics may be viewed on our website at www.eprkc.com. Changes to and waivers granted with respect to the Code of Business Conduct and Ethics required to be disclosed pursuant to applicable rules and regulations will be posted on our website.

Item 11. Executive Compensation
The Proxy Statement will contain under the captions “Election of Trustees”, “Executive Compensation”, and “Compensation Committee Report”, the information required by Item 11 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The Proxy Statement will contain under the captions “Share Ownership” and “Equity Compensation Plan Information” the information required by Item 12 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence
The Proxy Statement will contain under the captions “Transactions Between the Company and Trustees, Officers or their Affiliates,” “Election of Trustees” and “Additional Information Concerning the Board of Trustees” the information required by Item 13 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

Item 14. Principal Accounting Fees and Services
The Proxy Statement will contain under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm” the information required by Item 14 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules
(1) Financial Statements: See Part II, Item 8 hereof
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
119

Notes to Consolidated Financial Statements
The report of EPR Properties' independent registered public accounting firm (PCAOB ID: 185) with respect to the above-referenced financial statements and their report on internal control over financial reporting are included in Item 8 of this Form 10-K. Their consent appears as Exhibit 23 of this Form 10-K.
(2)Financial Statement Schedules: See Part II, Item 8 hereof
Schedule III – Real Estate and Accumulated Depreciation
(3)Exhibits
The Company has incorporated by reference certain exhibits as specified below pursuant to Rule 12b-32 under the Exchange Act.
Exhibit No. Description
Composite of Amended and Restated Declaration of Trust of the Company (inclusive of all amendments through May 26, 2023), which is attached as Exhibit 3.1 to the Company's Form 10-Q (Commission File No. 001-13561) filed on August 3, 2023, is hereby incorporated by reference as Exhibit 3.1
Articles Supplementary designating the powers, preferences and rights of the 5.750% Series C Cumulative Convertible Preferred Shares, which is attached as Exhibit 3.2 to the Company's Form 8-K (Commission File No. 001-13561) filed on December 21, 2006, is hereby incorporated by reference as Exhibit 3.2
Articles Supplementary designating powers, preferences and rights of the 9.000% Series E Cumulative Convertible Preferred Shares, which is attached as Exhibit 3.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on April 2, 2008, is hereby incorporated by reference as Exhibit 3.3
Articles Supplementary designating the powers, preferences and rights of the 5.750% Series G Cumulative Redeemable Preferred Shares, which is attached as Exhibit 3.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on November 30, 2017, is hereby incorporated by reference as Exhibit 3.4
Amended and Restated Bylaws of the Company (inclusive of all amendments through May 30, 2019), which is attached as Exhibit 3.2 to the Company's Form 8-K (Commission File No. 001-13561) filed on May 30, 2019, is hereby incorporated by reference as Exhibit 3.5
Form of share certificate for common shares of beneficial interest of the Company, which is attached as Exhibit 4.3 to the Company's Registration Statement on Form S-3ASR (Registration No. 333-35281), filed on June 3, 2013, is hereby incorporated by reference as Exhibit 4.1
Form of 5.750% Series C Cumulative Convertible Preferred Shares Certificate, which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on December 21, 2006, is hereby incorporated by reference as Exhibit 4.2
Form of 9.000% Series E Cumulative Convertible Preferred Shares, which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on April 2, 2008, is hereby incorporated by reference as Exhibit 4.3
Form of 5.750% Series G Cumulative Redeemable Preferred Shares Certificate, which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on November 30, 2017, is hereby incorporated by reference as Exhibit 4.4
Indenture, dated March 16, 2015, by and among the Company, certain of its subsidiaries, and UMB Bank, n.a., as trustee (including the form of 4.500% Senior Notes due 2025 included as Exhibit A thereto), which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on March 16, 2015, is hereby incorporated by reference as Exhibit 4.5
Indenture, dated December 14, 2016, by and among the Company, certain of its subsidiaries, and UMB Bank, n.a., as trustee (including the form of 4.750% Senior Notes due 2026 included as Exhibit A thereto), which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on December 14, 2016, is hereby incorporated by reference as Exhibit 4.6
Indenture, dated May 23, 2017, by and among the Company, certain of its subsidiaries, and UMB Bank, n.a., as trustee (including the form of 4.500% Senior Notes due 2027 included as Exhibit A thereto), which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on May 23, 2017, is hereby incorporated by reference as Exhibit 4.7
120

Indenture, dated April 16, 2018, by and between the Company and UMB Bank, n.a., as trustee (including the form of 4.950% Senior Notes due 2028 included as Exhibit A thereto), which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on April 16, 2018, is hereby incorporated by reference as Exhibit 4.8
Indenture, dated August 15, 2019, between the Company and UMB Bank, n.a., as trustee (including the form of 3.750% Senior Note due 2029 included as Exhibit A thereto), which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on August 15, 2019, is hereby incorporated by reference as Exhibit 4.9
Indenture, dated October 27, 2021, between the Company and UMB Bank, n.a., as trustee (including the form of 3.600% Senior Note due 2031 included as Exhibit A thereto), which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on October 27, 2021, is hereby incorporated by reference as Exhibit 4.10
Note Purchase Agreement, dated August 1, 2016, by and among the Company and the purchasers named therein, which is attached as Exhibit 4.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on August 3, 2016, is hereby incorporated by reference as Exhibit 4.11.1
First Amendment to Note Purchase Agreement, dated September 27, 2017, by and among the Company and the purchasers named therein, which is attached as Exhibit 10.2 to the Company's Form 8-K (Commission File No. 001-13561) filed on September 27, 2017, is hereby incorporated as Exhibit 4.11.2
Second Amendment to Note Purchase Agreement, dated June 29, 2020, by and among the Company and the purchasers named therein, which is attached as Exhibit 10.2 to the Company's Form 10-Q (Commission File No. 001-13561) filed on August 6, 2020, is hereby incorporated by reference as Exhibit 4.11.3
Third Amendment to Note Purchase Agreement, dated December 24, 2020, by and among the Company and the purchasers named therein, which is attached as Exhibit 4.11.4 to the Company's Form 10-K (Commission File No. 001-13561) filed on February 25, 2021, is hereby incorporated by reference as Exhibit 4.11.4
Fourth Amendment to Note Purchase Agreement, dated January 14, 2022, by and among the Company and the purchasers named therein, which is attached hereto as Exhibit 4.11.5 to the Company's Form 10-K (Commission File No. 001-13561) filed on February 23, 2022, is hereby incorporated by reference as Exhibit 4.11.5
Description of Securities Registered under Section 12 of the Exchange Act, is attached hereto as Exhibit 4.12
Third Amended, Restated and Consolidated Credit Agreement, dated as of October 6, 2021, by and among the Company, as borrower, KeyBank National Association, as administrative agent, and the other agents and lenders party thereto, which is attached as Exhibit 10.1.1 to the Company's Form 10-Q (Commission File No. 001-13561) filed on October 6, 2021, is hereby incorporated by reference as Exhibit 10.1.1
Amendment No. 1 to Third Amended, Restated and Consolidated Credit Agreement, dated February 17, 2023, by and among the Company, as borrower, KeyBank National Association, as administrative agent, and the other agents and lenders party thereto, which is attached as Exhibit 10.1.2 to the Company's Form 10-K (Commission File No. 001-13561) filed on February 23, 2023, is hereby incorporated by reference as Exhibit 10.1.2
Form of Indemnification Agreement entered into between the Company and each of its trustees and officers, is attached hereto as Exhibit 10.2
Deferred Compensation Plan for Non-Employee Trustees, which is attached as Exhibit 10.10 to Amendment No. 2, filed on November 5, 1997, to the Company's Registration Statement on Form S-11 (Registration No. 333-35281), is hereby incorporated by reference as Exhibit 10.3
2007 Equity Incentive Plan, as amended, which is attached as Exhibit 10.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on May 15, 2013, is hereby incorporated by reference as Exhibit 10.4
Form of 2007 Equity Incentive Plan Nonqualified Share Option Agreement for Employee Trustees, which is attached as Exhibit 10.2 to the Company's Registration Statement on Form S-8 (Registration No. 333-142831) filed on May 11, 2007, is hereby incorporated by reference as Exhibit 10.5
121

Form of 2007 Equity Incentive Plan Nonqualified Share Option Agreement for Non-Employee Trustees, which is attached as Exhibit 10.3 to the Company's Registration Statement on Form S-8 (Registration No. 333-142831) filed on May 11, 2007, is hereby incorporated by reference as Exhibit 10.6
Form of 2007 Equity Incentive Plan Restricted Shares Agreement for Employees, which is attached as Exhibit 10.4 to the Company's Registration Statement on Form S-8 (Registration No. 333-142831) filed on May 11, 2007, is hereby incorporated by reference as Exhibit 10.7
Form of 2007 Equity Incentive Plan Restricted Shares Agreement for Non-Employee Trustees, which is attached as Exhibit 10.3 to the Company's Form 8-K (Commission File No. 001-13561) filed on May 20, 2009, is hereby incorporated by reference as Exhibit 10.8
EPR Properties 2016 Equity Incentive Plan (as amended and restated effective May 28, 2021), which is attached as Exhibit 10.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on June 1, 2021, is hereby incorporated by reference as Exhibit 10.9
Form of 2016 Equity Incentive Plan Incentive and Nonqualified Share Option Award Agreement for Employees, which is attached as Exhibit 10.2 to the Company's Form 8-K (Commission File No. 001-13561) filed on May 12, 2016, is hereby incorporated by reference as Exhibit 10.10
Form of 2016 Equity Incentive Plan Restricted Shares Award Agreement for Employees, which is attached as Exhibit 10.3 to the Company's Form 8-K (Commission File No. 001-13561) filed on May 12, 2016, is hereby incorporated by reference as Exhibit 10.11
Form of 2016 Equity Incentive Plan Restricted Share Unit Award Agreement for Non-Employee Trustees, which is attached as Exhibit 10.4 to the Company's Form 8-K (Commission File No. 001-13561) filed on May 12, 2016, is hereby incorporated by reference as Exhibit 10.12
Annual Performance-Based Incentive Plan, which is attached as Exhibit 10.1 to the Company's 8-K (Commission File No. 001-13561) filed on June 2, 2017, is hereby incorporated by reference as Exhibit 10.13
EPR Properties Employee Severance Plan (as amended June 1, 2018), which is attached as Exhibit 10.1 to the Company's Form 10-Q (Commission File No. 001-13561) filed on July 31, 2018, is hereby incorporated by reference as Exhibit 10.14
EPR Properties Employee Severance and Retirement Vesting Plan (effective July 31, 2020), which is attached as Exhibit 10.15 to the Company's Form 10-K (Commission File No. 001-13561) filed on February 25, 2020, is hereby incorporated by reference as Exhibit 10.15
2020 Long Term Incentive Plan, which is attached as Exhibit 10.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on February 26, 2020, is hereby incorporated by reference as Exhibit 10.16
Form of Performance Shares Awards Agreement under the 2020 Long Term Incentive Plan, which is attached as Exhibit 10.2 to the Company's Form 8-K (Commission File No. 001-13561) filed on February 26, 2020, is hereby incorporated by reference as Exhibit 10.17
Form of Restricted Shares Award Agreement under the 2020 Long Term Incentive Plan, which is attached as Exhibit 10.3 to the Company's Form 8-K (Commission File No. 001-13561) filed on February 26, 2020, is hereby incorporated by reference as Exhibit 10.18
The list of the Company's Subsidiaries is attached hereto as Exhibit 21
Consent of KPMG LLP is attached hereto as Exhibit 23
Certification of Gregory K. Silvers pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit 31.1
Certification of Mark A. Peterson pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit 31.2
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 32.1
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 32.2
Policy relating to the Recovery of Erroneously Awarded Compensation is attached hereto as Exhibit 97.1
122

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema
101.CAL Inline XBRL Extension Calculation Linkbase
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB Inline XBRL Taxonomy Extension Label Linkbase
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
* Management contracts or compensatory plans

PLEASE NOTE: Pursuant to the rules and regulations of the Securities and Exchange Commission, we have filed or incorporated by reference the agreements referenced above as exhibits to this Annual Report on Form 10-K. The agreements have been filed to provide investors with information regarding their respective terms. The agreements are not intended to provide any other factual information about the Company or its business or operations. In particular, the assertions embodied in any representations, warranties and covenants contained in the agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to investors and may be qualified by information in confidential disclosure schedules not included with the exhibits. These disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the agreements. Moreover, certain representations, warranties and covenants in the agreements may have been used for the purpose of allocating risk between the parties, rather than establishing matters as facts. In addition, information concerning the subject matter of the representations, warranties and covenants may have changed after the date of the respective agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. Accordingly, investors should not rely on the representations, warranties and covenants in the agreements as characterizations of the actual state of facts about the Company or its business or operations on the date hereof.

Item 16. Form 10-K Summary Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
None.
123

SIGNATURES
 
EPR Properties
Dated: February 29, 2024 By /s/ Gregory K. Silvers
Gregory K. Silvers, Chairman, President and Chief Executive Officer (Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature and Title Date
/s/ Gregory K. Silvers February 29, 2024
Gregory K. Silvers, Chairman, President, Chief Executive Officer (Principal Executive Officer) and Trustee
/s/ Mark A. Peterson February 29, 2024
Mark A. Peterson, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ Tonya L. Mater February 29, 2024
Tonya L. Mater, Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
/s/ Peter C. Brown February 29, 2024
Peter C. Brown, Trustee
/s/ John P. Case February 29, 2024
John P. Case, Trustee
/s/ James B. Connor February 29, 2024
James B. Connor, Trustee
/s/ Virginia E. Shanks February 29, 2024
Virginia E. Shanks, Trustee
/s/ Robin P. Sterneck February 29, 2024
Robin P. Sterneck, Trustee
/s/ Lisa G. Trimberger February 29, 2024
Lisa G. Trimberger, Trustee
/s/ Caixia Ziegler February 29, 2024
Caixia Ziegler, Trustee
124
EX-4.12 2 exhibit412-123123x10k.htm EX-4.12 Document
Exhibit 4.12
DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
The following is a brief description of shares of beneficial interest ("shares") of EPR Properties, Inc. (the "Company," "we," "us," or "our"). The brief description is based upon our Amended and Restated Declaration of Trust, including the articles supplementary for each series of preferred shares (as amended, our "Declaration of Trust"), our Amended and Restated Bylaws (as amended, our "Bylaws"), and provisions of applicable Maryland law. This summary does not purport to be complete and is subject to, and qualified in its entirety by, the full text of our Declaration of Trust and Bylaws, each of which is incorporated by reference as an exhibit to our Annual Report on Form 10-K.
GENERAL
Our Declaration of Trust authorizes us to issue up to 125,000,000 common shares, par value $0.01 per share, and 25,000,000 preferred shares, par value $0.01 per share, 6,000,000 of which are designated as 5.75% Series C Cumulative Convertible Preferred Shares ("Series C Preferred Shares"), 3,450,000 of which are designated as 9.00% Series E Cumulative Convertible Preferred Shares ("Series E Preferred Shares"), and 6,000,000 of which are designated as 5.75% Series G Cumulative Redeemable Preferred Shares ("Series G Preferred Shares").  Our Declaration of Trust authorizes our Board of Trustees to determine, at any time and from time to time, the number of authorized shares of beneficial interest, as described below.
COMMON SHARES
All of our common shares are entitled to the following, subject to the preferential rights of any other class or series of shares which may be issued and to the provisions of our Declaration of Trust regarding the restriction of the ownership of shares:
•to receive distributions on our shares if, as and when authorized by our Board of Trustees and declared by us out of assets legally available for distribution; and
•upon our liquidation, dissolution, or winding up, to receive all remaining assets available for distribution to common shareholders after satisfaction of our liabilities and the preferential rights of any preferred shares.
At any meeting of shareholders, the presence in person or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at such meeting will constitute a quorum. Subject to the provisions of our Declaration of Trust on registration or transfer, each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders, including the election of Trustees. Holders of our common shares do not have cumulative voting rights in the election of Trustees. A nominee for Trustee will be elected to the Board of Trustees if, at a meeting of shareholders duly called and at which a quorum is present, a majority of the votes cast are in favor of such nominee’s election; provided, however, that, if the number of nominees for Trustee exceeds the number of Trustees to be elected, Trustees will be elected by a plurality of all votes cast at a meeting of shareholders duly called and at which a quorum is present. A majority of the votes cast at a meeting of shareholders duly called and at which a quorum is present will be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required under our Bylaws or by statute or by our Declaration of Trust.


Holders of our common shares have no preference, conversion, exchange, sinking fund, redemption or, except to the extent expressly required by the law pertaining to Maryland real estate investment trusts, appraisal rights. Shareholders have no preemptive rights to subscribe for any of our securities.
PREFERRED SHARES
General
Our Declaration of Trust authorizes our Board of Trustees to determine the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption of our authorized and unissued preferred shares. These may include:
•the distinctive designation of each series and the number of shares that will constitute the series;
•the voting rights, if any, of shares of the series;
•the distribution rate on the shares of the series, any restriction, limitation or condition upon the payment of the distribution, whether distributions will be cumulative, and the dates on which distributions accumulate and are payable;
•the prices at which, and the terms and conditions on which, the shares of the series may be redeemed, if the shares are redeemable;
•the purchase or sinking fund provisions, if any, for the purchase or redemption of shares of the series;
•any preferential amount payable upon shares of the series upon our liquidation or the distribution of our assets;
•if the shares are convertible, the price or rates of conversion at which, and the terms and conditions on which, the shares of the series may be converted into other securities; and
•whether the series can be exchanged, at our option, into debt securities, and the terms and conditions of any permitted exchange.
Series C Preferred Shares
    Rank
The Series C Preferred Shares rank senior to our common shares and on a parity with our Series E Preferred Shares, Series G Preferred Shares, and other parity securities we may issue in the future with respect to the payment of distributions and amounts on liquidation, dissolution and winding up. 
    Distributions
Our Series C Preferred Shares provide for quarterly payments of cumulative distributions at the rate of 5.75% per annum of the $25 per share liquidation preference of the Series C Preferred Shares, or a fixed rate of $1.4375 per share each year.


Distributions not declared or paid in any quarter continue to accumulate.
    Liquidation Preference
    On liquidation of the Company, holders of the Series C Preferred Shares are entitled to a liquidation preference of $25 per share plus all accumulated, accrued and unpaid distributions before any amount is payable to the holders of our common shares.
Redemption
    The Series C Preferred Shares are not redeemable.
    Voting Rights
Holders of Series C Preferred Shares generally have no voting rights, except that if distributions on the Series C Preferred Shares have not been paid for six or more quarterly periods (whether or not consecutive), holders of the Series C Preferred Shares (together with shares having like voting rights) are entitled to elect two additional trustees to the Board of Trustees to serve until all unpaid distributions have been paid or declared and set aside for payment. In addition, certain material and adverse changes to the terms of the Series C Preferred Shares cannot be made without the affirmative vote of at least two-thirds of the outstanding Series C Preferred Shares and the holders of all other shares on parity with the Series C Preferred Shares and having like voting rights.
Conversion Rights
Holders of Series C Preferred Shares may, at their option, convert the Series C Preferred Shares into our common shares subject to certain conditions at the then applicable conversion rate. The conversion rate is subject to adjustment upon the occurrence of specified events. We may, at our option, convert some or all of the Series C Preferred Shares into common shares at the then applicable conversion rate in certain circumstances based on the market price of our common shares. Upon any conversion of Series C Preferred Shares, we will have the option to deliver either (1) a number of common shares based upon the applicable conversion rate, or (2) an amount of cash and common shares as specified in the articles supplementary for such shares. In addition, upon a fundamental change, when the actual applicable price of our common shares, as determined in accordance with the articles supplementary, is less than $59.45 per share, the holders of Series C Preferred Shares may require us to convert some or all of their Series C Preferred Shares at a conversion rate equal to the liquidation preference of the Series C Preferred Shares being converted plus accrued and unpaid distributions divided by 98% of the market price of our common shares. We will have the right to repurchase for cash some or all of the Series C Preferred Shares that would otherwise be required to be converted. 
Series E Preferred Shares
Rank
    The Series E Preferred Shares rank senior to our common shares and on a parity with our Series C Preferred Shares, Series G Preferred Shares, and other parity securities we may issue in the future with respect to the payment of distributions and amounts on liquidation, dissolution and winding up.


Distributions
Our Series E Preferred Shares provide for quarterly payments of cumulative distributions at the rate of 9.00% per annum of the $25 per share liquidation preference of the Series E Preferred Shares, or a fixed rate of $2.25 per share each year. Distributions not declared or paid in any quarter continue to accumulate. 
Liquidation Preference
On liquidation of the Company, holders of the Series E Preferred Shares are entitled to a liquidation preference of $25 per share plus all accumulated, accrued and unpaid distributions before any amount is payable to the holders of our common shares. 
Redemption
The Series E Preferred Shares are not redeemable. 
Voting Rights
Holders of Series E Preferred Shares generally have no voting rights, except that if distributions on the Series E Preferred Shares have not been paid for six or more quarterly periods (whether or not consecutive), holders of the Series E Preferred Shares (together with shares having like voting rights) are entitled to elect two additional trustees to the Board of Trustees to serve until all unpaid distributions have been paid or declared and set aside for payment. In addition, certain material and adverse changes to the terms of the Series E Preferred Shares cannot be made without the affirmative vote of at least two-thirds of the outstanding Series E Preferred Shares and the holders of all other shares on parity with the Series E Preferred Shares and having like voting rights.
Conversion Rights
Holders of Series E Preferred Shares may, at their option, convert the Series E Preferred Shares into our common shares subject to certain conditions at the then applicable conversion rate. The conversion rate is subject to adjustment upon the occurrence of specified events. We may, at our option, convert some or all of the Series E Preferred Shares into common shares at the then applicable conversion rate in certain circumstances based on the market price of our common shares. Upon any conversion of Series E Preferred Shares, we will have the option to deliver either (1) a number of common shares based upon the applicable conversion rate, or (2) an amount of cash and common shares as specified in the articles supplementary for such shares. In addition, upon a fundamental change, when the actual applicable price of our common shares, as determined in accordance with the articles supplementary, is less than $48.18 per share, the holders of Series E Preferred Shares may require us to convert some or all of their Series E Preferred Shares at a conversion rate equal to the liquidation preference of the Series E Preferred Shares being converted plus accrued and unpaid distributions divided by 98% of the market price of our common shares. We will have the right to repurchase for cash some or all of the Series E Preferred Shares that would otherwise be required to be converted.


Series G Preferred Shares
Rank
    The Series G Preferred Shares rank senior to our common shares and on parity with our Series C Preferred Shares and Series E Preferred Shares, and other parity securities we may issue in the future with respect to the payment of distributions and amounts on liquidation, dissolution and winding up.
Distributions
Our Series G Preferred Shares provide for quarterly payments of cumulative distributions at the rate of 5.75% per annum of the $25 per share liquidation preference of the Series G Preferred Shares, or a fixed rate of $1.4375 per share each year. Distributions not declared or paid in any quarter continue to accumulate. 
Liquidation Preference
On liquidation of the Company, holders of the Series G Preferred Shares are entitled to a liquidation preference of $25 per share plus all accumulated, accrued and unpaid distributions before any amount is payable to the holders of our common shares. 
Redemption
The Series G Preferred Shares are not redeemable prior to November 30, 2022, except in limited circumstances relating to the preservation of our status as a real estate investment trust. On or after that date, we may at our own option redeem the Series G Preferred Shares in whole or in part by paying the $25 per share liquidation preference plus all accumulated, accrued and unpaid distributions. 
Voting Rights
Holders of Series G Preferred Shares generally have no voting rights, except that if distributions on the Series G Preferred Shares have not been paid for six or more quarterly periods (whether or not consecutive), holders of the Series G Preferred Shares (together with other shares having like voting rights) are entitled to elect two additional trustees to the Board of Trustees to serve until all unpaid distributions have been paid or declared and set aside for payment. In addition, certain material and adverse changes to the terms of the Series G Preferred Shares cannot be made without the affirmative vote of at least two-thirds of the outstanding Series G Preferred Shares and the holders of all other shares on a parity with the Series G Preferred Shares and having like voting rights. 
Conversion Rights
The Series G Preferred Shares are not convertible into any other of our securities, except under certain circumstances in connection with a change of control.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF OUR DECLARATION OF TRUST, BYLAWS AND MARYLAND LAW
The following is a brief description of the provisions in our Declaration of Trust, Bylaws and Maryland Law that could have an effect of delaying, deferring, or preventing a change in control of the Company.


Number of Trustees; Vacancies; Removal
Our Declaration of Trust and Bylaws provide that only our Board of Trustees will establish the number of Trustees, provided however that the term of office of a Trustee will not be affected by any decrease in the number of Trustees. Any vacancy on the Board of Trustees may be filled only by a majority of the remaining Trustees, even if the remaining trustees do not constitute a quorum, or by the sole Trustee. Any Trustee elected to fill a vacancy will hold office until the next annual meeting of shareholders and until a successor is elected and qualified. 
Our Declaration of Trust provides that, subject to any right of holders of one or more classes of preferred shares to elect or remove one or more Trustees, a Trustee may be removed for cause by the affirmative vote of the holders of at least two-thirds of our common shares entitled to be cast in the election of trustees. This provision precludes shareholders from removing our incumbent Trustees unless cause, as defined in the Declaration of Trust, exists, and they can obtain a substantial affirmative vote of shares.
Authorized Shares; Undesignated Preferred Shares
Without any action by our shareholders, we may increase or decrease the aggregate number of shares or the number of shares of any class we have authority to issue at any time. Our Board of Trustees may cause us to issue our authorized shares and to reclassify any unissued shares into our classes or series. This ability of our Board of Trustees provides us with flexibility in structuring possible future financings and acquisitions and in meeting other business needs which might arise. Our Board of Trustees may also authorize us to issue a new class or series that could, depending upon the terms of the class or series, delay, defer, or prevent a change of control of the Company.
Advance Notice for Shareholder Proposals and Nominations
Our Bylaws provide that nominations of persons for election to our Board of Trustees and business to be transacted at shareholder meetings may be properly brought pursuant to our notice of the meeting, by our Board of Trustees or by a shareholder who (i) is a shareholder of record at the time of giving the advance notice and at the time of the meeting, (ii) is entitled to vote at the meeting and (iii) has complied with the advance notice provisions set forth in our Bylaws.
Under our Bylaws, a shareholder's notice of nominations for Trustee or business to be transacted at an annual meeting of shareholders must be delivered to our secretary at our principal office not later than the close of business on the 60th day and not earlier than the close of business on the 90th day prior to the first anniversary of the preceding year's annual meeting. In the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the preceding year's annual meeting, a shareholder's notice must be delivered to us not earlier than the close of business on the 90th day prior to such annual meeting and not later than the later of: (i) the 60th day prior to such annual meeting or (ii) the 10th day following the day on which we first make a public announcement of the date of such meeting. The public announcement of a postponement or of an adjournment of such annual meeting to a later date or time will not commence a new time period for the giving of a shareholder's notice. If the number of Trustees to be elected to our Board of Trustees is increased and we make no public announcement of such action at least 70 days prior to the first anniversary of the preceding year's annual meeting, a shareholder's notice also will be considered timely, but only with respect to nominees for any new positions created by such increase, if the notice is delivered to our secretary at our principal office not later than the close of business on the 10th day immediately following the day on which such public announcement is made.


For special meetings of shareholders, our Bylaws require a shareholder who is nominating a person for election to our Board of Trustees at a special meeting at which Trustees are to be elected to give notice of such nomination to our secretary at our principal office not earlier than the close of business on the 90th day prior to such special meeting and not later than the close of business on the later of: (1) the 60th day prior to such special meeting or (2) the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Trustees to be elected at such meeting. The public announcement of a postponement or adjournment of a special meeting to a later date or time will not commence a new time period for the giving of a shareholder's notice as described above.
No Cumulative Voting
Holders of our common shares do not have cumulative voting rights in the election of Trustees. The absence of cumulative voting may make it more difficult for shareholders owning less than a majority of our common shares to elect any Trustees to our Board.
Restrictions on Ownership and Transfer of Shares
Our Declaration of Trust restricts the number of shares which may be owned by shareholders. Generally, for us to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the "Code"), not more than 50% in value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals (defined in the Code to include certain entities and constructive ownership among specified family members) at any time during the last half of a taxable year. The shares also must be beneficially owned by 100 or more persons during at least 335 days of a taxable year or during a proportionate part of a shorter taxable year. In order to maintain our qualification as a REIT, our Declaration of Trust contains restrictions on the acquisition of shares intended to ensure compliance with these requirements.
Our Declaration of Trust generally provides that any person (not just individuals) holding more than 9.8% in number of shares or value, of the outstanding shares of any class or series of our common shares or preferred shares (the "Ownership Limit") may be subject to forfeiture of the shares (including common shares and preferred shares) owned in excess of the Ownership Limit. We refer to the shares in excess of the Ownership Limit as "Excess Shares." The Excess Shares may be transferred to a trust for the benefit of one or more charitable beneficiaries. The trustee of that trust would have the right to vote the voting Excess Shares, and distributions on the Excess Shares would be payable to the trustee for the benefit of the charitable beneficiaries.
Holders of Excess Shares would be entitled to compensation for their Excess Shares, but that compensation may be less than the price they paid for the Excess Shares. Persons who hold Excess Shares or who intend to acquire Excess Shares must provide written notice to us.
Our Ownership Limit may also act to deter an unfriendly takeover of the Company.
In addition, our Declaration of Trust allows the Company to redeem its Securities where the person owning or controlling such Securities is determined to be unsuitable to own or control such Securities due to failure to comply with all applicable laws, statutes and ordinances pursuant to which any gaming authority possesses regulatory, permit and licensing authority over the conduct of gaming activities.


Our Declaration of Trust defines the term "Securities" to mean the Company's common shares, preferred shares and/or capital stock, member's interests or membership interests, partnership interests or other equity securities of entities affiliated with the Company. The foregoing provision may also act to deter an unfriendly takeover of the Company.
Business Combination Statute
The Maryland General Corporation Law (the "MGCL") contains a provision which regulates business combinations with interested shareholders. This provision applies to Maryland real estate investment trusts like us. Under the MGCL, business combinations such as mergers, consolidations, share exchanges and the like between a Maryland real estate investment trust and an interested shareholder or an affiliate of an interested shareholder are prohibited for five years after the most recent date on which the shareholder becomes an interested shareholder. Under the MGCL, the following persons are deemed to be interested shareholders:
•any person who beneficially owns 10% or more of the voting power of the trust's shares; or
•an affiliate or associate of the trust who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting shares of the trust.
After the five-year prohibition period has ended, a business combination between a trust and an interested shareholder must be recommended by the board of trustees of the trust and must receive the following shareholder approvals:
•the affirmative vote of at least 80% of the votes entitled to be cast; and
•the affirmative vote of at least two-thirds of the votes entitled to be cast by holders of shares other than shares held by the interested shareholder with whom or with whose affiliate or associate the business combination is to be effected or held by an affiliate or associate of the interested shareholder.
The shareholder approvals discussed above are not required if the trust's shareholders receive the minimum price set forth in the MGCL for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its shares.
The foregoing provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by the board of trustees of the trust prior to the time that the interested shareholder becomes an interested shareholder. A person is not an interested shareholder under the MGCL if the board of trustees approved in advance the transaction by which the person otherwise would have become an interested shareholder. The board of trustees may provide that its approval is subject to compliance with any terms and conditions determined by the board of trustees.
Control Share Acquisition Statute
The MGCL contains a provision which regulates control share acquisitions. This provision also applies to Maryland real estate investment trusts. The MGCL provides that control shares of a Maryland real estate investment trust acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by trustees who are employees of the trust are excluded from shares entitled to vote on the matter.


Control shares are voting shares which, if aggregated with all other shares owned by the acquiror, or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing trustees within one of the following ranges of voting power:
•One-tenth or more but less than one-third;         
•One-third or more but less than a majority; or         
•A majority or more of all voting power.
Control shares do not include shares which the acquiring person is entitled to vote as a result of having previously obtained shareholder approval. A control share acquisition means the acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition may compel the board of trustees to call a special meeting of shareholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the trust may itself present the question at any shareholders meeting.
If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the MGCL, then the trust may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the trust to redeem control shares is subject to conditions and limitations. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any meeting of shareholders at which the voting rights of the shares are considered and not approved. If voting rights for control shares are approved at a shareholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute of the MGCL does not apply to the following:
•shares acquired in a merger, consolidation or share exchange if the trust is a party to the transaction; or
•acquisitions approved or exempted by a provision in the declaration of trust or bylaws of the trust adopted before the acquisition of shares.
Maryland Unsolicited Takeovers Act
Subtitle 8 of Title 3 of the MGCL, known as the "Maryland Unsolicited Takeovers Act," permits a Maryland corporation (or real estate investment trust) with a class of equity securities registered under the Exchange Act and at least three independent directors (or trustees) to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors (or board of trustees) and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions of the MGCL which provide, respectively, that:


•the entity's board of directors (or board of trustees) will be divided into three classes;
•the affirmative vote of two-thirds of all of the votes entitled to be cast by shareholders generally in the election of directors (or trustees) is required to remove a director (or trustee);
•the number of directors (or trustees) may be fixed only by vote of the directors (or trustees);
•a vacancy on the board of directors (or board of trustees) may be filled only by the remaining directors (or trustees) and that directors (or trustees) elected to fill a vacancy will serve for the remainder of the full term of the class of directors (or trustees) in which the vacancy occurred; and
•the request of shareholders entitled to cast at least a majority of all of the votes entitled to be cast at the meeting is required for shareholders to require the calling of a special meeting of shareholders.
The Maryland Unsolicited Takeovers Act does not limit the power of a corporation (or real estate investment trust) to confer on the holders of any class or series of preferred stock the right to elect one or more directors (or trustees). The Maryland Unsolicited Takeovers Act also permits the charter or a board resolution to prohibit the corporation (or real estate investment trust) from electing to be subject to any or all of the provisions of Subtitle 8, which we have not done. We currently have more than three independent Trustees and have a class of equity securities registered under the Exchange Act, and therefore our Board of Trustees may elect to provide for any of the foregoing provisions without shareholder approval. As of the date hereof, our Board of Trustees has not made any such election. However, through provisions of our Declaration of Trust and Bylaws unrelated to the Maryland Unsolicited Takeovers Act, we already provide for certain of the foregoing provisions of the Maryland Unsolicited Takeovers Act.
LISTING
Our common shares are traded on the New York Stock Exchange under the symbol "EPR." Our Series C Preferred Shares, Series E Preferred Shares and Series G Preferred Shares are traded on the New York Stock Exchange under the symbols "EPR PrC," "EPR PrE" and "EPR PrG," respectively.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our shares is Computershare Trust Company, N.A.


EX-10.2 3 exhibit102-1231202310xk.htm EX-10.2 Document
Exhibit 10.2
FORM OF
INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of , ___ (the “Effective Date”), by and between EPR Properties, a Maryland real estate investment trust (the “Company”), and (“Indemnitee”).

WHEREAS, at the request of the Company, Indemnitee currently serves as a trustee, an officer, or both, of the Company and may, therefore, be subjected to Proceedings (as defined herein) arising as a result of such service;

WHEREAS, as an inducement to Indemnitee to serve or continue to serve in such capacity, the Company has agreed to indemnify Indemnitee and to advance expenses and costs incurred by Indemnitee in connection with any such Proceedings, to the maximum extent permitted by law; and

WHEREAS, in order to provide such protection pursuant to express contract rights, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Definitions. For purposes of this Agreement:

(a) “Beneficial Owner” has the meaning set forth in Rule 13d-3 under the Exchange Act (as in effect on the date hereof).

(b) “Board of Trustees” means the board of trustees of the Company.

(c) “Bylaws” means the bylaws of the Company, as they may be amended from time to time.

(d) “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred upon the earliest to occur after the Effective Date of any of the following events:

(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of trustees (the “Outstanding Voting Securities”) without the prior approval of the Continuing Trustees (as defined herein) immediately prior to such person’s attaining such percentage interest (excluding any such acquisition constituting a Change in Control under part (ii) of this definition);



(ii) the consummation of a merger, statutory share exchange, consolidation, reorganization or similar transaction involving the Company or any of its subsidiaries or sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (a “Business Combination”), in each case, unless, following such Business Combination: (A) all or substantially all of the individuals and entities who were the Beneficial Owners of the Outstanding Voting Securities immediately prior to such Business Combination are the Beneficial Owners, directly or indirectly, of more than 50% of the combined voting power of the then-outstanding securities entitled to vote generally in the election of trustees (or similar body) of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Voting Securities; (B) no “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) (excluding any entity resulting from such Business Combination) is the Beneficial Owner, directly or indirectly of 15% or more of the Outstanding Voting Securities of the Company (or equivalent securities of the entity resulting from such Business Combination), except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the board of trustees (or similar body) of the Company or other entity resulting from such Business Combination were Continuing Trustees at the time of the execution of the initial agreement, or of the action of the Board of Trustees, providing for such Business Combination;

(iii) at any time, a majority of the members of the Board of Trustees are not individuals (A) who were trustees as of the Effective Date or (B) whose appointment or election by the Board of Trustees or nomination for election by the Company’s shareholders was approved by the affirmative vote of at least two-thirds of the trustees then in office who were trustees as of the Effective Date or whose appointment, election or nomination for election was previously so approved (collectively, the “Continuing Trustees”); or

(iv) the approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(e) “Company Status” means the status of a person as a present or former director, trustee, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust or other enterprise (1) of which a majority of the voting power or equity interest is or was owned directly or indirectly by the Company or (2) the management of which is controlled directly or indirectly by the Company and (ii) if, as a result of Indemnitee’s service to the Company or any of its affiliated entities, Indemnitee is or was subject to duties by, or required to perform services for, an employee benefit plan or its participants or beneficiaries, including as a deemed fiduciary thereof.



(f) “Declaration of Trust” means the declaration of trust (as defined in the Maryland REIT Law) of the Company, as it may be in effect from time to time.

(g) “Disinterested Trustee” means a trustee of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee.

(h) “Effective Date” means the date of this Agreement.

(i) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(j) “Expenses” means any and all reasonable, documented and out-of-pocket attorneys’ fees and costs, retainers, court costs, arbitration and mediation costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, negotiating the settlement of, responding to a request to provide discovery in, or otherwise participating in, any Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding, including, without limitation, the premium for, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments, fines or penalties against Indemnitee (other than ERISA excise taxes and penalties).

(k) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation and real estate investment trust law and neither is as of the date of selection, nor in the past five years preceding the date of selection has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

(l) “MGCL” means that Maryland General Corporation Law.

(m) “Maryland REIT Law” means Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland.



(n) “Proceeding” means any threatened, pending or completed action, suit, claim, cross-claim, counterclaim, arbitration, alternate dispute resolution mechanism, investigation, inquiry, enforcement proceeding, administrative hearing, demand or discovery request or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.

Section 2. Services by Indemnitee. Indemnitee serves or will serve in the capacity or capacities set forth in the first WHEREAS clause above. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

Section 3. General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by the MGCL or Maryland REIT Law, including, without limitation, Section 2-418 of the MGCL, as applicable to a Maryland real estate investment trust by virtue of Section 8-301(15) of the Maryland REIT Law, and the Declaration of Trust and the Bylaws.

Section 4. Standard for Indemnification. If, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines, and amounts paid or to be paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s act or omission was unlawful.

Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to:

(a) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable to the Company; (b) indemnification hereunder if Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable on the basis that personal benefit was improperly received by Indemnitee in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in Indemnitee’s Company Status;




(c) indemnification hereunder if a court of appropriate jurisdiction determines in a final adjudication not subject to further appeal that such indemnification is prohibited by applicable law;

(d) indemnification or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s Declaration of Trust or Bylaws, a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board of Trustees or an agreement approved by the Board of Trustees to which the Company is a party expressly provide otherwise;

(e) indemnification or advance of Expenses hereunder if indemnification or advance of Expenses would conflict with the rules of a listing exchange;

(f) indemnification hereunder with respect to any claim made against Indemnitee for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law; or

(g) indemnification or advance of Expenses hereunder with respect to any claim made against Indemnitee for [(i)] any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2022 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by the Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act)[, or (ii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board Trustees or a committee thereof, including but not limited to, any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act (the “Clawback Policy”).]1

[In furtherance of Section 5(g) above, Indemnitee hereby agrees that Indemnitee is and will continue to be subject to the Clawback Policy and that the Clawback Policy will apply both during and after Indemnitee’s employment with the Company Group (as defined in the Clawback Policy). Further, Indemnitee agrees to abide by the terms of the Clawback Policy, including, without limitation, by returning any Erroneously Awarded Compensation (as defined in the
1 Bracketed text in Section 5(g) to be included if Indemnitee is an officer.


Clawback Policy) to the Company Group to the extent required by, and in a manner permitted by, the Clawback Policy.]2

Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

(a) if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or

(b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper; provided, however, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

Section 7. Indemnification for Expenses of an Indemnitee Who is Successful or Wholly or Partially Entitled to Indemnification. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee was or is, by reason of Indemnitee’s Company Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, or is otherwise entitled to indemnification for judgments, penalties, fines, and amounts paid or to be paid in settlement in such Proceeding, the Company shall, to the maximum extent permitted by applicable law, indemnify Indemnitee for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly entitled to indemnification in such Proceeding, the Company shall, to the maximum extent permitted by law, indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter that is indemnified or indemnifiable, with such Expenses allocated on a reasonable and proportionate basis between the indemnifiable and non-indemnifiable claims, issues or matters. For purposes of this Section 7 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 8. Advance of Expenses for Indemnitee. If, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding. The Company shall make such advance of incurred Expenses within ten days after the receipt by the Company of a statement or statements requesting such advance from time to time, whether prior to or after final disposition of such Proceeding, which
2 Bracketed text to be included if Indemnitee is an officer.


advance may be in the form of, in the reasonable discretion of Indemnitee (but without duplication), (a) payment of such Expenses directly to third parties on behalf of Indemnitee, (b) advance of funds to Indemnitee in an amount sufficient to pay such Expenses or (c) reimbursement to Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor or pay interest thereon.

Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Company Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other person, and to which Indemnitee is not a party, Indemnitee shall be advanced and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. In connection with any such advance of Expenses, the Company may require Indemnitee to provide an undertaking and affirmation substantially in the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of execution thereof.

Section 10. Procedure for Determination of Entitlement to Indemnification.

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary or appropriate to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Trustees in writing that Indemnitee has requested indemnification.

(b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control has occurred, by Independent Counsel, in a written opinion to the Board of Trustees, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Trustees in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control has not occurred, (A) by a majority vote of the Disinterested Trustees or by the majority vote of a group of Disinterested Trustees designated by the Disinterested Trustees to make the determination, (B) if Independent Counsel has been selected by the Board of Trustees in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld or delayed, by Independent Counsel, in a written opinion to the Board of Trustees, a copy of which shall be delivered to Indemnitee or (C) if so directed by the Board of Trustees, by the shareholders of the Company, excluding shares held by trustees or officers who are parties to the Proceeding.


The Company will promptly advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification including a brief description as to why indemnification has been denied. If it is so determined that Indemnitee is entitled to indemnification, the Company shall make payment to Indemnitee within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary or appropriate to such determination in the discretion of the Board of Trustees or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b); provided, that the foregoing shall not require Indemnitee to take any action or refrain from taking any action if Indemnitee’s legal counsel reasonably advises that doing so is reasonably likely to be prejudicial to Indemnitee’s legal interests or rights in any other potential or pending Proceeding related to Indemnitee. Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

(c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is selected or engaged as described in clause (b) above.

Section 11. Presumptions and Effect of Certain Proceedings.

(a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity (including any court having jurisdiction over the matter) making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of overcoming that presumption in connection with the making of any determination contrary to that presumption. Neither the failure to make a determination pursuant to Section 10(b) as to whether indemnification is proper in the circumstances because Indemnitee has met any particular standard of conduct, nor an actual determination by the Company (including by the Board of Trustees or Independent Counsel) pursuant to Section 10(b) that Indemnitee has not met such standard of conduct, shall create a presumption that indemnification is not proper in the circumstances or create a presumption that Indemnitee has not met any particular standard of conduct.

(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.



(c) The knowledge and/or actions, or failure to act, of any other trustee, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.

(d) For purposes of any determination of whether any act or omission of the Indemnitee met the requisite standard of conduct described herein for indemnification, each act or omission of the Indemnitee shall be deemed to have met such standard if the Indemnitee’s action is based on the records or books of accounts of the Company, including financial statements, or on information supplied to the Indemnitee by the officers of the Company in the course of their duties, or on the advice of legal counsel for the Company or on information or records given or reports made to the Company by an independent certified public accountant or by an appraiser or other expert, provided, in each instance, such reliance is in accordance with Section 2-405.1(d) of the MGCL. The provisions of this Section 11(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement or under applicable law.

Section 12. Remedies of Indemnitee.

(a) If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification or Expenses pursuant to any other section of this Agreement or the Declaration of Trust or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, or alternatively, at Indemnitee’s option, in an arbitration conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association, of Indemnitee’s entitlement to indemnification or advance of Expenses. If Indemnitee chooses to seek such adjudication or arbitration, Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce Indemnitee’s rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).


The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.

(c) If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification that was not disclosed in connection with the determination.

(d) In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by Indemnitee in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be reasonably proportioned.

(e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company.

Section 13. Defense of the Underlying Proceeding.

(a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.



(b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise with respect to Indemnitee which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty, amount paid in settlement or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.

(c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Company Status, (i) Indemnitee reasonably concludes, based upon an opinion of outside counsel approved by the Company, which approval shall not be unreasonably withheld or delayed, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of outside counsel approved by the Company, which approval shall not be unreasonably withheld or delayed, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.

Section 14. Non-Exclusivity; Survival of Rights. The rights of indemnification and advancement of Expenses as provided by this Agreement shall not be exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Declaration of Trust or Bylaws of the Company, any agreement or a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board of Trustees, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of the Declaration of Trust or Bylaws of the Company, this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement, the Declaration of Trust or Bylaws of the Company in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Company Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder, or under the Declaration of Trust or Bylaws of the Company, or now or hereafter existing at law, in equity or otherwise.


The assertion of any right or remedy hereunder, under the Declaration of Trust or Bylaws of the Company, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.

Section 15. Insurance.

(a) The Company will use its reasonable best efforts to acquire trustees and officers liability insurance, on terms and conditions deemed appropriate by the Board of Trustees, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of Indemnitee’s Company Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of Indemnitee’s Company Status. In no event shall the terms of such trustees and officers liability insurance be less favorable to Indemnitee than the terms applicable to the Company’s executive officers generally. In the event of a Change in Control, the Company shall maintain in force any and all directors and officers liability insurance policies that were maintained by the Company immediately prior to the Change in Control for a period of six years with the insurance carrier or carriers and through the insurance broker in place at the time of the Change in Control; provided, however, (i) if the carriers will not offer the same policy and an expiring policy needs to be replaced, a policy substantially comparable in scope and amount shall be obtained and (ii) if any replacement insurance carrier is necessary to obtain a policy substantially comparable in scope and amount, such insurance carrier shall have an AM Best rating that is the same or better than the AM Best rating of the existing insurance carrier; provided, further, however, in no event shall the Company be required to expend an amount per year of such extended six year coverage in excess of 250% of the annual premium or premiums paid by the Company for directors and officers liability insurance in effect on the date of the Change in Control (the “Prior Annual Premium”). In the event that 250% of the Prior Annual Premium (the “Maximum Annual Premium Amount”) is insufficient for any one or more years of such extended coverage, then for any such year(s) the Company shall spend the Maximum Annual Premium Amount to purchase the maximum of such lesser coverage as may be obtained with such amount.

(b) Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee which would otherwise be indemnifiable hereunder arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in Section 15(a). The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise) the Company has trustee and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies and shall thereafter take all action reasonably necessary to cause such insurers to pay all amounts payable as a result of such Proceeding in accordance with the terms of such policies.



(c) The Indemnitee shall reasonably cooperate with the Company or any insurance carrier of the Company with respect to any Proceeding; provided, that the foregoing shall not require Indemnitee to take any action or refrain from taking any action if Indemnitee’s legal counsel reasonably advises that doing so is reasonably likely to be prejudicial to Indemnitee’s legal interests or rights in any potential or pending Proceeding related to Indemnitee.

Section 16. Coordination of Payments; Subrogation. (a) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents or other instruments required and take all action necessary to secure such rights, including execution of such documents or other instruments as are necessary to enable the Company to bring suit to enforce such rights.

Section 17. Contribution. If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any reason, other than for failure to satisfy the standard of conduct set forth in Section 4 or due to the provisions of Section 5, then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permissible under applicable law, the Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses or judgments, penalties, fines, and/or amounts paid or to be paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

Section 18. Reports to Shareholders. To the extent required by the MGCL or Maryland REIT Law, the Company shall report in writing to its shareholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of shareholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

Section 19. Duration of Agreement; Binding Effect.

(a) This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a trustee, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).



(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement (i) shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), (ii) shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and (iii) shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

(d) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult to prove, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.

Section 20. Severability. If any provision or provisions of this Agreement shall be held to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, void, illegal or otherwise unenforceable that is not itself invalid, void, illegal or otherwise unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, void, illegal or otherwise unenforceable, that is not itself invalid, void, illegal or otherwise unenforceable) shall be construed so as to give effect to the intent manifested thereby.



Section 21. Counterparts. This Agreement may be executed in one or more counterparts, (delivery of which may be by facsimile, or via e-mail as a portable document format (.pdf) or other electronic format), each of which will be deemed to be an original, and it will not be necessary in making proof of this Agreement or the terms of this Agreement to produce or account for more than one such counterpart. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 22. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 23. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor, unless otherwise expressly stated, shall such waiver constitute a continuing waiver.

Section 24. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a) If to Indemnitee, to the address set forth on the signature page hereto.

(b) If to the Company, to:

EPR Properties
909 Walnut Street, Suite 200
Kansas City, Missouri 64106
Attn: Secretary

or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 25. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

Section 26. Section 409A. It is intended that any indemnification payment or advancement of Expenses made hereunder shall be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance issued thereunder (“Section 409A”) pursuant to Treasury Regulation Section l .409A-l (b)(10). Notwithstanding the foregoing, if any indemnification payment or advancement of Expenses made hereunder shall be determined to be “nonqualified deferred compensation” within the meaning of Section 409A, then (i) the amount of the indemnification payment or advancement of Expenses during one taxable year shall not affect the amount of the indemnification payments or advancement of Expenses during any other taxable year, (ii) the indemnification payments or advancement of Expenses must be made on or before the last day of Indemnitee’s taxable year following the year in which the expense was incurred, and (iii) the right to indemnification payments or advancement of Expenses hereunder is not subject to liquidation or exchange for another benefit.



Section 27. Entire Agreement. Without limiting any of the rights of Indemnitee under the Declaration of Trust or the Bylaws of the Company, as they may be amended from time to time, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof (including without limitation any prior indemnification agreement between Indemnitee and the Company or its predecessors).

[SIGNATURE PAGE FOLLOWS]





IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
ATTEST: EPR PROPERTIES
By:
Name:
Title:
WITNESS: INDEMNITEE
Name:
Address:






EXHIBIT A

FORM OF AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED

To: The Board of Trustees of EPR Properties

Re: Affirmation and Undertaking

Ladies and Gentlemen:

This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement dated the _____ day of , 20__, by and between EPR Properties, a Maryland real estate investment trust (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).

Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Company Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as [a trustee] [and] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance by the Company for Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___ day of , 20___.

Name:


EX-21 4 exhibit21-123123x10k.htm SUBSIDIARIES OF THE COMPANY Document

EXHIBIT 21

Subsidiaries of the Company
Subsidiary Jurisdiction of Incorporation or Formation
30 West Pershing, LLC   Missouri
Adelaar Developer II, LLC Delaware
Adelaar Developer, LLC Delaware
Atlantic - EPR I   Delaware
Atlantic - EPR II   Delaware
Blankenbaker X, LLC Indiana
Brandywine X, LLC Indiana
Burbank Village, Inc.   Delaware
Burbank Village, L.P.   Delaware
Calypso Property LP Ontario
Cantera 30, Inc.   Delaware
Cantera 30 Theatre, L.P.   Delaware
Catskill Resorts TRS, LLC Delaware
CLP Northstar Commercial, LLC Delaware
CLP Northstar, LLC Delaware
Columbia Screens TRS I, LLC Delaware
Early Childhood Education, LLC Delaware
Early Education Capital Solutions, LLC Delaware
ECE I, LLC   Delaware
ECE II, LLC   Delaware
Education Capital Solutions, LLC   Delaware
EPR Accommodations, LLC Delaware
EPR Ambassador Holdings, LLC Delaware
EPR Apex, Inc. Delaware
EPR Brews, LLC Delaware
EPR Camelback, LLC   Delaware
EPR Canada, Inc.   Missouri
EPR Concord II, L.P.   Delaware
EPR Experience, LLC Delaware
EPR Fitness, LLC Delaware
EPR Gaming Properties, LLC Delaware
EPR Go Zone Holdings, LLC Delaware
EPR Grand Prairie, LLC Delaware
EPR Hospitality, LLC Delaware
EPR iHoldings, LLC Delaware
EPR International, Inc. Maryland
EPR Karting, LLC   Delaware
EPR Lodging, LLC Delaware
EPR Louisiana TRS, Inc. Delaware
EPR Marinas, LLC Delaware
EPR Maryland Gaming, LLC Delaware
EPR Mountain, LLC Delaware
EPR North Finance Trust Ontario
EPR North GP ULC British Columbia
EPR North Holdings GP ULC British Columbia


EPR North Holdings LP Ontario
EPR North Properties LP Ontario
EPR North Trust   Kansas
EPR North US GP Trust Delaware
EPR North US LP Delaware
EPR PA TRS, Inc. Delaware
EPR Parks, LLC Delaware
EPR Resorts, LLC Delaware
EPR Resorts Financing, LLC Delaware
EPR Springs, LLC Delaware
EPR Springs II, LLC Delaware
EPR St. Petes TRS, Inc. Delaware
EPR Thornton Holdings, Inc. Delaware
EPR TRS Holdings, Inc.   Missouri
EPR TRS I, Inc.   Missouri
EPR TRS II, Inc.   Missouri
EPR TRS III, Inc.   Missouri
EPR TRS IV, Inc.   Missouri
EPR Tuscaloosa, LLC      Delaware
EPR Water, LLC Delaware
EPR VC Acquisition, ULC British Columbia
EPR Wisconsin TRS, Inc. Delaware
EPT 301, LLC   Missouri
EPT 909, Inc.   Delaware
EPT Aliso Viejo, Inc.   Delaware
EPT Arroyo, Inc.   Delaware
EPT Auburn, Inc.   Delaware
EPT Biloxi, Inc.   Delaware
EPT Boise, Inc.   Delaware
EPT Chattanooga, Inc.   Delaware
EPT Columbiana, Inc.   Delaware
EPT Concord II, LLC   Delaware
EPT Concord, LLC   Delaware
EPT Davie, Inc.   Delaware
EPT Deer Valley, Inc.   Delaware
EPT DownREIT II, Inc.   Missouri
EPT DownREIT, Inc.   Missouri
EPT East, Inc.   Delaware
EPT Firewheel, Inc.   Delaware
EPT First Colony, Inc.   Delaware
EPT Fresno, Inc.   Delaware
EPT Gulf Pointe, Inc.   Delaware
EPT Hamilton, Inc.   Delaware
EPT Hattiesburg, Inc.   Delaware
EPT Huntsville, Inc.   Delaware
EPT Hurst, Inc.   Delaware
EPT Indianapolis, Inc.   Delaware
EPT Kenner, LLC   Delaware
EPT Kenner Tenant, LLC Delaware
EPT Lafayette, Inc.   Delaware


EPT Lawrence, Inc.   Delaware
EPT Leawood, Inc.   Delaware
EPT Little Rock, Inc.   Delaware
EPT Macon, Inc.   Delaware
EPT Mad River, Inc.   Missouri
EPT Manchester, Inc.   Delaware
EPT Melbourne, Inc.   Missouri
EPT Mesa, Inc.   Delaware
EPT Mesquite, Inc.   Delaware
EPT Modesto, Inc.   Delaware
EPT Mount Attitash, Inc.   Delaware
EPT Mount Snow, Inc.   Delaware
EPT New Roc GP, Inc.   Delaware
EPT New Roc, LLC   Delaware
EPT Nineteen, Inc.   Delaware
EPT Pensacola, Inc.   Missouri
EPT Pompano, Inc.   Delaware
EPT Raleigh Theatres, Inc.   Delaware
EPT Ski Properties, Inc.   Delaware
EPT Slidell, Inc.   Delaware
EPT South Barrington, Inc.   Delaware
EPT Twin Falls, LLC   Delaware
EPT Virginia Beach, Inc.   Delaware
EPT Waterparks, Inc.   Delaware
EPT White Plains, LLC   Delaware
EPT Wilmington, Inc.   Delaware
ERC Opportunity, LLC Delaware
Flik Depositor, Inc.   Delaware
Flik, Inc.   Delaware
Foothill Ranch Screens TRS I, LLC Delaware
GE EPR Warrens HoldCo Lessee, LLC Delaware
GE EPR Warrens HoldCo Owner, LLC Delaware
International Building Condominium Association, Inc. Missouri
Kanata Entertainment Holdings, Inc.   New Brunswick
Kozy Rest EPR-NG Lessor, LLC Delaware
Kozy Rest EPR-NG Lssee, LLC Delaware
Kozy Rest PropCo, LLC Delaware
Kozy Rest Lessee, LLC Delaware
Kozy Rest Lessor, LLC Delaware
McHenry FFE, LLC   Delaware
Megaplex Four, Inc.   Missouri
Megaplex Nine, Inc.   Missouri
Mississauga Entertainment Holdings, Inc.   New Brunswick
New Albany Screens TRS I, LLC Delaware
New Roc Associates, L.P.   New York
Northgate Cajun Palms, LLC Delaware
Northgate Cajun Palms HoldCo Lessee, LLC Delaware
Northgate X, LLC Indiana
Oakville Entertainment Holdings, Inc.   New Brunswick
Private ECS, LLC   Delaware


Richmond Screens TRS I, LLC   Delaware
Tampa Veterans 24, Inc.   Delaware
Tampa Veterans 24, L.P.   Delaware
Theatre Sub, Inc.   Missouri
Warrenville Screens TRS I, LLC Delaware
ValCal EPR GP Inc. Quebec
Valcartier Property LP Quebec
WestCol Center, LLC   Delaware
Whitby Entertainment Holdings, Inc.   New Brunswick




EX-23 5 exhibit23-123123x10k.htm CONSENT OF KPMG LLP Document

EXHIBIT 23
Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (Nos. 333‑265415 and 333-265410) on Form S-3, the registration statements (Nos. 333-215099 and 333-78803) on Form S-4, and the registration statements (Nos. 333-256932, 333-159465, 333-211815, 333-189028, 333-142831, and 333-76625) on Form S-8 of our report dated February 29, 2024, with respect to the consolidated financial statements and financial statement schedule III of EPR Properties and the effectiveness of internal control over financial reporting.

/s/ KPMG LLP

Kansas City, Missouri
February 29, 2024


EX-31.1 6 exhibit311-1231x23x10k.htm CERTIFICATION OF GREGORY K. SILVERS PURSUANT TO SECTION 302 Document

EXHIBIT 31.1
CERTIFICATION

PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
I, Gregory K. Silvers, certify that:
1.I have reviewed this Annual Report on Form 10-K of EPR Properties;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
Date: February 29, 2024 /s/ Gregory K. Silvers
  Gregory K. Silvers
  Chairman, President and Chief Executive Officer
(Principal Executive Officer)


EX-31.2 7 exhibit312-123123x10k.htm CERTIFICATION OF MARK A. PETERSON PURSUANT TO SECTION 302 Document

EXHIBIT 31.2
CERTIFICATION

PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
I, Mark A. Peterson, certify that:
1.I have reviewed this Annual Report on Form 10-K of EPR Properties;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 29, 2024 /s/ Mark A. Peterson
Mark A. Peterson
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)

EX-32.1 8 exhibit321-123123x10k.htm CERTIFICATION BY CEO PURSUANT TO 18 USC 1350 Document



EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350 AS
ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT
I, Gregory K. Silvers, Chairman, President and Chief Executive Officer of EPR Properties (the “Issuer”), have executed this certification for furnishing to the Securities and Exchange Commission in connection with the filing with the Commission of the registrant’s Annual Report on Form 10-K for the period ended December 31, 2023 (the “Report”). I hereby certify that, to the best of my knowledge and belief:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
/s/ Gregory K. Silvers
Gregory K. Silvers
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
Date: February 29, 2024

EX-32.2 9 exhibit322-123123x10k.htm CERTIFICATION OF CFO PURSUANT TO 18 USC 1350 Document



EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350 AS
ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT
I, Mark A. Peterson, Executive Vice President, Chief Financial Officer and Treasurer of EPR Properties (the “Issuer”), have executed this certification for furnishing to the Securities and Exchange Commission in connection with the filing with the Commission of the registrant’s Annual Report on Form 10-K for the period ended December 31, 2023 (the “Report”). I hereby certify that, to the best of my knowledge and belief:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
/s/ Mark A. Peterson
Mark A. Peterson
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
Date: February 29, 2024

EX-97.1 10 exhibit971-1231202310xk.htm EX-97.1 Document
Exhibit 97.1
EPR PROPERTIES

Executive Compensation Clawback Policy

(Effective as of October 2, 2023)

The Compensation and Human Capital Committee (the “Committee”) of the Board of Trustees (the “Board”) of EPR Properties (the “Company”) believes that it is in the best interests of the Company and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance compensation philosophy by providing for the recovery of Erroneously Awarded Compensation in the event of a restatement of the Company’s financial statements. This executive compensation clawback policy (as the same may be amended and/or restated from time to time, the “Policy”) is designed to ensure that compensation is paid to executive officers based on accurate financial statements and ethical and legal conduct. The Committee has therefore adopted this Policy, effective as of October 2, 2023 (the “Effective Date”). For purposes of this Policy, capitalized terms not otherwise defined shall have the meanings set forth below in the definitions paragraphs.

1.Purpose. The purpose of this Policy is to describe the circumstances in which Executive Officers will be required to repay or return Erroneously Awarded Compensation to members of the Company Group. This Policy is designed to comply with, and shall be interpreted consistent with, Section 303A.14 of the Listed Company Manual of the NYSE that was adopted to implement Rule 10D-1 under the Securities Exchange Act of 1934. Each Executive Officer shall be required to sign and return to the Company the Acknowledgement Form attached hereto as Exhibit A pursuant to which such Executive Officer will agree to be bound by the terms of and comply with this Policy.

2.Mandatory Clawback of Erroneously Awarded Compensation.

(a)In the event of an Accounting Restatement, the Committee shall recover reasonably promptly the amount of any Erroneously Awarded Compensation, determined in accordance with this Policy and applicable laws and regulations.

(b)The Committee shall have broad discretion to determine the appropriate means and methods of recovery of Erroneously Awarded Compensation based on all applicable facts and circumstances and taking into account the time value of money and the cost to shareholders of delaying recovery. Such means and methods of recovery may include, subject to compliance with any applicable law, without limitation, (i) seeking repayment from the Executive Officer; (ii) reducing the amount that would otherwise be payable to the Executive Officer under any compensatory plan, program, agreement, policy or arrangement maintained by the Company or any of its affiliates; (iii) canceling any outstanding vested or unvested award (whether cash- or equity-based) previously granted to the Executive Officer; (iv) any other method authorized by applicable law or contract; or (v) any combination of the foregoing. For the avoidance of doubt, except as set forth in Section 2(c) below, in no event may the Company Group accept an amount that is less than the amount of Erroneously Awarded Compensation in satisfaction of an Executive Officer’s obligations hereunder.



(c) Notwithstanding anything herein to the contrary, the Company shall not be required to take the actions contemplated by Sections 2(b) and 2(c) if the following conditions are met and the Committee determines that recovery would be impracticable:

(i) The direct expenses paid to a third party to assist in enforcing the Policy against an Executive Officer would exceed the amount to be recovered, after the Company has made a reasonable attempt to recover the applicable Erroneously Awarded Compensation, documented such attempts and provided such documentation to NYSE to the extent required by applicable rules and listing standards;

(ii) Recovery would violate home country law where that law was adopted prior to November 28, 2022, provided that, before determining that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of home country law, the Company has obtained an opinion of home country counsel, acceptable to NYSE, that recovery would result in such a violation and a copy of the opinion is provided to NYSE; or

(iii) Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company Group, to fail to meet the anti-alienation and other applicable requirements of Section 401(a)(13) or Section 411(a) of the Internal Revenue Code and regulations thereunder.

3.Definitions. For purposes of this Policy, the following capitalized terms shall have the meanings set forth below.

(a)“Accounting Restatement” shall mean an accounting restatement (i) due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial restatements that is material to the previously issued financial statements (a “Big R” restatement), or (ii) that corrects an error that is not material to previously issued financial statements, but would result in a material misstatement if the error were not corrected in the current period or left uncorrected in the current period (a “little r” restatement).

(b)“Clawback Eligible Incentive Compensation” shall mean, in connection with an Accounting Restatement and with respect to each individual who served as an Executive Officer at any time during the applicable performance period for any Incentive-based Compensation (whether or not such Executive Officer is serving at the time the Erroneously Awarded Compensation is required to be repaid to the Company Group), all Incentive-based Compensation Received by such Executive Officer (i) on or after the Effective Date, (ii) after beginning service as an Executive Officer, (iii) while the Company has a class of securities listed on a national securities exchange or a national securities association, and (iv) during the applicable Clawback Period.

(c)“Clawback Period” shall mean, with respect to any Accounting Restatement, the three completed fiscal years of the Company immediately preceding the Restatement Date and any transition period (that results from a change in the Company’s fiscal year) of less than nine months within or immediately following those three completed fiscal years.



(d)“Company Group” shall mean the Company, together with each of its direct and indirect subsidiaries.

(e)“Erroneously Awarded Compensation” shall mean, with respect to each Executive Officer in connection with an Accounting Restatement, the amount of Clawback Eligible Incentive Compensation that exceeds the amount of Incentive-based Compensation that otherwise would have been Received had it been determined based on the restated amounts, computed without regard to any taxes paid. For Incentive-based Compensation based on (or derived from) stock price or total shareholder return where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the applicable Accounting Restatement, the amount shall be determined by the Committee based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or total shareholder return upon which the Incentive-based Compensation was Received (in which case, the Company shall maintain documentation of such determination of that reasonable estimate and provide such documentation to the NYSE).

(f)“Executive Officer” shall mean any current or former “executive officer” of the Company as defined in Section 303A.14 of the NYSE Listed Company Manual.

(g)“Financial Reporting Measures” shall mean measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and all other measures, including non-GAAP measures, that are derived wholly or in part from such measures. Stock price and total shareholder return (and any measures that are derived wholly or in part from stock price or total shareholder return) shall for purposes of this Policy be considered Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the SEC.

(h)“Incentive-based Compensation” shall mean any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure. For purposes of clarity, Incentive-based Compensation includes compensation that is in any plan, other than tax-qualified retirement plans, including long-term disability, life insurance, and supplemental executive retirement plans, and any other compensation that is based on such Incentive-based Compensation, such as earnings accrued on notional amounts of Incentive-based Compensation contributed to such plans.

(i)“NYSE” shall mean the New York Stock Exchange.



(j)“Received” shall, with respect to any Incentive-based Compensation, mean actual or deemed receipt, and Incentive-based Compensation shall be deemed received in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-based Compensation award is attained, even if payment or grant of the Incentive-based Compensation occurs after the end of that period.

(k)“Restatement Date” shall mean the earlier to occur of (i) the date the Board, a committee of the Board or the officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (ii) the date a court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement.

(l)“SEC” shall mean the U.S. Securities and Exchange Commission.

4.Indemnification Prohibited. No member of the Company Group shall be permitted to indemnify any person subject to this Policy against (i) the loss of any Erroneously Awarded Compensation that is repaid, returned or recovered pursuant to the terms of this Policy, or (ii) any claims relating to the Company Group’s enforcement of its rights under this Policy. Further, no member of the Company Group shall pay for or reimburse the cost of insurance against recovery of any Erroneously Awarded Compensation, or enter into any agreement that exempts any Incentive-based Compensation from the application of Section 2 of this Policy or that waives the Company Group’s right to recovery of any Erroneously Awarded Compensation and this Policy shall supersede any such agreement (whether entered into before, on or after the Effective Date).

5.Administration and Interpretation. This Policy shall be administered by the Committee. The Committee is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy. Any determinations made by the Committee shall be final and binding on all Executive Officers and their beneficiaries, heirs, executors or other legal representatives.

6.Amendment; Termination. The Board or Committee may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary, including as and when it determines that it is legally required by any federal securities laws, SEC rules or the rules of any national securities exchange or national securities association on which the Company’s securities are listed. The Board or Committee may terminate this Policy at any time. Notwithstanding anything in this paragraph to the contrary, no amendment or termination of this Policy shall be effective if such amendment or termination would (after taking into account any actions taken by the Company contemporaneously with such amendment or termination) cause the Company to violate any federal securities laws, SEC rules or the rules of any national securities exchange or national securities association on which the Company’s securities are listed.

Reference to this Policy may be made in any agreement or similar document evidencing awards or grants to any executive to whom this Policy is applicable; provided, however, that this Policy is applicable to such executive officer notwithstanding any other terms of the agreement or similar documents evidencing such awards or grants.



7.Other Recoupment Rights; No Additional Payments. The Committee intends that this Policy will be applied to the fullest extent permitted by law. This Policy shall be incorporated by reference into and shall apply to all incentive, bonus, equity, equity-based and compensation plans, agreements, and awards outstanding as of the Effective Date or entered into on or after the Policy’s Effective Date. The Committee may require that any employment agreement, equity award agreement, or any other agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require an Executive Officer to agree to abide by the terms of this Policy. This Policy shall apply in addition to any right of recoupment against the Chief Executive Officer and Chief Financial Officer pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 and any other remedies or rights of recoupment that may be available to the Company Group under applicable law, regulation or rule or pursuant to the terms of any similar policy in any compensation plan or arrangement, employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company Group; provided that there shall be no duplication of recovery under this Policy and Section 304 of The Sarbanes-Oxley of 2002.

8.Reporting and Disclosure. The Company shall file all disclosures with respect to this Policy in accordance with the requirements of the federal securities laws, including the disclosure required by the applicable SEC filings.

9.Conflicts. In the event of any conflict or inconsistency between this Policy and any provisions in (x) any agreement, plan or other arrangement applicable to any member of the Company Group, and (y) any organizational documents of any entity that is part of Company Group that, (a) exempt any Incentive-Based Compensation from the application of this Policy, (b) waive or otherwise prohibit or restricts the Company Group’s right to recover any Erroneously Awarded Compensation, including, without limitation, in connection with exercising any right of setoff as provided herein, and/or (c) require or provide for indemnification to the extent that such indemnification is prohibited under Section 4 above, the terms of this Policy shall supersede and control.

10.Successors. This Policy shall be binding and enforceable against all Executive Officers and their beneficiaries, heirs, executors, administrators or other legal representatives.

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EPR PROPERTIES

EXECUTIVE COMPENSATION CLAWBACK POLICY
ACKNOWLEDGEMENT FORM

By signing below, the undersigned acknowledges and confirms that the undersigned has received and reviewed a copy of the EPR Properties Executive Compensation Clawback Policy (the “Policy”). Capitalized terms used but not otherwise defined in this Acknowledgement Form (this “Acknowledgement Form”) shall have the meanings ascribed to such terms in the Policy.

By signing this Acknowledgement Form, the undersigned acknowledges and agrees that the undersigned is and will continue to be subject to the Policy and that the Policy will apply both during and after the undersigned’s employment with the Company Group. Further, by signing below, the undersigned agrees to abide by the terms of the Policy, including, without limitation, by returning any Erroneously Awarded Compensation (as defined in the Policy) to the Company Group to the extent required by, and in a manner permitted by, the Policy.

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