Q2 2020 EPR Properties Earnings Call
Good day, ladies and gentlemen, and welcome to the second quarter 2020, you'd be our properties earnings conference call.
That's fine all participants are in listen only mode.
Third we will conduct a question and answer session.
Instructions will follow that side.
If anyone should require assistance during the conference the spreads bars, then zero under Touchstone telephone.
As a reminder, this conference call is being recorded.
I would like.
Likes you had the conference over to host Mr., Brian more your feet.
Especially that corporate communications.
Thank you hi, everybody and welcome thanks for joining us today for second quarter, only 20 earnings call.
I'll start the call by forming new this this call may include forward looking statement as defined in the private Securities litigation active 1995.
Identified by such words as will be intend continue believe may expect hope anticipate or other comparable terms.
The company's actual financial condition and the result to the operations may vary materially from those contemplated by such forward looking statement discussion of these factors that could cause results to differ materially from these forward looking statements are contained in the Companys FCC filings, including the Companys reports on form 10-K intent.
Q.
Additionally, this call contain references to certain non-GAAP measures, which we believe or useful in evaluating the company's performance.
A reconciliation to the to measure the most directly comparable GAAP measures are included in today's earnings release, and supplemental information furnished to the FCC under form 8-K.
If you wish to follow along todays earnings release supplemental and earnings call presentation or all available on the Investor Center page of the company's website Www <unk> EPA, our Casey Dot com.
Now I'll turn the call over to the company's President and CEO, Greg Silvers.
Thank you Brian.
Good morning, everyone and thank you for joining us on today's second quarter call.
I'd like to start by extending our best wishes for the health and safety of everyone and by voicing my appreciation to the entire NPR team that has been diligently working to advance the goal to be PR, while working remotely and facing the challenges of the ongoing pandemic.
Joining me on the call today, our company's CIO, Greg Zimmerman.
The company's <unk> CFO, Mark Peterson I will start the call with an opening statement then turn the call over to Greg and Mark will provide more detail.
As we discussed on our last fall during this unprecedented time, we've taken the necessary steps in terms of our balance sheet and tenant agreements to help ensure nprs long term success.
To this end we have maintained an essential focus on fortifying our balance sheet with sufficient liquidity to sustain us we have more than $1 billion of cash on hand puts us in a very strong position to navigate the current challenges.
Furthermore, with increasing progress in our rent collections as we move through the quarter and for July we're cautiously optimistic that we will continue to see sustained improvement during the coming quarters.
We're also pleased to see that our tenants have made significant progress and safely reopening our properties within the confines of jurisdictional mandates and our theater tenants are currently targeting the late summer to reopen.
Separately, we've reached resolution with the vast majority of our customers were deferrals, where warranted. Our team has worked extremely hard over the past few months to execute execute agreements, which are reasonable for both NPR and our tenants as we ramp back up throughout the year.
Greg will have more detail on this.
Additionally, we executed important new lease restructuring agreements with AMC theaters. The lease contain the leases contains several features which we believe will significantly enhance our long term position with respect to AMC, which we received in return for providing a reduction in annual fixed minimum rents.
Specifically, we believe the new master lease structure will reduce our risk should AMC seek to protections of a reorganization process.
As Greg will elaborate we also meaningfully extended our lease term and gain the optionality to reduce AMC concentration to the bundling of transitional properties.
Lastly, with regard to the recent studio announcements regarding the release of titles I think it's important to remember that all of us or trying to navigate a pandemic that has disrupted our normal activities. We understand that some will want to mark this time as a permanent change. However, we believe such leaps are not supported by the underlying economics.
All of the studios understand that to maximize the economics brookdale they need a robust theatre exhibition platform.
Notwithstanding the excitement generated by Trolls World Tour. The reality is that universal did not make near the revenues or profit of the original title that was released theatrically and in reality after taking into account significant marketing expenditures. They may have lost money.
The uncertainty of each of the time says lets studios to preserve pursue various avenues, including premium video on demand streaming on demand and delaying titles.
It's important to note that the delaying the releases has been by far the most frequent choice for the studios even those that are experimenting with PB Odeon SBO D. Both universal and Disney reaffirmed their commitment to theatre exhibition.
Disney indicated that the release of Milan was driven by the pandemic and not a change in their operating model.
Universal moved fast and furious nine to a 2021 theatrical release.
We understand that these experiments may result in changes to the model, but these changes will be driven by economics and theatrical release continues to be important part of that equation.
As with any experiment many questions remain including what's the economic model. This film rent reduction or exhibitor participation in PV OTI revenues offset revenue losses from shortening the window and how much revenue will be loss. If in fact studios like universal only intend to move films that we're not going to generate signal.
Current box office anyway.
What price point will consumer support for at home viewing and is this data skewed to reflect current pandemic conditions to date, most non theatrical releases have been family product with a younger target demographic.
Separately over the last five years PB OTI has shown significant decline while monthly subscription streaming platforms has seen significant growth.
How would this be implemented internationally remember worldwide box office was approximately 42 billion and this hybrid approach is difficult profit is a difficult proposition for most of the remaining given the fear of privacy.
Any long term systematic change requires a viable economic model and the underlying economics at this point simply do not support radical shift to the strategy could we see revisions to the theatrical window definitely especially for low budget films are films with low to moderate box office expectations. Likewise, we.
It also see new content providers like Netflix move into theatrical release as a means to increase revenues.
The long term effects of the pandemic on our everyday lives have yet to be defined but we're confident that the Patrick will exhibition will remain an important part of film distribution simply because of these economics now I'll turn the call over to Greg Zimmerman.
Thanks, Greg at the end of the first quarter. Our total investments were approximately 6.7 billion with 369 properties and service and 97.3% occupied during the quarter. Our investment spending was 11.7 million and wasn't entirely in our experiential portfolio comprising built.
The suit development and redevelopment projects that were committed prior to the covered 19 pandemic.
Our experience will portfolio comprises 284 properties with 44 operators is 97% occupied and accounts for nearly 6 billion of our 6.7 billion in total investments we have three properties under development.
Our education portfolio comprises 85 properties with 15 operators and at the end of the quarter was 100% occupied.
I now want to turn to our customers reopening schedules and to update you on our deferral agreements and rent payment timelines.
We have ongoing discussions with our major exhibitor partners about their reopening plans there have been several stops and starts selling to the pandemic, but as of today. The major exhibitors have announced their intent to reopen in mid to late August to prepare for the release of tenant on September 3rd for the Labor day weekend.
Openings will be state by state city by city, given the varying impact of co that 19 throughout the country. We do not anticipate that AMC regal or send a mark we'll be able to opened 100% of their theaters and their first reopening phase.
As the past several months have demonstrated reopening plans are entirely dependent on the studios release schedule, which has been pushed back based on governmental restrictions as we mentioned on our Q1 call while ongoing social distancing requirements will limit capacity in most theaters given typical seat utilization metric.
Theater should have sufficient capacity to meet demand.
Our exhibitor partners have developed comprehensive cobot 19 safety plans, the safety and comfort of their employees and guess is top of mind as they come back to the movies as like begins to return to normal seeing movies on the big screen in a theater will as it has always been an exciting cost effective out of how center.
Payment option.
We expect the remainder of 2020 will be a slow ramp up as customers grow more comfortable coming back to the movies with social distancing protocols and studios better understand the exhibitors ability to look to deliver box office results. The current 2020 film slate, which is subject subject to change includes tenant.
Jeff on the NIE with Kennett Bronto, the empty man honest deep with Liam Neeson Wonder woman 1984, Black widow, no time to die coming to America and June the 2021 film slate was strong before the pandemic because a number of films have pushed to 2021, we're bullish the twice.
21 film slate includes strong offerings, a quiet placed part to top gun Maverick, the fast and furious nine spiderman three ghostbusters after life jungle crews drastic world Dominion and EMI seven.
We believe the studios pushing their these releases to 2021 is strong evidence of their commitment to the exhibition industry and the big screen as the best format for major releases.
I want to spend a minute updating you on our other major customer groups as of August 4th approximately 88% of our non theater operators are open. These businesses continue to implement social distancing guidelines to comply with state and local requirements performance remains fluid depending on the impact of cobot 19 in each locale.
At high level performance has generally exceeded our operators expectations in the face of an ever changing and hugely challenging environment. We believe this performance has clearly demonstrated that our drive to value oriented destinations are resilient, we have not seen any meaningful impact to our port.
Folio from reduced airline travel.
35 of our 36 top golf locations, all four of our Andretti carding locations and the majority of our family Entertainment centers are open.
All but one of our U.S. gyms are open.
About 56% of our attractions are open attractions of the negatively impacted by the increase spread of Cobot 19 in California, Arizona and Texas as we indicated on our Q1 call. A few attractions may Miss all or part of the season due to governmental health and sanitation measures and the finance.
We will feasibility of operating with a reduced occupancy and a truncated season.
Except for the Cartwright hotel and indoor Waterpark all of our experience for lodging assets are open.
Cartwright remains subject to New York States phased reopening plans given we will miss the entire summer season, we're planning for a card right reopening in spring of 2021.
Resorts World Catskills remains close because of New York reopening orders, we continue to believe the ski season opening will not be impacted.
Turning to our education portfolio all of our early childhood education centers have reopened they continue to ramp up operations consistent with applicable state and local requirements. There ramp up is impacted by hotspot throughout the country and the timetable for parents to return to work.
Most of our private schools were forced to close in Q2, but quickly pivoted to online learning.
As we head to the fall they are evaluating state and local requirements to to determine if they can go back to in person learning need to develop a hybrid of in person then online learning or can only provide online learning.
We anticipate all of our private schools will be opened four in person hybrid online learning in the fall, we'll have more clarity over the next 30 days as public schools determine their reopening plans and tuition payments for the fall come due.
I want to take a moment to update you on the status of our cash collections and deferral agreements.
Tenants and borrowers have paid approximately 21% and 28% of second quarter and July 2020, pre co the contractual cash rent and interest payments respectively.
We anticipate that are permanent rent reductions will total approximately 5% to 7% of annualized pre coded contractual cash rent and interest payments the bulk of which relates to the AMC rent reduction I will discuss in a few moments.
We diligently worked with our customers to structure appropriate deferral and repayment agreements to facilitate their ability to reopen efficiently and to help ensure their long term health, while also protect the our position and rights as landlord.
Our goal has been to help them through a period, where they have significantly reduced or no cash flow ramping back to a more stabilized cash flow we've individually tailored each deal taking into account the variables impacting each business and improved our position through various arrangements.
With regard to 18 of our top 20 customers, we have executed agreements or in several cases, no deferral agreement as required between executed agreements and those customers for whom no agreement has been required we have addressed 85% of our annualized pre coded contractual cash.
Brent and interest payments, we are actively negotiating documents with the remainder of our customers and are very close to finalizing and executing agreements with all customers comprising the lions share of our lease space and cash revenue.
Our agreements are generally structured to ramp up rent and mortgage payments through the end of 2020 and in some cases beyond 2020 repayment of deferred amounts typically commences in 2021, depending on the deferred amount and to allow our customers. Some breathing room, the deferral repayment period General released.
Ends beyond 2021.
The vast majority of our arrangements provide repayment of all deferred rent.
In a few cases, we have provided rent concessions, but in each case, we've received equal or greater value through additional lease term additional collateral or other benefits.
In virtually every case, our customers have paid and continue to pay third party expenses, including ground rent taxes and insurance.
Finally, I want to provide an update on AMC.
We executed a comprehensive agreement with AMC to meaningfully reduce our risk improve our collateral and enhance our position in the event of a reorganization proceedings. We also provided AMC with appropriate deferrals and rent relief to weather the code at 19 pandemic.
To summarize through this agreement, we created a master lease structure, which reduces our risk in the event of restructuring.
Extended our average lease term by nine years, and we've given ourselves the option to reduce our concentration to AMC by transitioning seven theaters.
We entered into a master lease for 46 of our 53, AMC theaters, where we extended our average lease term by nine years to 15.5 years enforced staggered individual trenches and included fixed escalators of 7.5% every five years on fixed rent.
For the remaining seven eight AMC theaters, we have the right, but not the obligation to recapture any or all of these two either sell for another use more to lease to another exhibitor.
In return, we reduced AMSC sees annual fixed cash rent by approximately 26 million or 21% to approximately 96 million.
We also deferred rent for April through June 2020 that deferred rent is included in the 96 million of fixed cash rent in the master lease and in the rent under the set an individual leases repayment will be made in equal monthly installments over the 14 near term of the first tranche of the master lease or the term.
Of each of the seven individually says.
Additionally to allow AMC to ramp up in lieu of fixed contract rent and repayment of past deferrals from July through December 2020, AMC will pay percentage rent equal to 50% of gross sales with the difference to be added to the deferred rent payments for the month of July the company expects.
Percentage rent because AMC theaters did not reopened.
For additional details on the agreement please see our 10-Q to be filed after this call.
Mark will provide additional color on the revenue recognition and cash collection implications of our prospective rent deferral and repayment agreements I now turn it over to him for a discussion of the financials. Thank you Greg today, I will discuss our financial performance for the quarter, which was significantly impacted by that.
Temporary disruption caused by coven 19 discuss payment deferrals provide an update on our balance sheet and strong liquidity position and close with some estimated forward information.
Before I get into the results for the quarter I think it is helpful. The first go over the charts included in the press release, which detail, how we classify tenants and borrowers for accounting purposes, as well as certain deferral information.
As you can see on the left side of the slide we've classified or tenants and borrowers into five categories based on how we accounted for them in the context of our annualized pre cobot contractual revenue level of 624 million.
Which consists of cash rent, including tenant reimbursements and interest payments.
Note that this annualized cash revenue excludes properties under operated under a Trs structure.
Customers with no payment deferral represent 18% of such revenue.
Customers that had some or all payments deferred with such deferrals recognized as revenue in our financial statements represent 50%.
Note that for this category of customers, we had 64 million of accounts receivable related to payment deferrals at June Thirtyth.
That we believe is fully collectible and anticipate recognizing another $67 million of such deferrals in future periods for a total of 131 million.
Customers with payments deferred, but such deferrals were not recognized as revenue in our financial statements as amounts were not dean probable of collection represent 4%.
And customers that are under a cash basis of accounting and or if that had been where are expected to be restructured which includes AMC represent 27% of such revenue.
Note that certain payments were deferred in the second quarter for customers in these two categories totaling 41 million and this deferred revenue was not recognized in our financial statements.
Finally, new vacancies as a result of the pandemic represent about 1% of such revenue.
The last column of the chart shows our projected total payment deferrals of 142 million. This amount does not include include any deferrals for customers that are cash basis, and or that have or are expected to be restructured.
AMC has the largest tenant in this category and as a good example of why they're deferrals are not reflected here as the red has been restructured under a new agreement as Greg described.
The next chart shows the statistics for the 142 million of projected total deferrals as well as the status of all agreements based on annualized pre cobot contractual revenue.
Note that the average deferral period is 11 months the average months deferred as five months and the average collection period, which begins after the deferral period is 32 months the bottom of the chart shows that customers, representing 85% of annualized pre cobot contractual revenue have either executed a deferral agreement.
Where do not require a deferral agreement.
Now with that context, let's go over the financial results for the quarter.
FFO as adjusted for the quarter was 41 cents per share versus $1.36 in the prior year.
And AFFO for the quarter was 44 cents per share compared to $1.37 in the prior year.
Please note that the operating results for the second quarter of 2019 included the public Charter school portfolio, which was sold last year isn't and is included in discontinued operations. The prior period results also included a $6.5 million termination fee.
Total revenue from continuing operations for the quarter was down 55.3 million from prior year, mostly due to the impact of cobot 19, including less revenue recognized for customers are on a cash basis or that had been restructured deferred rent that was not recognized as collection was not probable and to a lesser degree contractual renovate.
Thats and concessions.
Additionally, as the Cartwright resort indoor Waterpark remains closed due to covert 19 restrictions, we had lower other income and lower other expense of 5.3 million.
The negative impacts from Cobot 19 were partially offset by increases in revenue related to property acquisitions and developments over the past year.
Finally percentage rents for the quarter totaled 1.5 million worse versus 4.1 million in the prior year.
Of this decreased 1.8 million related to the closure of properties due to cover 19 restrictions and the remaining decrease was due primarily to the early education facilities that were previously operated by CLA, who paid percentage rent only in 2019 note that these properties are not least accretive to the crown.
General and administrative expense decreased by 1.8 million from the prior year to 10.4 million.
This decrease is due primarily to lower payroll and benefit costs as well as mobile travel and professional fees.
During the quarter, we recognized a total of 54.5 million an impairment charges on six properties and for joint venture investments in China. These impairments were a result of short narrow hold periods on several properties considering the cobot 19 pandemic and our expectation that the theaters in China were continued to underperform.
These impairment charges were excluded from FFO as adjusted.
Transaction costs were 771000 for the quarter compared to $6.9 million in the prior year. The prior year expense primarily related to the Preopening expenses in connection with the current right resorting indoor waterpark.
During the quarter, we recognized an additional 3.5 billion of credit loss expense, mostly due to the impact of KOVA 19 based on our third party model, we used to calculate these losses.
Now, let's move to our balance sheet and capital markets activities.
Our debt to gross assets was 41% on a book basis at June Thirtyth. Please note. We have not included net debt to adjusted EBITDA or any coverage ratio is in our reporting as we did not bleeds such ratios ratios are meaningful during this period of temporary disruption caused by Copel 19.
At quarter end, we had total outstanding debt of $3.9 billion of which 3.1.
Billion as either fixed rate debt or debt that has been fixed or interest rate swaps with the blended coupon of approximately 4.5%.
Additionally, our weighted average debt maturities approximately five years and we have no scheduled debt maturities until 2022, and only our revolving credit facility matures.
As previously announced due to the pressure on near term quarterly results as a result of the accounting associated with Cobot 19 on June 29, we amended our credit agreement and no purchase agreements to obtain a temporary suspension or modification of certain covenants with some of the suspended financial covenants extending to the first quarter of 2021.
In connection with the amendment, we paid 3.4 million related fees of which 820000 was expensed and the rest was capitalized on the financing fees. We also suspended our common share PERC repurchase plan.
We believe we have ample liquidity to see us through the market disruption caused by cobot 19, our cash outflows from operations, which includes interest payments less deferred debt preferred dividends was approximately 38 million during the second quarter.
We anticipate having a lower quarterly cash burn rate subsequent to the second quarter as collections are expected to continue to improve.
However, even at the elevated second quarter level, and considering our committed investments spending an anticipated maintenance capex and 22020 in 2021.
We would have approximately six years of liquidity based in our ending unrestricted cash on hand at quarter end of over 1 billion.
During the quarter, we before the suspension of the plan, we purchased 4.1 million common shares for 106 million of 150 million common share repurchases authorized by our board.
These purchases were executed at an average price of 26, so six which we believe provide significant value to existing shareholders.
Finally, as previously announced due to the uncertainties created by the Cobot 19 disruption, we're not providing any forward earnings guidance, however, similar to last quarter.
This slide provides an expected percentage of pre cobot contractual cash revenue that we expect to recognize in our financial statements for the last six months of 2020, and full year 2020 of 65% to 75% and 70% to 80% respectively.
The expected percentage, we expect to collect of such pre covered contractual cash revenue in the same period.
Or 50% to 60% and 55% to 65% respectively.
Note that the revenue recognition recognition range for full year 2020 is lower than previously estimated due primarily to lower estimates for theaters and other conservatism, while the cash collection range for full year 2020 is higher than previously estimated.
Based on our collections to date and projected cash collections over the remainder of the year based primarily on executed deferral agreements.
Now with that I'll turn it back over to Greg for his closing remarks. Thank.
Thank you Mark as we discussed today, we're cautiously optimistic about the reopenings to date and the planned reopening for theaters.
While optimistic there remain several hurdles that we must cross until we can resumed normal operations, including the payment of a dividend.
I can assure you that the resumption of a dividend is a priority for award, but only after we have clarity on some of the challenges we face.
As we discussed today, we're hopeful that that process is well underway.
With that why don't I open it up for questions.
Okay.
Thank you ladies and gentlemen, if you have a question that despite the spreads the spar and Ben but number one touch the Dallas.
If your question has been answered or you wish to remove yourself from the Q piece fast netback key.
You have your first question from Gibbons Kim from treatments. Your line is open.
Thanks, Good morning, guys.
So you guys made a pretty cold forecasts that you expect.
Permanent.
Option.
5% to 7%.
Just to clarify for everyone, you're talking about your and tied our entire.
Great Kobe revenue base right not just the 85% of tenants that you've reached an agreement with.
Thats correct, it's off the entire okay.
And.
Can you just help me understand how much of that is.
Actually no.
And how much of that.
No.
You have agreements for 85% your tenant base.
And outlet outlet, Greg chime in but I think even with what we counted where the 85% those are kind of signed agreements. The remainder of that portion is substantially complete so but so we feel very confident about kind of where we're at with those numbers, yes, Ki bin its Greg yes, we.
Feel very confident and as you would expect we focused on the majority of our large tenants and big revenue first and then more we're knocking out the remainder, but we were fairly confident on the rest of the agreements.
Okay, and obviously, it's going to be hard too.
Forecast earnings or cash collection for your company.
How are you thinking about it the cadence from here on out and unless you're looking right metric as.
Right to get providing color to the street on.
What we should expect going forward in terms of a collection of the revenue recognition.
Again, I think you can imply kind of what it will be for the balance of the year based upon the numbers that March is supplied because we gave kind of what revenue recognition would be our estimates. If you go to the midpoint of that I'll, let mark jump in but I think if you look at the Midpoints of those that would give the best indication of what our.
Our balance of the year cash collections would be just little bit about timing I think collections will continue further as we as we come off of these deferral agreements in Q3 in Q4.
Certainly and with respect to revenue recognition, we'll see a marginally better Rev. A record revenue recognition Q3.
And then as we move into Q4, I think you'll see even greater revenue recognition as some of those.
Tenants that are in that category three that we were weren't recognizing the during the deferral period start to get recognized Furthermore, we get a little more percentage rents and other income recognized.
Properties that are either cash basis other in restructuring, so I think cash ramps up nicely and Rev. Rec.
As as well, but it's more fourth quarter oriented.
Okay last question.
The 21%.
Rent reduction for AMC was that for all 53, or 46, and what does that do for you and how much breathing room does that give them.
And maybe the I'm not sure, which how you want to answer that but maybe you can touch on what would the coverage ratio was Brady AMCU pre called bit.
What a 20% reduction or rent would do to that coverage ratio.
On a pre close Peter.
Well. The first question is it involved all 53 assets. So it wasn't just on the 46 it was all 53.
And again I think it will provide them you know some degree of relief. However, you know AMC has.
Close to 700 theaters. So there there's a lot of things they need to work through with a lot of people and what we tried to do keep it was positioned ourselves.
In the event that they can't work through that and they do not we're not saying they will but if they do pursue some sort of of restructuring Avenue that we have we've dealt with art, we believe our issues and we're positioned ourselves to move forward I see we generally do not.
Give coverages.
Individual tenants, but it's needless to say, it's meaningfully improve that over the over the balance of those assets.
Okay. Thank you guys.
Thank you. Your next question comes from the line brine halting from RBC capital markets. Your line is open.
Hi, good morning.
First question and a bankruptcy scenario how comfortable are you got the AMC Master lease will stand up in court.
Do you know I don't think anybody can give you great assurances, but I can tell you that when we structured it we used.
Bankruptcy Council the latest court decisions that were out there to structure a transaction that we believe is the most formidable available.
Okay.
And then.
15% of gross receipts for the AMC monthly payments for the rest of this year I guess, how much how should we think about that in terms of assuming theaters opened as plan now I.
I guess kind of I wish potential Ryan could AMC, hey, this year.
Again, I don't think we're giving that number I can assure you that it's probably conservative and how we've approached this just because of.
There were lot unknowns as to how various jurisdictions would allow reopening what product will be available.
I don't I don't think we're prepared to give a specific number but I am comfortable that it's a conservative approach that we took.
Is that percentage right. That's not included in the cash collections number you guys gave right not in that range.
Correct a percentage right.
Right, Okay, alright, thank you.
Thank you Sir your next question comes from the line of Nick Joseph from Citi. Your line is okay.
Thanks, just following up on the AMC restructuring and Greg you, obviously gave a lot of kind of comment on the theater industry more broadly and kind of the uncertainty.
Shortening of the exclusive wouldn't be so where do you think about kind of medium and longer term, how you said rent.
How did that factor in.
I recognize you walk through a lot of the push and pull but just in general how did you think about creating a buffer for any kind of structural changes to that business.
Again, it's primarily you're kind of looking at overall coverage. So you you have to have some degree of forecast as too and we spent a lot of time on it looking on on where we think impacts of various things will be and then it rolls through two where what you think your coverage.
Refer needs to be and you're also looking that again against where other theater companies, our operating and if you've got into a situation where could you release those theaters that given very similar economics. So all of those.
I can assure you that all of those things went into consideration.
Thanks, and then for the.
8% of the properties that are now reopened.
How is performance kind of four wall performance for those.
Properties relative to pretty cold good levels.
With that basis.
It's still very early but can you give us a sense of how so I would say and this is a.
Yes. This is a general and outlet that Greg kind of way and I would say the tendency that we've seen is probably 65% to 70%.
Of of pre Cobot revenues now again, we have some properties that are operating at a 100% of 2019 revenues and summed it up but generally that kind of 65% to 70% in this the reason that that kind of really solid is those are generally breakeven numbers for for.
Operators. So again there there at those levels, they're not burning cash they are there at least breaking even and generally tending to grow now as Greg mentioned it. If you have hot spots are flare ups or things like that it could tap back down but those numbers hub.
Been kind of at that level in building.
Nick the only other thing I would add is that almost across the board everybody's doing better than they projected they would do which is comforting to us.
Thank you.
Thank you again, ladies and gentlemen, if you have a question. This spring lease first this bar then but number one such thanks Allison.
Your next question comes from the line John Massocca from Ladenburg Thalmann. Your line is open.
Good morning, everyone.
Morning, Georgia.
Going back kind of the.
The ski segment again, I know a little bit early days, but you guys mentioned, you're confident they're going to reopen as planned I guess are there any particular conversations you're having that give you that confidence.
That just simply the outdoor nature of that activity and outdoor activity has been treated and kind of other segments going forward.
Color there would be helpful.
Yes, John now we're talking to all of our tenants. So I think Jeff as as Greg mentioned, if you remember most of our and we built that portfolio as a drive to destination portfolio and I think if you talk to the ski operators, there's a lot of confidence that when you're within.
Yes, two to four hours around major Emmis AIDS that that will be kind of the positive spots I think if theres any area, where ski as worried if air lift is involved in the impact that we'll have given the depressed cut a flight schedules and challenges in that space.
Okay, then as we think maybe about.
Kind of the hospitality segment.
The lodging segment and outside of cart right.
I mean, how has that kind of trended it seems like there I'll open but are you.
It's kind of.
Getting about revenue projection bearing I'd imagine distinctly down versus kind of pre Kobe to me or those kind of a significant portion of.
The tenant that maybe are in the east kind of longer term deferrals.
You know its its case cart rights.
One of that but I think on the large part and I'll ask Greg I.
I would include them in the guys that are doing surprisingly well. They you know these are the drive two locations. We can argue if they should be doing well given that conditions, but they are surprisingly doing quite quite well, probably some impact to food and beverage.
Okay, and then maybe a little bit to the first question I had anything a significant divergence in performance most kind of maybe critical outdoor tenants versus indoor tenant is it kind of come a little farther along here in the pandemic and I guess, maybe you'll broadly speaking how would you kind of slice the portfolio between quote unquote.
Outdoor tenants and indoor I know its imperfections everything's going a little bit of an outdoor and indoor element but.
Yes.
I think you're correct, John I think outdoor at least additionally.
Outdoor was as a perceived safety factor, so a top golf or something which has a a outdoor element was.
Had a very cut a positive reception.
What I think we've seen.
More recently is that the indoor people, who have demonstrated strong safety programs and that word of mouth gets out we've seen that reversion back toward the mean for all of our our our product types to where the indoor is not significantly lagging the outdoor it.
This point I think the other thing John to remember on the endorsed office I'm going to go out on a lemon say every one is still subject to restrictions on a number of people that can be there.
And that's providing some comfort to customers because if you're operating at 50% capacity. It just doesn't look very full.
[music].
Okay, and then and broadly speaking as you kind of think about the portfolio.
Is there kind of rough metric you can give on the division between outdoor indoor.
Again, it's the reason that that's hard is ski as significant outdoor but they're not even operating for the most part this time so it's hard.
I would say that 65% to 70% is pretty consistent across outdoor and indoor as far as performance.
Yes, and I Didnt know John you know a number of the attractions are not not open specifically like Waterparks because right now theyre shutdown by governmental action. So for example state of Arizona I don't think you can even be open right now, yes, even properties that open strong correct. So we had several water parks that did.
Very strong business to start subsequently were shut down in those states.
Okay.
Very helpful. That's it from me.
Thanks very much.
Thanks, John.
I'm showing no further questions at this time.
I'd now like to turning to contrasts back to Mr., Greg Silvers.
Well. Thank you all for joining US today, we look forward to tuck in new next quarter be safe and we.
We're as I said, we're optimistic things are things are improving out there. So thanks, a lot guys and tuck you soon thanks.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation.
And have a wonderful day you may all disconnect.
[music].
[noise] [noise].
[music].