Q4 2023 EPR Properties Earnings Call

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Operator: To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I will now hand the conference over to your first speaker today, Brian Moriarty, Senior Vice President, Corporate Communications.

And your Vice President Corporate Communications. Please go ahead.

Brian Moriarty: Okay, thank you, Victor. Thanks for joining us today for our fourth quarter 2023 and year-end earnings call and webcast. Participants on today's call are Greg Silvers, Chairman and CEO, Greg Zimmerman, Executive Vice President and CIO, and Mark Peterson, Executive Vice President and CFO. We'll start the call by informing you that this may include forward-looking statements as defined by the Private Security to Litigation Act of 1995, identified by such words as will be, intend to continue, believe, may expect, hope anticipate, or other such comparable terms. The company's actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of those factors that could cause results to differ materially from those contemplated by such forward-looking statements is contained in the company's SEC filings, including the company's reports on Form 10-K and 10-Q. Additionally, this call will contain references to certain non-GAAP measures which we believe are useful in evaluating a company's performance.

Okay. Thank you Victor.

Thanks for joining us today for fourth quarter, 2023, and you're in earnings call and webcast.

Participants on today's call, our Greg Silvers, chairman into Yo, Greg Zimmerman Executive Vice President M. C. I O and Mark Peterson Executive Vice President and C. F O.

<unk> by informing you that this may include forward looking statements.

Find by the private security to litigation Act of 1995 identify by touch word as will be intent continue believe may expect hope anticipate or other such comparable terms.

The company's actual financial condition and the results of operations may very materially from those contemplated by such forward looking statements.

Discussion of those factors that could cause results to differ materially from these forward looking statements are contained in the company's SEC filings, including the company to report on Form 10-K and 10-Q.

Additionally, this call will contain references to certain non-GAAP measures, which we believe are useful in evaluating a company's performance.

Gregory K. Silvers: A reconciliation of these measures to the most materially comparable gap measures is included in today's earnings release and supplemental information furnished to the SEC under Form 8K. If you wish to follow along, today's earnings release supplementary and earnings call presentation are all available on the Investor Center page of the company's website, www.eprkc.com. And I'll turn the call over to Greg Silvers. Thank you, Brian.

A reconciliation of these measures to the most materially comparable GAAP measures are included in today's Ernie to release and supplemental information furnished to the SEC under form 8-K if.

If you if you wish to follow along today's earnings release supplemental and earnings call presentation are all available on the Investor Center page of the company's website Www EPR Casey Dot com and I'll turn the call over to Greg Silver.

Gregory K. Silvers: Good morning, everyone, and thank you for joining us on today's fourth quarter in Europe earnings call-in webcast. 2023 was a year of meaningful progress as we delivered strong earnings growth, executed our investment spending, delivered sector-leading total shareholder return, and positioned the company to achieve sustainable growth in the coming years. During the year, we saw a sustained level of strong performance in our non-theater portfolio, as evidenced by a consistent 2.6 times coverage level. Additionally, we were pleased to see over 20% growth in 2023 North American Box Office revenues versus the previous year. This growth translates to an increased coverage level of 1.7 times in our theater portfolio, which is squarely in line with pre-COVID coverage levels. It's important to highlight that we achieved this coverage level even as 2023 box office revenues were down approximately 20% from 2019. This coverage data reflects the strength of our theater portfolio, along with the sustained trend of increased food and beverage per-cap spending, and along with operating efficiencies implemented by our tenants. This coverage data is also consistent with our anticipation that we would achieve pre-COVID theater coverage levels prior to reaching pre-COVID box office levels.

Thank you Brian Good morning, everyone and thank you for joining us on today's fourth quarter in Europe in 2023 earnings call and webcast.

2023, with a year of meaningful progress as we delivered strong earnings growth executed our investment spending delivered sector, leading total shareholder return and positioned the company to achieve sustainable growth in the coming years.

During the year, we saw a sustained level of strong performance in our non theater portfolio as evidenced by a consistent 2.6 times coverage level.

Additionally, we were pleased to see over 20 per cent growth in 2023, North American box office revenues versus the previous year.

This growth translates to an increased coverage level of 1.7 times and our theater portfolio, which is squarely in line with pre COVID-19 coverage levels.

It's important to highlight that we achieved this coverage level, even as 2023 box office revenues were down approximately 20% from 2019.

Coverage data reflects the strength of our theater portfolio, along with the sustained trend of increased food and beverage per cap spending and along with operating efficiencies implemented by tenants.

This coverage data is also consistent with our anticipation that we would achieve pre COVID-19 theater coverage levels prior to reaching pre Covid box office levels.

Gregory E. Zimmerman: While last year's strikes will interrupt the linear annual growth in box office revenues due to title delays, the quality of our portfolio continues to endure and positions us well for a very favorable looking 2025 film slate. Our investments during the year provided increased diversification and highlighted our ability to source what are non-marketed opportunities. We ended the year with positive momentum in our investment spending, and as we move into 2024, we will continue to leverage this strength while remaining disciplined in our capital deployment and delivering reliable earnings growth. Our investment pipeline includes investments across our target property types with both new and existing relationship-based customers. We are also announcing a 3.6% increase in our monthly dividend to common shareholders. Considering our 2024 earnings guidance along with our dividend yield, we are positioned to deliver strong returns.

While last year strikes will interrupt the linear annual growth in box office revenues due to title the delays the quality of our portfolio continues to endure and positions as well for a very favorable looking 2025 film slate.

Our investments during the year provided increase diversification and highlight our ability to source what are non marketed opportunities.

We ended the year with positive momentum and our investment spending and as we move into 2024, we will continue to leverage this string while remaining disciplined and our capital deployment at delivering reliable earnings growth.

Our investment pipeline includes investments across our target property types with both new and existing relationship based customers.

We are also announcing a 3.6% increase in our monthly dividend common shareholders.

Considering our 2024 earnings guidance, along with our dividend yield we our position to deliver strong returns.

Gregory E. Zimmerman: While our equity remains at historically discounted price levels, the fundamentals of our business continue to strengthen, and our thesis on experiential real estate remains intact. Consumers have demonstrated consistent demand for the experiences our customers have to offer, and we look forward to again delivering for our customers and shareholders in 2024. Now, I'll turn the call over to Greg Zimmerman to go over the business in greater detail. Greg, at year end, our total investments were approximately $6.8 billion with 359 properties that are 99% leased, excluding properties we intend to sell. During the quarter, our investment spending was $133.9 million, bringing the total investment spending for 2023 to $269.4 million. 100% of the spending was on our experiential portfolio.

While our equity remains at historically discounted price levels. The fundamentals of our business continued to strengthen and our thesis on experiential real estate remains intact consumers have demonstrated consistent demand for the experiences our customers have to offer and we look forward to again delivering for our customers.

Dimmers and shareholders in 2024, now I'll turn the call over to Greg Zimmerman to go over the business in greater detail.

Greg at year end, our total investments where approximately six 8 billion with 359 properties that are 99% leased excluding properties, we intend to sell.

During the quarter or investment spending was $133.9 million, bringing the total investment spending for 2023 to 269 $4 million, 100% of the spending was in our experiential portfolio.

Gregory E. Zimmerman: Our experiential portfolio comprises 289 properties with 50 operators and accounts for 93% of our total investments, or approximately $6.3 billion, and at the end of the quarter, it was 99%. Our education portfolio comprises 70 properties with 8 operators, and at the end of the quarter, it was 100%. Turning to coverage, the most recent data provided is based on a September trailing 12-month. Overall portfolio coverage for the trailing 12 months continues to be strong at 2.2 times. Trailing 12-month coverage for theaters is 1.7 times, with box office at $8.8 billion for the same period. Our theater coverage reporting assumes that the regal deal was in place for the entire trailing 12 months.

Our experiential portfolio comprises 289 properties with 50 operators and accounts for 93% of our total investments or approximately $6 3 billion and at the end of the quarter was 99% leased.

Our education portfolio comprises 70 properties with eight operators and at the end of the quarter was 100% leased.

Turning to coverage. The most recent data provided is based on a September trailing 12 month period overall portfolio coverage for the trailing 12 months continues to be strong at 2.2 times.

Trailing 12 months coverage for theaters is one seven times with box office at eight $8 billion for the same period.

Our theater coverage reporting assumes that the Regal deal was in place for the entire trailing 12 month period.

Gregory E. Zimmerman: For comparison, our Q3 theater coverage was 1.4 times on a trailing 12-month box office of $8.1 billion. Trailing 12-month coverage for the non-theater portion of our portfolio is 2.6%. Now, I'll update you on our operating status.

For comparison R. Q3 theater coverage was one four times on a trailing 12 month box office of $8.1 billion.

Trailing 12 months coverage for the non theater portion of our portfolio is two six times.

Now I will update you on the operating status of our tenants.

Gregory E. Zimmerman: Our theater coverage is at 2019 levels, even though North American box office remains well below 2019. We continue to see sustained increases in food and beverage and spending on premium large formats. Our portfolio is well positioned to capitalize on these trends. As we have previously discussed, we are actively refining our overall portfolio by continuing to diversify our holdings and increasing our non-theater investments. We are also focused on reducing our number of theaters and improving the quality and coverage of our theater portfolio.

Our theater coverage is at 2019 levels, even though north American box office remains well below 2019 levels. We continue to see sustained increases in food and beverage spending and spending on premium large format screens are portfolio is well positioned to capitalize on these trends.

As we have previously discussed we are actively refining our overall portfolio by continuing to diversify our holdings and increasing our non theater investments. We are also focused on reducing our number of theaters and improving the quality and coverage of art theater portfolio.

Gregory E. Zimmerman: In Q4, we took steps on both. In our Q3 call, we noted an impairment of $20.9 million related to a likely restructuring with a small regional chain. In Q4, we finalized a restructuring agreement with Xscape Theaters, with whom we had four theaters. Pursuant to this agreement, we terminated a lease for one underperforming theater in exchange for a $2.5 million termination fee, and entered into a percentage rent deal with a recapture right for another. For the remaining two theaters, we reduced rent, enhanced the percentage rent component, and required the exhibitor to spend a minimum of $1 million per theater from its own funds to improve each theater within one year. In addition, in Q4, we sold two small market and underperforming Alamo draft houses operated by franchisees to the operator. We now have two Alamo Draft House theaters, both corporately owned, one in San Francisco and the other in Austin. Turning to box office in the state, in 2023, North American boxed office was $8.9 billion, a 21% increase over 2020. Q4's total box office was $1.9 billion.

In queue for we took steps on both fronts.

In our queue three call. We noted an impairment of 29 million related to a likely restructuring with a small regional chain in queue for we finalized a restructuring agreement with escaped theaters with whom we had four theaters pursuant to this agreement we terminated a lease for one underperforming thief.

In exchange for a $2.5 million termination fee and entered into a percentage rent deal with a recapture rate for another for.

For the remaining two theaters, we reduced rent enhanced the percentage of rent component and required the exhibitor to spend a minimum of $1 million per theater from it's from its own funds to improve each theater within one year.

In addition in queue for we sold two small market and underperforming Alamo Drafthouse is operated by franchisees to the operator, we now have two Alamo Drafthouse theaters, both corporately owned one in San Francisco and the other in Austin.

Turning the box office in the state of the industry 2023, North American box office was eight 9 billion% to 21% increase over 2022 Q4 total box office was $1.9 billion.

Gregory E. Zimmerman: Because the regal resolution has a percentage rent component and because we now have seven managed theaters, we will provide our view of 2024 North American box office gross each quarter. Based on a review of box office estimates from industry analysts and our own independent analysis, we are estimating 2024 North American box office growth to be in the range of $8 billion to $8.4 billion. We are cautiously optimistic that as the year progresses, more titles will be released in anticipation, as studios ramp up production coming out of the delays caused by the writers' and actors' strike. While it's too early to provide estimates for 2025, we are confident it will be a significant improvement over 2024. As we have said repeatedly, box office gross is directly tied to the number of titles released.

Because of the Regal resolution has a percentage rent component and because we now have seven manage theaters, we will provide our view of 2024, North American box office gross each quarter.

Based on a review of box office estimates from industry analysts and our own independent analysis. We are estimating 2024, North American box office gross to be in the range of $8 billion to $8.4 billion.

We are cautiously optimistic that as the year progresses more titles will be released than anticipated as studios ramp up production coming out of the delays caused by the writers and actors strikes.

While it's too early to provide estimates for 2025, we are confident it will be a significant improvement over 2024.

As we have said repeatedly the box office grosses directly tied to the number of titles released given the strong performance a major titles in 2023 consumers clearly want to see movies in theaters and importantly are high quality theater portfolio continues to outperform the industry.

Gregory E. Zimmerman: Given the strong performance of major titles in 2023, consumers clearly want to see movies in theaters, and importantly, our high-quality theater portfolio continues to outperform. Turning now to an update on our other major customer groups, we continue to see good results in ongoing consumer demand across all segments of our drive-to value-oriented destination. However, increases in fixed costs, including labor, insurance, and taxes, continue to pressure EBITARM for many of our operators.

Turning now to an update on our other major customer groups. We continue to see good results and ongoing consumer demand across all segments of our drive to value oriented destinations increases in fixed cost, including labor insurance and taxes continue to pressure EBIT arm for.

Many of our operators and some locations we are seeing some pullback in attendance from post COVID-19 highs. Nonetheless are non theater coverage remains healthy at two six times the same as we reported on our queue three call.

Gregory E. Zimmerman: In some locations, we are seeing some pullback in attendance from post-COVID highs. Nonetheless, our non-theater coverage remains healthy at 2.6 times, the same as we reported on our Q3 call. Our eat and play assets continue their strong performance with portfolio revenue up by over 5% and EBIT up 6% over 2020. Topgolf completed a self-funded refresh of four of its venues in 2023, and three more are scheduled for 2025.

Or even play assets continue their strong performance with portfolio revenue up in 2023 over 5% and EBIT arm up 6% over 2022 top golf completed a self funded refresh of four of our venues in 2023 and three more are scheduled for 2024.

Gregory E. Zimmerman: Our cultural portfolio performed very well in 2023 with increased revenue and significant increases in attendance. For many of our attractions offerings, attendance was up in 2023 over 2020. Our Murrieta Hot Springs Resort, operated by our partner at the very successful Springs Resort in Pagosa Springs, opened to the public in early February and is already receiving accolades. Condé Nast Traveler recently ranked it as one of the best new wellness retreats in the world for 2024. Marietta Hot Springs is midway between Los Angeles and San Diego and boasts over 50 natural hot spring pools and waterfalls, along with numerous historic buildings.

Our cultural portfolio performed very well in 2023 with increase revenue and significant increases in attendance for many of our attractions offerings attendance was up in 2023 over 2022.

R. Murray at a hot Springs resort, operator by our partner at the very successful Springs resort and Pagosa Springs open to the public in early February and is already receiving accolades Conte Nast traveler recently ranked it as one of the best New wellness retreats in the World for 2024 Maria.

Hot Springs is midway between Los Angeles, and San Diego and boasts over 50 natural Hot Springs pulls in water features along with numerous historic buildings on 46 acres further rooms, and amenities will come online through the spring and summer.

Gregory E. Zimmerman: 516-4048. Further rooms and amenities will come online through the spring. At the Springs Resort in Pagosa Springs, progress continues on the expansion, with completion expected in 2025. Midway through the 2023-2024 ski season, year-over-year revenue was essentially flat across the ski portfolio, primarily reflecting challenging weather conditions in November and December at all of our resorts other than Alyeska Resort in Alaska. Room renovations continue at Alyeska, and we are very pleased with the performance of the Newark spot.

At the Springs resort in Pagosa Springs progress continues on the expansion with completion expect mid 2025.

Midway through the 2023 24 ski season year over year revenue was essentially flat across escape portfolio, primarily reflecting challenging weather conditions in November and December at all of our resorts other than alyeska resort in Alaska.

Room renovations continue with alyeska and we're very pleased with the performance of the Nordic Spa.

Gregory E. Zimmerman: In our experiential lodging portfolio, revenue in EBITDARM increased year-over-year from 2022 to 2023. Our Margaritaville Hotel Nashville, proximate to all of Nashville's famous downtown destinations, had an excellent year in 2023 with significant increases in all metrics. Our Beachcomber and Bellwether resorts in St. Petersburg had year-over-year increases in occupancy and revenue, but there was some pressure on RevPAR and EBITDAR. Our Camp Margaritaville RV resorts in Pigeon Forge and Brough Bridge, Louisiana, showed strong year-over-year revenue.

And our experiential lodging portfolio revenue in EBITDAR increased year over year from 2022 to 2023 are Margaritaville Hotel Nashville, proximate to all of Nashville's famous downtown destinations had an excellent 2023 with significant increases in all metrics.

Our beachcomber in bellwether resorts in Saint Petersburg had year over year increases in occupancy in revenue, but there was some pressure on Rev par and EBITDAR.

Our camp Margaritaville RV resorts in Pigeon Forge and Breaux Bridge, Louisiana showed strong year over year revenue gains.

Gregory E. Zimmerman: At Jellystone Warrens, we also saw solid revenue growth as we are seeing positive returns from our completed redevelopment program. Finally, we are underway with a substantial redevelopment at our most recent acquisition, Jellystone Cozy Rest, scheduled to be completed in time for the summer. Our education portfolio continues to perform well, with year-over-year increases across the portfolio through Q3 of 6% in revenue, 15% in EBITDARM, and 2% in enrollment. As we indicated last year, our kinder care portfolio is subject to a rent reset retroactive to January 1st, but will be calculated in the first quarter. We also anticipate receiving one additional kinder care location back to sell in 2020. Turning to a quick update on capital, During the quarter, in addition to the sale of our two Alamo Drafthouse franchise theaters to the operator that I mentioned earlier, we sold the second of our vacant formal regals and the fourth of the five kinder care properties we took back in 2023. The fifth vacant kinder care location is under a signed purchase and sale agreement. Net proceeds for all transactions in the quarter were $22.2 million, and we recognized a net loss on sale of $3.6 million.

At Jelly Stone Warren's, we also saw solid revenue growth as we're seeing positive returns from our completed ripped up redevelopment program.

Finally, we are underway with a substantial redevelopment at our most recent acquisition jelly stone cozy rest scheduled to be completed in time for the summer season.

Our education portfolio continues to perform well with year over year increases across a portfolio through Q3 of 6% in revenue, 15% in EBIT arm and 2% in enrollment as we indicated last year are kindercare portfolio is subject to a rent reset.

To January 1st calculated in the first quarter.

We also anticipate receiving one additional kindercare location back to sell in 2024.

Turning to a quick update on Capitol recycling during the quarter. In addition to the sale of our two Alamo Drafthouse franchise theaters to the operator that I mentioned earlier, we sold the second of our vacant former Eagles and the fourth of the five Kindercare properties. We took back in 2023, the fifth vacant Kindercare low.

Patient is under assigned purchase and sale agreement.

Net proceeds for all transactions in the quarter were $22.2 million and we recognized in net loss on sale of $3.6 million.

Gregory E. Zimmerman: Disposition proceeds for 2023 totaled $57.2 million. Subsequent to the end of the quarter, we sold another of our vacant former royal theaters and now have sold three, with eight remaining to sell. Of those, we have either a signed purchase and sale agreement or a signed letter of intent for three. Additionally, beyond the vacant former Regal Theaters, we have one remaining vacant AMC Theater, which is under a signed purchase and sale agreement, and the vacant Xscape Theater we terminated in Q5.

Disposition proceeds for 2000 twenty-three totaled $57.2 million.

Subsequent to the end of the quarter, we sold another of our vacant former Regal theaters and now have sold three with eight remaining to sell of those we have either assigned purchase and sale agreement or a signed letter of intent for three b.

Beyond the vacant former Regal theaters, we have one remaining vacant AMC theater, which is under a signed purchase and sale agreement and the vacant escape theater, we terminated in Q4.

Gregory E. Zimmerman: After the close of the quarter, we sold both of our Titanic attractions in Pigeon Forge, Tennessee, and Branson, Missouri, to a private equity firm at a 6% cap rate on in-place entries for a combined $45 million in net proceeds, and a gain on sale of approximately $17 million. The cap rate and gain demonstrate the value of our experiential investment. Finally, we are issuing 2024 disposition guidance in the range of $50 million to $75 million. During Q4, our investment spending was $133.9 million, and for all of 2023, total $269.4. In Q4, we closed on the funding of $77 million in convertible mortgage financing for the Mirabal Company's collection of award-winning Mirabal Inn & Spa Resorts in Skaneateles and Rhinebeck, New York, and Plymouth EPR has the option to convert the mortgage financing to a traditional sale-leaseback structure. The deal also includes additional commitments of $47.1 million to finance future projects. Mirabal's unique assets have received numerous national awards from Condé Nast Traveler, Wine Spectator, Forbes, and U.S. News & World Report.

After the close of the quarter, we sold both of our Titanic museums in Pigeon Forge, Tennessee in Branson, Missouri to a private equity firm at a six per cent cap rate on in place income for combined $45 million in net proceeds and again on sale of approximately $17 million the cap.

Right and gained demonstrate the value of our experiential investments.

Finally, we are issuing 2024 disposition guidance in the range of $50 million to $75 million.

During Q for our investment spending was $133 $9 million and for all of 2023 total $269.4 million in.

In queue for we closed on the funding of $77 million and convertible mortgage financing for the Mirabelle companies collection of award, winning mirror ball and and Spa resorts and Skinny analysts and Rhinebeck, New York in Plymouth, Massachusetts.

EPR has the option to convert the mortgage financing to a traditional sale leaseback structure.

The deal also includes additional commitments of $47 $1 million to finance future projects.

Your balance unique assets have received numerous national awards from <unk> traveller wine Spectator Forbes in U S News and World report, we couldn't be more thrilled with our partnership with the mirabelle companies and the dour and <unk> families as they expand their award winning Mirabel brand.

Gregory E. Zimmerman: We couldn't be more thrilled with our partnership with Amirabal Company and the Dower and Dalposs families as they expand their award-winning Mirabal brand. This partnership once again demonstrates our unparalleled ability to source sales because of our deep knowledge and reputation in the industry. In the quarter, we also closed on a $9.4 million acquisition of our second movement climbing and third, overall climate, in Belmont, California, 20 miles south of San Francisco. Movement is a quality operator, and this real estate is excellent. Finally, subsequent to the end of the quarter, we closed on a build-to-suit financing for a sixth and ready carting location, this one in the greater Kansas City area. The total commitment is $35 million, with $8.8 million funded at closing.

This partnership once again demonstrates are unparalleled ability to source sales because of our deep knowledge and reputation in the industry.

And the quarter. We also closed on a nine $4 million acquisition of our second movement climbing gym, and third overall climbing gym, and Belmont, California, 20 miles south of San Francisco movement is a quality operator and this real estate is excellent.

Finally, subsequent to the end of the quarter, we close on a bill to suit financing for a sixth and ready carting location. This one in the greater Kansas City area. The total commitment is $35 million with eight $8 million funded at closing cap rates exceeded 8%, which creates compelling longterm value.

Gregory E. Zimmerman: Cap rates exceeded 8%, which creates compelling long-term value. As I mentioned, our total investment spending for 2023 was $269.4 million, entirely in our experiential portfolio. A number of these transactions will be funded through 2024 and 2025. We're extremely pleased with the quality of the experiential investments we made in 2023 while we continued to exercise discipline in our investment spending. In 2023, with Mirabelle, we added three unique and award-winning properties and developed a new partnership for growth. We developed our second natural hot springs resort, Murrieta Hot Springs, and continued the expansion of the Springs Resort. We opened a new Topgolf in densely populated King of Prussia, Pennsylvania, and added to our growing investment in climbing gyms. We substantially completed the renovation of our Jellystone Warrens RV Park and successfully rebranded our Cajun Palms RV Resort as Margaritaville Pro Bridge.

As I mentioned are total investment spending for 2023 was 269 $4 million entirely and or experiential portfolio of.

A number of these transactions will be funded through 2024 and 2025, we're extremely pleased with the quality of the experiential investments. We made in 2023, while we continued to exercise discipline in our investment spending.

In 2023 with Mirabel, we added three unique and award winning properties and developed a new partnership for growth. We developed our second natural Hot Springs resort with Murray at a Hot Springs and continue the expansion of the Springs resort, we open a new top golf and densely populated king King of Prussia.

Pennsylvania and added to our growing investment and climbing gyms, we substantially completed the renovation of our jelly stone Warren's RV parked and successfully rebranded are Cajun palms, RB resort to Margaritaville Breaux Bridge, we continued our renovation and reinvestment in our alyeska resort in Alaska.

Gregory E. Zimmerman: We continued our renovation and reinvestment at our Alyeska Resort in Alaska. The pace of investments heading into 2024 is strong. As always, our performance and pipeline are driven by the hard work of our investments and underwriting team, leveraging our unmatched network of tenants and partners. We're issuing investment spending guidance for funds to be deployed in 2024, in a range of $200 million to $300 million. Through year-end, we have committed approximately $240 million for experiential development and redevelopment projects that have closed but are not yet funded to be deployed over the next two years. We anticipate approximately $140 million of that $240 million will be deployed in 2024, and that amount is included at the midpoint of our 2024 guidance. In most of our experiential categories, we continue to see high-quality opportunities for both acquisition and build-to-suit redevelopment and expansion. We have a robust pipeline with new and existing customers. Given our cost of capital, we will continue to maintain discipline and fund those investments primarily from cash on hand, cash from operations, proceeds from dispositions, and with our borrowing ability under our unsecured revolving credit facility.

The cadence of investments heading into 2024 as strong as always our performance and pipeline are driven by the hard work of our investments and underwriting team leveraging are unmatched network of tenants in partners.

We're issuing investment spending guidance for funds to be deployed in 2024.

And a range of $200 million to $300 million through year, and we have committed approximately $240 million for experiential development and redevelopment projects that have closed that are not yet funded to be deployed over the next two years, we anticipate approximately $140 million of that 200.

<unk> $40 million will be deployed in 2024 and that amount is included at the midpoint of our 2024 guidance range.

And most of our experiential categories, we continue to see high quality opportunities for both acquisition and build to suit redevelopment and expansion, we have a robust pipeline with new and existing customers and concepts given our cost of capital. We will continue to maintain discipline and to fund those investments primarily from cash on hand.

Cash from operations proceeds from dispositions and with our borrowing ability under our unsecure revolving credit facility.

Mark Alan Peterson: I now turn it over to Mark for a discussion of the, Today I will discuss our financial performance for the fourth quarter and the year, provide an update on our balance sheet, and close by introducing 2024 guidance. We had another strong quarter of results with FFO's adjusted of $1.18 per share versus $1.25 in the prior year and AFFO of $1.16 per share compared to $1.27 in the prior year. Note that out-of-period deferral collections from cash basis customers included in income were $0.6 million versus $6.2 million in the prior year, resulting in a decrease versus the prior year of $0.07 per share. I'm pleased to report that, as of year-end, we have collected all accrued deferred amounts related to the pandemic.

I now turn it over to Mark for a discussion of the financials.

Thank you Greg today, I will discuss our financial performance for the fourth quarter and the year.

Provide an update on our balance sheet and close with introducing 2024 guidance.

We had another strong quarter results with <unk> adjusts of $1 18 per share versus $1.25 in the prior year and a half of $1 16 per share compared to $1.27 in the prior year note that auto period deferral collections from cash basis customers included an income we're point $6 million versus $6.2 million in the prior.

Per year, resulting in a decrease versus prior year seven per share.

I'm pleased to report that as of here and we have collected all accrued deferred amounts related to the pandemic. The remaining off balance sheet amount of $12 million relates to only two tenants one with a balance of approximately point $6 million that has been paying based upon an agreed upon schedule, which concludes in 2024 and the other with a balance of approximately <unk>.

Mark Alan Peterson: The remaining off-balance sheet amount of $12 million relates to only two tenants, one with a balance of approximately $0.6 million that has been paying based upon an agreed-upon schedule, which concludes in 2024, and the other with a balance of approximately $11.4 million, with payment depending on exceeding an EBITDA threshold. We believe the fact we have been paid back over $150 million in deferred rent since the pandemic, in addition to current rents, speaks to the strength of our tenants' businesses and validates our approach to managing through that challenging time. We work closely with each of our tenants to develop plans that work with their businesses and help position them for longer-term success. Now moving to the key variances by line item. Total revenue for the quarter was $172 million, versus $178.7 million in the prior year. Within total revenue, rental revenue decreased by $3.9 million compared to the prior year.

<unk> $4 million with payment depending on exceeding an EBITDA threshold.

We believe the fact, we had been paid back over $150 million of deferred rent since the pandemic. In addition to current rents speaks to the strength of our tenants businesses and validates our approach and managing through that challenging time work closely with each of our tenants to develop plans that work with their businesses and help position them for longer term success.

Now moving to the key variances by line item total revenue for the quarter was $172 million versus $178 $7 million in the prior year within total revenue rental revenue decreased by $3.9 million versus the prior year.

Mark Alan Peterson: The positive impact of net investment spending in the current and prior years and the $2.5 million lease termination fee recognized during the fourth quarter of 2023 that Greg discussed were more than offset by the reduction in out-of-period deferral collections that I just mentioned, as well as a reduction in rental revenue related to the regal restructuring that took place in August. Additionally, percentage rents for the quarter increased to $6.2 million versus $5 million in the prior year, primarily due to increased revenue at two attractions properties acquired in June of 2022. Call that percentage rents are expected to be recognized for the first time for theaters under the Regal Mass Release beginning in mid-year 2024. I will have more on percentage rents when I discuss our 2024 guidance. The increase in mortgage and other financing income of $1.9 million was due to additional investments in mortgage notes during the year.

The positive impact of net investment spending the current and prior years and the 2.5 million dollar lease termination fee recognized during the fourth quarter of 2023 that Greg discussed were more than offset by the reduction and not a period deferral collections that I just mentioned.

As well as a reduction in rental revenue related to the Regal restructuring that took place in August.

Additionally percentage rents for the quarter increased to $6 $2 million first $5 million in the prior year, primarily due to increased revenue to attraction properties acquired in June of 2022.

Call that percentage rates are expected to be recognized for the first time for theaters under the Regal mass release, beginning in mid mid year 2024.

I'll have more on percentage rats, when I discuss our 2024 guidance.

The increase in mortgage and other financing income of $1.9 million was due to additional investments and mortgage notes during the year.

Mark Alan Peterson: Both other income and other expense relate primarily to our consolidated operating properties, including the Cartwright Hotel and Indoor Water Park and seven operating theaters. However, other income for the fourth quarter of 2022 included $9.1 million of sale participation income. The offsetting increase in other income and the increase in other expense compared to the prior year were due primarily to the additional five theaters surrendered by and previously leased to Regal, which have been operated by third parties on EPR's behalf since early August. On the expense side, G&A expense for the quarter increased to $13.8 million versus $13.1 million in the prior year, due primarily to higher payroll costs, including non-cash share-based Interest expense net for the quarter decreased by $1.5 million compared to the prior year due to an increase in interest income on short-term investments and an increase in capitalized interest on projects under development.

Both other income and other expense relate primarily to our consolidated operating properties, including the Cartwright Hotel, an indoor Waterpark and seven operating theatres. However, other income for the fourth quarter of 2022.

Included $9.1 million of sale participation income.

The offsetting increase in other income and the increase at other expense compared to the prior year was due primarily to the additional five theaters surrounded by surrendered by and previously leased to Regal, which had been operated by third parties on Epr's, perhaps since early August.

On the expense side G&A expense for the quarter increased to $13 $8 million versus $13 1 million in the prior year due primarily to higher payroll costs, including non-cash sure based compensation as well as an increase in professional fees.

Interest expense net for the quarter decreased by $1.5 million compared to the prior year due to an increase in interest income on short term investments and an increase in capitalized interest on projects under development.

Mark Alan Peterson: Now shifting to full year results, FFO is adjusted for $518 per share versus $469 in the prior year, an increase of about 10%, and AFFO is 5.22 per share compared to 4.89 in the prior year, an increase of about 7%, as shown on the next slide. Both 2022 and 2023 results benefited from out-of-period deferral collections from cash basis customers that recognized an income of about 24 cents and 48 cents per share, respectively. However, excluding these collections from both years, FFOs adjusted per share still grew by nearly six percent.

Now shifting the full year results.

<unk> adjusted was 518 per share verse 469 in the prior year.

An increase of about 10% and <unk> is 522 per share compared to 489 in the prior year, an increase of about 7%.

As shown on the next slide.

Both 2022 in 2023 results benefited from auto period deferral collections from cash basis customers recognizing the income of.

About 24, and 48 cents per share respectively.

Colluding these collections from both ears episodes adjusted per share still grew by nearly 6%.

Mark Alan Peterson: And nearly 5% when you also exclude the lease termination fees recognized in all of 2023, totaling $3.4 million. On the next slide, I'll review some of the company's key credit ratios. As you can see, our coverage ratios continue to be strong, with fixed charge coverage at 3.2 times and both interest and debt service coverage ratios at 3.8 times. Our net debt to adjusted EBITDA was 5.3 times for the quarter.

And nearly 5% when you're also exclude the lease termination fees recognized in all of 2023 totaling $3.4 million.

Certainly the next slide a review some of the companies key credit ratios.

As you can see our coverage ratios continue to be strong with fixed charge coverage of three two times in both interest in debt service coverage ratios at three eight times.

Our net debt to adjusted EBITDA was five three times for the quarter.

Mark Alan Peterson: Additionally, our net debt to gross assets was 39% on a book basis at year end. Lastly, our common dividend continues to be very well covered, with an AFFO payout ratio for the fourth quarter of 71%. Now let's move to our balance sheet, which is in great shape. At quarter end, we had consolidated debt of $2.8 billion, all of which is either fixed-rate debt or debt that has been fixed through interest rate swaps, with a blended coupon of approximately 4.3%. Our weighted average consolidated debt maturity is over four years, with only $136.6 million due in 2024, which we anticipate paying off using our line of credit. We had $78.1 million of cash on hand at quarter end and no balance drawn on our $1 billion revolver, which puts us in an enviable position given the continued difficult backdrop of the capital market.

Clearly our net debt to gross assets with 39% on a book basis at year end.

Lastly are common dividend continues to be very well covered with an F F with an epiphone payout ratio for the fourth quarter of 71%.

Now, let's move to our balance sheet, which is in great shape.

At quarter, and we had consolidated data of $2.8 billion, all of which is either fixed raped at her that that has been fixed or interest rate swaps with a blended coup out of approximately 4.3%.

Sure. They are weighted average consolidated debt maturities over four years with only $136 $6 million June 2024, which we anticipate paying off using our line of credit.

We had $78.1 million of cash on hand at quarter end and no balance drawn on our $1 billion revolver.

<unk> puts puts puts us in an enviable position given the continued difficult backdrop of the capital markets.

Mark Alan Peterson: We are pleased to be announcing 2024 FFO's adjusted per share guidance of 476 to 496. Note that given the timing of expected percentage rents, which are heavily weighted to the last three quarters of the year as in the past, as well as the fact that the first quarter is the off-season for many of our operating properties, including all of our RV parks. We expect results for the first quarter of 2024 to be lower than the full year, divided by four by about nine cents per share. As we have discussed previously, given our current cost of capital, we have consciously decided to limit our near-term investment spending.

We are pleased to be announcing of 2024 episodes adjusted per share guidance of 476 to 496 note that given the timing of expected percentage Reds, which are heavily weighted to last three quarters of the year as in the past.

As well as the fact that the first quarter is the off season for many of our operating properties, including all of our all of our R V parks.

We expect results for the first quarter of 2024 to be lower than the full year divided by four by about nine per share.

As we have discussed previously given our current cost of capital we have consciously decided to limit our near term investments spending we are providing our 2024 investments spending guidance of $200 million to $300 million.

Mark Alan Peterson: We are providing our 2024 investment spending guidance of $200 million to $300 million. And, as in 2023, we do not anticipate the need to raise additional capital to fund these amounts. We are also providing our guidance for disposition proceeds for 2024 of $50 million to $75 million, percentage rent and participating interest of $12 million to $16 million, and G&A expense of $52 million to $55 million. The midpoint of guidance for percentage rents and participating interests reflects an increase of about $2 million versus the prior year. This increase is primarily related to the percentage rents expected from theaters subject to the Regal Master Lease and is offset by certain properties that have base rent increases in 2024, causing the breakpoint for percentage rents to go up, as well as the cultural property that was sold in February that had percentage rents in 2023. The midpoint of G&A guidance reflects a decrease from the prior year of about $3 million.

It is in 2023, we do not anticipate the need to raise additional capital to fund these amounts.

We are also provide air guidance for disposition proceeds for 2024 of $50 million to $75 million percentage retton participating interests of $12 million to 16 million and G&A expense of $52 million to $55 million.

The mid point of guidance for percentage rants and participating interest reflects an increase of about $2 million versus the prior year.

This increase is primarily related to the percentage rates expected from theater is subject to the Regal Master release and is offset by certain properties that are base rent increases in 2024, causing the break 0.4 percentage rents to go up as well as the cultural property that was sold in February that had percentage rents in 2023.

The mid point of G&A guidance reflects a decrease from prior year of about $3 million. This is primarily due to a decrease in expected non-cash stock grant amortization and to a lesser degree the decrease in legal costs associated with the Regal bankruptcy settlement in 2023.

Mark Alan Peterson: This is primarily due to a decrease in expected non-cash stock grant amortization, and to a lesser degree, the decrease in legal costs associated with the Regal Bankruptcy Settlement in 2023. Note that this G&A guidance does not include or does not reflect the two to three cents per share charge expected to be recognized in Q1 related to an executive retirement. This charge is substantially non-cash and will also be excluded from FFO's adjustment and AFFO.

Note that this G&A guidance does not include does not reflect the 2% to three per share charge expected to be recognized and Q1 related to an executive retirement.

This charge is substantially non-cash and will also be excluded from <unk> adjusted and <unk>.

Mark Alan Peterson: On the next slide, guidance for our consolidated operating properties is provided by giving a range for other income and other expense. In addition, we are providing guidance for our operating JVs, both equity and loss from JVs per gap, which, of course, is after our share of depreciation, as well as the expected contribution from JVs to FFO as adjusted. The midpoint of guidance for both our consolidated operating properties as well as our operating JVs implies an increase in FFOs adjusted, verse 2023. Guidance details can be found on page 24 of our supplementary.

On the next slide guidance for our consolidated operating properties is provided by giving a range for other income and other expense.

In addition, we are providing guidance for our operating Jv's both equity in loss from JV per gap, which of course is after our share of depreciation.

As well as they expected contribution from JV <unk> adjusted.

The mid point of guidance for both of them. Both are consolidated operating properties as well as our operating Jv's implies an increase in episodes adjusted versus 2023.

Guidance details can be found on page 24 of our supplemental.

Mark Alan Peterson: On the next slide, I thought it would be helpful to illustrate the anticipated impact on growth in FFO as adjusted per share for 2024 at the midpoint of guidance. When you remove the impact of out-of-period cash basis deferral collections from 2023 of $36.4 million, or $0.48 per share, and the amount expected for 2024 of $0.6 million, or a penny per share. As you can see on the schedule, FFO adjusted per share growth without deferral collections from 2023 to 2024 is expected to grow by 3.2%. The expected growth is just over 4% when also excluding the impact of lease termination fees recognized in 2023 of $3.4 million. This is consistent with what I said last quarter when I mentioned we could grow our earnings at about 4% without the need to access the capital markets and while maintaining our targeted debt-to-eBITDA range of 5 to 5.6 times. Finally, based on our expected 2024 performance, we are pleased to announce a 3.6% increase in our monthly dividend, beginning with the dividend payable April 15th to shareholders of record as of March 28th.

On the next slide I thought it'd be helpful to illustrate the anticipated impact on growth in F. F. O is adjusted per share for 2000 2004 at the midpoint of guidance. When you remove the impact of auto period cash basis deferral collects from 2023 of $36.4 million or 48 cents per share.

And the amount expected for 2000 $24.6 million or a penny per share.

As you can see on the schedule F. F. O is adjusted per share growth without deferral collections from 2023% of 2024 expected to grow is expected to grow by 3.2%.

The expected growth is just over 4% when also excluding the impact impact of lease termination fees recognized in 2023 of $3 $4 million.

This is consistent with what I said last quarter, what I mentioned, we could grow earnings at about 4% without the need to access the capital markets and while maintaining our targeted debt to EBITDA range of five to 565 to five six times.

Finally based on expected 2024 performance, we are pleased to announce a 3.6% increase in our monthly dividend.

Beginning with the dividend payable April 15th to shareholders of record as of March 28th.

We expect our 2024 dividend to be well covered with an <unk> per share payout ratio about 70% at the mid point of guidance.

Gregory K. Silvers: We expect our 2024 dividend to be well covered with an AFFA per share payout ratio of about 70% at the midpoint of guidance. Now, with that, I'll turn it back over to Greg for his closing remarks. Thank you, Mark.

Now with that I'll turn it back over to Greg for his closing remarks.

Thank you Mark.

Today's report reflects the continued strengthening of our portfolio with dealer coverage returning to pre pandemic levels.

Gregory K. Silvers: Today's report reflects the continued strengthening of our portfolio, with theater coverage returning to pre-pandemic levels. The quality of our portfolio has allowed us to collect over 150 million deferred rents, including all accrued amounts related to the pandemic. Additionally, our guidance demonstrates our ability to continue to grow even in a capital-constrained environment. Finally, I want to take a minute to acknowledge the retirement of Craig Evans, our General Counsel and Secretary. Craig and I have worked together for many years, and he has served as a trusted advisor and respected member of the EPR Executive Team. His accomplishments are too numerous to mention, but his efforts are much appreciated, and we wish him all the best in his retirement. Now, let's open it up for questions. Victor, are you there?

Quality of our portfolio has allowed us to collect over 150 million different <unk>.

Including all accrued amounts related to the pandemic.

Additionally, our guidance demonstrates are to continue to grow even in a capital constrained environment.

Finally, I want to take a minute to acknowledge the retirement of Craig Evans, Our general Counsel and Secretary, Craig and I have worked together for many years and he has served as a trusted advisor and respected member of the EPR executive team.

His accomplishments are too numerous to mention but his efforts are much appreciated and we wish him all the best in his retirement.

Now, let's open it up for questions Victor are you there.

Okay. Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you would need to press start one one on your telephone and wait for it to be announced to withdraw your question <unk>.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you need to press star 11 on your telephone and wait for your name to be announced.

While the composite kunai roster.

One moment for our first question.

Our first question comes from a line of Joshua generally from Bank of America. Your line is open.

Hey, guys. Thanks for the time could you remind us what's in your JV bucket in our operating assets I'm, assuming all the operating assets are in the JV and just like how you. How you guys are thinking about those assets on a longer term basis, whether or not like the guide for 2024 is like where they kind of stabilize out.

Joshua Dennerlein: To withdraw your question, please press star 11 again while we compile the Q&A roster. One moment for our first question. Our first question comes from the line of Joshua Dennerlein from Bank of America. Your line is open.

Gregory K. Silvers: Yeah, hey guys, thanks for the time. Could you remind us what's in your JV bucket and or operating assets? I'm assuming all the operating assets are in the JV and just like how you guys are thinking about those assets on a longer term basis and whether or not the guide for 2024 is like where they kind of stabilize. Yeah, so you've got operating properties in a couple buckets. You've got consolidated operating properties that are in other income and other expense. And that's the Cartwright Hotel and Water Park.

Yeah. So you've got an operating properties in a couple of buckets, you've got consolidated operating properties that are in other income another expense and that's the Cartwright hotel and Waterpark and you've got the seven operating theatres. So thats other income another expense.

On the JV side, we've got.

Four properties or four sets of properties three of which are <unk>.

<unk> three of its R. R V parks and one the other one is the investment and the two hotels in Saint Petersburg as far as the guidance for 24 on the JV is because I think that's more what you were asking about.

Mark Alan Peterson: And you've got the seven operating theaters, so that's other income and other expense. On the JV side, we've got four properties or four sets of properties, three of which are.

It's up about.

100000 versus actual results for the prior year and we.

We also have an increase of about $1.2 million in interest expense embedded in that so from an operating perspective, it's really up more like a million dollars five.

Mark Alan Peterson: JVs, three of which are RV parks, and one, the other one is the investment in the two hotels in St. Petersburg. As far as the guidance for 24 on the JVs, because I think that's maybe more what you're asking about, they, you know, it's up about... 400,000 versus actual results for the prior year. We also have an increase of about $1.2 million in interest expense embedded in that. So, from an operating perspective, it's really up more like $1.5 million. Part of that interest expense increase is things coming off of capitalization, but in the St. Petersburg properties, we also have an interest rate cap that's expiring in June. June, that was kind of capped so far at like 3.5 percent, so that's going to go up. But beyond that, we do expect, you know, we've made recent investments in the JVs. I think we spent somewhere upwards of $16 million in 2023. And unlike a lease, it takes a bit of time for that to ultimately result in improved performance.

Part of that interest expense increases things coming off of capitalization, but in this Saint Petersburg properties. We also have a interest rate cap that is expiring.

In June June that was kind of kept sofa at like 3.5%. So that's going to go up but beyond that we do expect.

Recent investments in the Jv's I think we spent somewhere upwards of $16 million in in 2023, and unlike a lease it takes a bit of time for that to ultimately result in improved performance. So we were a little bit conservative or cautious thinking that I would have an immediate impact in 2024.

And our guidance, but longer term, we're confident that those investments are going to bear fruit and I think if you move into twenty-five you'll receive an even larger increase so to answer. Your question. We don't think they are at their final endpoint in our 2024 guidance given the recency of the investment and it takes a little time for those to bear fruit.

Mark Alan Peterson: So, we were a little bit conservative or cautious, thinking that it would have an immediate impact in 2024, in our guidance. But longer term, we're confident that those investments are going to bear fruit. And I think if you move into 2025, you'll see an even larger increase. So, to answer your question, we don't think they're at their kind of final endpoint in our 2024 guidance, given the recency of the investment. And it takes a little time for those to bear fruit. Okay, that's a good color.

Okay. That's a good color and then maybe just on the operating assets that don't flow through the JV line.

How are you thinking about those from I guess.

Where they are in the 2024 God versus like maybe where they can kind of stabilize out.

Yeah sure if you kind of look at the guidance.

For other income another expense last year that net amount was about $1 million one, but some of that was income from FX.

And some miscellaneous income so it's kind of about breakeven you put it all together with the operating theatres just transitioning from Regal and then sort of the Cartwright for.

Mark Alan Peterson: And then maybe just on the operating assets that don't flow through the JV line. How are you thinking about those? where they are in the 2024 guide versus maybe where they can kind of stabilize. Yeah, sure. If you kind of look at the guidance, you know, for other income and other expense, last year, that net amount was about $1.1 million, but some of that was income from FX and some miscellaneous income. So it's kind of about breakeven. You put it all together with the operating theaters, just transitioning from Regal and then sort of the cartwright. For next year, if you look at the midpoint of our other income and other expense guidance, it's about $3 million. And about $2 million of that is from the theaters, from the seven theaters. And we expect... that those will start to produce income. Obviously, we were in transition in 2023.

For next year, if you look at the mid point of our other income and other expense guidance is about $3 million.

And about $2 million of that is from the theaters.

From the seven theaters and we expect.

That.

Those will start to.

Produce income obviously, we are in transition in 2023 as we move into 24 of those were start to produce income that's a little bit lower than the chart, we put out frankly for the theaters.

For the operating theatres that were getting back for that we got back in the Regal transition and frankly, we're just being a little bit conservative on that takes a little bit of time to transition those two centermark in Phoenix, the operator of those those five theater so.

That's a little below with the chart imply that we put out back and we did regal.

I will say on the percentage rent side, we do have the full number baked and from that chart on the theaters that didn't have to go through that transition that we took back from <unk>. When we did the percentage rent deal. So.

Mark Alan Peterson: As we move into 2024, those will start to produce income. That's a little bit lower than the chart we put out, frankly, for the theaters, for the operating theaters that we're getting back for, that we got back in the regal transition. And frankly, we're just being a little bit conservative on that because it takes a little bit of time to transition those to Cinemark and Phoenix, the operator of those five theaters. So that's a little below what the chart implied that we put out back when we did Regal. I will say on the percentage rent side, we do have the full number kind of baked in from that chart on the theaters that didn't have to go through that transition that we took back from Regal when we did the percentage rent deal. So that kind of gives you a little color.

That kind of gives you a little color I do expect.

Those if you move to 25 and you can see the increase in box office is expected for 25, those should both in the percentage rents line and in the operating profits line should increase.

Eight a bit as box office is scheduled to go up.

Anywhere from.

8884 to something like nine and a half billion dollars ish for 225% growth in twenty-five in those ought to be pretty good.

Thanks for that.

Thanks.

Thank you one moment for our next question.

And our next question comes from nine a ton Thomas from Qbank capital markets. Your line is open.

Hi, Thanks. Good morning, first question, Mark and I, just wanted to follow up on.

Mark Alan Peterson: I do expect, you know, those if you move to 25, and you see the increase in box offices expected for 25, those should both in the percentage rents line and in the operating profits line should increase, you know, quite a bit as box offices go up, you know, anywhere from 8 to 8.4 to something like $9.5 billion-ish for 2025. So growth in 2025 in those ought to be pretty good. Thanks for that.

Sort of the guidance and the theater commentary.

Looking for a little clarity you outline the box office projections for the calendar year 2000, $40 billion to $8.4 billion.

But also noted at the box office is running a little behind in the near term due to due to the strikes what's the contribution to percentage rent.

From the Regal lease specifically in that $12 million to $16 million percentage round assumption and.

Operator: Thank you. One moment for our next question, and our next question comes from the line of Todd Thomas from Key Bank Capital Markets. Your line is open.

Can you just talk a little bit I guess about how you think the box office shakes out.

For the release, which which runs through July 31st.

Todd Michael Thomas: Hi, thanks. First question, Mark. I just wanted to follow up on, you know, sort of the guidance in the theater. I'm just looking for a little priority you outlined. The box office projections for the calendar, but also noted. Thanks for watching. See you next time, from the... and talk a little bit, I guess, about how you think the box office shakes out for the remake... Sure, and I'll jump in, Mark, before this. This is Greg, Todd.

Sure now Jumpin Mark before this is Greg Todd I think what we would say is we think for the lease year that the box office is going to be eight $3 billion for the lease year. So again.

Mark indicated otherwise we think if you've followed <unk> go and look at our chart that we supplied when we do that those numbers are consistent with with what we think on the Regal contribution will again that that's remember that's a August 1st to July 31 last year. So we kind of broken it out both giving you our view on.

Gregory K. Silvers: I think what we would say is that for the lease year, we think the box office is going to be $8.3 billion for the lease year. So, again, as Mark indicated otherwise, we think if you follow, if you go and look at our chart that we supplied when we did that, those numbers are consistent with what we think on the regal contribution. Again, that's, remember, that's a August 1st to July 31st lease year, so we kind of have broken it out, both giving you our view on kind of what the full-year box office will be and then kind of the lease year. So, again, those are clearly impacted by the strike, but I still think that it will be a nice contribution, as Mark indicated in his comments. The percentage rents from regal per the chart, and what we have in our guidance is about $3.8 million. Okay, I hope that's helpful. I got it.

Kind of what the full year box office will be and then kind of the lease year.

So again.

Those are clearly impacted by the strike, but still think that it will be a a nice contribution is mark indicated in his comments.

Of what it will add the percentage Renstrom Regal for the chart and what we have in our guidance is about $3.8 million.

Okay. That's helpful got it so so $8 billion to $8.4 billion for 2024, and $8 3 billion is sort of the assumption for the Regal lease here I just want to lease year. That's correct you got it.

Then you discuss the lease restructuring with escape that took place during the quarter.

Gregory K. Silvers: So 8 to 8.4 billion for 2024 and the lease year. That's correct. Got it.

Should we expect additional lease restructurings in the theater portfolio in the near term and is there a percentage rent.

Gregory K. Silvers: And then you discussed the lease restructuring. Should we expect additional lease restructurings in the theater portfolio in the near term, and is there a percentage rent that you're expecting from it? Within that 12 months, I don't know, and Todd, this is Greg. I don't know that we have any other planned restructuring, but we, Greg and his team, will take the opportunity. If we can, if we think we can improve the overall portfolio and save or create capital by taking theaters back and selling them and still creating an overall stronger company, we'll definitely take a look at it. I don't think that there's a meaningful contribution to that theater.

That you are expecting from escaped in 2024 within that 12 to 16 million dollar guide.

I don't know how this is Greg I don't know that we have any other planned restructuring, but we Greg and his team take the opportunity. If we can if we think we can improve the overall portfolio and save or create capital by taking theaters back and selling them and still create an overall stronger.

We will definitely take a look at it I don't think that there is.

Ah meaningful content.

Four four that theater I think the long term plan is probably self F theater as.

Gregory K. Silvers: I think the long-term plan is probably to sell that theater as, you know, either for theater use or for other uses. Well, let me clarify. So there's a percentage rent component to one theater, and then we also enhance the percentage rent on the two theaters that we're going to continue, Todd. And like Mark said about investments in the Barbary Park I mentioned, the operator is going to refurbish both of those theaters. So we would hope that if there was a percentage rent, that would come in for. Okay, got it. That's helpful.

Either.

These or theater use but well let me let me. So there was a percentage rent component to one theater and then we also enhance the percentage around on the two theaters that we're going to continue Todd and like Mark said about investments.

Harvey Park, I mentioned that the operators going to refurbish both of those theater. So we would hope that if they're winning percentage rent that would come after those reforms.

Okay got it and that's helpful and then Mark.

Gregory K. Silvers: And then, Mark, you know, just in terms of the August 24 maturity, 135................... I think you mentioned the plan to retire that on the line. ®MD-BO Curious if that's still the plan.

Just in terms of the August 24 majority $135 million.

435%.

I think you mentioned that you plan to retire that on the line I, which I think is consistent with what you said last quarter, but that costs have come in somewhat just just curious if that's still the plan or if your thought processes has evolved a bit.

Mark Alan Peterson: It's still the plan. If you kind of look at our cash flows for the year, you know, we start with, we have cash on hand. We have excess cash flow in excess of $100 million. We have dispositions, fund CAPEX, maintenance CAPEX, and pay off that private placement, and still only end up with about $150 drawn on our line, given our current plan, so still a modest draw. But yes, the plan, as I said, as you said, and as I said last quarter, is to pay it off the line and not have to access the capital markets. Now, should the capital markets be there, we can look at longer-term financing, but our plan right now is to pay it off the line.

It's still the plan and if you kind of look at our cash flows for the year.

We start with cash.

Cash on hand, we have excess cash flow in excess of $100 million, we have dispositions and then we can fund.

Fund Capex maintenance Capex and pay off that that private placement and still only ended up with about 150 drawn on our line given our current plans so.

Still a modest draw, but yes. The plan as I said as you said and as I said last quarters to pay it off the line and not have to access the capital markets should the capital markets be there. We can look at longer term financing about our plan right now is to pay it off the line.

Mark Alan Peterson: All right, thanks. One moment for our next question. Our next question comes from Anthony Paolone from J.P. Morgan. Your line is open. Great, thanks. Can you talk just generally, as you're looking out to 24, where the coverage levels are lowest or what might be on the watch list outside of, say, the theater stuff, just your non-theater assets? Again, I'll let Greg jump in, but really, our watch list is very diminished. Again, I don't know that we have anything that's jumping out. Greg's shaking his head, so you can't hear that.

Okay alright, thank you.

Thank you.

One moment for our next question.

Our next question comes from the line of Anthony <unk> alone from J P. Morgan Your line is open.

Alright, great. Thanks can you talk just generally as you are looking out to 24, where the coverage levels, our lowest or what might be on the watch list outside of Satan theater stuff just non theater assets.

Again, I'll, let Greg jump in but really it's our watch list is very diminished.

Again, I don't know that we have anything that's jumping out Greg shaking. His head. So you can't hear that but I think again and it points to the idea of.

Gregory K. Silvers: But I think, again, and it points to the idea of, you know, when we reflected last quarter, we talked about theater revenue in the $1.415 range. That was on an $8.1 billion box office. So I think our thoughts are, you know, relatively, Tony, we've seen the low water mark of theater coverage, if we talk somewhere between $8 and $8.4. So that is, things are clearly improving in that sector. And as we've talked about earlier, even with and in the face of some increased expense pressure, our coverages have remained high in our non-theater space. So I don't think we see really, we don't have any credit worries that we're addressing right now.

Would we reflected last quarter.

We talked about a theater coverage in the 1415 range on on an eight that was on an $8.1 billion box office. So I think our thoughts are.

Relatively Tony we've seen the low water Mark of theater coverage, if we talk somewhere between eight and eight four so that that is things are clearly improving in that sector and as we've talked about earlier, even risks and in the face of some increased expense pressure our coverages of.

Remained high in our non theater space. So I don't think we see really we don't have any.

Any credit worries that we're addressing right now Tony also as I said my script and we keep repeating.

Gregory K. Silvers: And Tony, also, as I said in my script and we keep repeating, you know, we're very thoughtful on the theater side about pruning what I would call underperforming or small market theaters, which kind of, by definition, have poor coverage. So I think overall, our portfolio is healthier because of the steps we've taken. Okay, so then, I mean, if we think about just, you know, put aside sort of the operating assets and percentage rents, but if you think about just the contractual or organic growth in the portfolio, I mean, what should that number look like? Because it seems like 24 might be down because you did the theater, you got the term fee, and so you did the theater restructuring. It sounds like you're getting kinder care back, trying to understand like you know how to think about organic growth going forward.

We're very thoughtful in the theater side about pruning, what I would call underperforming are small market theaters, which.

By definition had poor coverage. So I think overall our portfolio is healthier because of the steps we've taken.

Mmk. So then if we think about just.

Put aside the operating assets in percentage ranch, but if you think about just the contractual organic growth in the portfolio.

Which should that number look like because it seems like 24 might be down because you did the theater you got the term fee and so you did the theater restructuring it sounds like you're getting a kindercare back just trying to understand like.

How to think about organic growth going forward.

Mark Alan Peterson: Sure. I mean, I think generally we've said somewhere that 1.5% to 2% is kind of. Next year, in 2025, we'll be impacted by that because of our AMC lease restructure. We have a lease bump for AMC next year in 2025, which because of the fact that they're cash bases, we're not straightlining. So that will be a more meaningful bump as we get into 2025. But on a run rate basis, that kind of 1.5% to 2% is generally speaking. Yeah, as Greg said, it can vary depending on whether it's every five years it actually hits.

Sure I mean, I think generally we've said somewhere in that 1.5% to 2% is kind of next year and 25 will be impacted by that because because of our AMC lease restructure we have a lease bump.

For AMC next year, and twenty-five which because of the fact that we're cash basis, we're not straight lining so that will be a more meaningful bump as we get into 25, but on a run rate bases that kind of 1.5% to 2% as general Yeah. Gregg said it can vary depending on whether it's every five years it actually hits and like you said in the case of AMC.

Mark Alan Peterson: And like you said, in the case of AMC, this is our first bump, and it will be pretty meaningful in 2025. So we should see more of the same kind of higher internal growth in 2025 than in 2024. Okay, great. Thank you. Thank you, Charlie.

It's our first bump and it will be pretty meaningful in 2025, So we should see more kind of higher internal growth and talk about 524.

Okay, great. Thank you.

Thank you Tony.

Operator: One moment for our next question. Our next question comes from the line of Smead Rose from Citi. Your line is open. Hi, thank you.

One moment for our next question.

Our next question will come from the line of Smedes Rose from City. Your line is open.

Hi, Thank you I just wanted to ask you a little bit about the the nearby spa relationship. It sounds like it's for mortgage drilling and you mentioned you can convert it into a more sort of traditional sale leaseback is that at your option and would you expect to do that and could you just talk about they're kind of deals that you're getting online investment.

Smead Rose: I just wanted to ask you a little bit about the Mirabeau spa relationship. It sounds like it's a mortgage going in. You mentioned you could convert it into a more sort of traditional sale leaseback. Is that your option?

Gregory K. Silvers: And would you expect to do that? And could you just talk about the kind of yields that you're getting on that investment? Sheriff's needs. Yes, it is at our discretion. There are a couple of triggers that would take time. We get to make a decision in real time as the performance goes out. And then some of it also relates to the forward commitment that we have with them to fund future operations. We don't get into the cap rates on individual deals, but as I said early on in the script, most of our deals last year were eight or above eight. Okay. And then the leverage looks like it moved up sequentially.

Sure if needs yes. It is an option there are a couple of triggers that would take.

Get to make a decision over time is that performance goes out and then some of it also relates to the four work commitment that we have with them to fund future operations, we don't get into the cap rates on individual deals, but as I said early on in the script most of our deals last year were eight or above.

The 8% cap right.

Okay, and then the leverage looks like it moved up sequentially I, just swimming, where you expect that to be maybe by year end and your guidance and could you just start could you just repeat what the goal is on the leper time sure leverage is five to five six and with our plan b squarely within that.

Mark Alan Peterson: I'm just wondering where you expect that to be, maybe by year-end, in your guidance? And could you just repeat what the goal is for leverage time? Sure.

Mark Alan Peterson: Leverage is 5 to 5.6, and with our plan, we'll be squarely within that, perhaps even at the lower end of that in our plan, going into 24. So we've always kind of maintained that 5 to 5.6, and I kind of laid out the cash flows for next year. A lot of our funding is being financed by free cash flow and, to some extent, dispositions. So that's why leverage can remain low, and we can still invest in new acquisitions and so forth. Okay, thank you.

Perhaps even at the lower end of that and our plan going into 2004. So we've always kind of maintain that 5% to five six and I kind of laid out the cash flows for next year a lot of a lot of our funding is.

Being financed by free cash flow and even and to some extent dispositions. So thats why leverage can.

Remained low and we can still invest.

Invest in.

In new acquisitions, and so forth.

Okay. Thank you.

Thank you Sweetie.

Smead Rose: One moment for our next question. Our next question comes from Michael Carroll from RBC. Yeah, thanks.

One moment for our next question.

Mmm next question was on the line I'm, Michael Carroll from RBC is open.

Michael Albert Carroll: I just wanted to touch on the escape theaters and the Alamo Drafthouse transitions. I guess, generally, why were those theaters underperforming? I mean, I think, Greg, you kind of highlighted in your prepared remarks that, generally, you've been getting rid of the theaters in smaller towns. Is that the reason that drove those underperformance or those assets, or is there something else there? I think it's a couple of things. The Alamode Reft Houses, in particular, were in smaller markets in Texas. They were actually in Laredo and Corpus Christi.

Yeah. Thanks, I just wanted to touch on the escape theaters in the Alamo Draft House transitions generally why word those theatres underperforming.

I think Greg you kind of highlight in your prepared remarks that generally you've been getting rid of the theaters in smaller towns is that the reason that drove those under performance are those assets or is there something else there.

I think it's a couple of things.

Alamode.

[noise] houses in particular were on smaller markets in Texas, They were actually in Laredo in Corpus Christi.

Gregory E. Zimmerman: And again, I would say, Michael, we don't necessarily think that every small market is bad, but smaller market theaters sometimes have more pressure on them. And then the same escape, the one that we terminated, was actually attached to a dying mall in Cincinnati, so we didn't see a lot of opportunity for growth there. And the one that we have a percentage rent deal on is in a highly competitive zone with other theatres or parks. So I hope that answers the question. It's a combination of everything.

And again I would say, Michael we don't necessarily think that every small market was bad but smaller market theater, sometimes have more pressure on them and.

And that's the same escape one the one that we terminated was actually attached to a dying mall in Cincinnati. So they are just <unk> a lot of opportunity for growth there.

And the one that we have a percentage rent deal on is in a in a highly competitive zone.

Lee other theaters.

So.

I hope that answers the question, it's a combination of everything we look at the performance.

Gregory E. Zimmerman: We look at the performance and also look at what we think the performance cadence can be over the next couple of years. I think there are a couple of things I'll add to that, and Greg can chime in. First of all, you look at the underlying credit.

Look at what we think the performance cadence can be over the next couple of years. When we make those decisions I think a couple of things I'll add to that and Greg can chime in.

First of all you look at the underlying credit as Greg mentioned that two Alamo Drafthouse as we're franchisees. So the other two that we kept our corporate credits.

Gregory E. Zimmerman: As Greg mentioned, the two Alamo draft houses were franchisees, so the other two that we kept are corporate credits. So, again, the fundamentals. Next to that is what we saw at NXSCAPE.

So again.

The fundamental next to that is what we saw it and escape we have a firm belief.

Gregory E. Zimmerman: We have a firm belief that operators need to continue to commit capital to improving these theaters, whether that's expanded offerings in the terms of recliners or premium screens, IMAX, that sort of thing. But some of these smaller operators don't have access to capital. When we did XSCAPE, we got a commitment of a million dollars per theater that kept them from improving those theaters. And so when you look at all of those things, it's not just are they doing well now, but how are they going to do and perform over the life of the lease, and are they going to be able to put the money in them to keep them as competitive as we think they need to be. Okay, and then that million-dollar commitment, I mean, how significant is that per theater? I mean, can they do those significant upgrades that you kind of were just mentioning? Yeah, I mean, yeah, they definitely can.

Of operators need to continue to commit capital to improving these these theaters and whether that expanded offerings in the terms of recliners or our our premium screens IMAX that sort of thing.

And some of these smaller operators don't have access to capital.

When we did the escape we got a commitment for a million dollars per theater that kept for them to improve those theaters.

And so when you look at all of those things. It's not just are they doing well now, but how are they going to do and perform over the life of the lease and are they going to be able to put the money in them to keep them as competitive as we think they need to be Michael.

Okay, and then that million dollars commitment how significant is that per theater I mean can they do those significant upgrades that you kind of just mentioning.

I mean, yeah. They definitely can I mean, if you think about it.

Gregory E. Zimmerman: I mean, if you think about it, a upgrade, a full kind of renovation for, you know, seats and things is about $250,000. So you can make significant improvements with this capital. Okay, and then within your remaining theater portfolio, I mean, how many kind of fit that market where there are smaller town-type theaters where you're concerned that you might have to potentially transition or do something with? I think Greg and his team are doing a great job of, as he talks, pruning those out. And again, Michael, I said a minute ago, and I'll reiterate, there's nothing wrong with small markets. The theater has a good footprint and has been upgraded. Small markets perform very well.

You know a upgrade a full kind of renovation for as seats and things is about $250000. So you can you can get a significant improvements with this capital.

Okay, and then within your remaining to your portfolio I mean, how many kind of fit that.

Market, where there are smaller town type theaters, where you're concerned that you might have to potentially transition or do something with.

I think Greg and his team are doing a great job of of kind of.

As he talks pruning those out.

And again, Michael I said, a minute ago and I'll reiterate there's nothing wrong with small markets. If the theater has a good footprint in has been upgraded.

<unk> markets perform very well so we tend to look at everything.

Gregory E. Zimmerman: So we tend to look at everything. And I would say we feel pretty good about where we are now. We've taken a lot of steps.

And I would say, we feel pretty good about where we are now we've taken a lot of steps since COVID-19.

Gregory E. Zimmerman: We've disposed of 16 theaters in the past three and a half years. Okay, great. And then this last one for me, I guess, Mark, related to your guidance on the other revenue and other expense lines, obviously, there are big ranges between both those. And can we assume that your other revenue guidance is $3 million? Or not?

We've dispose of 16 theaters in the past three and a half years.

Okay, Great and then just the last one for me I guess mark related to your guidance on the other revenue another expense lines, obviously, there's big ranges between both those.

Can we assume that your other income guidance is $3 million or does it or can other revenues trained trained differently within that range and the same with other expenses I mean can you get something lower higher than that 3 million dollar target.

Michael Albert Carroll: Or can other revenues trend differently within that range and the same with other expenses, and we can get something lower or higher than that $3 million target? So, you're talking about the net $3 million target, right? Correct. Yeah. So, yeah, I mean, these are operating properties, so there certainly is a range that they could operate in.

So you were talking about the net $3 million target ranked correct. Yeah. So yeah. I mean these are operating property. So there is certainly is.

Arrange that they could operate in for example, part of that is these operating theatres and we think we've been fairly conservative projecting that for for 2024, given the fact that they were shut down for a bit in 2000, and 2023 and the operators are now getting a full year under their belts. So yeah that can <unk>.

Mark Alan Peterson: For example, you know, part of that is these operating theaters, and we think we've been fairly conservative projecting that for 2024, given the fact that they were, you know, shut down for a bit in 2000, sort of in 2023, and the operators are now getting a full year under their belts. So, yeah, that can vary, and, of course, cartwright, which is another part of other income and expense, can vary We think the $3 million is fair and achievable, but, you know, we're hopeful that there's upside to that, and that's why there's a range. I think the other thing that, and I'll ask Mark to comment, is the seasonality of that number. I would not expect that to divide by four and lay that in there because, whether it's theaters or Cartwright, you know, theaters generally have their busiest seasons are kind of the second and fourth quarter.

<unk> and of course Cartwright.

Which is another part of other income and expense can vary.

We think the $3 million is fair achievable, but.

We're hopeful that there is upside of that and that's why there's a range I think the other thing that mark to comment is.

The seasonality of that number I would not expect that to divide by forward and laid that in there because whether it's theaters or heart rate.

Theaters generally out they're busy seasons are kind of the second and fourth quarter and similarly, so it will be March tried to give you kind of an annual look on this but there will be some movement. So.

Mark Alan Peterson: And similarly, so it's just it will be Mark's tried to give you kind of an annual look at this, but there will be some movement. So generally speaking, the first quarter in the theater business is not nearly as strong as the second quarter. So seeing those numbers flow through for the whole year will be important, but there will be seasonality to that on a quarter to quarter basis. And just to add that we don't give quarterly guidance, but I said in my prepared comments that the first quarter would be below the kind of annual number guidance midpoint divided by four by about nine cents. And it's in part due to what Greg just said with the theaters, but also the off season for our operating properties, particularly RV parks and so forth, as well as percentage rents are much lower in Q1 than they are for the remainder of the year. So it's important to understand that seasonality, if you will, in terms of projecting quarterly results. Okay, great, thank you. Thank you, Mark.

Generally speaking the first quarter in the theater business is not nearly as strong as the second quarter. So.

Seeing those numbers flow through for the whole year, it will be what's important but there will be seasonality to that on a quarter to quarter and just add that we don't give quarterly guidance, but I said and Mike prepared comments that the first quarter will be below the kind of the.

The annual number guidance midpoint divided by four by about nine and some parts of what Greg said.

With the theaters, but also the off season for our operating properties, particularly RV parks, and so forth as well as percentage rents as much lower in Q1 than it is for the remainder of the year. So it's important to understand that.

Seasonality, if you will in terms of projecting quarterly results.

Okay, great. Thank you.

Mark Alan Peterson: Thank you. One moment for our next question. Our next question comes from Ky Ben Kim from Churus. Your line is open. Thanks, Don. Good morning.

Thank you Michael.

Thank you one moment till next question.

Our next question <unk> from choice your line is open.

Ki Bin Kim: Just going back to your theater projections, you made a comment that 2025 will be a much bigger year. Can you just provide a range of outcomes that you're thinking about and what you're seeing that makes you believe that? Again, it's really about titles.

Sound. Good morning, just going back to your theater projections you made a comment that you. Thank God 2025, we have a much bigger year.

Can you just provide like Ah.

Range of outcomes that you're thinking about and and what you like what you are saying that makes you believe that.

Again, keven, it's really about titles and again when we come to our estimates were using.

Gregory K. Silvers: And again, when we come to our estimates, we're using a variety of industry pundits, including some of the major theater analysts at some of the banks who are on the line here. And I think, again, when we say 8-8-4, I think there's probably no analyst out there that doesn't have at least 9-10 in the 25 number. And it's fully, as Greg said, it's really about the number of titles. So as production ramps back up from the writers and actor strike, we're seeing, again, and an acknowledgment, when you combine that with an acknowledgment by all the studios, that they need the theater exhibition business. I think other than Netflix, almost all the streamers are losing money on their businesses, and they need the cash flow that's generated from the theater exhibition movie, and they've all kind of recommitted to that.

A variety of industry pundits, including for some of the major theater analysts that some of the banks who are on the line here and I think again, when we say eight to eight four I think there's probably no analyst out there that doesn't have at least nine to 10 and the two.

25 number and it's fully as Greg said, it's really about the number of titles.

So as the production ramps back up from the writers and actors strike were seen again, and then acknowledgement when you combine that with an acknowledgment by all the studios that they need.

The theater exhibition business I mean almost.

I think other than Netflix almost all the streamers are losing money on their businesses and they need the cash flow that's generated from from the theater exhibition movie and they have all kind of re kind of.

Gregory K. Silvers: And so we're getting really good visibility into titles right now, beginning right now into 25, and it looks very strong. And again, that's not just our numbers; that's kind of pretty much industry-wide. You see some above 10, but generally, I think everyone's in the range of 9 to 10, so at a midpoint at 9.5, that's a pretty strong year compared to what we're seeing this year.

Of committed to that and so we're getting really good visibility into titles right now beginning right now in the 25 and it looks very strong and again.

That's not just our numbers, that's kind of pretty much industry wide.

You see some above 10, but generally I think everyone's in the range of nine to 10, so at a midpoint at nine and a half that's a pretty pretty strong year compared to what we're seeing this year. If you have coverage was 1.7 times at $8 812 months. So we'll be in good shape put some numbers. If you look at the chart that.

Mark Alan Peterson: Yeah, if you look at the coverage, it was 1.7 times higher at 8.8 in 12 months, so we'll... To put some numbers in, if you look at the chart that we put out, which we probably would have been at $9.4 billion or so for this year, but for the strike. So as you kind of think about that, it's just a year delayed. The chart suggests that the percentage rent could be another $5 million higher than what we're guiding to this year at $8.7 million. And of course, operating profits will go up as well, given if the performance of those years follows the box office, which we think it will.

We put out which we probably would have it at nine 4 billion or so forth this year, but for the strike. So as you kind of think about that is just a year delayed. The chart suggests that the percentage rent could be another $5 million higher than what we're guiding two this year.

At $8.7 million and of course, the operating profits will go up as well.

Given if the performance of those see are as follows the box office, which we think it.

Mark Alan Peterson: Yeah, you read my mind on the next question. Is that chart still the same? The base case, there is some rent restructuring from other theaters. So I wasn't sure if there were some movements in this part.

Yeah, you read my mind and the next question is that charge so.

<unk> the.

The base case.

Restructuring some other theater, so I wasn't sure if there are some.

Ki Bin Kim: That's just regal in the operating theater. So we still think it's the base case that we're we're operating under. As Mark said earlier, our operating theaters are a little off that, but we really think that's a ramping up period of time that we will be there. And our and our percentage rent number is holding true to that case this coming year. Okay, on the AMC ramp bump that's coming in 2025, can you just remind us what that is? It's a 7.5% bump. So, again, I don't have their actual rent number. Mark, do you have that? I don't have it. I don't have it!

That's just regal in the operating theatre. So we still think it's the base case that we're operating under.

As Mark said earlier, our operating theatres are a little off that but we really think thats a ramping up period of time that we will we will be there in our in our percentage rent number is holding true to the to that case this coming year.

Okay EM.

The AMC rent bump that's coming twenty-five can you just remind us what that what that is.

The amount is seven 7.5%.

<unk>.

So again.

I don't have their actual rent number mark do you have that I don't have it.

Mark Alan Peterson: It's 7.5%. And roughly, let's, we'll refine this, but I think it's roughly on $90 million. Yeah, so every five years. Yeah, 7.5% on $90 million.

It's a it's a 7.5%.

Roughly let's.

We will refine this but I think it's roughly on 90.

So.

Every five years got 75% on $90 million so.

Ki Bin Kim: And that occurs in August, July, July, or August. Okay, and just one more. The executed LOIs or Purchase Sales Agreements for the three of the remaining eight regals and the one AMC that you have under PSA, just a high level, does this mean you're just assigning a lease, and you're going to get rent pinned? And if you can just provide some color on what that..., you know, NOI would be a good group. Yeah, so for the vacant Regals and vacant AMCs, we are selling them. We're not going to enter into a lease.

Okay and that occurred in August August July July or August.

Okay, and just one more.

Executed loi's.

Or purchase sales will be administered at three of their remaining eight Regal and one AMC that you have under pasa.

Just high level.

Does this mean, you're just assigning a leaf and you're gonna get rent and.

And if you can just.

Provide some color on with that.

In Hawaii.

Okay.

Yeah, so for the vacant Regal and vacant Amcs, we are selling them, we're not going to enter into a lease there vacant. So there's no reason to assign.

Gregory E. Zimmerman: They're vacant, so there's no... to assign, and, you know, we have a cycle of selling about six a year. And I think that's probably what it'll be this year. A lot of it depends on whether people need to get entitlements, you know, how long that process takes.

And you know.

We have a cadence of selling about six a year.

I think that's probably what it will be this year a lot of it depends on whether people need to get entitlements how.

How long that process takes <unk>.

Gregory E. Zimmerman: Of the 16 we've sold over the past three and a half years, roughly 50% are being reused as theaters, and the other 50% are not. So, and as I've said many times, we're agnostic. We just, we just market and take the highest price. Okay, thank you. Thank you. Thank you. And I'm not throwing any further questions in the queue. I'd like to turn the call back over to Greg Silvers for any closing remarks. Well, we really appreciate everyone's time and attention. I look forward to talking to you in the coming year.

16, we've sold over the past three and a half years roughly 50% are are being used reused as theaters and the other 50% or not.

So and as I've said, many times were agnostic, we just we just market and take the highest price.

One.

Okay. Thank you.

Thank you then.

Thank you.

And I'm, assuming any further questions in the queue I'd like to turn the call back over to Greg silvers for any closing remarks.

Well, we really appreciate.

<unk> everyone's time at attention look forward to talk to you in the coming year and thanks, everyone in.

Gregory K. Silvers: And thanks, everyone, and I appreciate it. Have a great day. Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Appreciate it and have a great day. Thank you.

Thank you for your participation in today's conference does does conclude the program you may now disconnect everyone have a great day.

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