Citi's 2026 Global Property CEO Conference. I'm Smedes Rose with Citi Research. We're pleased to have with us EPR and CEO Greg Silvers. This session is for Citi clients only, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC26 to submit questions. Greg, I'm gonna turn it over to you and ask you to introduce your colleagues that you're with today, give a few opening remarks about the company and tell us a few reasons why investors should buy your stock, and then we'll go into some Q&A. Thanks, Smedes. First of all, let me thank Citi and everything you guys do putting on this event. We really appreciate the ability to participate. To my left is Mark Peterson, our Executive Vice President and CFO. To my right, I'd like to introduce everyone to our Executive Vice President and Chief Investment Officer, Ben Fox, who has just recently succeeded Greg Zimmerman, who announced and formally retired earlier this month. To his right is Brian Moriarty, our Senior Vice President of Corporate Communications. As far as things that I think make EPR attractive, a couple of ideas. One mainly is, like, we believe a strong value proposition. When you think about a 6% dividend, 5% growth, and still an opportunity for multiple expansion. Again, when you look at it on the short term or any time during the last five years, we have consistently delivered outside results and have been at the top of the group. Secondly, I think is, again, when we think about the spaces that we're in, if you look at the latest BEA data on consumer spending, experiential spending went up 7% from 2024 to 2025. Even in a period of time where there is question about the consumer, we actually had increased spending in the experiential. My third thing would probably be the team. We have a unique team that has really developed long-standing relationships that allows us to uniquely identify, underwrite, and secure and acquire these assets. I think all of those things are really what kind of drives our value proposition. When you talk about the consumer experiential spending, do you know what the sort of major categories of that are? Are we talking theme parks? I think it's. I'll let Brian, who works with that data. Yeah, it's from, it's government data, so it's personal consumption expenditures and it cuts across everything that you'd kind of consider experiential, whether it's theaters, clubs- Fitness and wellness. - fitness and wellness, museums, attractions. Okay. Just really kind of the... Not restaurants, I assume. Not restaurants per se. We thought that was a little bit too broad, w e don't include that. Okay, this is your data that you're cutting from the BEA. Well, yeah, we look at the BEA data. We try to align it as closely as possible to the segments that we focus on. It's not perfect, i t's a pretty good assimilation. Good proxy. Yeah. Okay. Is it. T Hat spending was up 7%. Correct. Yes. Okay. Interesting. Okay. All right. In terms of recapping the reasons that you noted, valuation, you mentioned 5% AFFO growth, 6% dividend yield. Consumer experiential spending is up, and you have a tenured team. The relationships to kind of harness into that, those verticals and categories of experiential products. Okay. We're gonna go over some tried and true ground here. Perfect. Let's do it. Let's do it. These are the questions that typically come up. The first, you know, I think your largest tenant is Topgolf, now I think 60% owned by private equity. Was that the outcome that you were kind of hoping for with that tenant? Kind of maybe you can talk about your relationship with them and with the new majority owner. Sure. I think it's a very good outcome for us in this sense, and you should know we spent time with Leonard Green before they announced the deal. They wanted to talk to us. I think one Callaway was really born as a manufacturer. I think they struggled with the consumer-facing actual experience part of the business, where Leonard Green has a lot of experience with multi-unit retail and in the kind of experiential fitness and wellness space. You know, they were the lead on the Life Time Fitness, so they've been in these categories. I think the 60/40 ownership split is really attractive in the sense that, A, Callaway's very mindful of their credit rating. Their intent is to not lever up the entity. Both Leonard Green and Callaway have informed us that they intend to keep this below two times levered. I think that speaks well, and if you talk to Leonard Green, they have indicated the same thing we talked to them about, that they needed to slow the growth down and focus on fewer quality locations, not multiples of locations. They're headed back to doing three to five locations a year that meet a very defined criteria. The other thing they do is they recent announced the hiring of their new CEO, who is the former CEO who just kind of turned around Chuck E. Cheese, and they've recruited him. It's 'cause one of the issues they talked to us about, and we thought they could improve their F&B operations, and that's one of his strengths. Everything they're doing so far is very much closely aligned with kind of our thoughts on where things are going. Candidly, if you go look in the second half of the year, their performance was quite strong. It looks like they're on the right track. Topgolf's performance was. Topgolf was a bove projections if you look at Callaway in their presentations. Okay. I mean, do you think that they'll kind of regroup a little bit and potentially shut some locations? I don't, no. N ot yours. I don't think there's anything. I mean, again, I think the question is, we have a pretty high standard on what success looks like, a really high coverage. I think all of their locations that we're aware of are making money, it's just they may not be making as much money as they make on our locations, which have been demonstrably high coverage. Okay. I know you have two times coverage portfolio-wide, but is it higher for? They are higher. Thinking about Topgolf alone? They are higher than that. Okay. It's been sort of consistently higher, say? Yes. Okay. All right. Anything else we should talk about for Topgolf, anybody? Any concerns? Like, I want to go down the list. Keep going. Let's do it. L et's talk about movie theater exposure. I think it's still about 35% of your EBITDA comes from AMC and Regal, I guess. Cinemark. T he main two, and Cinemark. Maybe just kind of talk about where you are there. There's some media stories about AMC sort of doing debt restructuring. How would that or maybe not impact you, and kind of what are your thoughts there? Yeah, we'll talk. I think one of the things we've talked with people about is, first of all, I think people sometimes forget that of that group, we talk about movie, but Cinemark is a BB credit and Regal is a B credit. Those are on par with kind of the gaming companies out there. I mean, people forget that, but they're doing that well. For AMC, the thing that's interesting for us about, basically they're extending their maturities. They're taking their maturities out to 2031 and lowering their debt rate. They're in the market to do that. What's interesting for us, and as we look for... it doesn't really have any effect on us other than, I would say, some degree of positivity, is S&P is rating that rating as B, with a one recovery, which means an expectation of a 90% to 100% full recovery of any amounts related to that. We think we actually sat in front of that, meaning we have the same obligor and we are secured with hard assets. They are secured with our leases. Again, I think we believe it's a very positive that they're getting new money into the company, that it's at a rate that's lower than the rate that they're replacing. It doesn't have any direct impact on us, but again, extending their maturities and getting a, you know, new investors in at more favorable rates, generally a positive for us. Yeah. Okay. You've decided to no longer kind of do the North American box office forecasting. What was kind of the reasoning behind that? Primarily it created a lot of confusion. I say this. Most everybody were really trying to track Regal, and Regal, because they're the major percentage rent contributor, their is as a lease year, not a calendar year. People were confusing, A, at what period of time there was. There is a lot of third-party resources out there that do the full year. We were giving a full year forecast. That's duplicative of what other experts are doing, and it was confusing the idea that people were trying to see how is that impacting into Regal? What we said this year, is that Regal's number should be up over last year. That would imply implicitly that we think for the Regal year, that box office will be higher than it was. It's just there's we don't wanna create a confusion and have people kind of react to things that really have no impact. Okay. I guess over time, what would you like to see theater exposure be reduced to, you know? We've said that we'd like it 20% or below. 20% or below. You know, that generally kind of what it represents in the experiential world. What do you think the timeframe is to get there? I think it's probably kind of somewhere in the next three to five years as we work through things and grow others. Okay. That's primarily by adding versus selling? We've, I mean, we've sold 33 theaters over the last year, over the last year and a half. We've done, we're doing both, and we'll continue to look and do both. Again, it's not, you know, if there's an opportunity to sell and accelerate that, we'll take a look at that. It's, it's really about pulling both levers. Okay. Just in terms of identified assets to sell, you've kind of worked through theaters, right? No. more? We tell people all the time, if anybody here today would like to buy some theaters, we're open to it for discussion. We've said we wanna reduce those. I mean, again, in the first, I think we talked about it in our call, we sold two theaters here recently. Again, we're continuing to actively look at that. Those were two operating theaters. I think one difference is we're down to one vacant theater where we were working through those, and so now we're only down to one vacant theater. That's why the pace of those theaters is selling, is slowing, I should say. Okay. Anything, you know, with the consolidation of theater or movie makers in Hollywood, does that have any impact to you for, you think? Again, it's always interesting. What's really been. I don't know if anybody saw the Bloomberg article that was published Monday from Ted Sarandos from Netflix, who said. This was after they decided they were out. He said, "The one interesting thing that we didn't appreciate, that we've come to change our opinion is we're gonna look at the movie theater business differently, and maybe we should be in that." That is a change. Again, that's an exciting development that maybe Netflix is going to begin to look. They're. Remember, they've started dabbling in that. This year they're going to release a Narnia movie into the theaters. They did K-Pop:Demons, if I get that right. I'm not sure of that. My kids are no longer that age to where they did that in the theaters. We're starting to see them dabble, so this may be a new revenue generation opportunity for them, which is pretty exciting. Okay, okay. I just wanted to switch back one second to Topgolf. Would you be willing to commit more capital into that sector right now? We'll have to see. Into the... We'll have to see. Again, if we can get some really, really strong coverage assets that we like. Like I said, two years ago we did King of Prussia. We did suburban Los Angeles. If we could get kind of high coverage with really strong performing and, you know, 15-20 acres of really quality, we'll take a look at it. I can't say. We're not being presented anything right now. I wouldn't say we're adverse as we grow to grow with small additions with them. Okay. Maybe let's circle up on the, on the other issue that comes up a lot, which is the Sullivan County. I don't know how much you can say on that, but maybe kind of recap where you were and where we are. Maybe what kind of, what a couple of the different outcomes could be. Again, as we talked about on our call, we don't really have any meaningful update. What occurred, for those who don't know, is we were approached by the tenant of our ground lease in Sullivan County. They were structuring a deal with the county to do municipal bonds to basically refinance their existing debt and take us out of the ground lease. That process then got a little bit more convoluted in the sense that they decided to add a guarantor on there. They had a parent kind of M&A deal. Anyway, they go delayed twice. Mm-hmm. Genting's been awarded the downstate license. We don't know if they're gonna try to finance everything together and do that. We just haven't had meaningful discussions with them, Smedes. It's not part of our plan. It would be positive for us if it did happen, but it's not needed for our capital plan, nor do we have it built in there. All the estimates that you're looking at and dealing with do not have it. It's status quo. Okay. right now you just, you've received your rent. Yes. What is that annually? Yep. How much is it? Yeah. Roughly $10 million, $10 million, $12 million. Okay. They were looking at t he buyout was, like, what, $200 million or something, right? Okay. All right. That potentially is on the come. We'll see what happens. Could be. Okay. It could be very favorably. Maybe we can just switch a little bit then to, you know, you've talked for a while now about an accelerating pipeline acquisition opportunities. You've got a much better cost of capital, obviously, which allows you probably to be more aggressive in that arena. Maybe just talk about the pipeline first, kind of where are you seeing opportunities, kind of what kind of pricing are you seeing, and, you know, how are they coming to you? Sure. I'll give a little bit and then I'll let Ben speak to this. I think overall, we've said all along the three bigger categories were fitness and wellness, attractions, and eat and play. I think all of those were still. I mean, one of the things that's always interesting when we have somebody new is I think Ben's really kind of energized the team, new faces, getting things and everybody moving. Really through the six months he's here has been really accelerating building that pipeline and positioned us through third and fourth quarter to kind of take advantage of that. Ben, if you want to give a little more color on that. Yeah, no, thank you. It's really right. It's just taking a lot of the momentum, and deals beget deals, right? The team has been very active having conversations. As you saw, in the fourth quarter, we announced an acquisition in the fitness and wellness arena of golf courses. Putting that into the market just really unleashed a lot of inbound inquiries and also provided access to our team to invitation-only events, where the investment professional leading that transaction was able to participate with operators in the sector in a very exclusive invitation-only environment. Those kind of conversations have been happening. As that dovetails with our improving cost of capital is really unlocking incrementally more opportunities, and the pipeline just continues to build both in breadth and depth across the verticals that Greg mentioned and really across the spectrum. Where roughly do you think your weighted average cost of capital is and kind of what's kind of the spread to where you're investing, ballpark? Yeah. Again, I'll let Mark, I think we're somewhere in the neighborhood about 100 basis points on issuing new capital. Mark. Yeah. I mean, high 50s, low 60s. Do the math, 60/40 with the cost of debt probably puts us in the low 7s. If we do, call it 8.25, you add 100 basis points of spread, initial spread, and of course, the IRR would be even higher. We're kind of in the right at the cusp here and in the green light area in terms of cost of capital that works for incremental. You put in an ATM program, right? Correct. I don't think you've used it yet, but how are you thinking or how are you feeling? Again, we couldn't. About that program? W e couldn't tell you if we had. Yeah. What we did say is, here's the thing. We start the year with $90 million of cash, nothing drawn on our line of credit, 4.9 times leverage. We started in a great place. When we look at our plan, as we said on the call, we could do it entirely without raising equity and still be below the midpoint of our debt range, which is 5.0 to 5.6, below 5.3 at the end of the year. In kind of looking at sources and uses, you know, we've got free cash flow of roughly $150 million. We do have one bond deal in our plan to refinance the debt that's due. We have about $630 million of debt due in August and December. Then we have, you know, a modest amount of dispositions that'll help fund that. If you do all the math, we finish the year about $300 million drawn on the line of credit, assuming no equity and at a leverage point that's below the midpoint. That said, opportunistically, we could raise equity. As we just said, the cost of capital works either for de-levering or to support incremental volume. You know, we look at both of those opportunities should they present themselves, and we think with our range of earnings, we think we can handle that, particularly if some of it were on a forward basis. Okay. What was the acquisitions guidance for this year? $400 million to $500 million. In my math I was using $450, just midpoint. Okay. How does first quarter look? Kind of what have you identified so far of that 400-500? What we said in our call was that that number was more front-loaded. Again, yet, you know, to the front half of this, we've announced that we did, roughly $35 million. We also came into the year with roughly $85 million of build to suit, either projects that have started or will start. Again, when you start to think about that, we're probably sitting at $119, $120 million we're I think we're under a good place. Okay. Maybe just talk a little bit more within kind of the fitness and wellness space. It's, you know, with some other companies pursuing similar kinds of assets, I guess. Maybe talk about what does fitness and wellness mean for you guys. What do you look for? 'Cause you're not really doing, like, Life Time, per se. We looked at that deal. I mean, that deal was presented to us. Okay A gain, it's not that. What made you pass on it? I'm sorry? What made you-? because we probably weren't ready to do 10. Okay. They again, there was again, I'll be candid. We bid on a number less than 10, and somebody said, "I'll take them all," and that was, I think, kind of the easiest thing for them to do. I'm probably speaking out of turn, but again, Life Time is a operator that we would be interested in, and Life Time's in the space. It's not what we would think as commodity space, but as a much more community and sense of place. We did announce, as we, as I said, a new Vital acquisition on the Lower East Side. Again, we continue to look in the, what I would say, the wellness space as we think about the two major demographic groups that are driving that, the millennials, which hopefully a lot of people here. I'm in the other one, which are the boomers, which again, wellness means something different in that side of the space. It's a lot more of the, think of, like I said, the hot springs, the spa, the golf, things of that nature, and we're leaning into both sides of those. I think you know, our team has developed kind of the relationships that allow us to access both. We talked about kinda in the golf space, we've been quite successful early on in that, in getting kinda the how we define what we want to do in there. We've also, if you look in that kind of spa fitness area, we've been very good at kind of these kind of concepts, whether it's Vital, Mirbeau. You know, if you think about last year, I wanna speak this, top four hot springs resorts in the country, we had three of the four. Again, I think we've been very good at both identifying and securing those, and we continue to look at developing that. I wanted to circle back just for on the golf for a moment. I think that's something you did in the, in the fourth quarter, s ome Texas courses. You know, golf has had kind of a boom and bust kind of history, big picture. I, you know, I'm sure yours will be great, but just how do you think about valuation of a golf course, like what you're willing to pay? I guess underneath, you know, how do you think about just sort of the real estate? Maybe this is just a broader question because, you know, concepts, themes, brands all, you know, come and go over time. If you're just stuck with the real estate, how do you think about that underlying value? It's interesting. I think the golf space has really changed and really changed over the last probably 10 years. Okay. If you think about on a supply-demand, there's probably 2,000 courses that have been eliminated. The only thing that's really growing in golf right now, I would say, is destination golf. By destination golf, you know, it's the Bandon Dunes, it's the, you know, that kind of. That's not the space that we're in, candidly. That's very expensive. What really happened is you can't build a golf course reasonably priced now. We can't. We can buy golf courses, generally speaking, 50% of original cost. It's about running and operating and partnering with people who can do that. What we're seeing is the idea of changing and getting the operating metrics to a, call it, a 24% to 28% kind of margin business. And getting our rent to kind of a 10 to 4, 12, 14% business. We have that kind of two times cover. That's with an appropriate maintenance CapEx reserve as part of that. That you really are. Like I said, the dynamics have changed, and you're correct, Smedes, that these are $30 million courses that we're buying for $15 million. Now, again, when somebody originally may have done those as part of a home development, they looked at it and said, "I'm willing to spend $30 million to sell homes." Those are not getting built anymore. They. There's not. There's no very rare, very few non-destination courses being built in the U.S. right now, but there is opportunity to recap some of those, purchase them right, and be part of that. If you look at, we'll give you an example of ours, the one before in Georgia that we bought before this group. It's a 2,000 home development. If you're, if you own a home, you have to be a member of the club. Every time you sell the home, a new membership is sold, and if you don't pay your dues, it becomes a lien on your house. Hmm. Okay. You know what? We like that structure. That's a pretty good credit structure. We're happy with that. There are opportunity. It's a beautiful course. He spent a ton of money doing it, but he did it to sell houses, and now he's sold all the houses, and he's willing to sell it at a. We're able to get the right operator in there and make those numbers work. We think there are ways in the space to be smart, to be thoughtful. If you look at demand is very strong right now. And I think it. The supply dynamics are really good. Demand to play golf is strong, or you mean- Well... - demand for the houses- Play golf. -on these golf courses? S tronger than it's been in the last 20 years. Okay. Again, across multiple demographic groups. If you can look at the numbers, if you look at the number of people who are on waiting lists to join private clubs, it's never been higher in the existence of EPR. You mentioned you're sort of underwriting to two times coverage- Minimum -g olf course. That's assuming they can get the margin up to, like, the 28%, or are you going at it 2 times and then hoping that it gets better? No. That's from the go and hoping that things can get- If they can get to 28. -beyond. T hey can get better. Yeah. Okay. What sort of cap rates are you buying these at? Generally what we said is kind of low, low 8%-mid 8%. Low to mid 8s. Is there anyone else, you know, discovering this renaissance of golf? There's probably eight private equity-backed golf owners out there, large out there. You know, they range from Apollo at the biggest end to Arcus to all of these things. I think from a public, the only guy who's really dabbling in golf, I think VICI does it, but with destination golf. They're doing the Cabot and things like that, but I don't think they're just doing normal play golf. Yeah. I mean, they got a few courses kind of as part of their legacy. Yeah, but I... It's been out, but yeah. Yeah, I know they did the Cabot thing. I think it's more destination. That was, that would be in your destination comment, right? Interesting though that you did mention value, which I want to go back to, which was another area of our portfolio, which is our attraction space. Which most people don't realize, or maybe they do, but when you think about amusement parks in this country, most of them are in and around major metropolitan areas, and they're 200 to 300 acre tracts of land, generally located on major thoroughfares, interstates. It represents probably one of the more interesting land bank plays. Now, we can't access it until the lease is done, but from a land bank play, it's incredible relative to you know, what you have in the overall investment. The just kind of on that, some of the major public theme park companies have, you know, been undergoing some challenges. There's been talks about maybe, you know, selling some of their smaller assets. I mean, are you participating in any conversations around that? Could you be a beneficiary there or-? We would always be think we would participate in there in the sense that we're very, we know and deal with those. We're Six Flags' largest landlord. United Parks, which is kind of the, you know, Busch Gardens there. We've known that group. I mean, there's The, the interesting thing, we're Parques Reunidos, which just sold to the Herschend family. Again, we're probably the only REIT that participates in all those conversations, just because we've known those group for years. If you look at you know Richard Zimmerman, who used to run Six Flags, I've known for years. The gentleman who just, John Reilly, who just become the CEO, used to be the CEO of Palace Entertainment, which was owned by Parques Reunidos. Again, if you notice, I mean, we know this is a world t hat's what I talked about on our value proposition. We know and work with everybody in these industries. If Six Flags said, "I want to reposition some of my assets, some of the kind of less than $20 million EBITDA assets," we would probably be a call they would make, and we would probably be the one who would probably help put that deal together. Okay. That's right. You bought an attraction in, I think you said Virginia during the fourth quarter? Yeah. Right? Yes, we did. Okay. Okay. Then you have one in New Jersey, I think that's relatively new well. Are you happy with the way that's performing with the... They're all above 20 covers and exceeding our underwriting. You see what? Exceeding our underwriting. Okay. It sounds like everything's above 2 times, so what's bringing down the- Again- -portfolio to two? -honestly, if you think about, we talked about this, theaters when we last reported- Theaters -they're kind of, probably kind of, 1.7-1.8. That was what they were in 2019, but that's, if you think about 35%-37%, that's. Okay. That's the math. That's where you end up, you know. Okay. All right. You suspect that coverage will get better for theaters as we move through. I think it should. I mean, if you think about The interesting thing about the theater business is, going back to that, is what's kinda changed is the food and beverage spend is like phenomenal relative. If you think in 2019 on average, the per wrap customer per spend was about $4 and a quarter. Cinemark reported last week that it was $8.75. That is 80%. Probably on public, but it's 80% margin business. It has meaningfully changed on an EBITDA contribution relative to the overall box office. Therefore, literally on an EBITDA contribution, the $11 billion box office needs to be low $9s to be the exact same EBITDA. Yeah that we were before. As a New York resident, I can tell you it's astounding what they charge, A. B, we participate. Well, we. Yeah I'm sure they appreciate that. We have a few minutes left, and I did wanna ask you kind of how you're thinking about AI internally, and is it helping you underwrite, find deals? Where's the puck moving in real estate or other efficiencies that you might be finding internally? I think it's operational efficiency. I think we're using it in our asset management and our underwriting. I don't think it's helping us necessarily find deals, but it's helping us. I'll give you an example. We used to have people I like to come into the office and say, "What happened to any of our tenants over the last 24 hours?" That used to be a lot of asset managers looking and check. Now it's one button push, and AI synthesizes all that data and says, "Okay, look, here's any of your named tenants that came out or anything that happened in your industry." We can have that information for you. In our asset management, it's every able. In our underwriting, it's able to support our underwriting both in terms of model building, but also in terms of the research that we look at. Mm-hmm. I don't think we're looking at eliminating anything. I do think operational efficiency is being. It's helped candidly in our legal and how we're looking at things in that nature. Efficiency, and we're deploying it. I think everyone has AI at their desk or AI component at their desk. Mm-hmm. We're trying to be thoughtful about it. Yeah, we've heard a few times that people are kind of reducing their legal bills. We're trying. It seems like it's coming for all of us one way or the other. As you We can kind of close out here unless there's any questions from the audience, but we have two closing questions. One is as you think about the net lease space, just yourselves, but traditional net lease space, what do you think same store NOI can be in 2027? 27, probably 1.5, 2%. 1.5 to 2, so we'll go with 1.75. Yes. Where's the spreadsheet? Thank you. It's AI. Thank you for making the decision. Do you think there'll be more, fewer, or the same number of net lease companies, public net lease companies a year from now? My guess is the same. The same. Okay. Thanks for your time today. We appreciate you being here. I appreciate it. Thanks, guys.