Good day, ladies and gentlemen and welcome to your EPR Properties Q1 2015 earnings conference call. At this time, all participants via the phone lines have been placed on mute. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I’d like to now introduce your host for today’s call Mr. Brian Moriarty, Vice President of Corporate Communications. Sir, please begin.

Great. Thank you for joining us today. I’ll start the call today by informing you that this conference call may include forward-looking statements as defined in the Private Securities Litigation Act of 1995, identified by such words as will be, intend, continue, believe, may, expect, hope, anticipate, or other comparable terms. The company’s actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of these factors that could cause the results to differ materially from those forward-looking statements are contained in the company’s SEC filings, including the company’s reports on Form 10-K and 10-Q. With that, now, I’ll turn the call over to Company President and CEO, Greg Silvers.

Thank you, Brian and good afternoon to everyone. I’d like to remind everyone that slides are available to follow along via our website at www.eprkc.com. I’ll start with our quarterly headlines and then discuss the business in greater detail before turning the call over to our CFO, Mark Peterson for a discussion of our financial results and capital market activity. The first headline is strong quarterly performance, as illustrated by double-digit growth in both revenue and FFO as adjusted versus same quarter previous year. Second, primary investment segments remain healthy. Box office receipts remain on track to deliver a record year, our recreation assets continue to exhibit strong rent coverages and demand for quality educational facilities continue to outstrip supply. Third, investment spending on track with guidance. Our current pace allows us to remain confident in our initial investment spending guidance. Fourth, balance sheet strengthened and cost of capital reduced. Our successful bond issuance and amended credit facility reinforced our balance sheet, further reduced our cost of capital and positions us well to fund our investment pipeline. Mark will give you further details on this important progress. Our final headline is earning guidance increased. We are adjusting guidance upward to a range of $4.34 to $4.44 from a range of $4.32 to $4.42, reflecting the early momentum we’ve established. These headlines speak to the strength of our industries, the strength of our portfolio and the strength of our balance sheet. Our investment strategy reflects our commitment to knowledge-based investing in assets that are supported by long-lived activities are durable and produce a consistent and reliable income stream With that, I'll now move on to discuss the business in further detail. The first quarter of 2015 continued to demonstrate our ability to access quality investment opportunities across each of our asset…

Thank you, Greg. I like to remind everyone on the call that our quarterly investor supplemental can be downloaded from our website. Now, turning to the first slide. FFO for the first quarter decreased to $32.1 million or $0.56 per share from $52.7 million or $1 per share in the prior year. FFO as adjusted per share was $1.03 versus $0.94 in the prior year, an increase of approximately 10%. Before I walk through the key variances, I want to discuss three items that are excluded from net income to come to FFO as adjusted for the quarter. Each of these items were anticipated and discussed on our last earnings call. First, as Greg mentioned, we completed the sale of a theatre in LA for net proceeds of $42.7 million and recognized a gain of $23.7 million. Second, in connection with the retirement from the Company of our former President and CEO, we recognized $18.6 million in retirement severance expense. Third, in connection with the audit of our Canadian trust by the Canadian Revenue Agency, we recognized an additional $6.5 million in deferred tax expense, which is excluded from FFO as adjusted. We also recognized an additional $1.4 million in current tax expense due to this audit, which has been included in FFO as adjusted. Now, let me walk through the key line item variances for the quarter versus the prior year. Our total revenue increased 11% compared to the prior year to $99.4 million. Within the revenue category, rental revenue increased by $10.3 million versus the prior year to $76.7 million, resulted primarily from new investments. This increase was partially offset by the impact of the weaker Canadian dollar exchange rate versus the prior year of over 12%. [indiscernible] rental revenue as well as tenant reimbursements at our Canadian…

Thank you, Mark. I’ve had the opportunity to speak to many of our investors over the past several weeks and discuss our differentiated approach and exciting opportunities that lie in front of us. We are continuing to execute on established strategies in order to grow EPR's leadership position in our key non-commodity investment segments. We have an outstanding team of highly skilled professionals who possess deep industry knowledge within our core asset segments. This knowledge and a disciplined underwriting approach when combined with our industry relationships will allow us to continue to grow and expand these segments, while delivering consistent and reliable results. As you’ve heard today, our performance is strong, our opportunities are robust and we are committed to being a results driven organization anchored to an underwriting discipline founded on knowledge based investing. With that, I’ll open it up for questions.

[Operator Instructions] Our first question comes from the line of Nick Joseph with Citigroup. Your line is now open. Your question please.

Thanks. I was wondering if you can touch on guidance, you increased guidance $0.02 at the midpoint, but the first quarter actually came in $0.03 ahead of where you thought you would be, so you mentioned the lower G&A going forward and the increase in interest expense. Can you put numbers around both of those and give us a walk-through from previous guidance to update it?

Yes, sure. Actually, I think we were $0.02 higher than the midpoint of our guidance for the first quarter and if you look over the balance of the nine months, you’ll find that G&A, we expect G&A to be lower, but that's offset by interest expense being higher and the interest expense being higher is primarily a result of the extra 50 million we decided to take down in the last public debt deal that we did. That's partially offset by the savings we are going to enjoy on the refinancings that we did, but it’s still a net negative if you compare it to what otherwise would have been the line of credit. So the $0.02 really is from the first quarter and G&A savings over the balance of the nine months are really offset by additional interest expense beyond what was originally planned.

Okay, thanks. And then what was the cap rate on the ski resort acquisition as well as the megaplex theatre?

The cap rate on the ski was approximately a 9% return on that and the theatre was right in the, around 8% or a little above 8% [ph].

Thanks. And then finally, can you talk about the acquisition pipeline today?

Sure. I think what we've said, it's reflective of kind of our first quarter performance, if you look at compared to even last year, at $137 million, I think that's nearly twice what we came out of the first quarter last year. So again, we’re seeing really good opportunities both in – in all of our primary segments, I think as we talked about, the opportunity for high amenity remodelling is very strong at this point. We are seeing a lot of interest in that from our operators. Likewise, we've got good things going on in our recreation portfolio with our Topgolf construction and we have several of those under construction. We closed an acquisition as we reported with the Wintergreen ski facility and our schools continue to present a very, very strong pipeline of opportunity and we continue to get a lot of inbound opportunities as we grow that opportunity pipeline.

Thanks.

Thank you.

Thank you. Our next question comes from the line of Dan Altscher with FBR. Your line is now open. Your question please.

Thanks and good afternoon, everyone. Following up on Nick’s question around the acquisition pipeline, specifically as it relates to skis, is that a very lumpy kind of deal flow right now or you’re kind of seeing a little bit of a consistent base, as this relates to pick and choose?

I think for us it groups into kind of two different areas. I mean the ski aspect of that has always been kind of lumpy, meaning that it's opportunistic as the opportunities. Our Topgolf is much more of a build-to-suit, so it is very – not lumpy in the sense that we are able to forecast that out. So it truly is kind of depending on the product, Dan, dependent on I think – like I said, I think we're seeing more opportunities in that area, but it will be a little more lumpy on the non-Topgolf build-to-suit.

Right, okay, got it. And then just sticking with the ski aspects, just from a market standpoint, are you seeing any maybe, I guess you call maybe non-traditional players starting to get in the market, maybe a little more on the private equity side or alternative guys, maybe some newer entrants in the space or is it still fairly, fairly concentrated?

It's actually, we've seen a couple of players that have come in, both a fund and another publicly traded triple-net REIT who closed on ski transactions in the last quarter. So as within all of the segments that we're in, the competition continues to be strong as more and more people are trying to find product to fulfill their investment spending guidance, but we're seeing all of those players come into play.

And then just a follow-up for Mark. Based upon the comments, I think you quoted 95% fixed rate debt. I assume that means you are also swapping the amended term loans. Can you guys just give us a sense of what, I guess, the swap cost is or the all-in kind fixed financing rate on that borrowing?

Yeah. We've actually -- so that new $350 million loan is not funded yet, so we still have the $285 million outstanding. $240 million of that is swapped, so of that $70 million that's not fixed, a chunk of that is part of the term loan that's not swapped. That rate is, there is two different swaps, but I think it's something like 2.17% or 2.2% on the term loan as far as the swap. And then as we take down the additional $65 million, taking it from $285 million to $350 million, we will likely swap out a part of that as well to provide a little more fixed term to that.

Okay. And then I apologize, I didn't read the document carefully enough, but there is no sort of amortization or principal repayment around that, right?

No, it's freely pre-payable and there is no amortization, just a five year [indiscernible]

Okay, perfect. Thanks so much.

Thanks, Dan.

Thank you. Our next question comes from the line of Craig Mailman with KeyBanc. Your line is now open. Your question please.

Just to clarify back on guidance, so the G&A and the interest expense offset each other, so it's really just you guys are seeing a higher volume of investment activity earlier in the year relative to what you guys had previously budgeted, is that fair?

No, I think the investment spending was on track with what we were thinking. The interest expense is just a taking down more of the tenured debt as opposed to funding on our line of credit. It really was unrelated to the timing. It was more of a financing activity.

Craig, I think from our standpoint this is consistent with our plan. I think what Mark mentioned is, we have some G&A savings as he gave you the run rate, but some of that savings is, we don't get the full benefit of that savings, because we are losing some to taking down this additional debt. But as far as tracking with our plan of investment spending, I think what we’ve delivered this quarter is consistent with our internal plan.

Okay. Apologies, that's off the whole G&A savings that is getting offset by interests, so you actually are getting a net benefit from G&A?

Well, for the last -- we got a benefit in the first quarter from G&A, so that was the $0.02 effectively. There was couple of other things, but G&A was the primary. Going forward, the G&A benefit is offset by the interest savings, the interest cost, I should say. But that interest cost isn't due to volume, unexpected volume, it's due financing more long term debt versus line of credit.

Right. No, I got that. I was a little bit confused there, so apologies on that. Then just on the spending you guys did in the quarter, how much of that was the stuff you had in the bag and kind of holdover from last year versus newly identified projects?

Last quarter, if you look at page 20, we showed $260 million of cost that we expected for projects that are already started by the end of the year. So that $260 million was roughly half of our -- half of the midpoint of our guidance of $525 million. Now, if we look at page 20, obviously as the year goes on, that number is going to creep up. About 70% of our guidance roughly is projects that have already started as of March 31st, either happened in the first quarter or in process as of March 31st. So, we feel good about hitting the guidance and I think we’re right on track with what we’re expecting.

I’ll echo Mark’s comments there that it clearly -- that page 21 does give a real good -- 20, sorry, does give a real good snapshot of kind of projects. You can see the account of projects that we’ve added and so, as you said, we probably come up overall 20% from where we were before. So, again, strengthening our belief that we have great confidence in hitting that number.

Okay. Then, how do you guys kind of look at bigger portfolio deals these days versus kind of one-off investments and kind of what -- is there a pricing premium at all for bigger portfolios in the market?

I think that’s a fair point that I think A, for aggregation, there is sort of a pricing premium, I mean, is that 50 basis points or so, but I think it would be fair to say that there generally be aggregation of assets and the immediate deployment of that would have some degree of premium, but it’s still as we’ve talked about would need to meet our criteria and would need to take our discipline and apply that to it and make sure that it qualified under our asset qualification, but if did that, definitely we would look at some level of premium for the aggregation.

Okay. And then, just lastly from Mark, debt to EBITDA crept up a bit here, but clearly you guys did more on the bond deal and you have good amount of cash, but just thinking from a leverage perspective to keep the investment grade rating here, how high do you want to let that flow before you guys think about introducing a little bit of equity and maybe how much of a benefit is developments coming online to kind of offset that increase its debt balance?

I think you can think of debt to EBITDA, we like to operate in the low 5s. It was a little bit lower the previous quarter as we had done the equity offering. So, I think low 5s is where we operate and you will see a nice balance of new projects being started and you pay a little bit of a price for that while we’re building them with the debt being there and not the EBITDA, but you’ll have projects coming in that will offset that. So, I think low 5s is sort of where we live and I think that’s consistent with the investment grade rating.

Great, thank you guys.

Thanks, Craig.

Thank you. Our next question comes from the line of Rich Moore with RBC Capital Markets. Your line is now open. Your question please?

Hi, good afternoon guys. You had talked a bit in the past, Greg, about the possibility of doing some dispositions, maybe having a more defined disposition program on certain assets that may not go as fast as other assets, certain assets are not strategic. Where are you lift the emotion of a disposition program?

Sure and thank you, Rich. We’re constantly looking and we’re trying probably doing a more deep dive. What we’ve said is that we would like to probably prune our Imagine exposure and so, we have nothing to announce but it’s something that we would look at. Likewise, as our assets -- if we have assets that are not performing or we think are getting a valuation that are greatly in excess of our cost to capital that it’s an area that we should look at. Right now, we don’t have anything really as far as forward guidance on that, but we are considering it and as we get more detail on that, we’ll share that with you guys.

Okay, good, thank you. And then, you had also -- I think you have theatre conversion that is sort of a value-add play and I’m curious where you see that going? I mean, you see more of these kind of cropping up there for CinemaCon or maybe --?

Sure. Yeah, you saw our announcement of that. What we’re really seeing is an opportunity to buy existing inventory and convert that to a high-amenity theatre and that’s what you saw at the beginning of that one of the deals that we announced as part of the first quarter and we’re seeing more opportunity in that where it’s actually buying an older theatre and then kind of partnering with our operator where they’re going to bring capital and we’re going to bring capital and we’re going to triple net lease that as a high amenity theatre and we think over the next 12 to 18 months, that can be a nice complement to our traditional ground up construction.

Okay good, got you. And then, last thing on the Topgolfs, I think you guys have 11, and you have 11 more in progress, is that right?

Yes.

Okay, so how big does that get for you guys before you reach that sort of [indiscernible] maximum that you have with Topgolf?

Right, we think that's probably around 500 million total, which we think equals about 30 units.

About 30 units, so you can build another eight more?

Yeah, about another eight more, that's correct.

Great, terrific. Thank you guys.

Thank you.

Thank you. And I'm showing no further questions in the queue at this time, I'd like to hand the call over to Mr. Greg Silvers for any final remarks.

Well, thank you everybody for attending today and we will talk to you at the end of next quarter. Have a good day.

Thank you.