Exhibit 99.2

Supplemental Operating and Financial Data

Second Quarter and Six Months Ended June 30, 2011

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Entertainment Properties Trust

Supplemental Operating and Financial Data

Second Quarter and Six Months Ended June 30, 2011

Table of Contents

 

Section		Page
Company Profile			4
Investor Information			5
Selected Financial Information			6
Selected Balance Sheet Information			7
Selected Operating Data			8
Funds From Operations and Funds From Operations as Adjusted			9
Adjusted Funds From Operations			10
Capital Structure			11
Ratios			16
Capital Spending and Disposition Summaries			19
Financial and Investment Information by Asset Type			20
Lease Expirations Excluding Non-Theatre Retail			26
Top Ten Customers by Revenue from Continuing Operations			27
Summary of Mortgage Notes Receivable			28
Summary of Notes Receivable			29
Summary of Unconsolidated Joint Ventures			30
Definitions			31

 

2

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CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS

With the exception of historical information, certain statements contained or incorporated by reference herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as those pertaining to our acquisition or disposition of properties, our capital resources, future expenditures for development projects, and our results of operations. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward-looking statements will occur. You can identify forward-looking statements by use of words such as “will be,” “intend,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “expects,” “pipeline,” “anticipates,” “estimates,” “offers,” “plans,” “would,” “may” or other similar expressions or other comparable terms or discussions of strategy, plans or intentions contained or incorporated by reference herein. Forward-looking statements necessarily are dependent on assumptions, data or methods that may be incorrect or imprecise. In addition, references to our budgeted amounts and guidance are forward looking statements. These forward-looking statements represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. For further discussion of these factors see “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K and, to the extent applicable, our Quarterly Reports on Form 10-Q.

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

DEFINITIONS

See pages 31 through 33 for definitions of certain non-GAAP financial measures used in this document.

 

3

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Entertainment Properties Trust

Company Profile

The Company

 

Entertainment Properties Trust (“EPR or the Company”) is a self administered and self-managed real estate investment trust. EPR was formed in August 1997 as a Maryland real estate investment trust (“REIT”), and an initial public offering was completed on November 18, 1997.

Since that time, the Company has grown into a leading specialty real estate investment trust with an investment portfolio that includes megaplex theatres and adjacent retail, public charter schools and other destination recreational and specialty investments.

Company Strategy

 

EPR’s primary business objective is to enhance shareholder value by achieving predictable and increasing Funds from Operations (“FFO”) and dividends per share. Our prevailing strategy is to focus on long-term investments in a limited number of categories in which we maintain a depth of knowledge and relationships, and which we believe offer sustained performance throughout all economic cycles. We believe our focused niche approach provides a competitive advantage, and the potential for higher growth and better yields.

We also adhere to rigorous underwriting and investing criteria, centered on key industry and property level cash flow criteria. As part of our growth strategy we will consider acquiring, developing or financing additional properties which are consistent with our overall strategy and meet our underwriting and investing criteria. In executing our growth strategy, we will employ moderate leverage. We have historically paid out approximately 75% of our FFO in the form of quarterly dividends. This allows investors to realize a portion of their returns on a current basis.

Following are the key criteria against which our investments are evaluated:

Inflection Opportunity - Renewal or restructuring in an industry’s properties

Enduring Value - Real estate devoted to and improving long-lived activities

Excellent Execution - Market-dominant performance that creates value beyond tenant credit

Attractive Economics - Accretive initial returns along with growth in yield

Advantageous Position - Sustainable competitive advantages

 

4

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Entertainment Properties Trust

Investor Information

Senior Management

 

 

David Brain		Greg Silvers
President and Chief Executive Officer		Vice President and Chief Operating Officer
Mark Peterson		Jerry Earnest
Vice President and Chief Financial Officer		Vice President and Chief Investment Officer
Mike Hirons
Vice President, Finance

Company Information

 

 

Corporate Headquarters		Trading Symbols
909 Walnut, Suite 200		Common Stock:
Kansas City, MO 64106		EPR
888-EPR-REIT		Preferred Stock:
www.eprkc.com		EPR-PrB
		EPR-PrC
Stock Exchange Listing		EPR-PrD
New York Stock Exchange		EPR-PrE

Equity Research Coverage

 

 

J.P. Morgan		Anthony Palone		212-622-6682
RBC Capital Markets		Richard Moore		440-715-2646
Citi Global Markets		Michael Bilerman/Gregory Schweitzer		212-816-4471
Keybanc Capital Markets		Jordan Sadler		917-368-2280
FBR Capital Markets & Co.		Gabe Poggi		703-469-1141
BMO Capital Markets		Paul Adornato		212-885-4170
Kansas City Capital		Johnathan Braatz		816-932-8019
Janney Montgomery Scott		Andrew DiZio		215-665-6439

Entertainment Properties Trust is followed by the analysts identified above. Please note that any opinions, estimates, forecasts or recommendations regarding Entertainment Properties Trust’s performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or recommendations of Entertainment Properties Trust or its management. Entertainment Properties Trust does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

 

5

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Entertainment Properties Trust

Selected Financial Information

(Unaudited, dollars and shares in thousands)

 

		Three Months Ended June 30,								Six Months Ended June 30,
Operating Information		2011				2010				2011				2010
Revenue (1)		$	74,438			$	70,921			$	148,056			$	141,752
Net income (loss) available to common shareholders of Entertainment Properties Trust			(7,549	)			8,036				26,630				30,560
Earnings before interest, taxes, depreciation and amortization (EBITDA) - continuing operations (2)			27,645				60,164				87,662				118,403
Earnings before interest, taxes, depreciation and amortization (EBITDA) - discontinued operations (2)			1,005				4,547				2,755				(1,681	)
Adjusted EBITDA - continuing operations (2)			61,977				60,237				123,267				119,468
Adjusted EBITDA - discontinued operations (2)			1,005				4,584				4,555				5,589
Interest expense, net (1)			17,287				16,946				36,110				33,839
Recurring principal payments			6,011				7,722				12,273				14,475
Capitalized interest			153				92				250				175
Straight-lined rental revenue			58				469				576				815
Dividends declared on preferred shares			7,552				7,552				15,103				15,103
Dividends declared on common shares			32,660				30,222				65,308				58,097
General and administrative expense			5,105				4,633				10,573				9,722

 

		June 30,
Balance Sheet Information		2011				2010
Total assets			2,729,716				2,910,654
Total assets before depreciation (gross assets)			3,046,615				3,183,940
Unencumbered real estate assets (3)
Number			111				103
Gross book value			1,485,543				1,496,711
Annualized stabilized NOI			140,832				146,329
Total debt			1,048,122				1,208,567
Equity			1,581,345				1,617,917
Common shares outstanding			46,657				46,496
Total market capitalization (using EOP closing price)			3,643,239				3,394,917
Debt/total assets			38	%			42	%
Debt/total market capitalization			29	%			36	%
Debt/gross assets			34	%			38	%
Debt/Adjusted EBITDA - continuing operations (1)(4)			4.23				5.02
Debt/Adjusted EBITDA - continuing and discontinued operations (4)			4.16				4.66

 

(1)	Excludes discontinued operations.

(2)	See pages 31 through 33 for definitions.

(3)	Includes unencumbered rental properties, gross, direct financing lease, net and mortgage notes receivable; excludes property under development and undeveloped land.

(4)	Adjusted EBITDA is for the quarter annualized. See pages 31 and 32 for definitions.

 

6

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Entertainment Properties Trust

Selected Balance Sheet Information

(Unaudited, dollars in thousands)

 

		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				2nd Quarter 2010				1st Quarter 2010
Assets
Rental properties:(2)
Megaplex theatres and other retail		$	1,954,212			$	1,948,256			$	2,101,795			$	2,085,187			$	2,069,652			$	2,087,909
Other			183,318				224,589				221,896				221,629				221,676				229,894
Less: accumulated depreciation			(316,899	)			(305,751	)			(297,068	)			(286,392	)			(273,286	)			(272,993	)
Land held for development			184,457				184,457				184,457				184,457				184,457				4,457
Property under development			19,856				8,638				5,967				7,671				7,779				9,162
Mortgage notes receivable: (1)
Waterpark			175,029				170,517				168,994				168,545				168,545				165,452
Concord			—				—				—				—				—				133,119
Metropolitan ski areas			136,410				136,410				136,410				136,410				136,410				136,409
Investment in a direct financing lease, net			231,099				229,801				226,433				225,187				216,419				215,196
Investment in joint ventures			24,138				23,570				22,010				19,334				19,423				4,356
Cash and cash equivalents			15,740				15,164				11,776				14,860				20,144				21,029
Restricted cash			34,120				31,490				16,279				21,253				16,351				10,770
Accounts receivable, net			34,983				38,204				39,814				36,364				33,483				34,834
Notes receivable (1)			5,079				5,104				5,127				5,152				5,159				7,247
Other assets and intangible assets, net			48,174				47,608				79,530				82,594				84,442				75,664
Total Assets		$	2,729,716			$	2,758,057			$	2,923,420			$	2,922,251			$	2,910,654			$	2,862,505
Liabilities and Equity
Liabilities:
Accounts payable and accrued liabilities		$	49,982			$	41,612			$	56,488			$	44,673			$	37,190			$	48,375
Common dividends payable			32,660				32,648				30,253				30,248				30,222				27,875
Preferred dividends payable			7,552				7,552				7,551				7,552				7,552				7,552
Unearned rents and interest			10,055				5,995				6,691				13,148				9,206				5,087
Line of credit			90,000				87,000				142,000				150,000				153,500				107,000
Long-term debt			958,122				963,621				1,049,179				1,052,180				1,055,067				1,201,623
Total Liabilities			1,148,371				1,138,428				1,292,162				1,297,801				1,292,737				1,397,512
Equity:
Common stock and additional paid in capital			1,792,622				1,790,570				1,785,848				1,783,852				1,781,104				1,637,040
Preferred stock at par value			167				167				167				167				167				167
Treasury stock			(44,834	)			(44,743	)			(39,762	)			(39,069	)			(36,812	)			(36,804	)
Loans to shareholders			—				—				—				(281	)			(281	)			(281	)
Accumulated other comprehensive income			25,904				25,940				38,842				29,988				21,188				24,027
Distributions in excess of net income			(220,535	)			(180,326	)			(181,856	)			(178,255	)			(175,463	)			(153,278	)
Entertainment Properties Trust shareholders’ equity			1,553,324				1,591,608				1,603,239				1,596,402				1,589,903				1,470,871
Noncontrolling interests			28,021				28,021				28,019				28,048				28,014				(5,878	)
Total Equity			1,581,345				1,619,629				1,631,258				1,624,450				1,617,917				1,464,993
Total Liabilities and equity		$	2,729,716			$	2,758,057			$	2,923,420			$	2,922,251			$	2,910,654			$	2,862,505

 

(1)	Includes related accrued interest receivable and is net of loan loss reserves.

(2)	Includes rental properties held for sale.

 

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Entertainment Properties Trust

Selected Operating Data

(Unaudited, dollars in thousands)

 

		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				2nd Quarter 2010				1st Quarter 2010
Rental revenue and tenant reimbursements:
Theatres and adjacent retail		$	58,326			$	57,894			$	57,488			$	57,298			$	53,883			$	53,735
Vineyards and wineries			1,751				1,819				3,465				3,335				3,665				3,985
Metropolitan ski areas			318				318				316				315				315				315
Public charter schools			144				12				—				—				—				—
Mortgage and other financing income:
Public charter schools (1)			7,062				6,951				6,872				6,604				6,567				6,208
Metropolitan ski areas			3,437				3,410				3,410				3,398				3,398				3,358
Waterpark			3,044				2,965				2,940				2,940				2,878				2,825
Other			225				225				136				353				170				201
Other income			131				24				52				235				45				205
Total revenue		$	74,438			$	73,618			$	74,679			$	74,478			$	70,921			$	70,832
Property operating expense			6,656				6,360				6,822				6,674				5,962				6,225
Other expense			700				500				390				339				89				287
General and administrative expense			5,105				5,468				4,430				4,076				4,633				5,089
Costs associated with loan refinancing			—				6,163				—				—				11,383				—
Interest expense, net			17,287				18,823				19,245				19,227				16,946				16,893
Transaction costs			76				1,273				141				11				74				292
Provision for loan losses			—				—				—				—				—				700
Impairment charges			34,256				—				463				—				—				—
Depreciation and amortization			12,123				12,012				12,034				11,717				11,067				11,076
Equity in income from joint ventures			781				774				776				706				423				233
Income (loss) from continuing operations			(984	)			23,793				31,930				33,140				21,190				30,503
Discontinued operations:
Income (loss) from discontinued operations			986				1,447				1,690				1,705				(5,471	)			(2,648	)
Impairment charges			—				(1,800	)			—				—				—				—
Gain on acquisition			—				—				555				—				—				8,468
Transaction costs			—				—				—				—				(37	)			(7,232	)
Gain (loss) on sale of real estate			—				18,293				—				198				(934	)			—
Net income (loss)			2				41,733				34,175				35,043				14,748				29,091
Net loss (income) attributable to noncontrolling interests			—				(2	)			28				(34	)			840				984
Preferred dividend requirements			(7,551	)			(7,552	)			(7,551	)			(7,552	)			(7,552	)			(7,552	)
Net income (loss) available to common shareholders of Entertainment Properties Trust		$	(7,549	)		$	34,179			$	26,652			$	27,457			$	8,036			$	22,523

 

(1)	Represents income from owned assets under a direct financing lease and one note receivable.

 

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Entertainment Propertiest Trust

Funds From Operations and Funds From Operations as adjusted

(Unaudited, dollars in thousands except per share information)

 

		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				2nd Quarter 2010				1st Quarter 2010
Funds From Operations (“FFO”) (1):
Net income available to common shareholders of Entertainment Properties Trust		$	(7,549	)		$	34,179			$	26,652			$	27,457			$	8,036			$	22,523
Loss (gain) on sale of real estate			—				(18,293	)			—				(198	)			934				—
Real estate depreciation and amortization			11,873				13,598				13,694				13,334				13,527				12,273
Allocated share of joint venture depreciation			112				109				90				81				72				65
Noncontrolling interest			—				—				—				—				(872	)			(1,033	)
FFO available to common shareholders of Entertainment Properties Trust		$	4,436			$	29,593			$	40,436			$	40,674			$	21,697			$	33,828
Funds From Operations as adjusted (1):
FFO available to common shareholders of Entertainment Properties Trust		$	4,436			$	29,593			$	40,436			$	40,674			$	21,697			$	33,828
Costs associated with loan refinancing			—				6,388				—				—				15,620				—
Transaction costs			76				1,273				141				11				111				7,524
Provision for loan losses			—				—				—				—				—				700
Impairment charges			34,256				1,800				463				—				—				—
Gain on acquisition			—				—				(555	)			—				—				(8,468	)
FFO as adjusted available to common shareholders of Entertainment Properties Trust		$	38,768			$	39,054			$	40,485			$	40,685			$	37,428			$	33,584
FFO per common share attributable to Entertainment Properties Trust:
Basic		$	0.10			$	0.64			$	0.87			$	0.87			$	0.48			$	0.79
Diluted			0.09				0.63				0.86				0.87				0.48				0.78
FFO as adjusted per common share attributable to Entertainment Properties Trust:
Basic		$	0.83			$	0.84			$	0.87			$	0.87			$	0.83			$	0.78
Diluted			0.83				0.83				0.86				0.87				0.83				0.78
Shares used for computation (in thousands):
Basic			46,648				46,503				46,539				46,511				44,869				42,850
Diluted			46,956				46,805				46,893				46,809				45,214				43,141

 

(1)	See pages 31 through 33 for definitions.

 

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Entertainment Properties Trust

Adjusted Funds From Operations

(Unaudited, dollars in thousands except per share information)

 

		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				2nd Quarter 2010				1st Quarter 2010
Adjusted Funds from Operations (“AFFO”) (1):
FFO available to common shareholders of Entertainment Properties Trust		$	4,436			$	29,593			$	40,436			$	40,674			$	21,697			$	33,828
Adjustments:
Non-cash impairment charges and provision for loan losses			34,256				1,800				463				—				—				700
Transaction costs			76				1,273				141				11				111				7,524
Non-real estate depreciation and amortization			269				270				239				130				97				130
Deferred financing fees amortization			764				1,023				1,061				1,122				1,390				1,236
Costs associated with loan refinancing			—				6,388				—				—				15,620				—
Share-based compensation expense to management and trustees			1,474				1,367				1,188				1,187				1,172				1,163
Maintenance capital expenditures (2)			(600	)			(1,602	)			(2,559	)			(2,872	)			(163	)			(288	)
Straight-lined rental revenue			(58	)			(518	)			(642	)			(426	)			(469	)			(346	)
Non-cash portion of mortgage and other financing income			(1,350	)			(1,258	)			(1,274	)			(1,201	)			(1,257	)			(2,006	)
Amortization of above market leases, net			—				20				66				74				39				21
Gain on acquisition			—				—				(555	)			—				—				(8,468	)
AFFO available to common shareholders of Entertainment Properties Trust		$	39,267			$	38,356			$	38,564			$	38,699			$	38,237			$	33,494
Weighted average shares outstanding-diluted AFFO (in thousands)			46,956				46,805				46,893				46,809				45,214				43,141
AFFO per diluted common share		$	0.84			$	0.82			$	0.82			$	0.83			$	0.85			$	0.78
Dividends declared per common share		$	0.70			$	0.70			$	0.65			$	0.65			$	0.65			$	0.65
AFFO payout ratio (3)			83	%			85	%			79	%			78	%			76	%			83	%

 

(1)	See pages 31 through 33 for definitions.

(2)	Includes maintenance capital expenditures and certain second generation tenant improvements and leasing commissions.

(3)	AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share.

 

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Entertainment Properties Trust

Capital Structure at June 30, 2011

(Unaudited, dollars in thousands)

Consolidated Debt

 

Principal Payments Due on Long-Term Debt:

 

		Mortgages (1)								Term Loans/Bond/Capital Lease
Year		Amortization				Maturities				Amortization				Maturities				Credit Facility (2)				Senior Notes				Total				Weighted Avg Interest Rate
2011		$	12,388			$	—			$	—			$	9,215			$	—			$	—			$	21,603				4.68	%
2012			25,407				65,293				—				—				—				—				90,700				6.52	%
2013			18,198				98,484				—				—				90,000				—				206,682				4.75	%
2014			12,503				144,058				—				—				—				—				156,561				6.34	%
2015			11,118				90,813				—				—				—				—				101,931				5.74	%
2016			7,233				96,144				—				—				—				—				103,377				6.08	%
2017			3,752				85,500				—				—				—				—				89,252				5.89	%
2018			919				12,462				—				—				—				—				13,381				6.34	%
2019			—				—				—				—				—				—				—				—
2020			—				—				—				—				—				250,000				250,000				7.75	%
2021			—				—				—				—				—				—				—				—
Thereafter			—				4,000				—				10,635				—				—				14,635				1.65	%
		$	91,518			$	596,754			$	—			$	19,850			$	90,000			$	250,000			$	1,048,122				6.16	%

 

		Balance				Weighted Avg Interest Rate				Weighted Avg Maturity (yrs)
Fixed Rate Secured Debt		$	697,487				6.06	%			3.7
Fixed Rate Unsecured Debt			250,000				7.75	%			9.0
Variable Rate Secured Debt			10,635				0.21	%			26.3
Variable Rate Unsecured Debt			90,000				3.19	%			2.4
Total		$	1,048,122				6.16	%			5.1

 

(1)	Scheduled amortization and maturities represent only consolidated debt obligations.

(2)	Credit Facility Summary:

 

Commitment		Balance				Maturity				Rate at 6/30/2011
$382,500,000		$	90,000,000				December 1, 2013				3.19	%

Note: The facility includes an accordion feature in which the facility can be increased to up to $420 million subject to certain conditions, including lender consent.

 

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Entertainment Properties Trust

Capital Structure at June 30, 2011 and December 31, 2010

(Unaudited, dollars in thousands)

 

Consolidated Debt (continued)

 

 

Summary of Long-Term Debt:

 

		June 30, 2011				December 31, 2010
Capital lease obligation, due December 31, 2011		$	9,215			$	9,251
Mortgage notes payable, 6.57%-6.73%, due October 1, 2012			43,767				44,473
Mortgage note payable, 6.63%, due November 1, 2012			24,473				24,866
Mortgage notes payable, 4.26%-9.01%, due February 10, 2013			109,652				112,982
Unsecured revolving variable rate credit facility, LIBOR + 3.00%, due December 1, 2013			90,000				142,000
Mortgage note payable, 6.84%, due March 1, 2014			103,816				103,127
Mortgage note payable, 5.58%, due April 1, 2014			58,942				59,537
Mortgage note payable, 5.56%, due June 5, 2015			32,876				33,182
Mortgage notes payable, 5.77%, due November 6, 2015			70,087				71,014
Mortgage notes payable, 5.84%, due March 6, 2016			39,441				39,944
Mortgage notes payable, 6.37%, due June 30, 2016			28,187				28,514
Mortgage notes payable, 6.10%, due October 1, 2016			25,328				25,625
Mortgage notes payable, 6.02%, due October 6, 2016			19,091				19,317
Mortgage note payable, 6.06%, due March 1, 2017			10,641				10,762
Mortgage note payable, 6.07%, due April 6, 2017			10,953				11,076
Mortgage notes payable, 5.73%-5.95%, due May 1, 2017			50,730				51,319
Mortgage note payable, 5.29%, due July 1, 2017			4,068				—
Mortgage notes payable, 5.86%, due August 1, 2017			25,975				26,268
Term loans payable, $82,958 at December 31, 2010 fixed through interest rate swaps at 5.11%-5.76%, $3,314 at December 31, 2010 at variable rates of LIBOR + 1.75%-2.00%, due December 1, 2017-June 5, 2018, paid in full February 7, 2011			—				86,272
Mortgage note payable, 6.19%, due February 1, 2018			15,910				16,171
Mortgage note payable, 7.37%, due July 15, 2018			10,335				10,844
Senior unsecured notes payable, 7.75%, due July 15, 2020			250,000				250,000
Bond payable, variable rate, due October 1, 2037			10,635				10,635
Mortgage note payable, 5.50%			4,000				4,000
Total		$	1,048,122			$	1,191,179

 

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Entertainment Properties Trust

Capital Structure

Senior Notes

Senior Debt Ratings as of June 30, 2011

 

 

Moody’s		Baa3
Fitch		BBB-
Standard and Poor’s		BB+

Summary of Covenants

 

The Company’s outstanding bonds have a fixed interest rate at 7.75%. Interest on the senior notes is paid semiannually. The notes contain various covenants, including: (i) a limitation on incurrence of any debt which would cause the Company’s debt to adjusted total assets ratio to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause the Company’s secured debt to adjusted total assets ratio to exceed 40%; (iii) a limitation on incurrence of any debt which would cause the Company’s debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of the Company’s outstanding unsecured debt.

The following is a summary of the key financial covenants for our $250.0 million senior unsecured notes, as defined and calculated per the terms of our notes. These calculations, which are not based on U.S. generally accepted accounting principles, or GAAP, measurements, are presented to investors to show our ability to incur additional debt under the terms of our notes only and are not measures of our liquidity or performance. The actual amounts as of June 30, 2011 and December 31, 2010 are:

 

Note Covenants		Required		Actual 2nd Quarter 2011 (1)		Actual 1st Quarter 2011
Limitation on incurrence of total debt (Total Debt/Total Assets)		£ 60%		35%		35%
Limitation on incurrence of secured debt (Secured Debt/Total Assets)		£ 40%		23%		23%
Debt service coverage (Consolidated Income Available for Debt Service/Annual Debt Service)		³ 1.5x		3.8x		3.6x
Maintenance of total unencumbered assets (Unencumbered Assets/Unsecured Debt)		³ 150% of unsecured debt		491%		502%

 

(1)	See page 14 for detailed calculations

 

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Entertainment Properties Trust

Capital Structure

Senior Notes

(Unaudited, dollars in thousands)

Covenant Calculations

 

 

 

Consolidated income available for debt service:		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				Trailing  Twelve Months
Adjusted EBITDA		$	61,977			$	61,289			$	63,036			$	63,388			$	249,690
Add (subtract): EBITDA of discontinued operations			1,005				3,552				3,643				3,514			$	11,714
Less: straight-line rental revenue			(58	)			(518	)			(642	)			(426	)			(1,644	)
Consolidated income available for debt service		$	62,924			$	64,323			$	66,037			$	66,476			$	259,760
Annual Debt Service:
Interest expense, gross		$	17,441			$	18,925			$	19,351			$	19,331			$	75,048
Interest expense from discontinued operations			—				22				53				49				124
Less: deferred financing fees amortization			(764	)			(1,023	)			(1,061	)			(1,122	)			(3,970	)
Annual Debt Service		$	16,677			$	17,924			$	18,343			$	18,258			$	71,202
Debt Service Coverage			3.8				3.6				3.6				3.6				3.6

 

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Entertainment Properties Trust

Capital Structure at June 30, 2011

(Unaudited, dollars in thousands except share information)

Equity

 

 

Security		Shares Issued and Outstanding				Price per share  at June 30, 2011				Liquidation Preference				Dividend Rate				Convertible
Common shares			46,656,690			$	46.70				N/A				(1	)		N/A
Series B			3,200,000			$	24.85			$	80,000				7.750	%		N
Series C			5,400,000			$	19.94			$	135,000				5.750	%		Y
Series D			4,600,000			$	24.73			$	115,000				7.375	%		N
Series E			3,450,000			$	29.26			$	86,250				9.000	%		Y

Calculation of Total Market Capitalization:

 

Common shares outstanding at June 30, 2011 multiplied by closing price at June 30, 2011		$	2,178,867
Aggregate liquidation value of Series B preferred shares			80,000
Aggregate liquidation value of Series C preferred shares			135,000
Aggregate liquidation value of Series D preferred shares			115,000
Aggregate liquidation value of Series E preferred shares			86,250
Total long-term debt at June 30, 2011			1,048,122
Total consolidated market capitalization		$	3,643,239

 

(1)	Quarterly dividend declared in the second quarter of 2011 was $0.70 per share.

 

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Entertainment Properties Trust

Summary of Ratios

(Unaudited)

 

		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				2nd Quarter 2010				1st Quarter 2010
Debt to total assets (book value)			38	%			38	%			41	%			41	%			42	%			46	%
Debt to total market capitalization			29	%			29	%			32	%			33	%			36	%			38	%
Debt to gross assets			34	%			34	%			37	%			37	%			38	%			42	%
Debt/Adjusted EBITDA - continuing operations (1)			4.23				4.29				4.72				4.74				5.02				5.52
Debt/Adjusted EBITDA - continuing and discontinued operations (1)			4.16				4.05				4.47				4.49				4.66				5.43
Secured debt to secured assets (2)			59	%			60	%			60	%			61	%			61	%			52	%
Unencumbered real estate assets to total real estate assets (3)			55	%			56	%			54	%			53	%			53	%			17	%
Interest coverage ratio (4)			3.7				3.5				3.5				3.5				3.2				3.2
Fixed charge coverage ratio (4)			2.6				2.5				2.5				2.5				2.4				2.3
Debt service coverage ratio (4)			2.8				2.6				2.6				2.7				2.4				2.4
FFO payout ratio (5)			741	%			111	%			76	%			75	%			135	%			83	%
FFO as adjusted payout ratio (6)			84	%			84	%			75	%			75	%			79	%			83	%
AFFO payout ratio (7)			83	%			85	%			79	%			78	%			76	%			83	%

 

(1)	Adjusted EBITDA is for the quarter annualized. See pages 31 through 33 for definitions.

(2)	Prior to June 30, 2010, includes previous secured revolving line of credit borrowing base assets.

(3)	Total real estate assets includes rental properties, gross, direct financing lease, net and mortgage notes receivable; excludes property under development and land held for development.

(4)	See page 17 for detailed calculation.

(5)	FFO payout ratio is calculated by dividing dividends declared per common share by FFO per diluted common share.

(6)	FFO as adjusted payout ratio is calculated by dividing dividends declared per common share by FFO as adjusted per diluted common share.

(7)	AFFO payout ratio is calculated by dividing dividends declared per common share by AFFO per diluted common share.

 

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Entertainment Properties Trust

Calculation of Interest, Fixed Charge and Debt Service Coverage Ratios

(Unaudited, dollars in thousands)

 

		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				2nd Quarter 2010				1st Quarter 2010
Interest Coverage Ratio (1):
Net income		$	2			$	41,733			$	34,175			$	35,043			$	14,748			$	29,091
Impairment charges			34,256				1,800				463				—				—				—
Provision for loan losses			—				—				—				—				—				700
Transaction costs			76				1,273				141				11				111				7,524
Interest expense, gross			17,441				18,947				19,404				19,380				20,308				19,327
Depreciation and amortization			12,142				13,869				13,933				13,458				13,632				12,403
Share-based compensation expense to management and trustees			1,474				1,367				1,188				1,187				1,172				1,163
Costs associated with loan refinancing			—				6,388				—				—				15,620				—
Interest cost capitalized			(153	)			(97	)			(105	)			(103	)			(92	)			(83	)
Straight-line rental revenue			(58	)			(518	)			(642	)			(426	)			(469	)			(346	)
Loss (gain) on sale of real estate from discontinued operations			—				(18,293	)			—				(198	)			934				—
Gain on acquisition			—				—				(555	)			—				—				(8,468	)
Interest coverage amount		$	65,180			$	66,469			$	68,002			$	68,352			$	65,964			$	61,311
Interest expense, net		$	17,287			$	18,845			$	19,298			$	19,276			$	20,207			$	19,219
Interest income			1				5				1				1				9				25
Interest cost capitalized			153				97				105				103				92				83
Interest expense, gross		$	17,441			$	18,947			$	19,404			$	19,380			$	20,308			$	19,327
Interest coverage ratio			3.7				3.5				3.5				3.5				3.2				3.2
Fixed Charge Coverage Ratio (1):
Interest coverage amount		$	65,180			$	66,469			$	68,002			$	68,352			$	65,964			$	61,311
Interest expense, gross		$	17,441			$	18,947			$	19,404			$	19,380			$	20,308			$	19,327
Preferred share dividends			7,551				7,552				7,551				7,552				7,552				7,552
Fixed charges		$	24,992			$	26,499			$	26,955			$	26,932			$	27,860			$	26,879
Fixed charge coverage ratio			2.6				2.5				2.5				2.5				2.4				2.3
Debt Service Coverage Ratio (1):
Interest coverage amount		$	65,180			$	66,469			$	68,002			$	68,352			$	65,964			$	61,311
Interest expense, gross		$	17,441			$	18,947			$	19,404			$	19,380			$	20,308			$	19,327
Recurring principal payments			6,011				6,262				6,501				6,286				7,722				6,753
Debt service		$	23,452			$	25,209			$	25,905			$	25,666			$	28,030			$	26,080
Debt service coverage ratio			2.8				2.6				2.6				2.7				2.4				2.4

 

(1)	See pages 31 through 33 for definitions. Amounts above include the impact of discontinued operations, which is separately classified in the income statement.

 

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Entertainment Properties Trust

Reconciliation of Interest Coverage Amount to Net Cash Provided by Operating Activities

(Unaudited, dollars in thousands)

The interest coverage amount per the table on the previous page is a non-GAAP financial measure and should not be considered an alternative to any GAAP liquidity measures. It is most directly comparable to the GAAP liquidity measure, “Net cash provided by operating activities,” and is not directly comparable to the GAAP liquidity measures, “Net cash used in investing activities” and “Net cash provided by financing activities.” The interest coverage amount can be reconciled to “Net cash provided by operating activities” per the consolidated statements of cash flows as follows:

 

		2nd Quarter 2011				1st Quarter 2011				4th Quarter 2010				3rd Quarter 2010				2nd Quarter 2010				1st Quarter 2010
Net cash provided by operating activities			57,326				35,004				53,251			$	52,497			$	41,151			$	33,492
Equity in income from joint ventures			781				774				776				706				423				233
Distributions from joint ventures			(652	)			(652	)			(831	)			(796	)			(586	)			(269	)
Amortization of deferred financing costs			(764	)			(1,023	)			(1,061	)			(1,122	)			(1,390	)			(1,236	)
Amortization of above market leases, net			—				(20	)			(66	)			(74	)			(39	)			(21	)
Increase (decrease) in mortgage notes accrued interest receivable			—				—				—				—				(2,154	)			2,982
Increase (decrease) in restricted cash			(909	)			(740	)			1,467				675				(2,789	)			(304	)
Increase (decrease) in accounts receivable, net			(3,302	)			(1,353	)			2,916				1,592				1,143				2,246
Increase (decrease) in notes and accrued interest receivable			(25	)			(23	)			(25	)			(8	)			(69	)			49
Increase in direct financing lease receivable			1,298				1,255				1,246				1,167				1,223				1,114
Increase (decrease) in other assets			1,041				1,416				(732	)			1,094				(516	)			3,536
Decrease (increase) in accounts payable and accrued liabilities			(7,046	)			7,572				(7,556	)			(6,386	)			(1,576	)			(6,660	)
Decrease (increase) in unearned rents			126				25				(181	)			145				1,623				(273	)
Straight-line rental revenue			(58	)			(518	)			(642	)			(426	)			(469	)			(346	)
Interest expense, gross			17,441				18,947				19,404				19,380				20,308				19,327
Interest cost capitalized			(153	)			(97	)			(105	)			(103	)			(92	)			(83	)
Costs associated with loan refinancing (cash portion)			—				4,629				—				—				9,662				—
Transaction costs			76				1,273				141				11				111				7,524
Interest coverage amount (1)		$	65,180			$	66,469			$	68,002			$	68,352			$	65,964			$	61,311

 

(1)	See pages 31 through 33 for definitions. Amounts above include the impact of discontinued operations, which is separately classified in the income statement.

 

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Entertainment Properties Trust

Capital Spending and Disposition Summaries

(Unaudited, dollars in thousands)

2011 Capital Spending:

 

Description		Location		Capital Spending Three  Months Ended June 30, 2011				Capital Spending Six  Months Ended June 30, 2011
Acquisition of four theatre portfolio		various			—				37,761
Investment in a direct financing lease with Imagine Schools, Inc. related to public charter schools		various			—				2,113
Development of public charter school properties		various			10,250				14,529
Additions to mortgage note receivable for development of Schlitterbahn waterparks		Kansas City, KS			4,511				6,035
Development of entertainment retail center		Suffolk, VA			609				1,567
Investment in unconsolidated joint ventures		various			37				2,783
Investment in theatre and retail development projects		various			4,615				5,596
Capitalized building improvements and tenant improvements					116				133
Total investment spending				$	20,138			$	70,517
Other capital acquisitions, net		various			477				1,944
Total capital spending				$	20,615			$	72,461
2011 Dispositions:
Description		Location		Date of Disposition				Net Sales Proceeds
Toronto Dundas Square		Toronto, Ontario			March 2011			$	222,701
Gary Farrell Winery		Healdsburg, CA			April 2011			$	6,460

 

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Entertainment Properties Trust

Financial Information by Asset Type

For the Three Months Ended June 30, 2011

(Unaudited, dollars in thousands)

 

		Theatres  and Adjacent Retail*				Public Charter Schools				Metropolitan Ski Areas				Vineyards  and Wineries				Waterpark/ Concord Development				Subtotal				Unallocated				Consolidated
Rental revenue		$	53,811				144			$	318			$	1,751			$	—			$	56,024			$	—			$	56,024
Tenant reimbursements			4,515				—				—				—				—				4,515				—				4,515
Other income			44				—				—				12				75				131				—				131
Mortgage and other financing income			81				7,062				3,437				94				3,044				13,718				50				13,768
Total revenue			58,451				7,206				3,755				1,857				3,119				74,388				50				74,438
Property operating expense			6,277				—				—				271				108				6,656				—				6,656
Other expense			—				—				—				156				206				362				338				700
Total investment expenses			6,277				—				—				427				314				7,018				338				7,356
General and administrative expense			—				—				—				—				—				—				5,105				5,105
Transaction costs			—				—				—				—				—				—				76				76
Impairment charges			—				—				—				—				—				—				34,256				34,256
EBITDA - continuing operations		$	52,174			$	7,206			$	3,755			$	1,430			$	2,805			$	67,370			$	(5,469	)		$	27,645
			77	%			11	%			6	%			2	%			4	%			100	%
Add: transaction costs																											76				76
Add: impairment charges																											34,256				34,256
Adjusted EBITDA - continuing operations																														$	61,977
Reconciliation to Consolidated Statements of Income:
Interest expense, net																											(17,287	)			(17,287	)
Transaction costs																											(76	)			(76	)
Impairment charges																											(34,256	)			(34,256	)
Depreciation and amortization																											(12,123	)			(12,123	)
Equity in income from joint ventures																											781				781
Discontinued operations:
Income from discontinued operations																											986				986
Net loss																															2
Noncontrolling interests																											—				—
Preferred dividend requirements																											(7,551	)			(7,551	)
Net loss available to common shareholders																														$	(7,549	)

 

*	Includes 8.9 million square feet of megaplex theatres and 1.5 million square feet of retail at June 30, 2011

 

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Entertainment Properties Trust

Financial Information by Asset Type

For the Six Months Ended June 30, 2011

(Unaudited, dollars in thousands)

 

		Theatres  and Adjacent Retail*				Public Charter Schools				Metropolitan Ski  Areas				Vineyards  and Wineries				Waterpark/ Concord Development				Subtotal				Unallocated				Consolidated
Rental revenue		$	107,043				156			$	636			$	3,571			$	—			$	111,406			$	—			$	111,406
Tenant reimbursements			9,176				—				—				—				—				9,176				—				9,176
Other income			66				—				—				12				77				155				—				155
Mortgage and other financing income			162				14,013				6,847				237				6,010				27,269				50				27,319
Total revenue			116,447				14,169				7,483				3,820				6,087				148,006				50				148,056
Property operating expense			12,290				—				—				485				241				13,016				—				13,016
Other expense			—				—				—				320				308				628				572				1,200
Total investment expenses			12,290				—				—				805				549				13,644				572				14,216
General and administrative expense			—				—				—				—				—				—				10,573				10,573
Transaction costs			—				—				—				—				—				—				1,349				1,349
Impairment charges			—				—				—				—				—				—				34,256				34,256
EBITDA - continuing operations		$	104,157			$	14,169			$	7,483			$	3,015			$	5,538			$	134,362			$	(12,444	)		$	87,662
			78	%			10	%			6	%			2	%			4	%			100	%
Add: transaction costs																											1,349				1,349
Add: impairment charges																											34,256				34,256
Adjusted EBITDA - continuing operations																														$	123,267
Reconciliation to Consolidated Statements of Income:
Costs associated with loan refinancing																											(6,163	)			(6,163	)
Interest expense, net																											(36,110	)			(36,110	)
Transaction costs																											(1,349	)			(1,349	)
Impairment charges																											(34,256	)			(34,256	)
Depreciation and amortization																											(24,135	)			(24,135	)
Equity in income from joint ventures																											1,555				1,555
Discontinued operations:
Income from discontinued operations																											2,433				2,433
Impairment charges																											(1,800	)			(1,800	)
Gain on sale of real estate																											18,293				18,293
Net income																															41,735
Noncontrolling interests																											(2	)			(2	)
Preferred dividend requirements																											(15,103	)			(15,103	)
Net income available to common shareholders																														$	26,630

 

*	Includes 8.9 million square feet of megaplex theatres and 1.5 million square feet of retail at June 30, 2011

 

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Entertainment Properties Trust

Financial Information by Asset Type

For the Three Months Ended June 30, 2010

(Unaudited, dollars in thousands)

 

		Theatres  and Adjacent Retail*				Public Charter Schools				Metropolitan Ski  Areas				Vineyards  and Wineries				Waterpark/ Concord Development				Subtotal				Unallocated				Consolidated
Rental revenue		$	49,870			$	—			$	315			$	3,665			$	—			$	53,850			$	—			$	53,850
Tenant reimbursements			4,013				—				—				—				—				4,013				—				4,013
Other income			41				—				—				4				—				45				—				45
Mortgage and other financing income			96				6,567				3,398				42				2,878				12,981				32				13,013
Total revenue			54,020				6,567				3,713				3,711				2,878				70,889				32				70,921
Property operating expense			5,094				—				—				868				—				5,962				—				5,962
Other expense			—				—				—				68				—				68				21				89
Total investment expenses			5,094				—				—				936				—				6,030				21				6,051
General and administrative expense			—				—				—				—				—				—				4,633				4,633
Transaction costs			—				—				—				—				—				—				73				73
EBITDA - continuing operations		$	48,926			$	6,567			$	3,713			$	2,775			$	2,878			$	64,859			$	(4,695	)		$	60,164
			75	%			10	%			6	%			4	%			5	%			100	%
Add: transaction costs																											73				73
Adjusted EBITDA - continuing operations																														$	60,237
Reconciliation to Consolidated Statements of Income:
Costs associated with loan refinancing																											(11,383	)			(11,383	)
Interest expense, net																											(16,946	)			(16,946	)
Transaction costs																											(73	)			(73	)
Depreciation and amortization																											(11,068	)			(11,068	)
Equity in income from joint ventures																											423				423
Discontinued operations:
Loss from discontinued operations																											(5,471	)			(5,471	)
Transaction costs																											(37	)			(37	)
Loss on sale of real estate																											(934	)			(934	)
Net income																															14,748
Noncontrolling interests																											840				840
Preferred dividend requirements																											(7,552	)			(7,552	)
Net income available to common shareholders																														$	8,036

 

*	Includes 8.7 million square feet of megaplex theatres and 1.7 million square feet of retail at June 30, 2010

 

22

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Entertainment Properties Trust

Financial Information by Asset Type

For the Six Months Ended June 30, 2010

(Unaudited, dollars in thousands)

 

		Theatres  and Adjacent Retail*				Public Charter Schools				Metropolitan Ski  Areas				Vineyards  and Wineries				Waterpark/ Concord Development				Subtotal				Unallocated				Consolidated
Rental revenue		$	99,327			$	—			$	630			$	7,650			$	—			$	107,607			$	—			$	107,607
Tenant reimbursements			8,291				—				—				—				—				8,291				—				8,291
Other income			245				—				—				4				—				249				—				249
Mortgage and other financing income			235				12,775				6,756				42				5,703				25,511				94				25,605
Total revenue			108,098				12,775				7,386				7,696				5,703				141,658				94				141,752
Property operating expense			10,631				—				—				1,555				—				12,186				—				12,186
Other expense			216				—				—				132				—				348				28				376
Total investment expenses			10,847				—				—				1,687				—				12,534				28				12,562
General and administrative expense			—				—				—				—				—				—				9,722				9,722
Transaction costs			—				—				—				—				—				—				365				365
Provision for loan losses			—				—				—				—				—				—				700				700
EBITDA - continuing operations		$	97,251			$	12,775			$	7,386			$	6,009			$	5,703			$	129,124			$	(10,721	)		$	118,403
			75	%			10	%			6	%			5	%			4	%			100	%
Add: transaction costs																											365				365
Add: provision for loan losses																											700				700
Adjusted EBITDA - continuing operations																														$	119,468
Reconciliation to Consolidated Statements of Income:
Costs associated with loan refinancing																											(11,383	)			(11,383	)
Interest expense, net																											(33,839	)			(33,839	)
Transaction costs																											(365	)			(365	)
Provision for loan losses																											(700	)			(700	)
Depreciation and amortization																											(22,144	)			(22,144	)
Equity in income from joint ventures																											656				656
Discontinued operations:
Loss from discontinued operations																											(8,119	)			(8,119	)
Gain on acquisition																											8,468				8,468
Transaction costs																											(7,270	)			(7,270	)
Loss on sale of real estate																											(934	)			(934	)
Net income																															43,838
Noncontrolling interests																											1,825				1,825
Preferred dividend requirements																											(15,103	)			(15,103	)
Net income available to common shareholders																														$	30,560

 

*	Includes 8.7 million square feet of megaplex theatres and 1.7 million square feet of retail at June 30, 2010

 

23

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Entertainment Properties Trust

Financial Information by Asset Type - Discontinued Operations

(Unaudited, dollars in thousands)

 

		For the Three Months Ended June 30, 2011																For the Six Months Ended June 30, 2011
		Theatres  and Adjacent Retail				Vineyards and Wineries				Unallocated				Consolidated				Theatres  and Adjacent Retail				Vineyards and Wineries				Unallocated				Consolidated
Rental revenue		$	34			$	1,016			$	—			$	1,050			$	4,037			$	1,016			$	—			$	5,053
Tenant reimbursements			62				—				—				62				2,408				—				—				2,408
Mortgage and other financing income			—				—				—				—				—				4				—				4
Total revenue			96				1,016				—				1,112				6,445				1,020				—				7,465
Property operating expense			66				—				—				66				2,824				(3	)			—				2,821
Other expense			—				41				—				41				—				89				—				89
Total investment expenses			66				41				—				107				2,824				86				—				2,910
Transaction costs			—				—				—				—				—				—				—				—
Impairment charge			—				—				—				—				—				1,800				—				1,800
EBITDA - discontinued operations		$	30			$	975			$	—			$	1,005			$	3,621			$	(866	)		$	—			$	2,755
Add: transaction costs															—																—
Add: impairment charge															—																1,800
Adjusted EBITDA - discontinued operations														$	1,005															$	4,555
Reconciliation to Consolidated Statements of Income:
Costs associated with loan refinancing															—																(225	)
Interest expense, net															—																(21	)
Impairment charge															—																(1,800	)
Depreciation and amortization															(19	)															(1,876	)
Gain (loss) on sale of real estate															—																18,293
Income from discontinued operations														$	986															$	18,926
		For the Three Months Ended June 30, 2010																For the Six Months Ended June 30, 2010
		Theatres  and Adjacent Retail				Vineyards and Wineries				Unallocated				Consolidated				Theatres  and Adjacent Retail				Vineyards and Wineries				Unallocated				Consolidated
Rental revenue		$	5,754			$	153			$	—			$	5,907			$	8,816			$	306			$	—			$	9,122
Tenant reimbursements			3,021				—				—				3,021				4,403				—				—				4,403
Other income			—				—				—				—				—				31				—				31
Total revenue			8,775				153				—				8,928				13,219				337				—				13,556
Property operating expense			4,236				—				—				4,236				7,745				1				—				7,746
Other expense			—				108				—				108				—				221				—				221
Total investment expenses			4,236				108				—				4,344				7,745				222				—				7,967
Transaction costs							—				37				37				7,270				—				—				7,270
EBITDA - discontinued operations		$	4,539			$	45			$	—			$	4,547			$	(1,796	)		$	115			$	—			$	(1,681	)
Add: transaction costs															37																7,270
Adjusted EBITDA - discontinued operations														$	4,584															$	5,589
Reconciliation to Consolidated Statements of Income:
Transaction costs															(37	)															(7,270	)
Interest expense, net															(3,262	)															(5,588	)
Costs associated with loan refinancing															(4,236	)															(4,236	)
Depreciation and amortization															(2,557	)															(3,884	)
Gain on acquisition															—																8,468
Gain (loss) on sale of real estate															(934	)															(934	)
Loss from discontinued operations														$	(6,442	)														$	(7,855	)

 

24

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Entertainment Properties Trust

Investment Information by Asset Type

As of June 30, 2011 and December 31, 2010

(Unaudited, dollars in thousands)

 

		As of June 30, 2011
		Retail/ Theatres				Public  Charter Schools				Vineyards  and Wineries				Metropolitan Ski  Areas				Waterpark/ Concord Development				Consolidated
Rental properties, net of accumulated depreciation		$	1,658,221			$	4,256			$	142,100			$	11,358			$	—			$	1,815,935
Rental properties held for sale, net of accumulated depreciation			—				—				4,696				—				—				4,696
Add back accumulated depreciation on rental properties			295,991				23				18,917				1,649				—				316,580
Add back accumulated depreciation on rental properties held for sale			—				—				319				—				—				319
Land held for development			4,457				—				—				—				180,000				184,457
Property under development			9,607				10,249				—				—				—				19,856
Mortgage notes and related accrued interest receivable, net			—				—				—				136,410				175,029				311,439
Investment in a direct financing lease, net			—				231,099				—				—				—				231,099
Investment in joint ventures			24,138				—				—				—				—				24,138
Intangible assets, net of accumulated amortization			5,330				—				—				—				—				5,330
Add back accumulated amortization on intangible assets			9,417				—				—				—				—				9,417
Notes receivable and related accrued interest receivable, net			171				3,751				1,157				—				—				5,079
Total investments (1)		$	2,007,332			$	249,378			$	167,189			$	149,417			$	355,029			$	2,928,345
% of total investments			69	%			8	%			6	%			5	%			12	%			100	%
		As of December 31, 2010
		Retail/ Theatres				Public  Charter Schools				Vineyards  and Wineries				Metropolitan Ski  Areas				Waterpark/ Concord Development				Consolidated
Rental properties, net of accumulated depreciation		$	1,822,689			$	—			$	185,990			$	11,512			$	—			$	2,020,191
Rental properties held for sale, net of accumulated depreciation			—				—				6,432				—				—				6,432
Add back accumulated depreciation on rental properties			279,106				—				16,183				1,495				—				296,784
Add back accumulated depreciation on rental properties held for sale			—				—				284				—				—				284
Land held for development			4,457				—				—				—				180,000				184,457
Property under development			5,967				—				—				—				—				5,967
Mortgage notes and related accrued interest receivable, net			—				—				—				136,410				168,994				305,404
Investment in a direct financing lease, net			—				226,433				—				—				—				226,433
Investment in joint ventures			22,010				—				—				—				—				22,010
Intangible assets, net of accumulated amortization			35,644				—				—				—				—				35,644
Add back accumulated amortization on intangible assets			11,479				—				—				—				—				11,479
Notes receivable and related accrued interest receivable, net			166				3,751				1,210				—				—				5,127
Total investments (1)		$	2,181,518			$	230,184			$	210,099			$	149,417			$	348,994			$	3,120,212
% of total investments			70	%			7	%			7	%			5	%			11	%			100	%

 

(1)	See pages 31 through 33 for definitions.

 

25

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Entertainment Properties Trust

Lease Expirations Excluding Non-Theatre Retail

As of June 30, 2011

(Unaudited, dollars in thousands)

 

		Megaplex Theatres										Public Charter Schools												Vineyards and Wineries
Year		Total Number of Leases Expiring		Rental Revenue for the  Trailing Twelve Months Ended June 30, 2011 (1)				% of  Total Revenue				Total Number of Leases Expiring				Financing  Income/Rental Revenue for the Trailing Twelve Months Ended June 30, 2011				% of  Total Revenue				Total Number of Leases Expiring				Rental Revenue for the  Trailing Twelve Months Ended June 30, 2011				% of  Total Revenue
2011		2			3,920				1	%			—				—				—				—				—				—
2012		3			7,358				2	%			—				—				—				—				—				—
2013		4			14,505				5	%			—				—				—				—				—				—
2014		—			—				—				—				—				—				—				—				—
2015		3			9,221				3	%			—				—				—				—				—				—
2016		4			9,885				3	%			—				—				—				—				—				—
2017		3			4,693				2	%			—				—				—				1				1,869				1	%
2018		17			26,978				9	%			—				—				—				4				7,142				2	%
2019		7			22,409				8	%			—				—				—				1				1,360				0	%
2020		7			8,923				3	%			—				—				—				—				—				—
2021		4			7,346				2	%			—				—				—				—				—				—
2022		9			15,952				5	%			—				—				—				—				—				—
2023		2			2,294				1	%			—				—				—				—				—				—
2024		8			14,325				5	%			—				—				—				—				—				—
2025		7			14,260				5	%			—				—				—				—				—				—
2026		5			7,123				2	%			—				—				—				—				—				—
2027		3			3,939				1	%			—				—				—				—				—				—
2028		1			1,060				1	%			—				—				—				—				—				—
2029		15			14,125				5	%			—				—				—				—				—				—
2030		—			—				—				—				—				—				—				—				—
Thereafter		6			1,258				1	%			33				27,299				9	%			—				—				—
		110		$	189,574				64	%			33			$	27,299				9	%			6			$	10,371				3	%

Note: This schedule relates to consolidated assets only and excludes non-theatre retail. One owned ski property is excluded from this schedule and the remaining ski property investments are held in mortgage notes receivable which are included on page 28.

 

(1)	Consists of rental revenue and tenant reimbursements.

 

26

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Entertainment Properties Trust

Top Ten Customers by Revenue from Continuing Operations

(Unaudited, dollars in thousands)

 

Customers		Asset Type		Total Revenue For  The Three Months Ended June 30, 2011				Percentage of Total  Revenue				Total Revenue For  The Six Months Ended June 30, 2011				Percentage of Total  Revenue
1. American Multi-Cinema, Inc.		Retail/Theatres		$	26,464				36	%		$	52,804				36	%
2. Rave Cinemas/Rave Review Cinemas		Retail/Theatres			7,199				10	%			14,386				10	%
3. Imagine Schools, Inc.		Public Charter Schools			6,925				9	%			13,791				9	%
4. Regal Cinemas, Inc.		Retail/Theatres			4,953				7	%			9,906				7	%
5. Cinemark USA, Inc.		Retail/Theatres			4,022				5	%			8,175				6	%
6. Peak Resorts, Inc.		Metropolitan Ski Areas			3,755				5	%			7,483				5	%
7. SVVI, LLC		Waterparks			3,044				4	%			6,010				4	%
8. Southern Theatres, LLC		Retail/Theatres			2,804				4	%			5,617				4	%
9. Ascentia Wine Estates, LLC		Vineyards and Wineries			1,012				1	%			2,073				1	%
10. Muvico Entertainment, LLC		Retail/Theatres			943				1	%			1,929				1	%
Total				$	61,121				82	%		$	122,174				83	%

 

27

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Entertainment Properties Trust

Mortgage Notes Receivable

(Unaudited, dollars in thousands)

Summary of Mortgage Notes Receivable

 

 

		June 30, 2011				December 31, 2010
Mortgage note and related accrued interest receivable, 10.00%, due April 1, 2012		$	33,677			$	33,677
Mortgage notes and related accrued interest receivable, 7.00% and 10.00%, due May 1, 2019			175,029				168,994
Mortgage note, 9.82%, due March 10, 2027			8,000				8,000
Mortgage notes, 10.46%, due April 3, 2027			62,500				62,500
Mortgage note, 9.54%, due October 30, 2027			32,233				32,233
Total mortgage notes and related accrued interest receivable		$	311,439			$	305,404

Payments Due on Mortgage Notes Receivable

 

 

		As of June 30, 2011
Year:
2011		$	—
2012			33,677
2013			—
2014			—
2015			—
Thereafter			277,762
Total		$	311,439

 

28

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Entertainment Properties Trust

Notes Receivable

(Unaudited, dollars in thousands)

Summary of Notes Receivable

 

 

		June 30, 2011				December 31, 2010
Note and related accrued interest receivable, 9.23%, due August 31, 2012		$	3,751			$	3,751
Note and related accrued interest receivable, 6.00%, due December 31, 2017			1,279				1,332
Notes and related accrued interest receivable, 12.00% to 15.00%, past due (1)			8,074				8,074
Other			171				166
Total notes and related accrued interest receivable		$	13,275			$	13,323
Less: Loan loss reserves			(8,196	)			(8,196	)
Total notes and related accrued interest receivable, net		$	5,079			$	5,127

 

(1)	Note receivable is impaired as of June 30, 2011 and is shown below as past due. In accordance with the Company’s accounting policy, interest income is being recognized on a cash basis.

Payments Due on Notes Receivable

 

 

		As of June 30, 2011
Year:
Past due (100% reserved)		$	8,074
2011			68
2012			3,862
2013			118
2014			126
2015			133
Thereafter			894
Total		$	13,275

 

29

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Entertainment Properties Trust

Summary of Unconsolidated Joint Ventures

As of and for the Six Months Ended June 30, 2011

(Unaudited, dollars in thousands)

Atlantic EPR-I

 

EPR investment interest: 32.8%

EPR preferred interest: 15% priority return on $14.9 million

Income recognized for the six months ended June 30, 2011: $1,362

Distributions received for the six months ended June 30, 2011: $1,105

Unaudited condensed financial information for Atlantic-EPR I is as follows as of and for the six months ended June 30, 2011 and 2010:

 

		2011				2010
Rental properties, net		$	26,346			$	26,990
Cash			1,178				—
Partners’ equity			27,634				27,141
Rental revenue			2,283				2,238
Net income			816				1,088

Atlantic EPR-II

 

EPR investment interest: 25.7%

Income recognized for the six months ended June 30, 2011: $182

Distributions received for the six months ended June 30, 2011: $199

Unaudited condensed financial information for Atlantic-EPR II is as follows as of and for the six months ended June 30, 2011 and 2010:

 

		2011				2010
Rental properties, net		$	20,807			$	21,267
Cash			231				144
Long-term debt (due September 2013)			12,413				12,776
Note payable to Entertainment Properties Trust			117				117
Partners’ equity			8,140				8,260
Rental revenue			1,444				1,444
Net income			679				700

Ningbo PIC, Nanqiao PIC, Shanghai Himalaya PIC and Shanghai SFG-EPR Cinema

 

EPR investment interest: 30.0%, 49.0%, 49.0% and 49.0%, respectively

EPR investment: $4,202

Income recognized for the six months ended June 30, 2011: $11

Distributions received for the six months ended June 30, 2011: $0

Loss recognized for the six months ended June 30, 2010: $148

Distributions received for the six months ended June 30, 2010: $0

 

30

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Entertainment Properties Trust

Definitions-Non-GAAP Financial Measures

EBITDA AND ADJUSTED EBITDA

EBITDA is a widely used financial measure in many industries, including the REIT industry, and is presented to assist investors and analysts in analyzing the performance of the Company. Management utilizes EBITDA in its analysis of the business and operations of the Company and believes it is useful to investors because it excludes various items included in net income that are not indicative of operating performance, such as gains (or losses) from sales of property and depreciation and amortization and is used in computing various financial ratios as a measure of operational performance. The Company computes EBITDA - continuing operations as the sum of net income plus costs associated with loan refinancing, interest expense (net), depreciation and amortization, gain on acquisition of real estate, noncontrolling interests, equity in income from joint ventures and discontinued operations. EBITDA - discontinued operations is computed in the same manner but only as it relates to discontinued operations. Adjusted EBITDA - continuing operations is presented to also add back the effect of non-cash impairment charges, the provision for loan losses and transaction costs. Adjusted EBITDA - discontinued operations is computed in the same manner but only as it relates to discontinued operations.

The Company’s method of calculating EBITDA and Adjusted EBITDA may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDA and Adjusted EBITDA do not represent cash generated from operations as defined by U.S. generally accepted accounting principles (“GAAP”) and are not indicative of cash available to fund all cash needs, including distributions. These measures should not be considered as an alternative to net income for the purpose of evaluating the Company’s performance or to cash flows as a measure of liquidity.

FUNDS FROM OPERATIONS (“FFO”) AND FFO AS ADJUSTED

The National Association of Real Estate Investment Trusts (“NAREIT”) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP and management provides FFO herein because it believes this information is useful to investors in this regard. FFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share. FFO, as defined under the NAREIT definition and presented by us, is net income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from sales of depreciable operating properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. In addition, we present FFO as adjusted by adding to FFO costs associated with loan refinancing, transaction costs, provision for loan losses and impairment charges, and subtracting gain on acquisition. FFO and FFO as adjusted are a non-GAAP financial measures. FFO and FFO as adjusted do not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to fund all cash needs and are not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO and FFO as adjusted the same way so comparisons with other REITs may not be meaningful.

 

31

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Entertainment Properties Trust

Definitions-Non-GAAP Financial Measures

ADJUSTED FUNDS FROM OPERATIONS (“AFFO”)

In addition to FFO, we present AFFO by adding to FFO non-cash impairment charges, provision for loan losses, transaction costs, non-real estate depreciation and amortization, deferred financing fees amortization, costs associated with loan refinancing, share-based compensation expense to management and trustees and amortization of above market leases, net; and subtracting maintenance capital expenditures (including second generation tenant improvements and leasing commissions), straight-lined rental revenue, the non-cash portion of mortgage and other financing income and gain on acquisition. AFFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share and management provides AFFO herein because it believes this information is useful to investors in this regard. AFFO is a non-GAAP financial measure. AFFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate AFFO the same way so comparisons with other REITs may not be meaningful.

INTEREST COVERAGE RATIO

The interest coverage ratio is calculated as the interest coverage amount divided by interest expense, gross. We calculate the interest coverage amount by adding to net income impairment charges, provision for loan losses, transaction costs, interest expense, gross (including interest expense in discontinued operations), depreciation and amortization, share-based compensation expense to management and trustee and costs associated with loan refinancing; subtracting interest cost capitalized, straight-line revenue, gain or loss on sale of real estate from discontinued operations and gain on acquisition. We calculated interest expense, gross, by adding to interest expense, net, interest income and interest cost capitalized. We consider the interest coverage ratio to be an appropriate supplemental measure of a company’s ability to meet its interest expense obligations and management believes it is useful to investors in this regard. Our calculation of the interest coverage ratio may be different from the calculation used by other companies, and therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.

FIXED CHARGE COVERAGE RATIO

The fixed charge coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that preferred share dividends are also added to the denominator. We consider the fixed charge coverage ratio to be an appropriate supplemental measure of a company’s ability to make its interest and preferred share dividend payments and management believes it is useful to investors in this regard. Our calculation of the fixed charge coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.

 

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Entertainment Properties Trust

Definitions-Non-GAAP Financial Measures

DEBT SERVICE COVERAGE RATIO

The debt service coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that recurring principal payments are also added to the denominator. We consider the debt service coverage ratio to be an appropriate supplemental measure of a company’s ability to make its debt service payments and management believes it is useful to investors in this regard. Our calculation of the debt service coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures.

TOTAL INVESTMENTS

Total investments is a non-GAAP financial measure defined as the sum of the carrying values of rental properties (before accumulated depreciation), rental properties held for sale (before accumulated depreciation), land held for development, property under development, mortgage notes receivable (including related accrued interest receivable), investment in a direct financing lease, net, investment in joint ventures, intangible assets (before accumulated amortization) and notes receivable and related accrued interest receivable, net. Total investments is a useful measure for management and investors as it illustrates across which asset categories the Company’s funds have been invested.

 

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