EPR PROPERTIES
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
Three Months Ended March 31,
2019 2018
Operating activities:
Net income $ 65,349
$ 29,538
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of real estate (6,328 ) —
Deferred income tax (benefit) expense (609 ) 428
Costs associated with loan refinancing or payoff —
31,943
Equity in income from joint ventures (489 ) (51 )
Distributions from joint ventures 112
116
Depreciation and amortization 39,743
37,684
Amortization of deferred financing costs 1,502
1,398
Amortization of above/below market leases and tenant allowances, net (59 ) (417 )
Share-based compensation expense to management and Trustees 3,280
3,791
Decrease in operating lease assets and liabilities 445
—
(Increase) decrease in mortgage notes accrued interest receivable (135 ) 845
Decrease in accounts receivable 14,669
3,597
Increase in direct financing leases receivable (58 ) (198 )
Increase in other assets (5,673 ) (3,826 )
Increase (decrease) in accounts payable and accrued liabilities 4,684
(9,118 )
Increase in unearned rents and interest 5,951
13,234
Net cash provided by operating activities 122,384
108,964
Investing activities:
Acquisition of and investments in rental properties and other assets (93,322 ) (38,869 )
Proceeds from sale of real estate 37,810
—
Investment in unconsolidated joint ventures (325 ) —
Investment in mortgage notes receivable (10,998 ) (16,223 )
Proceeds from mortgage notes receivable paydowns 973
11,555
Investment in promissory notes receivable (61 ) (7,677 )
Additions to properties under development (61,910 ) (55,702 )
Net cash used by investing activities (127,833 ) (106,916 )
Financing activities:
Proceeds from debt facilities and senior unsecured notes 100,000
380,000
Principal payments on debt (66,150 ) (281,684 )
Deferred financing fees paid (40 ) (38 )
Costs associated with loan refinancing or payoff (cash portion) —
(28,650 )
Net proceeds from issuance of common shares 74,323
303
Impact of stock option exercises, net (732 ) —
Purchase of common shares for treasury for vesting (9,499 ) (7,116 )
Dividends paid to shareholders (88,748 ) (83,613 )
Net cash provided (used) by financing activities 9,154
(20,798 )
Effect of exchange rate changes on cash 70
(82 )
Net increase (decrease) in cash and cash equivalents and restricted cash 3,775
(18,832 )
Cash and cash equivalents and restricted cash at beginning of the period 18,507
58,986
Cash and cash equivalents and restricted cash at end of the period $ 22,282
$ 40,154
Supplemental information continued on next page.

EPR PROPERTIES
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
Continued from previous page.
Three Months Ended March 31,
2019 2018
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents at beginning of the period $ 5,872
$ 41,917
Restricted cash at beginning of the period 12,635
17,069
Cash and cash equivalents and restricted cash at beginning of the period $ 18,507
$ 58,986

Cash and cash equivalents at end of the period $ 11,116
$ 24,514
Restricted cash at end of the period 11,166
15,640
Cash and cash equivalents and restricted cash at end of the period $ 22,282
$ 40,154

Supplemental schedule of non-cash activity:
Transfer of property under development to rental properties $ 7,330
$ 55,377
Issuance of nonvested shares and restricted share units at fair value, including nonvested shares issued for payment of bonuses $ 14,682
$ 16,809
Conversion or reclassification of mortgage notes receivable to rental properties $ —
$ 155,185
Operating lease right-of-use assets $ 214,576
$ —
Operating lease liabilities $ 238,614
$ —
Sub-lessor straight-line rent receivable $ 24,454
$ —
Acquisition of real estate in exchange for assumption of debt at fair value $ 14,000
$ —
Assumption of debt $ 18,585
$ —
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 28,676
$ 41,948
Cash paid during the period for income taxes $ 695
$ 290
Interest cost capitalized $ 3,137
$ 2,244
Decrease in accrued capital expenditures $ (6,406 ) $ (4,278 )

~~See accompanying notes to consolidated financial statements.~~

EPR PROPERTIES

Notes to Consolidated Financial Statements (Unaudited)

1. Organization

Description of Business

EPR Properties (the Company) iswas formed on August 22, 1997 as a ~~specialty~~Maryland real estate investment trust (REIT) ~~organized~~, and an initial public offering of the Company's common shares of beneficial interest (“common shares”) was completed on ~~August 29, 1997 in Maryland. The~~November 18, 1997. Since that time, the Company ~~develops, owns, leases and finances properties~~has been a leading Experiential net lease REIT specializing in select ~~market segments primarily related to Entertainment, Recreation~~enduring experiential properties. The Company's underwriting is centered on key industry and ~~Education.~~property cash flow criteria, as well as the credit metrics of the Company's tenants and customers. The Company’s properties are located in the United States and Canada.

2. Summary of Significant Accounting Policies and Recently Issued Accounting Standards

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. In addition, operating results for the three month period ended March 31, ~~2019~~2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019.~~2020. Amounts as of December 31, 2019 have been derived from the audited consolidated financial statements as of that date and should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (SEC) on February 25, 2020.

The Company consolidates certain entities when it is deemed to be the primary beneficiary in a variable interest entity (VIE) in which it has a controlling financial interest in accordance with the consolidation guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The equity method of accounting is applied to entities in which the Company is not the primary beneficiary as defined in the FASB ASC Topic on Consolidation (Topic 810)~~, or does not have effective control,~~ but can exercise influence over the entity with respect to its operations and major decisions.

The ~~consolidated balance sheet~~Company’s variable interest in VIEs currently are in the form of equity ownership and loans provided by the Company to a VIE or other partner. The Company examines specific criteria and uses its judgment when determining if the Company is the primary beneficiary of a VIE. The primary beneficiary generally is defined as the party with the controlling financial interest. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. As of March 31, 2020 and December 31, ~~2018~~2019, the Company does not have any investments in consolidated VIEs.

Risks and Uncertainties

On March 11, 2020, the World Health Organization declared a novel strain of coronavirus (COVID-19) a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of COVID-19 on the Company’s business is highly uncertain and difficult to predict, as the response to the pandemic is in its incipient stages and information is rapidly evolving. The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the outbreak has been ~~derived from~~rapidly evolving and many countries, including the ~~audited consolidated balance sheet at~~United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly and is severely impacting experiential real estate properties given that ~~date~~such properties rely on social interaction and discretionary consumer spending. Substantially all the Company's tenants have announced temporary closures of their operations during this pandemic. The severity of the impact of COVID-19 on the Company’s

business will depend on a number of factors, including, but ~~does~~ not ~~include~~limited to, the duration and severity of the pandemic and the extent and severity of the impact on consumers, all of which are uncertain and cannot be predicted. Many experts predict that the ~~information~~outbreak will trigger a period of global economic slowdown or a global recession. COVID-19 has negatively affected, and ~~footnotes required~~COVID-19 (or a future pandemic) could have material and adverse effects on, the Company's ability to successfully operate and on its financial condition, results of operations and cash flows.

The Company’s consolidated financial statements reflect estimates and assumptions made by ~~U.S. GAAP for complete financial statements. For further information, refer to~~management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and ~~footnotes thereto included~~reported amounts of revenue and expenses during the reporting periods presented. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s financial condition and results of operations for the three month period ended March 31, 2020, other than the following:

The Company recognized straight-line write-offs totaling $12.5 million, which were comprised of $4.5 million of straight-line accounts receivable and $8.0 million of sub-lessor ground lease straight-line accounts receivable. Straight-line rental revenue, net of write-offs, was a reduction to total rental revenue of $9.7 million for the three months ended March 31, 2020.

The Company increased its expected credit losses by $1.2 million (an increase of approximately 50%) from its implementation estimate. This increase was primarily the result of the economic uncertainty and the rapidly changing environment surrounding the COVID-19 pandemic.

The Company reduced rental revenue by $1.5 million in rent abatements for certain of its tenants due to COVID-19.

Beginning with the quarter ended March 31, 2020, the Company will recognize revenue from American-Multi Cinema, Inc. (AMC) on a cash basis.

In reliance upon a FASB Staff Q&A (discussed below), the Company intends to not treat deferrals or rent concessions during the period effected by the COVID-19 pandemic as lease modifications. The Company will continue to evaluate the impacts of COVID-19 and its impact on the Company's ~~Annual Report~~lease receivables and related accounting processes.

In addition, the Company expects that it will not be in technical compliance (non-payment related) with certain earnings and other financial covenants under its bank credit facilities and private placement notes at the end of the second quarter of 2020 because such covenants are calculated based on ~~Form 10-K for~~ the ~~year ended December 31, 2018 filed~~most recent quarterly net operating income. Accordingly, the Company is in discussions with its lenders and private placement note holders to obtain a temporary suspension or modification of these covenants, with some suspended financial covenants expected to extend through the ~~Securities~~first quarter of 2021. The Company has received approval from the requisite lenders under its bank credit facilities that the bank lenders will temporarily suspend or modify these financial covenants, subject to the Company's and ~~Exchange Commission (SEC) on February 28, 2019.~~

such lenders' subsequent execution and delivery of a definitive agreement. The Company expects to execute these covenant modification agreements with its bank lenders and the holders of its private placement notes within the next 30 days. The Company has determined it is probable that the definitive agreement with its bank lenders will be completed and executed. While not anticipated, events and conditions could influence the timing and completion of this agreement. As a part of this process, the Company has also determined that it will temporarily suspend its monthly cash dividend to common shareholders after the common share dividend payable May 15, 2020 (except as may be necessary to maintain REIT status and to not owe income tax) and will suspend its share repurchase plan upon the effective date of the covenant modification agreements.

Recently Adopted Accounting Pronouncements

On January 1, ~~2019,~~2020, Accounting Standards Update (ASU) No. ~~2016-02~~ ~~Leases~~ ~~(Topic 842)~~2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) became effective for the Company. The Company adopted the standard on the effective date and used the effective date as the date of initial application. Accordingly, comparative periods have not been recast, and disclosures required under the new standard will not be provided for dates and periods before January 1, ~~2019.~~2020. On the effective date, the Company recognized credit loss expense through retained earnings and the corresponding allowance for credit losses of approximately $2.2 million, which was comprised of $2.1 million related to mortgage notes receivable and $0.1 million related to notes receivable (which are presented within other assets in the accompanying

The standard offered several practical expedients for transition and certain expedients specific to lessees or lessors. Both lessees and lessors are permitted to make an election to apply a package of practical expedients available for implementation under the standard. The Company elected to apply the package of practical expedients, which permitted the Company to not reassess its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company elected the expedient to not evaluate existing or expired land easements and elected the practical expedient to not separate lease and non-lease components for all its leases where it is the lessor. In addition, the Company elected the short-term lease exception, which allows the Company to account for leases with a lease term of 12 months or less similar to existing operating leases. The Company did not elect the use-of-hindsight expedient.consolidated balance sheet). See Note 165 for information related to the Company's ~~leases.~~measurement of credit losses on its mortgage notes and notes receivable.

~~Operating~~On April 10, 2020, the FASB issued a Staff Q&A on Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic. The purpose of this Staff Q&A was to respond to frequently asked questions about accounting for lease concessions related to the effects of the COVID-19 pandemic. In response to the Staff Q&A, the Company intends to not treat deferrals or rent concessions during the period effected by the COVID-19 pandemic as lease modifications. The Company will continue to evaluate the impacts of COVID-19 and its impact on the Company's lease accounting and related processes.

Reportable Segments

The Company has ~~four~~2 reportable operating segments: ~~Entertainment, Recreation,~~Experiential and Education. The Experiential segment includes the following property types: theatres, eat & play (including seven theatres located in entertainment districts), attractions, ski, experiential lodging, gaming, cultural and fitness & wellness. The Education segment includes the following property types: early childhood education centers and ~~Other.~~private schools. See Note 15 for financial information related to these ~~operating~~reportable segments.

~~Rental Properties~~Real Estate Investments

~~Rental properties~~Real estate investments are carried at ~~cost~~initial recorded value less accumulated depreciation. Costs incurred for the acquisition and development of the properties are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which generally are estimated to be 30 years to 40 years for buildings, ~~and~~ three years to 25 years for furniture, fixtures and equipment and 10 years to 20 years for site improvements. Tenant improvements, including allowances, are depreciated over the shorter of the ~~base~~lease term ~~of the lease~~ or the estimated useful life and leasehold interests are depreciated over the useful life of the underlying ground lease. Expenditures for ordinary maintenance and repairs are charged to operations in the period incurred. Significant renovations and improvements that improve or extend the useful life of the asset are capitalized and depreciated over their estimated useful life.

Management reviews a property for impairment whenever events or changes in circumstances indicate that the carrying value of a property may not be ~~recoverable. The review of recoverability~~recoverable, which is based on an estimate of undiscounted future cash flows expected to result from its use and eventual disposition. If impairment exists due to the inability to recover the carrying value of the property, an impairment loss is recorded to the extent that the carrying value of the property exceeds its estimated fair value.

The Company evaluates the held-for-sale classification of its real estate as of the end of each quarter. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value less costs to ~~sell. Assets~~sell and are generally classified as held for sale once management has initiated an active program to market them for sale and it is probable the assets will be sold within one year. On occasion, the Company will receive unsolicited offers from third parties to buy individual Company properties. Under these circumstances, the Company will classify the properties as held for sale when a sales contract is executed with no contingencies and the prospective buyer has funds at risk to ensure performance.

Real Estate Acquisitions

Upon acquisition of real estate properties, the Company evaluates the acquisition to determine if it is a business combination or an asset acquisition.

If the acquisition is determined to be an asset acquisition, the Company records the purchase price and other related costs incurred to the acquired tangible assets ~~(consisting of land, building, site improvements, tenant improvements, leasehold interests and furniture, fixtures and equipment)~~ and identified intangible assets and liabilities ~~(consisting of in-place leases, above and below-market leases, tradenames, contract value and assumed financing that is determined to be above or below-market terms)~~ on a relative fair value basis. In addition, costs incurred for asset acquisitions including transaction costs, are capitalized.

If the acquisition is determined to be a business combination, the Company records the fair value of acquired tangible assets ~~(consisting of land, building, site improvements, tenant improvements, leasehold interests and furniture, fixtures and equipment)~~ and identified intangible assets and liabilities ~~(consisting of in-place leases, above and below-market leases, tradenames, contract value and assumed financing that is determined to be above or below-market terms)~~ as well as any noncontrolling interest. ~~In addition, acquisition-related~~Acquisition-related costs in connection with business combinations are expensed as ~~incurred. Costs related to such transactions, as well as~~incurred and included in transaction costs ~~associated with terminated transactions and pre-opening costs, are included~~ in the accompanying consolidated statements of income ~~as transaction costs.~~and comprehensive income.

For real estate acquisitions (asset acquisitions or business combinations), the fair value (or relative fair value in an asset acquisition) of the tangible assets is determined by valuing the property using recent independent appraisals or methods

similar to those used by independent appraisers. Land is valued using the sales comparison approach which uses available market data from recent comparable land sales as an input to estimate the fair value. Site improvements and tenant improvements are valued using the cost approach which uses replacement cost data obtained from industry recognized guides less depreciation as an input to estimate the fair value. The building is valued either using the cost approach described above or a combination of the cost and the income approach. The income approach uses market leasing assumptions to estimate the fair value of the property as if vacant. The cost and income approaches are reconciled to arrive at an estimated building fair value.

Deferred Financing Costs

Deferred financing costs are amortized over the terms of the related debt obligations or mortgage note receivable as applicable. Deferred financing costs of ~~$32.8~~$35.9 million and $~~33.9~~37.2 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, are shown as a reduction of debt. The deferred financing costs of ~~$4.7~~$3.1 million and ~~$5.0~~$3.5 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, related to the unsecured revolving credit facility are included in other assets.

Rental Revenue

The Company leases real estate to its tenants primarily under leases that are predominately classified as operating leases. The Company's leases generally provide for rent escalations throughout the lease terms. Rents that are fixed

~~and determinable~~ are recognized on a straight-line basis over the lease term. Base rent escalations that include a variable component are recognized upon the occurrence of the specified event as defined in the Company's lease agreements. Many of the Company's leasing arrangements include options to extend the lease, which are not included in the minimum lease terms unless it is reasonably certain to be exercised. Straight-line rental revenue is subject to an evaluation for collectibility, and the Company records a direct write-off against rental ~~revenues~~revenue if collectibility of these future rents is not probable. For the three months ended March 31, ~~2019 and 2018,~~2020, the Company recognized ~~$2.4~~straight-line write-offs totaling $12.5 million, ~~and $1.9~~which were comprised of $4.5 million ~~respectively,~~ of straight-line accounts receivable and $8.0 million of sub-lessor ground lease straight-line accounts receivable. Straight-line rental revenue, net of write-offs, was a reduction to total rental revenue of ~~$0.9~~$9.7 million for the three months ended March 31, ~~2019. There were no straight-line write-offs recognized during~~2020. For the three months ended March 31, ~~2018. Base rent escalations that include a variable component are~~2019, the Company recognized ~~upon the occurrence~~$0.9 million (of which $0.8 million has been classified within discontinued operations) of ~~the specified event as defined in the Company's lease agreements.~~straight-line write-offs and total straight-line rental revenue net of these write-offs was $2.4 million (of which $0.2 million has been classified within discontinued operations).

~~A substantial portion~~Most of the Company’s lease contracts are triple-net leases, which require the tenants to make payments to third parties for lessor costs (such as property taxes and insurance) associated with the properties. In accordance with Topic 842, the Company does not include these payments made by the lessees to third parties in rental revenue or property operating expenses. In certain situations, the Company pays these lessor costs directly to third-parties and the tenants reimburse the Company. In accordance with Topic 842, these payments are presented on a gross basis in rental revenue and property operating expense. During the three months ended March 31, 2020 and 2019, the Company recognized $0.4 million and $2.2 million, respectively, in tenant reimbursements related to the gross up of these reimbursed expenses which are included in rental revenue.

Certain of the Company's leases, particularly at its entertainment ~~retail centers,~~districts, require the tenants to make payments to the Company for property related expenses such as common area maintenance. The Company has elected to combine these non-lease components with the lease components in rental revenue. ~~As such, certain reclassifications have been made to the 2018 presentation to conform to the 2019 presentation to combine tenant reimbursements with rental revenue.~~ For the three months ended March 31, 2020 and 2019, ~~and 2018,~~ the ~~Company recognized~~non-lease components included in rental revenue totaled $3.3 million and $3.9 million, ~~and $4.0 million, respectively, of tenant reimbursements that related to the operations of its entertainment retail centers.~~respectively.

In addition, most of the Company's tenants are subject to additional rents if gross revenues of the properties exceed certain thresholds defined in the lease agreements (percentage rents). Percentage rents are recognized at the time when specific ~~triggering events occur~~parameters have been met as provided by the lease agreement. Rental revenue included percentage rents of ~~$1.4~~$2.8 million and ~~$1.3~~$1.4 million for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

The Company regularly evaluates the collectibility of its receivables on a lease by lease basis. The evaluation primarily consists of reviewing past due account balances and considering such factors as the credit quality of the Company's tenants, historical trends of the tenant and/or other debtor, current economic conditions and changes in customer payment

terms. ~~The Company suspends revenue recognition when~~When the collectibility of lease receivables or future lease payments are no longer probable, ~~and~~the Company records a direct write-off of the receivable to rental ~~revenue. For the three months ended March 31, 2019, the Company recognized $0.2 million in reductions to~~revenue and recognizes future rental income related to the write-off of tenant receivables. Certain reclassifications have been made to the 2018 presentation to conform to the 2019 presentation related to the Company's former presentation of the allowance for doubtful accounts.revenue on a cash basis.

Property Sales

Sales of real estate properties are recognized when a contract exists and the purchaser has obtained control of the property. Gains on sales of properties are recognized in full in a partial sale of nonfinancial assets, to the extent control is not retained. Any noncontrolling interest retained by the seller would, accordingly, be measured at fair value.

The Company evaluates each sale or disposal transaction to determine if it meets the criteria to qualify as discontinued operations. A discontinued operation is a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on the Company's operations and financial results. If the sale or disposal transaction does not meet the criteria, the operations and related gain or loss on sale is included in income from continuing operations. Certain reclassifications have been made to prior period amounts to conform to the current period presentation for assets that qualify for presentation as discontinued operations.

Mortgage Notes and Other Notes Receivable

Mortgage notes and other notes receivable, including related accrued interest receivable, consist of loans originated by the Company and the related accrued and unpaid interest income as of the balance sheet date. Mortgage notes and other

notes receivable are initially recorded at the amount advanced to the ~~borrower.~~borrower less allowance for credit loss. Interest income is recognized using the effective interest method based on the stated interest rate over the estimated life of the note. Premiums and discounts are amortized or accreted into income over the estimated life of the note using the effective interest method.

The Company adopted Topic 326 effective January 1, 2020, which requires allowance for credit losses to be recorded to reflect that all mortgage notes and notes receivable have some inherent risk of loss regardless of credit quality, collateral, or other mitigating factors. While Topic 326 does not require any particular method for determining the reserves, it does specify that it should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, as well as reasonable and supportable forecasts for the term of each mortgage note or note receivable. The Company uses a forward looking commercial real estate forecasting tool to estimate its current expected credit losses (CECL) for each of its mortgage notes and notes receivable on a loan by loan basis. The CECL allowance required by Topic 326 is a valuation account that is deducted from the related mortgage note or note receivable.

Certain of the Company’s mortgage notes and notes receivable include commitments to fund incremental amounts to its borrowers. These future funding commitments are also subject to the CECL model. The allowance related to future funding is recorded as a liability and is included in Accounts payable and accrued liabilities in the accompanying consolidated balance sheet.

As permitted under Topic 326, the Company made an accounting policy election to not measure an allowance for credit losses for accrued interest receivables related to its mortgage notes and notes receivable. Accordingly, if accrued interest receivable is deemed to be uncollectible, the Company will record any necessary write-offs as a reversal of interest income.

In the event the Company has a past due mortgage note or note receivable and foreclosure is probable, the Company measures expected credit losses based on the fair value of the collateral. The Company evaluates the ~~collectibility~~collectability of both interest and principal offor each of its ~~loans~~mortgage notes and notes receivable on a quarterly basis to determine ~~whether it~~if foreclosure is ~~impaired. A loan is considered to be impaired when, based on current information and events,~~probable. As of March 31, 2020, the Company ~~determines that it is probable that it will be unable to collect all amounts due according to the existing contractual terms. An insignificant delay or shortfall in amounts of payments~~ does not ~~necessarily result in the loan being identified as impaired. When a loan is considered to be impaired, the amount of loss, if~~have any is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the loan’s effective interest rate or to the fair value of the Company’s interest in the underlying collateral, less costs to sell, if the loan is collateral dependent. For impaired loans, interest income is recognized on a cash basis, unless the Company determines based on the loan to estimated fair value ratio the loan should be on the cost recovery method, and any cash payments received would then be reflected as a reduction of principal. Interest income recognition is recommenced if and when the impaired loan becomes contractually current and performance is demonstrated to be resumed.mortgage notes receivable with past due principal balances.

Mortgage and Other Financing Income

Certain of the Company's borrowers are subject to additional interest based on certain thresholds defined in the mortgage agreements (participating interest). Participating interest income is recognized at the time when specific ~~triggering events occur~~parameters have been met as provided by the mortgage agreement. There was no participating interest income for the three months ended March 31, ~~2019~~2020 and ~~2018. In addition, for~~2019. For the three months ended March 31, 2019, mortgage and other financing income included $0.9 million in prepayment fees related to a mortgage ~~note~~notes that ~~was~~were paid fully in advance of ~~its~~their maturity date. There were no0 prepayment fees recognized during the three months ended March 31, ~~2018.~~2020.

As described above, the Company adopted Topic 842 on January 1, 2019 and elected to not reassess its prior conclusions about lease classification. Accordingly, the Company's leases that were classified as investment in direct financing leases retained this classification. Direct financing lease income is included in mortgage and other financing income and is recognized on the effective interest method to produce a level yield on funds not yet recovered. Estimated unguaranteed residual values at the date of lease inception represent management's initial estimates of fair value of the leased assets at the expiration of the lease, not to exceed original cost. Significant assumptions used in estimating residual values include estimated net cash flows over the remaining lease term and expected future real estate values. The Company evaluates on an annual basis (or more frequently, if necessary) the collectibility of its direct financing lease receivable and unguaranteed residual value to determine whether they are impaired. A direct financing lease receivable is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. When a direct financing lease receivable is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the direct financing lease receivable's effective interest rate or to the fair value of the underlying collateral, less costs to sell, if such receivable is collateralized.

Concentrations of Risk

Regal Entertainment Group (Regal), Topgolf USA (Topgolf) and American Multi-Cinema, Inc. (AMC) ~~was the lessee of~~represented a ~~substantial~~significant portion ~~(33%)~~ of the ~~megaplex theatre rental properties held by the Company at March 31, 2019. For~~Company's total revenue for the three months ended March 31, ~~2019~~2020 and ~~2018, approximately $30.6 million or 18.6% and $28.6 million or 18.4%, respectively,~~2019. The following is a summary of the Company's total ~~revenues were~~revenue (including revenue from discontinued operations) derived from rental or interest payments ~~by AMC.~~from Regal, Topgolf and AMC (dollars in thousands):



	Three months ended March 31,
	2020				2019
	Total Revenue		% of Company's Total Revenue		Total Revenue		% of Company's Total Revenue
Regal	$	21,354	14.1	%	$	15,692	9.5	%
Topgolf	20,075		13.3	%	18,654		11.3	%
AMC (1)	20,072		13.3	%	30,580		18.6	%

~~Topgolf USA (Topgolf) was the lessee of a substantial portion (43%) of the recreation properties held by the Company at March 31, 2019. For~~(1) During the three months ended March 31, ~~2019~~2020, the Company wrote-off $9.2 million of straight-line receivables to straight-line rental revenue classified in rental revenue in the accompanying consolidated statements of income and ~~2018, approximately $18.7 million or 11.3% and $15.1 million or 9.8%, respectively, of the Company's total revenues were derived from rental payments by Topgolf.~~comprehensive income.

Share-Based Compensation

Share-based compensation to employees of the Company is granted pursuant to the Company's Annual Incentive Program and Long-Term Incentive Plan and share-based compensation to non-employee Trustees of the Company is granted pursuant to the Company's Trustee compensation program. Prior to May 12, 2016, share-based compensation granted to employees and non-employee Trustees was issued under the 2007 Equity Incentive Plan. The 2016 Equity Incentive Plan was approved by shareholders at the May 11, 2016 annual shareholder meeting and this plan replaced

~~the 2007 Equity Incentive Plan. Accordingly, all share-based compensation granted on or after May 12, 2016 has been issued under the 2016 Equity Incentive Plan.~~

Share-based compensation expense consists of share option expense and amortization of nonvested share grants issued to employees, and amortization of share units issued to non-employee Trustees for payment of their annual retainers. Share-based compensation included in general and administrative expense in the accompanying consolidated statements of income ~~totaled $3.3 million~~ and ~~$3.8 million for the three months ended March 31, 2019 and 2018, respectively.~~comprehensive income.

Share Options

Share options are granted to employees pursuant to the Long-Term Incentive Plan. The fair value of share options granted is estimated at the date of grant using the Black-Scholes option pricing model. Share options granted to employees vest over a period of four years and share option expense for these options is recognized on a straight-line basis over the vesting period. Expense recognized related to share options and included in general and administrative expense in the accompanying consolidated statements of income and comprehensive income was $2$3 thousand and ~~$73~~$2 thousand for the three months ended March 31, 2020 and 2019, ~~and 2018,~~ respectively.

Nonvested Shares Issued to Employees

The Company grants nonvested shares to employees pursuant to both the Annual Incentive Program and the Long-Term Incentive Plan. The Company amortizes the expense related to the nonvested shares awarded to employees under the Long-Term Incentive Plan and the premium awarded under the nonvested share alternative of the Annual Incentive Program on a straight-line basis over the future vesting period (~~three~~(three years or four ~~years)~~ years). Expense recognized related to nonvested shares and included in general and administrative expense in the accompanying consolidated statements of income and comprehensive income was ~~$2.9~~$2.7 million and ~~$3.4~~$2.9 million for the three months ended March 31, 2020 and 2019, respectively. Expense recognized related to nonvested shares and ~~2018, respectively.~~included in severance expense in the accompanying consolidated statement of income was $0.1 million for the three months ended March 31, 2019.

Nonvested Performance Shares Issued to Employees

During the three months ended March 31, 2020, the Compensation and Human Capital Committee of the Board of Trustees (Board) approved the 2020 Long Term Incentive Plan (the 2020 LTIP) as a sub-plan under the Company's 2016 Equity Incentive Plan. Under the 2020 LTIP, the Company awards performance shares and restricted shares to the Company's executive officers. The performance shares contain both a market condition and a performance condition. The Company amortizes the expense related to the performance shares over the future vesting period of three years. Expense recognized related to performance shares and included in general and administrative expense in the accompanying consolidated statements of income and comprehensive income was $0.2 million for the three months ended March 31, 2020.

Restricted Share Units Issued to Non-Employee Trustees

The Company issues restricted share units to non-employee Trustees for payment of their annual retainers under the Company's Trustee compensation program. The fair value of the share units granted was based on the share price at the date of grant. The share units vest upon the earlier of the day preceding the next annual meeting of shareholders or a change of control. The settlement date for the shares is selected by the non-employee Trustee, and ranges from one year from the grant date to upon termination of service. This expense is amortized by the Company on a straight-line basis over the year of service by the non-employee Trustees. Total expense recognized related to shares issued to non-employee Trustees was ~~$409 thousand~~$0.5 million and ~~$337 thousand~~$0.4 million for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

Derivative Instruments

The Company ~~has entered into certain~~uses derivative instruments to reduce exposure to fluctuations in foreign currency exchange rates and variable interest rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These derivatives consist of foreign currency forward contracts, cross-currency swaps and interest rate swaps.

The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as ~~interest rate~~foreign currency risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows ~~or other types of forecasted transactions,~~ are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value ~~of the hedged asset or liability that are attributable to the hedged risk in a fair value~~ hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. ~~Derivatives may also be designated as~~For its net investment hedges ofthat hedge the foreign currency exposure of ~~a net investment in a foreign operation. For~~ its ~~net investment hedges,~~Canadian investments, the Company has elected to assess hedge effectiveness using a method based on changes in spot exchange rates and record the changes in the fair value amounts excluded from the assessment of effectiveness into earnings on a systematic

and rational basis. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. If hedge accounting is not applied, realized and unrealized gains or losses are reported in earnings.

The Company's policy is to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Impact of Recently Issued Accounting Standards

In ~~June 2016,~~March 2020, the FASB issued ASU No. ~~2016-13,~~ ~~Measurement of Credit Losses on Financial Instruments, which amends ASC Topic 326,~~ ~~Financial Instruments - Credit Losses~~2020-04, Reference Rate Reform (Topic 848). The ASU ~~changes the methodology~~contains practical expedients for ~~measuring credit losses on financial instruments~~reference rate reform related activities that impact debt, leases, derivatives and ~~timing of when such losses are recorded.~~other contracts. The ~~amendments~~guidance in ASU ~~No. 2016-13 require~~2020-04 is optional and may be elected over time as reference rate reform activities occur. During three months ended March 31, 2020, the Company elected to ~~measure all expected credit losses~~apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based ~~upon historical experience, current conditions~~matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and reasonable and supportable forecasts that affect the collectibility of financial assets and eliminates the incurred losses methodology under current U.S. GAAP. In addition, in November 2018, the FASB issued ASU No. 2018-19, ~~Codification Improvements to Topic 326, Financial Instruments - Credit Losses, which also amends ASC Topic 326,~~ ~~Financial Instruments - Credit Losses.~~ ~~The ASU states that operating lease receivables are not~~may apply other elections as applicable as additional changes in the scope of Subtopic 326-20. ASU No. 2016-13 and ASU No. 2018-19 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company is currently evaluating the impact that these ASUs will have on its consolidated financial statements and related disclosures.market occur.

3. ~~Rental Properties~~Real Estate Investments

The following table summarizes the carrying amounts of ~~rental properties~~real estate investments as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 (in thousands):


	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Buildings and improvements	$	4,667,681		$	4,593,159		$	4,761,319		$	4,747,101
Furniture, fixtures & equipment	99,613			97,463			123,229			123,239
Land	1,199,372			1,190,568			1,298,096			1,290,181
Leasehold interests	26,041			26,041			26,041			26,041
	5,992,707			5,907,231			6,208,685			6,186,562
Accumulated depreciation	(920,409		)	(883,174		)	(1,023,993		)	(989,254		)
Total	$	5,072,298		$	5,024,057		$	5,184,692		$	5,197,308

Item 4.Controls and Procedures

Evaluation of disclosures controls and procedures

As of March 31, ~~2019,~~2020, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Limitations on the effectiveness of controls

Our disclosure controls were designed to provide reasonable assurance that the controls and procedures would meet their objectives. Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable assurance of achieving the designed control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusions of two or more people, or by management override of the control. Because of the inherent limitations in a cost-effective, maturing control system, misstatements due to error or fraud may occur and not be detected.

Change in internal controls

Effective January 1, ~~2019,~~2020, we adopted ASC ~~842~~ ~~Leases~~326, Financial Instruments - Credit Losses. Except for the enhancements to the Company's internal control over financial reporting in relation to our adoption of ~~these standards,~~this standard, there have not been any changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter of the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to certain claims and lawsuits in the ordinary course of business, the outcome of which cannot be determined at this time. In the opinion of management, any liability we might incur upon the resolution of these claims and lawsuits will not, in the aggregate, have a material adverse effect on our consolidated financial position or results of operations.

~~Early Childhood Education Tenant~~

On December 18, 2017, ten subsidiaries (the "CLA Debtors") of Children's Learning Adventure USA, LLC ("CLA" or "CLA Parent") filed separate voluntary petitions for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the District of Arizona ("Court") (Jointly Administered under Case No. 2:17-bk-14851-BMW). The CLA Debtors in those cases consist of CLA Properties SPE, LLC, CLA Maple Grove, LLC, CLA Carmel, LLC, CLA West Chester, LLC, CLA One Loudoun, LLC, LLC, CLA Fishers, LLC, CLA Chanhassen, LLC, CLA Ellisville, LLC, CLA Farm, LLC, and CLA Westerville, LLC. CLA Parent has not filed a petition for bankruptcy. The CLA Debtors include each of the Company's direct or indirect tenants on 24 out of the Company's 25 CLA properties, including 21 operating properties, two partially completed properties and one unimproved land parcel. The only CLA tenant unaffected by the bankruptcy is CLA King of Prussia, LLC, which is the CLA tenant entity for an unimproved land parcel located in Tredyffrin, Pennsylvania. This property was one of the two properties sold in February 2019 as further discussed below. It is the Company's understanding that the CLA Debtors filed bankruptcy petitions to stay the termination of the remaining CLA leases and delay the eviction process.

On January 8, 2018, the Company filed with the Court (i) motions seeking rent for the post-petition period beginning on December 18, 2017, and (ii) motions seeking relief from the automatic stay seeking the right to terminate the remaining leases and evict the CLA Debtors from the properties. On March 14, 2018, CLA Parent, the CLA Debtors and certain other CLA subsidiaries (collectively, the "CLA Parties") and the Company entered into a Stipulation providing that (a) the CLA Parties would pay rent for the months of March through July 2018 for an aggregate total of $4.3 million, (b) resolution of restructuring of the leases between the Company and the CLA Parties would be concluded no later than July 31, 2018 (the "Forbearance Period"), (c) relief from stay would be granted with respect to the Company’s properties as needed to implement the Stipulation, (d) the parties would not commence or prosecute litigation against any other party during the Forbearance Period, and (e) the deadline for any motion by the CLA Debtors to assume or reject the leases under the U.S. Bankruptcy Code would be extended to July 31, 2018. On May 7, 2018, the Court entered an order approving the Stipulation. The CLA Parties made all of the rent payments required by the Stipulation.

The CLA Debtors did not assume the leases by July 31, 2018, and the Company entered into a new lease agreement with CLA Parent related to the 21 operating properties which replaced the prior lease arrangements and continued on a month-to-month basis. The lease agreement provided for a monthly rent of $1.0 million plus approximately $170 thousand for pro-rata property taxes. The CLA Parties relinquished control of four properties that were still under development as the Company no longer intended to develop these properties. Two of these properties were sold in February 2019.

In February 2019, the CLA Parties and the Company entered into agreements (collectively, the "PSA") providing for the purchase and sale of certain assets associated with the businesses located at the 21 operating CLA properties whereby the Company could nominate a third party operator to take an assignment and transfer of such assets from the CLA Parties and receive certain beneficial rights under various related ancillary agreements. Consideration provided by the Company for the asset transfers would include the release of past due rent obligations, previously fully reserved by the Company, and additional consideration of approximately $15.0 million which includes approximately $3.5 million for equipment used in the operations of the Company's schools. The transfers of such assets were expected to close between May 1, 2019 and March 31, 2020 as closing conditions for each transfer are satisfied. The CLA Parties agreed to surrender possession of any of those properties that have not been transferred to a replacement operator prior to March 31, 2020 and agreed to continue leasing and operating each of the 21 properties for an aggregate of approximately $1.0 million per month of minimum rent until the transfer of each property to the Company’s replacement tenant or surrender of the property.

Additionally, in February 2019, the Company entered into new leases of all 21 operating CLA properties with Crème de la Crème ("Crème"), a national early childhood education operator. These leases are contingent upon the Company delivering possession of the properties and include different financial terms based on whether or not the CLA Parties deliver Crème the assets associated with the in-place operations of the school. The leases have 20-year terms that commence upon Crème beginning operations of the schools. Additionally, Crème and the Company each have early termination rights based on school level economic performance.

On February 27, 2019, CLA filed a motion with the Court seeking authorization of the sale of assets as required by the PSA. A condition to the parties’ obligations under the PSA was the Court’s approval of the motion. The Court held a hearing regarding such approval on April 10, 2019. At the hearing, the Court did not rule on the motion based upon objections from another landlord of CLA. To mitigate the risk that CLA Parent would file for bankruptcy protection and delay our transfer of the properties to Crème, the Company terminated the PSA on April 11, 2019. However, the lease of the properties to CLA Parent was not terminated and is expected to continue while each property is operated by it.

The Company has informed CLA Parent and the other landlord that it is willing to consider an overall agreement regarding the transfer of properties to Crème if CLA Parent and the other landlord can agree to cooperate. The Company understands that CLA Parent and the other landlord have not resolved those issues. However, the Company and CLA Parent have discussed a process that would provide for the continuation of the lease to CLA Parent and the transfer of the properties one at a time to Crème as it receives the necessary licenses and permits for each property. The terms for such transfers would be similar to those contained in the PSA, except that the CLA Debtors would not be involved.

~~The Company has determined that the exclusion of any assets held by the CLA Debtors would not be material to the transfer of the operations of the properties to Crème.~~

CLA Parent continues to cooperate with Crème by providing access to facilities, staff and information. With this assistance, Crème has made substantial progress with its license applications and preparations to begin operating these schools later in 2019. This process must be undertaken on a state-by-state basis and is expected to be substantially complete before the end of 2019. There can be no assurance that Crème will timely obtain necessary licenses and permits, and therefore there can be no assurance as to the outcome of the contemplated transaction or whether some or all of the properties will be transferred to Crème with in-place operations. In addition, there can be no assurance that CLA Parent will continue to cooperate with Crème and provide access to personnel and information needed to acquire the operations of the properties. If the Company is unable to transfer the properties to Crème with in-place operations, the Company intends to take possession of the properties and transfer them without operations. If some or all of the schools are not transferred to Crème with in-place operations, there will be a delay in re-opening such schools and a corresponding reduction in near term rents from Crème.

Item 1A. Risk Factors

There ~~have been no material changes to~~are many risks and uncertainties that can affect our current or future business, operating results, financial performance or share price. The following discussion describes important factors which could adversely affect our current or future business, operating results, financial condition or share price. This discussion includes a number of forward-looking statements. See "Cautionary Statement Concerning Forward-Looking Statements." The following risk factors replace and supersede the risk factors ~~associated with our business previously disclosed in~~set forth under Item 1A - "Risk Factors" in ~~2018~~our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2018.~~2019 filed with the SEC on February 25, 2020.

Risks That May Impact Our Financial Condition or Performance

The current outbreak of the novel coronavirus, or COVID-19, has negatively impacted and caused disruption to, and the continued COVID-19 outbreak or the future outbreak of any other highly infectious or contagious diseases could materially and adversely impact or cause disruption to, our performance, financial condition, results of operations and cash flows.

A novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China in December 2019, and has since spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19.

The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, and is severely impacting experiential real estate properties given that such properties rely on social interaction and discretionary consumer spending. Substantially all of our tenants have announced temporary closures of their operations during this pandemic. Many experts predict that the outbreak will trigger a period of global economic slowdown or a global recession. COVID-19 has negatively affected, and COVID-19 (or a future pandemic) could have material and adverse effects on, our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors:

complete or partial closures of, or other operational issues at, our properties resulting from government or tenant action;

the reduced economic activity has severely impacted our tenants' businesses, financial condition and liquidity and caused substantially all of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations;

the reduced economic activity could result in a recession, which could negatively impact consumer discretionary spending;

difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis and our tenants' ability to fund their business operations and meet their obligations to us;

a general decline in business activity and demand for real estate transactions would adversely affect our ability or desire to grow our portfolio of experiential real estate properties;

a deterioration in our and our tenants' ability to operate in affected areas or delays in the supply of products or services to us and our tenants from vendors that are needed for our and our tenants' efficient operations has adversely affected our operations and those of our tenants; and

the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, would result in a deterioration in our ability to ensure business continuity during a disruption.

The ultimate extent to which COVID-19 impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the actions taken to contain the outbreak or mitigate its impact, and the direct and indirect economic effects of the outbreak and containment measures, among others. A continued reduction in our cash flows could impact our ability to continue paying dividends to our shareholders at expected levels or at all. The financial impact of COVID-19 could negatively impact our future compliance with financial covenants of our credit facility and other debt agreements and result in a default and potentially an acceleration of indebtedness. Such non-compliance could negatively impact our ability to make additional borrowings under our revolving credit facility, pay dividends and repurchase common shares under our share repurchase program. As discussed above under "Management's Discussion and Analysis of Financial Condition and Results of Operations," we expect that we will not be in technical compliance (non-payment related) with certain earnings and other financial covenants under our bank credit facilities and private placement notes at the end of the second quarter of 2020. We are currently in discussions with our lenders and private placement note holders to obtain a temporary suspension or modification of such covenants. We have

received approval from the requisite lenders under our bank credit facilities that the bank lenders will temporarily suspend or modify these financial covenants, subject to our and such lenders' subsequent execution and delivery of a definitive agreement. In connection with obtaining these covenant modifications, we are temporarily suspending our monthly cash dividend to common shareholders after the common share dividend payable May 15, 2020 (except as may be necessary to maintain REIT status and to not owe income tax) and suspending our share repurchase program upon the effective date of the covenant modification agreements, which is expected to occur within the next 30 days. While we have determined it is probable, there can be no assurances that we will successfully complete and execute these agreements in the time presently expected, or at all, nor can there be any assurances as to the ultimate terms of such agreements. In addition, there can be no assurances as to our ability to reinstitute cash dividend payments to common shareholders or share repurchases or the timing thereof. The rapid development and fluidity of the COVID-19 pandemic precludes any prediction as to the ultimate adverse impact of COVID-19. Nevertheless, COVID-19 has negatively affected, and presents additional material uncertainty and risk with respect to, our performance, financial condition, results of operations and cash flows.

Global economic uncertainty and disruptions in the financial markets may impair our ability to refinance existing obligations or obtain new financing for acquisition or development of properties.

There exists a high level of global economic uncertainty, including uncertainty regarding the impact of COVID-19 after the subsidence of the pandemic. Regarding experiential industries, it is unclear whether COVID-19 will negatively impact future consumer preferences regarding congregate activities, such as those offered by theatres, casinos, restaurants, attractions and other industries in which we invest. Political changes in the U.S. and abroad unrelated to COVID-19, such as the pending negotiations surrounding the United Kingdom's recent withdrawal of its membership from the European Union, have contributed to volatility in the global financial markets. Although during most of the first quarter of 2020 the U.S. economy continued to improve, there is significant risk that the U.S. economy will move into a recession this year. We rely in part on debt financing to finance our investments and development. To the extent that turmoil in the financial markets continues or intensifies, it has the potential to adversely affect our ability to refinance our existing obligations as they mature or obtain new financing for acquisition or development of properties and adversely affect the value of our investments. If we are unable to refinance existing indebtedness on attractive terms at its maturity, we may be forced to dispose of some of our assets. Uncertain economic conditions and disruptions in the financial markets could also result in a substantial decrease in the value of our investments, which could also make it more difficult to refinance existing obligations or obtain new financing. In addition, these factors may make it more difficult for us to sell properties or may adversely affect the price we receive for properties that we do sell, as prospective buyers may experience increased costs of capital or difficulties in obtaining capital. These events in the credit markets may have an adverse effect on other financial markets in the U.S., which may make it more difficult or costly for us to raise capital through the issuance of our common shares or preferred shares. Recently, global economic uncertainty has contributed to significant declines in equity markets generally and prices of our common shares and preferred shares specifically. These disruptions in the financial markets may have other adverse effects on us, our tenants or the economy in general.

Most of our customers, consisting primarily of tenants and borrowers, operate properties in market segments that depend upon discretionary spending by consumers. Any continued reduction in discretionary spending by consumers within the market segments in which our customers or potential customers operate could adversely affect such customers' operations and, in turn, reduce the demand for our properties or financing solutions.

Most of our portfolio is leased to or financed with customers operating service or retail businesses on our property locations. Many of these customers operate services or businesses that are dependent upon consumer experiences. Theatre, eat & play, attraction, ski, experiential lodging, gaming, private school and early childhood education center properties, represent some of the largest market investments in our portfolio; and AMC, Topgolf, Regal Cinemas, Inc. and Cinemark USA, Inc. represented our largest customers for the three months ended March 31, 2020. The success of most of these businesses depends on the willingness or ability of consumers to use their discretionary income to purchase our customers' products or services. In addition, the lodging and gaming industries are also highly sensitive to consumer discretionary spending. A downturn in the economy, or a trend to not want to go "out of home" could cause consumers in each of our property types to reduce their discretionary spending within the market segments in which our customers or potential customers operate, which could adversely affect such customers' operations and, in turn, reduce the demand for our properties or financing solutions. The current COVID-19 pandemic has significantly reduced consumer discretionary spending, which is severely impacting experiential real estate properties, including those of

our customers, and it is unclear whether COVID-19 will negatively impact future consumer preferences regarding congregate activities.

Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable terms, if at all, and negatively impact the market price of our securities, including our common shares.

The credit ratings of our senior unsecured debt and preferred equity securities are based on our operating performance, liquidity and leverage ratios, overall financial position and other factors employed by the credit rating agencies in their rating analysis of us. Our credit ratings can affect the amount and type of capital we can access, as well as the terms of any financings we may obtain, and changes in our credit ratings outlook to negative were recently made by certain credit rating agencies. There can be no assurance that we will be able to maintain our current credit ratings, particularly in light of the effects of the ongoing COVID-19 pandemic, and in the event that our current credit ratings deteriorate, we would likely incur a higher cost of capital and it may be more difficult or expensive to obtain additional financing or refinance existing obligations and commitments. Also, a downgrade in our credit ratings would trigger additional costs or other potentially negative consequences under our current and future credit facilities and debt instruments.

An increase in interest rates could increase interest cost on new debt and could materially adversely impact our ability to refinance existing debt, sell assets and limit our acquisition and development activities.

Although the U.S. Federal Reserve decreased its benchmark interest rate multiple times in 2019 and 2020, there can be no assurances that the rate will not increase in the future. If interest rates increase, so could our interest costs for any new debt. This increased cost could make the financing of any acquisition and development activity more costly. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. In addition, an increase in interest rates could decrease the amount third parties are willing to pay for our assets, thereby limiting our ability to reposition our portfolio promptly in response to changes in economic or other conditions.

We depend on leasing space to tenants on economically favorable terms and collecting rent from our tenants, who may not be able to pay.

At any time, a tenant may experience a downturn in its business that may weaken its financial condition. Similarly, a general decline in the economy may result in a decline in demand for space at our commercial properties. Our financial results depend significantly on leasing space at our properties to tenants on economically favorable terms. In addition, because a majority of our income comes from leasing real property, our income, funds available to pay indebtedness and funds available for distribution to our shareholders or share repurchases will decrease if a significant number of our tenants cannot pay their rent or if we are not able to maintain our levels of occupancy on favorable terms. If our tenants cannot pay their rent or we are not able to maintain our levels of occupancy on favorable terms, there is also a risk that the fair value of the underlying property will be considered less than its carrying value and we may have to take a charge against earnings. In addition, if a tenant does not pay its rent, we might not be able to enforce our rights as landlord without significant delays and substantial legal costs.

If a tenant becomes bankrupt or insolvent, that could diminish or eliminate the income we expect from that tenant's leases. If a tenant becomes insolvent or bankrupt, we cannot be sure that we could recover the premises from the tenant promptly or from a trustee or debtor-in-possession in a bankruptcy proceeding relating to the tenant. On the other hand, a bankruptcy court might authorize the tenant to terminate its leases with us. If that happens, our claim against the bankrupt tenant for unpaid future rent would be subject to statutory limitations that might be substantially less than the remaining rent owed under the leases. In addition, any claim we have for unpaid past rent would likely not be paid in full and we would also have to take a charge against earnings for any accrued straight-line rent receivable related to the leases.

The reduced economic activity resulting from the COVID-19 pandemic is severely impacting our tenants' businesses, financial condition and liquidity and has caused substantially all of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations. We also anticipate that one or more of our tenants may become bankrupt or insolvent as a result of this reduced economic activity. The ultimate extent to which COVID-19 impacts the operations of our tenants will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence.

We are exposed to the credit risk of our customers and counterparties and their failure to meet their financial obligations could adversely affect our business.

Our business is subject to credit risk. There is a risk that a customer or counterparty will fail to meet its obligations when due. Customers and counterparties that owe us money may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. Although we have procedures for reviewing credit exposures to specific customers and counterparties to address present credit concerns, default risk may arise from events or circumstances that are difficult to detect or foresee. Some of our risk management methods depend upon the evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible by us. That information may not, in all cases, be accurate, complete, up-to-date or properly evaluated. In addition, concerns about, or a default by, one customer or counterparty could lead to significant liquidity problems, losses or defaults by other customers or counterparties, which in turn could adversely affect us. We have experienced customer defaults resulting from the COVID-19 pandemic, and we expect to experience future defaults, the breadth of which will depend upon the scope, severity and duration of the COVID-19 pandemic. We may be materially and adversely affected in the event of a significant default by our customers and counterparties.

We could be adversely affected by a borrower's bankruptcy or default.

If a borrower becomes bankrupt or insolvent or defaults under its loan, that could force us to declare a default and foreclose on any available collateral. As a result, future interest income recognition related to the applicable note receivable could be significantly reduced or eliminated. There is also a risk that the fair value of the collateral, if any, will be less than the carrying value of the note and accrued interest receivable at the time of a foreclosure and we may have to take a charge against earnings. If a property serves as collateral for a note, we may experience costs and delays in recovering the property in foreclosure or finding a substitute operator for the property. If a mortgage we hold is subordinated to senior financing secured by the property, our recovery would be limited to any amount remaining after satisfaction of all amounts due to the holder of the senior financing. In addition, to protect our subordinated investment, we may desire to refinance any senior financing. However, there is no assurance that such refinancing would be available or, if it were to be available, that the terms would be attractive. We may experience borrower defaults resulting from the COVID-19 pandemic, the breadth of which will depend upon the scope, severity and duration of the COVID-19 pandemic. One or more of our borrowers may become bankrupt or insolvent as a result of this reduced economic activity. The ultimate extent to which COVID-19 impacts the operations of our tenants will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence.

From time to time, the base terms of some of our leases will expire and there is no assurance that such leases will be renewed at existing lease terms, at otherwise economically favorable terms or at all.

From time to time, the base terms of some of our leases with our tenants will expire. These tenants have and may continue to seek rent or other concessions from us, including requiring us to modify the properties in order to renew their leases. There is no guarantee that we will be able to renew these leases at existing lease terms, at otherwise economically favorable terms or at all. In addition, if we fail to renew these leases, there can be no assurances that we will be able to locate substitute tenants for such properties or enter into leases with these substitute tenants on economically favorable terms.

Operating risks in the experiential real estate industry may affect the ability of our tenants to perform under their leases.

The ability of our tenants to operate successfully in the experiential real estate industry and remain current on their lease obligations depends on a number of factors, including, with respect to theatres, the availability and popularity of motion pictures, the performance of those pictures in tenants' markets, the allocation of popular pictures to tenants, the release window (represents the time that elapses from the date of a picture's theatrical release to the date it is available on other mediums) and the terms on which the pictures are licensed. Neither we nor our tenants control the operations of motion picture distributors. There can be no assurances that motion picture distributors will continue to rely on theatres as the primary means of distributing first-run films, and motion picture distributors have and may in the future consider alternative film delivery methods. The U.S. Department of Justice has also announced that it is in the process of ending decrees that prohibit movie studios from owning theatres or utilizing "block booking," a practice whereby movie studios sell multiple films as a package to theatres. There can be no assurances as to the effects of this regulatory action or whether this regulatory action will materially adversely affect our theatre tenants' operations and, in turn, their ability to perform under their leases.

Our other experiential customers are exposed to the risk of adverse economic conditions that can affect experiential activities. Eat & play, ski, attraction, experiential lodging, gaming, fitness & wellness and cultural properties are discretionary activities that can entail a relatively high cost of participation and may be adversely affected by an economic slowdown or recession. Economic conditions, including high unemployment and erosion of consumer confidence, may potentially have negative effects on our customers and on their results of operations. The reduced economic activity resulting from the COVID-19 pandemic is severely impacting our tenants' businesses, financial condition and liquidity. The ultimate extent to which COVID-19 impacts the operations of our tenants will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence. We cannot predict what impact these uncertainties may have on overall guest visitation, guest spending or other related trends and the ultimate impact it will have on our tenants' and mortgagors' operations and, in turn, their ability to perform under their respective leases or mortgages.

Real estate is a competitive business.

Our business operates in highly competitive environments. We compete with a large number of real estate property investors and developers including traded and non-traded public REITS, private equity investors and institutional investment funds. Some of these investors may be willing to accept lower returns on their investments, or have greater financial resources than we do, a greater ability to borrow funds to acquire properties and the ability to accept more risk than we prudently manage. This competition may increase the demand for the types of properties in which we typically invest and, therefore, reduce the number of suitable acquisition opportunities available to us and increase the prices paid for such acquisition properties. This competition will increase if investments in real estate become more attractive relative to other types of investment. Accordingly, competition for the acquisition of real property could materially and adversely affect us.

Principal factors of competition are rent or interest charged, attractiveness of location, the quality of the property and breadth and quality of services provided. If our competitors offer space at rental rates below the rental rates we are currently charging our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants' leases expire. Our success depends upon, among other factors, trends of the national and local economies, financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends.

Three tenants represent a significant portion of our lease revenues.

AMC, Topgolf and Regal, represent a significant portion of our total revenue. For the year ended December 31, 2019, total revenues (including revenue from discontinued operations) of approximately $123.8 million or 17.6% were derived from rental payments by AMC, approximately $79.0 million or 11.2% were derived from rental payments by TopGolf and approximately $75.8 million or 10.8% were derived from rental payments by Regal. The COVID-19 pandemic is severely impacting these tenants', as well as our other tenants', businesses, financial condition and liquidity.

We have diversified and expect to continue to diversify our real estate portfolio by entering into lease transactions or financing arrangements with a number of other tenants or borrowers. If for any reason AMC, TopGolf and/or Regal failed to perform under their lease obligations for a significant period of time, or under any modified lease obligations, we could be required to reduce or suspend our shareholder dividends or share repurchases and may not have sufficient funds to support operations or service our debt until substitute tenants are obtained. If that happened, we cannot predict when or whether we could obtain substitute quality tenants on acceptable terms.

Properties we develop may not achieve sufficient operating results within expected timeframes and therefore the tenant or borrowers may not be able to pay their agreed upon rent or interest, and managed properties may not be able to operate profitably, which could adversely affect our financial results.

A significant portion of our investments include investments in build-to-suit projects. When construction is completed, these projects may require some period of time to achieve targeted operating results. For properties leased or financed, we may provide our tenants or borrowers with lease or financing terms that are more favorable to them during this timeframe. Tenants and borrowers that fail to achieve targeted operating results within expected timeframes may be unable to pay their obligations pursuant to the agreed upon lease or financing terms or at all. If we are required to

restructure lease or financing terms or take other action with respect to the applicable property, our financial results may be impacted by lower revenues, recording an impairment, writing off rental or interest amounts or otherwise. Additionally, if we have entered into a management agreement to operate a property we have developed, the project may not be able to achieve targeted operating results which may impact our financial results by lowering income or recording an impairment loss.

We have entered into management agreements to operate certain of our properties and we could be adversely affected if such managers do not manage these properties successfully.

To maintain our status as a REIT, we are generally not permitted to directly operate our properties. As a result, from time to time we enter into management agreements with third-party managers to operate certain properties. This practice has been most frequent with our experiential lodging properties. For managed properties, our ability to direct and control how our properties are operated is less than if we were able to manage these properties directly. Under the terms of our management agreements, our ability to participate in operating decisions relating to these properties is limited to certain matters, and we do not have the authority to require any such property to be operated in any particular manner. We do not supervise any of these managers or their personnel on a day-to-day basis. We cannot provide any assurances that the managers will manage our properties in a manner that is consistent with their respective obligations under the applicable management agreement or our obligations under any franchise agreements. We could be materially and adversely affected if any of our managers fail to effectively manage revenues and expenses, provide quality services and amenities, or otherwise fail to manage our properties in our best interests, and we may be financially responsible for the actions and inactions of the managers. In certain situations, we may terminate the management agreement. However, we can provide no assurances that we could identify a replacement manager, that a franchisor will consent to the replacement manager, or that the replacement manager will manage our experiential lodging property successfully. A failure by our third-party managers to successfully manage our properties could lead to an increase in our operating expenses or decrease in our revenue, or both.

Our indebtedness may affect our ability to operate our business and may have a material adverse effect on our financial condition and results of operations.

We have a significant amount of indebtedness. As of March 31, 2020, we had total debt outstanding of approximately $3.9 billion, including $750.0 million that we borrowed on March 20, 2020 under our revolving credit facility as a precautionary measure to increase our cash position and preserve financial flexibility considering the current uncertainty in the global markets. Our indebtedness could have important consequences, such as:

limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes;

limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service debt;

limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions;

restricting us from making strategic acquisitions, developing properties or pursuing business opportunities;

restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness;

exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our debt instruments that could have a material adverse effect on our business, financial condition and operating results;

increasing our vulnerability to a downturn in general economic conditions or in pricing of our investments;

negatively impacting our credit ratings; and

limiting our ability to react to changing market conditions in our industry and in our customers’ industries.

In addition to our debt service obligations, our operations require substantial investments on a continuing basis. Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund capital and non-capital expenditures necessary to meet our remaining commitments on existing projects and maintain the condition of our assets, as well as to provide capacity for the growth of our business, depends on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and financial, business, competitive, legal and other factors.

Subject to the restrictions in our unsecured revolving credit facility, our unsecured term loan facility and the debt instruments governing our existing senior notes, we may incur significant additional indebtedness, including additional secured indebtedness. Although the terms of our unsecured revolving credit facility, our unsecured term loan facility and the debt instruments governing our existing senior notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and additional indebtedness incurred in compliance with these restrictions could be significant. If new debt is added to our current debt levels, the risks described above could increase.

The financial impact of COVID-19 could negatively impact our future compliance with financial covenants of our credit facility and other debt agreements and result in a default and potentially an acceleration of indebtedness. Such non-compliance could negatively impact our ability to make additional borrowings under our revolving credit facility, pay dividends and repurchase common shares under our share repurchase program. As discussed above under "Management's Discussion and Analysis of Financial Condition and Results of Operations," we expect that we will not be in technical compliance (non-payment related) with certain earnings and other financial covenants under our bank credit facilities and private placement notes at the end of the second quarter of 2020. We are currently in discussions with our lenders and private placement note holders to obtain a temporary suspension or modification of such covenants. We have received approval from the requisite lenders under our bank credit facilities that the bank lenders will temporarily suspend or modify these financial covenants, subject to our and such lenders' subsequent execution and delivery of a definitive agreement. While we have determined it is probable, there can be no assurances that we will successfully complete and execute these agreements in the time presently expected, or at all, nor can there be any assurances that we will be able to continue to comply with any modified financial covenants in future periods. The ultimate extent to which COVID-19 impacts our operations will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence.

There are risks inherent in having indebtedness and using such indebtedness to fund acquisitions.

We currently use debt to fund portions of our operations and acquisitions. In a rising interest rate environment, the cost of our existing variable rate debt and any new debt will increase. We have used leverage to acquire properties and expect to continue to do so in the future. Although the use of leverage is common in the real estate industry, our use of debt exposes us to some risks. If a significant number of our tenants fail to make their lease payments for a significant period of time, the risk of which has been heightened as a result of the COVID-19 pandemic, and we do not have sufficient cash to pay principal and interest on the debt, we could default on our debt obligations. A small amount of our debt financing is secured by mortgages on our properties and we may enter into additional secured mortgage financing in the future. If we fail to meet our mortgage payments, the lenders could declare a default and foreclose on those properties.

Most of our debt instruments contain balloon payments which may adversely impact our financial performance and our ability to pay dividends.

Most of our financing arrangements require us to make a lump-sum or "balloon" payment at maturity. There can be no assurance that we will be able to refinance such debt on favorable terms or at all. To the extent we cannot refinance such debt on favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates, either of which would have an adverse impact on our financial performance and ability to pay dividends to our shareholders.

We must obtain new financing in order to grow.

As a REIT, we are required to distribute at least 90% of our taxable net income to shareholders in the form of dividends. Other than deciding to make these dividends in our common shares, we are limited in our ability to use internal capital to acquire properties and must continually raise new capital in order to continue to grow and diversify our investment portfolio. Our ability to raise new capital depends in part on factors beyond our control, including conditions in equity and credit markets, conditions in the industries in which our tenants are engaged and the performance of real estate investment trusts generally, all of which have been negatively impacted by the COVID-19 pandemic. We continually consider and evaluate a variety of potential transactions to raise additional capital, but we cannot assure that attractive alternatives will always be available to us, nor that our share price will increase or remain at a level that will permit us

to continue to raise equity capital publicly or privately, particularly in light of the effects of the ongoing COVID-19 pandemic.

Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities.

Some of our properties are subject to mortgages that contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable property or to discontinue insurance coverage. Our unsecured revolving credit facility, term loan facility, senior notes and other loans that we may obtain in the future contain certain cross-default provisions as well as customary restrictions, requirements and other limitations on our ability to incur indebtedness, including covenants involving our maximum total debt to total asset value; maximum permitted investments; minimum tangible net worth; maximum secured debt to total asset value; maximum unsecured debt to eligible unencumbered properties; minimum unsecured interest coverage; and minimum fixed charge coverage. Our ability to borrow under our unsecured revolving credit facility and our term loan facility is also subject to compliance with certain other covenants. We also have senior notes issued in a private placement transaction that are subject to certain covenants. As discussed above, we expect that we will not be in technical compliance (non-payment related) with certain earnings and other financial covenants under our bank credit facilities and private placement notes at the end of the second quarter of 2020. As a result, we are currently in discussions with our lenders and private placement note holders to obtain a temporary suspension or modification of such covenants. We have received approval from the requisite lenders under our bank credit facilities that the bank lenders will temporarily suspend or modify these financial covenants, subject to our and such lenders' subsequent execution and delivery of a definitive agreement. Failure to comply with our covenants or obtain modifications of such covenants could cause a default under the applicable debt instrument, and we may then be required to repay such debt with capital from other sources. The financial impact of COVID-19 could negatively impact our future compliance with financial covenants of our credit facility and other debt agreements and result in a default and potentially an acceleration of indebtedness. Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms. Additionally, our ability to satisfy current or prospective lenders' insurance requirements may be adversely affected if lenders generally insist upon greater insurance coverage against acts of terrorism than is available to us in the marketplace or on commercially reasonable terms.

We rely on debt financing, including borrowings under our unsecured revolving credit facility, term loan facility, issuances of debt securities and debt secured by individual properties, to finance our acquisition and development activities and for working capital. If we are unable to obtain financing from these or other sources, or to refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected. The ultimate extent to which COVID-19 impacts our ability to comply with existing or modified financial covenants and obtain financing will depend on future developments, which, as discussed above, are highly uncertain and cannot be predicted with confidence.

Our real estate investments are concentrated in experiential real estate properties and a significant portion of those investments are in megaplex theatre properties, making us more vulnerable economically than if our investments were more diversified.

We acquire, develop or finance experiential real estate properties. A significant portion of our investments are in megaplex theatre properties. Although we are subject to the general risks inherent in concentrating investments in real estate, the risks resulting from a lack of diversification become even greater as a result of investing primarily in experiential real estate properties. These risks are further heightened by the fact that a significant portion of our investments are in megaplex theatre properties. Although a downturn in the real estate industry could significantly adversely affect the value of our properties, a downturn in the experiential real estate industry could compound this adverse effect. These adverse effects could be more pronounced than if we diversified our investments to a greater degree outside of experiential real estate properties or, more particularly, outside of megaplex theatre properties. In addition, the COVID-19 pandemic is severely impacting experiential real estate properties given that such properties rely on social interaction and discretionary consumer spending.

If we fail to qualify as a REIT, we would be taxed as a corporation, which would substantially reduce funds available for payment of dividends to our shareholders.

If we fail to qualify as a REIT for U.S. federal income tax purposes, we will be taxed as a corporation. We are organized to and believe we qualify as a REIT, and intend to operate in a manner that will allow us to continue to qualify as a REIT. However, we cannot provide any assurance that we have always qualified and will remain qualified in the future. This is because qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), on which there are only limited judicial and administrative interpretations, and depends on facts and circumstances not entirely within our control, including requirements relating to the sources of our gross income. Rents received or accrued by us from our tenants may not be treated as qualifying income for purposes of these requirements if the leases are not respected as true leases or qualified financing arrangements for U.S. federal income tax purposes and instead are treated as service contracts, joint ventures or some other type of arrangement. If some or all of our leases are not respected as true leases or qualified financing arrangements for U.S. federal income tax purposes and are not otherwise treated as generating qualifying REIT income, we may fail to qualify to be taxed as a REIT. Furthermore, our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we may not obtain independent appraisals. In addition, future legislation, new regulations, administrative interpretations or court decisions may significantly change the tax laws, the application of the tax laws to our qualification as a REIT or the U.S. federal income tax consequences of that qualification.

If we were to fail to qualify as a REIT in any taxable year (including any prior taxable year for which the statute of limitations remains open), we would face tax consequences that could substantially reduce the funds available for the service of our debt and payment of dividends:

we would not be allowed a deduction for dividends paid to shareholders in computing our taxable income and would be subject to federal income tax at regular corporate rates;

we could be subject to increased state and local taxes;

unless we are entitled to relief under statutory provisions, we could not elect to be treated as a REIT for four taxable years following the year in which we were disqualified; and

we could be subject to tax penalties and interest.

In addition, if we fail to qualify as a REIT, we will no longer be required to pay dividends. As a result of these factors, our failure to qualify as a REIT could adversely affect the market price for our shares.

Even if we remain qualified for taxation as a REIT under the Internal Revenue Code, we may face other tax liabilities that reduce our funds available for payment of dividends to our shareholders or the repurchase of shares.

Even if we remain qualified for taxation as a REIT under the Internal Revenue Code, we may be subject to federal, state and local taxes on our income and assets, including taxes on any undistributed income, excise taxes, state or local income, property and transfer taxes, and other taxes. Also, some jurisdictions may in the future limit or eliminate favorable income tax deductions, including the dividends paid deduction, which could increase our income tax expense. In addition, in order to meet the requirements for qualification and taxation as a REIT under the Internal Revenue Code, prevent the recognition of particular types of non-cash income, or avert the imposition of a 100% tax that applies to specified gains derived by a REIT from dealer property or inventory, we may hold or dispose of some of our assets and conduct some of our operations through our TRSs or other subsidiary corporations that will be subject to corporate level income tax at regular rates. In addition, while we intend that our transactions with our TRSs will be conducted on arm's length bases, we may be subject to a 100% excise tax on a transaction that the Internal Revenue Service ("IRS") or a court determines was not conducted at arm's length. Any of these taxes would decrease cash available for distribution to our shareholders or the repurchase of shares under our share repurchase program.

Distribution requirements imposed by law limit our flexibility.

To maintain our status as a REIT for federal income tax purposes, we are generally required to distribute to our shareholders at least 90% of our taxable income for that calendar year. Our taxable income is determined without regard to any deduction for dividends paid and by excluding net capital gains. To the extent that we satisfy the distribution

requirement but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of (i) 85% of our ordinary income for that year, (ii) 95% of our capital gain net income for that year and (iii) 100% of our undistributed taxable income from prior years. We intend to continue to make distributions to our shareholders to comply with the distribution requirements of the Internal Revenue Code and to reduce exposure to federal income and nondeductible excise taxes. Differences in timing between the receipt of income and the payment of expenses in determining our taxable income and the effect of required debt amortization payments could require us to borrow funds on a short-term basis in order to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT.

If arrangements involving our TRSs fail to comply as intended with the REIT qualification and taxation rules, we may fail to qualify for taxation as a REIT under the Internal Revenue Code or be subject to significant penalty taxes.

We lease some of our experiential lodging properties to our TRSs pursuant to arrangements that, under the Internal Revenue Code, are intended to qualify the rents we receive from our TRSs as income that satisfies the REIT gross income tests. We also intend that our transactions with our TRSs be conducted on arm's length bases so that we and our TRSs will not be subject to penalty taxes under the Internal Revenue Code applicable to mispriced transactions. While relief provisions can sometimes excuse REIT gross income test failures, significant penalty taxes may still be imposed.

For our TRS arrangements to comply as intended with the REIT qualification and taxation rules under the Internal Revenue Code, a number of requirements must be satisfied, including:

our TRSs may not directly or indirectly operate or manage a lodging facility, as defined by the Internal Revenue Code;

the leases to our TRSs must be respected as true leases for federal income tax purposes and not as service contracts, partnerships, joint ventures, financings or other types of arrangements;

the leased properties must constitute qualified lodging facilities (including customary amenities and facilities) under the Internal Revenue Code;

our leased properties must be managed and operated on behalf of the TRSs by independent contractors who are less than 35% affiliated with us and who are actively engaged (or have affiliates so engaged) in the trade or business of managing and operating qualified lodging facilities for persons unrelated to us; and

the rental and other terms of the leases must be arm's length.

We cannot be sure that the IRS or a court will agree with our assessment that our TRS arrangements comply as intended with REIT qualification and taxation rules. If arrangements involving our TRSs fail to comply as we intended, we may fail to qualify for taxation as a REIT under the Internal Revenue Code or be subject to significant penalty taxes.

We may depend on distributions from our direct and indirect subsidiaries to service our debt, pay dividends to our shareholders and repurchase shares. The creditors of these subsidiaries, and our direct creditors, are entitled to amounts payable to them before we pay any dividends to our shareholders or repurchase shares.

Substantially all of our assets are held through our subsidiaries. We depend on these subsidiaries for substantially all of our cash flow from operations. The creditors of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary's obligations to them, when due and payable, before distributions may be made by that subsidiary to us. In addition, our creditors, whether secured or unsecured, are entitled to amounts payable to them before we may pay any dividends to our shareholders or repurchase shares under our share repurchase program. Thus, our ability to service our debt obligations, pay dividends to holders of our common and preferred shares and repurchase shares depends on our subsidiaries' ability first to satisfy their obligations to their creditors and then to pay distributions to us and our ability to satisfy our obligations to our direct creditors. Our subsidiaries are separate and distinct legal entities and have no obligations, other than limited guaranties of certain of our debt, to make funds available to us.

Our development financing arrangements expose us to funding and completion risks.

Our ability to meet our construction financing obligations which we have undertaken or may enter into in the future depends on our ability to obtain equity or debt financing in the required amounts. There is no assurance we can obtain

this financing or that the financing rates available will ensure a spread between our cost of capital and the rent or interest payable to us under the related leases or mortgage notes receivable. As a result, we could fail to meet our construction financing obligations or decide to cease such funding which, in turn, could result in failed projects and penalties, each of which could have a material adverse impact on our results of operations and business.

We have a limited number of employees and loss of personnel could harm our operations and adversely affect the value of our shares.

We had 58 full-time employees as of March 31, 2020 and, therefore, the impact we may feel from the loss of an employee may be greater than the impact such a loss would have on a larger organization. We are dependent on the efforts of the following individuals: Gregory K. Silvers, our President and Chief Executive Officer; Mark A. Peterson, our Executive Vice President and Chief Financial Officer; Craig L. Evans, our Executive Vice President, General Counsel and Secretary; Greg Zimmerman, our Executive Vice President and Chief Investment Officer; Michael L. Hirons, our Senior Vice President - Asset Management; and Tonya L. Mater, our Vice President and Chief Accounting Officer. While we believe that we could find replacements for our personnel, the loss of their services could harm our operations and adversely affect the value of our shares.

We are subject to risks associated with the employment of personnel by managers of our experiential lodging properties.

Managers of our experiential lodging properties are responsible for hiring and maintaining the labor force at each of these properties. Although we do not directly employ or manage employees at our experiential lodging properties, we are subject to many of the costs and risks associated with such labor force, including but not limited to risks associated with that certain union contract binding the manager of our Kartrite Resort and Indoor Waterpark. From time to time, the operations of our experiential lodging properties may be disrupted as a result of strikes, lockouts, public demonstrations or other negative actions and publicity. We may also incur increased legal costs and indirect labor costs as a result of contract disputes and other events. The resolution of labor disputes or renegotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules.

We may in the future have greater dependence upon the gaming industry and may be susceptible to the risks associated with it, which could materially and adversely affect our business, financial condition, liquidity, results of operations and prospects.

As a landlord of gaming facilities or secured creditor to gaming operators, we may be impacted by the risks associated with the gaming industry. Therefore, so long as we make investments in gaming-related assets, our success is dependent on the gaming industry, which could be adversely affected by economic conditions in general, changes in consumer trends and preferences and other factors over which we and our tenants have no control, such as the COVID-19 pandemic. A component of the rent under our gaming facility lease agreements will be based, over time, on the performance of the gaming facilities operated by our tenants on our properties and any decline in the operating results of our gaming tenants could be material and adverse to our business, financial condition, liquidity, results of operations and prospects.

The gaming industry is characterized by a high degree of competition among a large number of participants, including riverboat casinos, dockside casinos, land-based casinos, video lottery, sweepstakes and poker machines not located in casinos, Native American gaming, internet lotteries and other internet wagering gaming services and, in a broader sense, gaming operators face competition from all manner of leisure and entertainment activities. Gaming competition is intense in most of the markets where our facilities are located. Recently, there has been additional significant competition in the gaming industry as a result of the upgrading or expansion of facilities by existing market participants, the entrance of new gaming participants into a market, internet gaming and legislative changes. As competing properties and new markets are opened, we may be negatively impacted. Additionally, decreases in discretionary consumer spending brought about by weakened general economic conditions such as, but not limited to, lackluster recoveries from recessions, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, cultural and demographic changes and increased stock market volatility may negatively impact our revenues and operating cash flows.

We will face extensive regulation from gaming and other regulatory authorities with respect to our gaming properties.

The ownership, operation, and management of gaming facilities are subject to pervasive regulation. These gaming regulations impact our gaming tenants and persons associated with our gaming facilities, which in many jurisdictions

include us as the landlord and owner of the real estate. Certain gaming authorities in the jurisdictions in which we hold properties may require us and/or our affiliates to maintain a license as a key business entity or supplier because of our status as landlord. Gaming authorities also retain great discretion to require us to be found suitable as a landlord, and certain of our shareholders, officers and trustees may be required to be found suitable as well.

In many jurisdictions, gaming laws can require certain of our shareholders to file an application, be investigated, and qualify or have his, her or its suitability determined by gaming authorities. Gaming authorities have very broad discretion in determining whether an applicant should be deemed suitable. Subject to certain administrative proceeding requirements, the gaming regulators have the authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by the gaming authorities.

Gaming authorities may conduct investigations into the conduct or associations of our trustees, officers, key employees or investors to ensure compliance with applicable standards. If we are required to be found suitable and are found suitable as a landlord, we will be registered as a public company with the gaming authorities and will be subject to disciplinary action if, after we receive notice that a person is unsuitable to be a shareholder or to have any other relationship with us, we:

pay that person any distribution or interest upon any of our voting securities;

allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person;

pay remuneration in any form to that person for services rendered or otherwise; or

fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities, including, if necessary, the immediate purchase of the voting securities for cash at fair market value.

Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gaming company and, in some jurisdictions, non-voting securities, typically 5% of a publicly-traded company, to report the acquisition to gaming authorities, and gaming authorities may require such holders to apply for qualification, licensure or a finding of suitability, subject to limited exceptions for "institutional investors" that hold a company's voting securities for passive investment purposes only.

Required regulatory approvals can delay or prohibit transfers of our gaming properties, which could result in periods in which we are unable to receive rent for such properties.

Our tenant is (and any future tenants of our gaming properties will be) required to be licensed under applicable law in order to operate any of our properties that are gaming facilities. If our gaming facility lease agreements, or any future lease agreement we enter into, are terminated (which could be required by a regulatory agency) or expire, any new tenant must be licensed and receive other regulatory approvals to operate our properties as gaming facilities. Any delay in, or inability of, the new tenant to receive required licenses and other regulatory approvals from the applicable state and county government agencies may prolong the period during which we are unable to collect the applicable rent. Further, in the event that our gaming facility lease agreements or future lease agreements are terminated or expire and a new tenant is not licensed or fails to receive other regulatory approvals, the properties may not be operated as gaming facilities and we will not be able to collect the applicable rent. Moreover, we may be unable to transfer or sell the affected properties as gaming facilities, which could materially and adversely affect our business, financial condition, liquidity, results of operations and prospects.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer. Our service providers, tenants and managers of our properties and their business partners are exposed to similar risks.

In the ordinary course of our business, we collect and store sensitive data, including our proprietary business information and that of our tenants, managers of our properties and other customers and personally identifiable information of our employees, in our facility and on our network. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our network and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims

or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence, which could adversely affect our business. Our service providers, tenants, managers of our properties and other customers and their business partners are exposed to similar risks and the occurrence of a security breach or other disruption with respect to their information technology and infrastructure could, in turn, have a material adverse impact on our results of operations and business.

Changes in accounting standards issued by the Financial Accounting Standards Board ("FASB") or other standard-setting bodies may adversely affect our business.

Our financial statements are subject to the application of U.S. GAAP, which is periodically revised and/or expanded. From time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the FASB and the SEC. It is possible that accounting standards we are required to adopt may require changes to the current accounting treatment that we apply to our consolidated financial statements and may require us to make significant changes to our systems. Changes in accounting standards could result in a material adverse impact on our business, financial condition and results of operations.

Risks That Apply to Our Real Estate Business

Real estate income and the value of real estate investments fluctuate due to various factors.

The value of real estate fluctuates depending on conditions in the general economy and the real estate business. These conditions may also limit our revenues and available cash. The rents, interest and other payments we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of the factors that affect the value of our real estate. If our revenues decline, we generally would expect to have less cash available to pay our indebtedness, distribute to our shareholders and effect share repurchases. In addition, some of our unreimbursed costs of owning real estate may not decline when the related rents decline.

The factors that affect the value of our real estate include, among other things:

international, national, regional and local economic conditions;

consequences of any armed conflict involving, or terrorist attack against, the United States or Canada;

the threat of domestic terrorism or pandemic outbreaks (such as COVID-19), which could cause consumers to avoid congregate settings;

our ability or the ability of our tenants or managers to secure adequate insurance;

natural disasters, such as earthquakes, hurricanes and floods, which could exceed the aggregate limits of insurance coverage;

local conditions such as an oversupply of space or lodging properties or a reduction in demand for real estate in the area;

competition from other available space or, in the case of our experiential lodging properties, competition from other lodging properties or alternative lodging options in our markets;

whether tenants and users such as customers of our tenants consider a property attractive;

the financial condition of our tenants, mortgagors and managers, including the extent of bankruptcies or defaults;

whether we are able to pass some or all of any increased operating costs through to tenants or other customers;

how well we manage our properties or how well the managers of properties manage those properties;

in the case of our experiential lodging properties, dependence on demand from business and leisure travelers, which may fluctuate and be seasonal;

fluctuations in interest rates;

changes in real estate taxes and other expenses;

changes in market rental rates;

the timing and costs associated with property improvements and rentals;

changes in taxation or zoning laws;

government regulation;

availability of financing on acceptable terms or at all;

potential liability under environmental or other laws or regulations; and

general competitive factors.

The rents, interest and other payments we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of these factors. If our revenues decline, we generally would expect to have less cash available to pay our indebtedness and distribute to our shareholders. In addition, some of our unreimbursed costs of owning real estate may not decline when the related rents decline.

There are risks associated with owning and leasing real estate.

Although our lease terms in most cases, obligate the tenants to bear substantially all of the costs of operating the properties and our managers to manage such costs, investing in real estate involves a number of risks, including:

the risk that tenants will not perform under their leases or that managers will not perform under their management agreements, reducing our income from such leases or properties under such management;

we may not always be able to lease properties at favorable rates or certain tenants may require significant capital expenditures by us to conform existing properties to their requirements;

we may not always be able to sell a property when we desire to do so at a favorable price; and

changes in tax, zoning or other laws could make properties less attractive or less profitable.

If a tenant fails to perform on its lease covenants or a manager fails to perform on its management covenants, that would not excuse us from meeting any debt obligation secured by the property and could require us to fund reserves in favor of our lenders, thereby reducing funds available for payment of dividends. We cannot be assured that tenants or managers will elect to renew their leases or management agreements when the terms expire. If a tenant or manager does not renew its lease or agreement or if a tenant or a manager defaults on its lease or management obligations, there is no assurance we could obtain a substitute tenant or manager on acceptable terms. If we cannot obtain another quality tenant or manager, we may be required to modify the property for a different use, which may involve a significant capital expenditure and a delay in re-leasing the property or obtaining a new manager. In addition, tenants or managers may seek concessions or other modifications to existing leases and management agreements as a result of the COVID-19 pandemic.

Some potential losses are not covered by insurance.

Our leases with tenants and agreements with managers of our properties require the tenants and managers to carry comprehensive liability, casualty, workers' compensation, extended coverage and rental loss insurance on our properties, as applicable. We believe the required coverage is of the type, and amount, customarily obtained by an owner of similar properties. We believe all of our properties are adequately insured. However, we are exposed to risks that the insurance coverage levels required under our leases with tenants and agreements with managers of our properties may be inadequate, and these risks may be increased as we expand our portfolio into experiential properties that may present more risk of loss as compared to properties in our existing portfolio. In addition, there are some types of losses, such as pandemics, catastrophic acts of nature, acts of war or riots, for which we, our tenants or managers of our properties cannot obtain insurance at an acceptable cost or at all. If there is an uninsured loss or a loss in excess of insurance limits, we could lose both the revenues generated by the affected property and the capital we have invested in the property. We would, however, remain obligated to repay any mortgage indebtedness or other obligations related to the property. In addition, the cost of insurance protection against terrorist acts has risen dramatically over the years. There can be no assurance our tenants or managers of our properties will be able to obtain terrorism insurance coverage, as applicable, or that any coverage they do obtain will adequately protect our properties against loss from terrorist attack.

Joint ventures may limit flexibility with jointly owned investments.

We may continue to acquire or develop properties in joint ventures with third parties when those transactions appear desirable. We would not own the entire interest in any property acquired by a joint venture. Major decisions regarding a joint venture property may require the consent of our partner. If we have a dispute with a joint venture partner, we may feel it necessary or become obligated to acquire the partner's interest in the venture. However, we cannot ensure that the price we would have to pay or the timing of the acquisition would be favorable to us. If we own less than a 50% interest in any joint venture, or if the venture is jointly controlled, the assets and financial results of the joint venture may not be reportable by us on a consolidated basis. To the extent we have commitments to, or on behalf of, or are dependent on, any such "off-balance sheet" arrangements, or if those arrangements or their properties or leases

are subject to material contingencies, our liquidity, financial condition and operating results could be adversely affected by those commitments or off-balance sheet arrangements.

Our multi-tenant properties expose us to additional risks.

Our entertainment districts in Colorado, New York, California, and Ontario, Canada, and similar properties we may seek to acquire or develop in the future, involve risks not typically encountered in the purchase and lease-back of real estate properties which are operated by a single tenant. The ownership or development of multi-tenant retail centers could expose us to the risk that a sufficient number of suitable tenants may not be found to enable the centers to operate profitably and provide a return to us. This risk may be compounded by the failure of existing tenants to satisfy their obligations due to various factors, including economic downturns. In addition, the COVID-19 pandemic is severely impacting our retail tenants' businesses, financial condition and liquidity, which has resulted in substantially all of these tenants failing to satisfy their obligations to us or otherwise seeking modifications to their lease arrangements. These risks, in turn, could cause a material adverse impact to our results of operations and business.

Retail centers are also subject to tenant turnover and fluctuations in occupancy rates, which could affect our operating results. Multi-tenant retail centers also expose us to the risk of potential "CAM slippage," which may occur when the actual cost of taxes, insurance and maintenance at the property exceeds the CAM fees paid by tenants.

Failure to comply with the Americans with Disabilities Act and other laws could result in substantial costs.

Most of our properties must comply with the Americans with Disabilities Act ("ADA"). The ADA requires that public accommodations reasonably accommodate individuals with disabilities and that new construction or alterations be made to commercial facilities to conform to accessibility guidelines. Failure to comply with the ADA can result in injunctions, fines, damage awards to private parties and additional capital expenditures to remedy noncompliance. Our leases with tenants and agreements with managers of our properties require them to comply with the ADA.

Our properties are also subject to various other federal, state and local regulatory requirements. We do not know whether existing requirements will change or whether compliance with future requirements will involve significant unanticipated expenditures. Although these expenditures would be the responsibility of our tenants in most cases and for our managers to oversee at our properties, if these tenants or managers fail to perform these obligations, we may be required to do so.

Potential liability for environmental contamination could result in substantial costs.

Under federal, state and local environmental laws, we may be required to investigate and clean up any release of hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or actual responsibility, simply because of our current or past ownership of the real estate. If unidentified environmental problems arise, we may have to make substantial payments, which could adversely affect our cash flow and our ability to service our debt and pay dividends to our shareholders. This is because:

as owner, we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination;

the law may impose clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination;

even if more than one person is responsible for the contamination, each person who shares legal liability under environmental laws may be held responsible for all of the clean-up costs; and

governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs.

These costs could be substantial and in extreme cases could exceed the value of the contaminated property. The presence of hazardous substances or petroleum products or the failure to properly remediate contamination may adversely affect our ability to borrow against, sell or lease an affected property. In addition, some environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination. Most of our loan agreements require the Company or a subsidiary to indemnify the lender against environmental liabilities. Our leases with tenants and agreements with managers of our properties require them to operate the properties in compliance with environmental laws and to indemnify us against environmental liability arising from the operation of

the properties. We believe all of our properties are in material compliance with environmental laws. However, we could be subject to strict liability under environmental laws because we own the properties. There is also a risk that tenants may not satisfy their environmental compliance and indemnification obligations under the leases or other agreements. Any of these events could substantially increase our cost of operations, require us to fund environmental indemnities in favor of our lenders, limit the amount we could borrow under our unsecured revolving credit facility and term loan facility and reduce our ability to service our debt and pay dividends to shareholders.

Real estate investments are relatively illiquid.

We may desire to sell properties in the future because of changes in market conditions, poor tenant performance or default of any mortgage we hold, or to avail ourselves of other opportunities. We may also be required to sell a property in the future to meet debt obligations or avoid a default. Specialty real estate projects such as we have cannot always be sold quickly, and we cannot assure you that we could always obtain a favorable price. In addition, the Internal Revenue Code limits our ability to sell our properties. We may be required to invest in the restoration or modification of a property before we can sell it. The inability to respond promptly to changes in the performance of our property portfolio could adversely affect our financial condition and ability to service our debt and pay dividends to our shareholders.

There are risks in owning assets outside the United States.

Our properties in Canada are subject to the risks normally associated with international operations. The rentals under our Canadian leases are payable in Canadian dollars ("CAD"), which could expose us to losses resulting from fluctuations in exchange rates to the extent we have not hedged our position. Canadian real estate and tax laws are complex and subject to change, and we cannot assure you we will always be in compliance with those laws or that compliance will not expose us to additional expense. We may also be subject to fluctuations in Canadian real estate values or markets or the Canadian economy as a whole, which may adversely affect our Canadian investments.

Additionally, we have made investments in projects located in China and may enter other international markets, which may have similar risks as described above as well as unique risks associated with a specific country.

There are risks in owning or financing properties for which the tenant's, mortgagor's, or our operations may be impacted by weather conditions, climate change and natural disasters.

We have acquired and financed ski properties and expect to do so in the future. The operators of these properties, our tenants or mortgagors, are dependent upon the operations of the properties to pay their rents and service their loans. The ski property operator's ability to attract visitors is influenced by weather conditions and climate change in general, each of which may impact the amount of snowfall during the ski season. Adverse weather conditions may discourage visitors from participating in outdoor activities. In addition, unseasonably warm weather may result in inadequate natural snowfall, which increases the cost of snowmaking, and could render snowmaking wholly or partially ineffective in maintaining quality skiing conditions and attracting visitors. Excessive natural snowfall may materially increase the costs incurred for grooming trails and may also make it difficult for visitors to obtain access to ski properties. We also own and finance attractions (including waterparks) which would also be subject to risks relating to weather conditions such as in the case of waterparks and amusement parks, excessive rainfall or unseasonable temperatures. Prolonged periods of adverse weather conditions, or the occurrence of such conditions during peak visitation periods, could have a material adverse effect on the operator's financial results and could impair the ability of the operator to make rental or other payments or service our loans.

A severe natural disaster, such as a forest fire, may interrupt the operations of an operator, damage our properties, reduce the number of guests who visit the resorts in affected areas and negatively impact an operator's revenue and profitability. Damage to our properties could take a long time to repair and there is no guarantee that we would have adequate insurance to cover the costs of repair and recoup lost profits. Furthermore, such a disaster may interrupt or impede access to our affected properties or require evacuations and may cause visits to our affected properties to decrease for an indefinite period. The ability of our operators to attract visitors to our experiential lodging properties is also influenced by the aesthetics and natural beauty of the outdoor environment where these resorts are located. A severe forest fire or other severe impacts from naturally occurring events could negatively impact the natural beauty of our resort properties and have a long-term negative impact on an operator's overall guest visitation as it could take several years for the environment to recover.

We face risks associated with the development, redevelopment and expansion of properties and the acquisition of other real estate related companies.

We may develop, redevelop or expand new or existing properties or acquire other real estate related companies, and these activities are subject to various risks. We may not be successful in pursuing such development or acquisition opportunities. In addition, newly developed or redeveloped/expanded properties or newly acquired companies may not perform as well as expected. We are subject to other risks in connection with any such development or acquisition activities, including the following:

we may not succeed in completing developments or consummating desired acquisitions on time;

we may face competition in pursuing development or acquisition opportunities, which could increase our costs;

we may encounter difficulties and incur substantial expenses in integrating acquired properties into our operations and systems and, in any event, the integration may require a substantial amount of time on the part of both our management and employees and therefore divert their attention from other aspects of our business;

we may undertake developments or acquisitions in new markets or industries where we do not have the same level of market knowledge, which may expose us to unanticipated risks in those markets and industries to which we are unable to effectively respond, such as an inability to attract qualified personnel with knowledge of such markets and industries;

we may incur construction costs in connection with developments, which may be higher than projected, potentially making the project unfeasible or unprofitable;

we may incur unanticipated capital expenditures in order to maintain or improve acquired properties;

we may be unable to obtain zoning, occupancy or other governmental approvals;

we may experience delays in receiving rental payments for developments that are not completed on time;

our developments or acquisitions may not be profitable;

we may need the consent of third parties such as anchor tenants, mortgage lenders and joint venture partners, and those consents may be withheld;

we may incur adverse tax consequences if we fail to qualify as a REIT for U.S. federal income tax purposes following an acquisition;

we may be subject to risks associated with providing mortgage financing to third parties in connection with transactions, including any default under such mortgage financing;

we may face litigation or other claims in connection with, or as a result of, acquisitions, including claims from terminated employees, tenants, former stockholders or other third parties;

the market price of our common shares, preferred shares and debt securities may decline, particularly if we do not achieve the perceived benefits of any acquisition as rapidly or to the extent anticipated by securities or industry analysts or if the effect of an acquisition on our financial condition, results of operations and cash flows is not consistent with the expectations of these analysts;

we may issue shares in connection with acquisitions resulting in dilution to our existing shareholders; and

we may assume debt or other liabilities in connection with acquisitions.

In addition, there is no assurance that planned third-party financing related to development and acquisition opportunities will be provided on a timely basis or at all, thus increasing the risk that such opportunities are delayed or fail to be completed as originally contemplated. We may also abandon development or acquisition opportunities that we have begun pursuing and consequently fail to recover expenses already incurred and have devoted management time to a matter not consummated. In some cases, we may agree to lease or other financing terms for a development project in advance of completing and funding the project, in which case we are exposed to the risk of an increase in our cost of capital during the interim period leading up to the funding, which can reduce, eliminate or result in a negative spread between our cost of capital and the payments we expect to receive from the project. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or companies, some of which we may not be aware at the time of acquisition. In addition, development of our existing properties presents similar risks. If a development or acquisition is unsuccessful, either because it is not meeting our expectations or was not completed according to our plans, we could lose our investment in the development or acquisition.

Risks That May Affect the Market Price of Our Shares

We cannot assure you we will continue paying cash dividends at current rates.

Our dividend policy is determined by our Board of Trustees. Our ability to continue paying dividends on our common shares, to pay dividends on our preferred shares at their stated rates or to increase our common share dividend rate will depend on a number of factors, including our liquidity, our financial condition and results of future operations, the performance of lease and mortgage terms by our tenants and customers, our ability to acquire, finance and lease additional properties at attractive rates, and provisions in our loan covenants. The financial impact of the COVID-19 pandemic has reduced our cash flows, which we expect will impact our ability to continue paying dividends to our shareholders at expected levels or at all. In connection with obtaining the covenant modifications discussed above, we are temporarily suspending our monthly cash dividend to common shareholders after the common share dividend payable May 15, 2020 (except as may be necessary to maintain REIT status and to not owe income tax). If we do not reinstate common share dividends in future periods or maintain or increase any future common share dividend rate, that could have an adverse effect on the market price of our common shares and possibly our preferred shares. Furthermore, if the Board of Trustees decides to pay dividends on our common shares partially or substantially all in common shares, that could have an adverse effect on the market price of our common shares and possibly our preferred shares.

Market interest rates may have an effect on the value of our shares.

One of the factors that investors may consider in deciding whether to buy or sell our common shares or preferred shares is our dividend rate as a percentage of our share price, relative to market interest rates. If market interest rates increase, prospective investors may desire a higher dividend rate on our common shares or seek securities paying higher dividends or interest.

Broad market fluctuations could negatively impact the market price of our shares.

The stock market has experienced extreme price and volume fluctuations as a result of the COVID-19 pandemic that have affected the market price of the common equity of many companies, including companies in industries similar or related to ours, and that have been unrelated to these companies' operating performances. These broad market fluctuations could reduce the market price of our shares. Furthermore, our operating results and prospects may be below the expectations of public market analysts and investors or may be lower than those of companies with comparable market capitalizations. Either of these factors could lead to a material decline in the market price of our shares.

Market prices for our shares may be affected by perceptions about the financial health or share value of our tenants, mortgagors and managers or the performance of REIT stocks generally.

To the extent any of our tenants or customers, or their competition, report losses or slower earnings growth, take charges against earnings or enter bankruptcy proceedings, the market price for our shares could be adversely affected. The reduced economic activity resulting from the COVID-19 pandemic is severely impacting our tenants' businesses, financial condition and liquidity, which could adversely affect the market price for our shares. The market price for our shares could also be affected by any weakness in the performance of REIT stocks generally or weakness in any of the sectors in which our tenants and customers operate.

Limits on changes in control may discourage takeover attempts which may be beneficial to our shareholders.

There are a number of provisions in our Declaration of Trust and Bylaws and under Maryland law and agreements we have with others, any of which could make it more difficult for a party to make a tender offer for our shares or complete a takeover of the Company which is not approved by our Board of Trustees. These include:

a limit on beneficial ownership of our shares, which acts as a defense against a hostile takeover or acquisition of a significant or controlling interest, in addition to preserving our REIT status;

the ability of the Board of Trustees to issue preferred or common shares, to reclassify preferred or common shares, and to increase the amount of our authorized preferred or common shares, without shareholder approval;

limits on the ability of shareholders to remove trustees without cause;

requirements for advance notice of shareholder proposals at shareholder meetings;

provisions of Maryland law restricting business combinations and control share acquisitions not approved by the Board of Trustees and unsolicited takeovers;

provisions of Maryland law protecting corporations (and by extension REITs) against unsolicited takeovers by limiting the duties of the trustees in unsolicited takeover situations;

provisions in Maryland law providing that the trustees are not subject to any higher duty or greater scrutiny than that applied to any other director under Maryland law in transactions relating to the acquisition or potential acquisition of control;

provisions of Maryland law creating a statutory presumption that an act of the trustees satisfies the applicable standards of conduct for trustees under Maryland law;

provisions in loan or joint venture agreements putting the Company in default upon a change in control; and

provisions of our compensation arrangements with our employees calling for severance compensation and vesting of equity compensation upon termination of employment upon a change in control or certain events of the employees' termination of service.

Any or all of these provisions could delay or prevent a change in control of the Company, even if the change was in our shareholders' interest or offered a greater return to our shareholders.

We may change our policies without obtaining the approval of our shareholders.

Our operating and financial policies, including our policies with respect to acquiring or financing real estate or other companies, growth, operations, indebtedness, capitalization and dividends, are exclusively determined by our Board of Trustees. Accordingly, our shareholders do not control these policies.

Dilution could affect the value of our shares.

Our future growth will depend in part on our ability to raise additional capital. If we raise additional capital through the issuance of equity securities, the interests of holders of our common shares could be diluted. Likewise, our Board of Trustees is authorized to cause us to issue preferred shares in one or more series, the holders of which would be entitled to dividends and voting and other rights as our Board of Trustees determines, and which could be senior to or convertible into our common shares. Accordingly, an issuance by us of preferred shares could be dilutive to or otherwise adversely affect the interests of holders of our common shares. As of March 31, 2020, our Series C preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4137 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $60.43 per common share (subject to adjustment in certain events). Additionally, as of March 31, 2020, our Series E preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4826 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $51.80 per common share (subject to adjustment in certain events). Under certain circumstances in connection with a change in control of the Company, holders of our Series G preferred shares may elect to convert some or all of their Series G preferred shares into a number of our common shares per Series G preferred share equal to the lesser of (a) the $25.00 per share liquidation preference, plus accrued and unpaid dividends divided by the market value of our common shares or (b) 0.7389 shares. Depending upon the number of Series C, Series E and Series G preferred shares being converted at one time, a conversion of Series C, Series E and Series G preferred shares could be dilutive to or otherwise adversely affect the interests of holders of our common shares. In addition, we may issue a significant amount of equity securities in connection with acquisitions or investments, with or without seeking shareholder approval, which could result in significant dilution to our existing shareholders.

Future offerings of debt or equity securities, which may rank senior to our common shares, may adversely affect the market price of our common shares.

If we decide to issue debt securities in the future, which would rank senior to our common shares, it is likely that they will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any equity securities or convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common shares and may result in dilution to owners of our common shares. We and, indirectly, our shareholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our common shares will bear the risk of our future offerings reducing the market price of our common shares and diluting the value of their shareholdings in us.

Changes in foreign currency exchange rates may have an impact on the value of our shares.

The functional currency for our Canadian operations is the Canadian dollar. As a result, our future operating results could be affected by fluctuations in the exchange rate between U.S. and Canadian dollars, which in turn could affect our share price. We have attempted to mitigate our exposure to Canadian currency exchange risk by entering into foreign currency exchange contracts to hedge in part our exposure to exchange rate fluctuations. Foreign currency derivatives are subject to future risk of loss. We do not engage in purchasing foreign exchange contracts for speculative purposes.

Additionally, we have made investments in China and may enter other international markets which pose similar currency fluctuation risks as described above.

We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our shares.

At any time, the U.S. federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be changed, possibly with retroactive effect.

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. The Tax Cuts and Jobs Act made many significant changes to the U.S. federal income tax laws applicable to businesses and their owners, including REITs and their shareholders. Pursuant to this legislation, as of January 1, 2018, (1) the federal income tax rate applicable to corporations was reduced to 21%, (2) the highest marginal individual income tax rate was reduced to 37%, and (3) the corporate alternative minimum tax was repealed. In addition, individuals, estates and trusts may deduct up to 20% of certain pass-through income, including ordinary REIT dividends that are not "capital gain dividends" or "qualified dividend income," subject to complex limitations. For taxpayers qualifying for the full deduction, the effective maximum tax rate on ordinary REIT dividends would be 29.6% (through taxable years ending in 2025). The maximum rate of withholding with respect to our distributions to non-U.S. shareholders that are treated as attributable to gains from the sale or exchange of U.S. real property interests was also reduced from 35% to 21%. The deduction of net interest expense is limited for all businesses, other than certain electing businesses, including real estate businesses, which limitation could adversely affect our taxable REIT subsidiaries. The long-term impact of the Tax Cuts and Jobs Act on the overall economy, the real estate industry, us, our tenants and our shareholders cannot be predicted at this time, but it is possible that the extensive changes to the U.S. federal income tax laws made by the Tax Cuts and Jobs Act may have unanticipated effects on us or our shareholders.

We cannot predict if or when any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective or whether any such law, regulation or interpretation may take effect retroactively. We and our shareholders could be adversely affected by any such change in, or any new, U.S. federal income tax law, regulation or administrative interpretation. Furthermore, any proposals seeking broader reform of U.S. federal income tax laws, if enacted, could change the federal income tax laws applicable to REITs, subject us to federal tax or reduce or eliminate the current deduction for dividends paid to our shareholders, any of which could negatively affect the market for our shares.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 through January 31, 2019 common stock 153,654
⁽¹⁾
$ 65.63
—
$ —
February 1 through February 28, 2019 common stock 889
⁽¹⁾
73.74
—
—
March 1 through March 31, 2019 common stock 4,663
⁽²⁾
76.47
—
—

Total 159,206
$ 65.99
—
$ —



Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 through January 31, 2020 common shares	95,616	(1)	$	70.65	—	$	—
February 1 through February 29, 2020 common shares	—		—		—	—
March 1 through March 31, 2020 common shares	687	(1)	20.78		—	150,000,000

Total	96,303		$	70.29	—	$	150,000,000

⁽¹⁾ The repurchases of equity securities during January and ~~February~~March of ~~2019~~2020 were completed in conjunction with the vesting of employee nonvested ~~shares as well as employee stock option exercises.~~shares. These repurchases were not made pursuant to a publicly announced plan or program.

⁽²⁾ On March 24, 2020, we announced that our Board of Trustees approved a share repurchase program pursuant to which we may repurchase up to $150 million of our common shares. The ~~repurchases~~share repurchase program is scheduled to expire on December 31, 2020; however, we will suspend the program upon the effective date of ~~equity securities during March~~the covenant modification agreements as discussed above under "Management's Discussion and Analysis of ~~2019 were completed~~Financial Condition and Results of Operations." Under the share repurchase program, we may repurchase our common shares in ~~conjunction with employee stock option exercises. These repurchases were not made~~the open market, through block trades, in privately negotiated transactions, pursuant to a ~~publicly announced~~trading plan separately adopted in the future, or ~~program.~~by other means, in accordance with federal securities laws and other applicable laws. The actual timing, number and value of common shares repurchased under the share repurchase program will be determined by management at its discretion and will depend on a number of factors, including, but not limited to, the market price of our common shares, general market and economic conditions, our financial condition, and applicable legal requirements. We are not obligated to repurchase a minimum number of common shares under the share repurchase program, and we may modify, suspend or terminate the share repurchase program at any time without prior notice.

Dividends

As discussed above under "Management's Discussion and Analysis of Financial Condition and Results of Operations," we expect that we will not be in technical compliance (non-payment related) with certain earnings and other financial covenants under our bank credit facilities and private placement notes at the end of the second quarter of 2020. We are currently in discussions with our lenders and private placement note holders to obtain a temporary suspension or modification of such covenants. We have received approval from the requisite lenders under our bank credit facilities that the bank lenders will suspend or modify these financial covenants, subject to our and such lenders' subsequent execution and delivery of a definitive agreement. In connection with obtaining these covenant modifications, we are temporarily suspending our monthly cash dividend to common shareholders after the common share dividend payable May 15, 2020 (except as may be necessary to maintain REIT status and to not owe income tax). There can be no assurances at to our ability to reinstitute cash dividend payments to common shareholders in future periods or the timing thereof.

Item 3. Defaults Upon Senior Securities

There were no reportable events during the quarter ended March 31, ~~2019~~2020.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

There were no reportable events during the quarter ended March 31, ~~2019~~2020.

Item 6. Exhibits



31.1*10.1	2020 Long Term Incentive Plan, which is attached as Exhibit 10.1 to the Company's Form 8-K (Commission File No. 001-13561) filed on February 26, 2020, is hereby incorporated by reference as Exhibit 10.1.
10.2	Form of Performance Shares Awards Agreement under the 2020 Long Term Incentive Plan, which is attached as Exhibit 10.2 to the Company's Form 8-K (Commission File No. 001-13561) filed on February 26, 2020, is hereby incorporated by reference as Exhibit 10.2.
10.3	Form of Restricted Shares Award Agreement under the 2020 Long Term Incentive Plan, which is attached as Exhibit 10.3 to the Company's Form 8-K (Commission File No. 001-13561) filed on February 26, 2020, is hereby incorporated by reference as Exhibit 10.3.
31.1*	Certification of Gregory K. Silvers pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 31.1.
31.231.2	Certification of Mark A. Peterson pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 31.2.
32.132.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 32.1.
32.232.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 32.2.
101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema
101.CAL*	Inline XBRL Extension Calculation Linkbase
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase
104*	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		EPR Properties

Dated:	~~April 30, 2019~~May 11, 2020	By	/s/ Gregory K. Silvers
			Gregory K. Silvers, President and Chief Executive Officer (Principal Executive Officer)

Dated:	~~April 30, 2019~~May 11, 2020	By	/s/ Tonya L. Mater
			Tonya L. Mater, Vice President and Chief Accounting Officer (Principal Accounting Officer)

5171



Maryland		43-1790877
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

909 Walnut Street,	Suite 200
Kansas City,	Missouri	64106
(Address of principal executive offices)		(Zip Code)



Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common shares, par value $0.01 per share	EPR	New York Stock Exchange

5.75% Series C cumulative convertible preferred shares, par value $0.01 per share	EPR PrC	New York Stock Exchange

9.00% Series E cumulative convertible preferred shares, par value $0.01 per share	EPR PrE	New York Stock Exchange

5.75% Series G cumulative redeemable preferred shares, par value $0.01 per share	EPR PrG	New York Stock Exchange

EPR PROPERTIES Consolidated Balance Sheets (Dollars in thousands except share data)	EPR PROPERTIES Consolidated Balance Sheets (Dollars in thousands except share data)						EPR PROPERTIES Consolidated Balance Sheets (Dollars in thousands except share data)

	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(unaudited)						(unaudited)
Assets
Rental properties, net of accumulated depreciation of $920,409 and $883,174 at March 31, 2019 and December 31, 2018, respectively	$	5,072,298		$	5,024,057
Real estate investments, net of accumulated depreciation of $1,023,993 and $989,254 at March 31, 2020 and December 31, 2019, respectively							$	5,184,692		$	5,197,308
Land held for development	28,080			34,177			28,080			28,080
Property under development	315,237			287,546			30,063			36,756
Operating lease right-of-use assets	211,299			—			207,605			211,187
Mortgage notes and related accrued interest receivable	527,627			517,467			356,666			357,391
Investment in direct financing leases, net	20,616			20,558
Investment in joint ventures	35,188			34,486			33,897			34,317
Cash and cash equivalents	11,116			5,872			1,225,122			528,763
Restricted cash	11,166			12,635			4,583			2,677
Accounts receivable	111,146			98,369			72,537			86,858
Other assets	87,458			96,223			112,095			94,174
Total assets	$	6,431,231		$	6,131,390		$	7,255,340		$	6,577,511
Liabilities and Equity
Liabilities:
Accounts payable and accrued liabilities	$	117,746		$	168,463		$	112,167		$	122,939
Operating lease liabilities	235,612			—			232,343			235,650
Common dividends payable	28,306			26,765			30,063			29,424
Preferred dividends payable	6,034			6,034			6,034			6,034
Unearned rents and interest	85,012			79,051			84,190			74,829
Debt	3,045,742			2,986,054			3,854,062			3,102,830
Total liabilities	3,518,452			3,266,367			4,318,859			3,571,706
Equity:
Common Shares, $.01 par value; 100,000,000 shares authorized; and 78,601,769 and 77,226,443 shares issued at March 31, 2019 and December 31, 2018, respectively	786			772
Common Shares, $.01 par value; 100,000,000 shares authorized; and 81,811,816 and 81,588,489 shares issued at March 31, 2020 and December 31, 2019, respectively							818			816
Preferred Shares, $.01 par value; 25,000,000 shares authorized:
5,394,050 Series C convertible shares issued at March 31, 2019 and December 31, 2018; liquidation preference of $134,851,250	54			54
3,447,381 Series E convertible shares issued at March 31, 2019 and December 31, 2018; liquidation preference of $86,184,525	34			34
6,000,000 Series G shares issued at March 31, 2019 and December 31, 2018; liquidation preference of $150,000,000	60			60
5,394,050 Series C convertible shares issued at March 31, 2020 and December 31, 2019; liquidation preference of $134,851,250							54			54
3,447,381 Series E convertible shares issued at March 31, 2020 and December 31, 2019; liquidation preference of $86,184,525							34			34
6,000,000 Series G shares issued at March 31, 2020 and December 31, 2019; liquidation preference of $150,000,000							60			60
Additional paid-in-capital	3,597,130			3,504,494			3,845,093			3,834,858
Treasury shares at cost: 3,118,490 and 2,878,587 common shares at March 31, 2019 and December 31, 2018, respectively	(146,906		)	(130,728		)
Treasury shares at cost: 3,224,232 and 3,125,569 common shares at March 31, 2020 and December 31, 2019, respectively							(154,357		)	(147,435		)
Accumulated other comprehensive income	8,397			12,085			(5,289		)	7,275
Distributions in excess of net income	(546,776		)	(521,748		)	(749,932		)	(689,857		)
Total equity	$	2,912,779		$	2,865,023		$	2,936,481		$	3,005,805
Total liabilities and equity	$	6,431,231		$	6,131,390		$	7,255,340		$	6,577,511

EPR PROPERTIES Consolidated Statements of Income (Unaudited) (Dollars in thousands except per share data)
EPR PROPERTIES Consolidated Statements of Income and Comprehensive Income (Unaudited) (Dollars in thousands except per share data)							EPR PROPERTIES Consolidated Statements of Income and Comprehensive Income (Unaudited) (Dollars in thousands except per share data)

	Three Months Ended March 31,						Three Months Ended March 31,
	2019			2018			2020			2019
Rental revenue	$	150,723		$	132,924		$	135,043		$	140,292
Other income	344			630			7,573			344
Mortgage and other financing income	13,475			21,414			8,396			9,891
Total revenue	164,542			154,968			151,012			150,527
Property operating expense	15,793			7,564			13,093			15,551
Other expense							9,534			—
General and administrative expense	12,130			12,324			10,988			11,710
Costs associated with loan refinancing or payoff	—			31,943
Severance expense							—			420
Interest expense, net	33,826			34,337			34,753			33,963
Transaction costs	5,123			609			1,075			5,123
Credit loss expense							1,192			—
Depreciation and amortization	39,743			37,684			43,810			36,002
Income before equity in income from joint ventures and other items	57,927			30,507
Equity in income from joint ventures	489			51
Gain on sale of real estate	6,328			—
Income before equity in (loss) income from joint ventures, other items and discontinued operations							36,567			47,758
Equity in (loss) income from joint ventures							(420		)	489
Gain (loss) on sale of real estate							220			(388		)
Income before income taxes	64,744			30,558			36,367			47,859
Income tax benefit (expense)	605			(1,020		)
Income tax benefit							751			605
Income from continuing operations							$	37,118		$	48,464
Discontinued operations:
Income from discontinued operations before other items							—			10,169
Gain on sale of real estate from discontinued operations							—			6,716
Income from discontinued operations							—			16,885
Net income	65,349			29,538			37,118			65,349
Preferred dividend requirements	(6,034		)	(6,036		)	(6,034		)	(6,034		)
Net income available to common shareholders of EPR Properties	$	59,315		$	23,502		$	31,084		$	59,315
Per share data attributable to EPR Properties common shareholders:
Basic earnings per share data:
Net income available to common shareholders	$	0.79		$	0.32
Diluted earnings per share data:
Net income available to common shareholders	$	0.79		$	0.32
Net income available to common shareholders of EPR Properties per share:
Continuing operations							$	0.40		$	0.57
Discontinued operations							—			0.22
Basic							$	0.40		$	0.79

Continuing operations							$	0.40		$	0.57
Discontinued operations							—			0.22
Diluted							$	0.40		$	0.79
Shares used for computation (in thousands):
Basic	74,679			74,146			78,467			74,679
Diluted	74,725			74,180			78,476			74,725

Other comprehensive income (loss):
Net income							$	37,118		$	65,349
Foreign currency translation adjustment							(16,495		)	3,810
Change in net unrealized gain (loss) on derivatives							3,931			(7,498		)
Comprehensive income attributable to EPR Properties							$	24,554		$	61,661



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Registrant’s telephone number, including area code:	(816)	472-1700



			Page

PART I			1

	Item 1.	Financial Statements	1
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3029
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4546
	Item 4.	Controls and Procedures	4647

PART II			4647

	Item 1.	Legal Proceedings	4647
	Item 1A.	Risk Factors	4847
	Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	4868
	Item 3.	Defaults Upon Senior Securities	4869
	Item 4.	Mine Safety Disclosures	4969
	Item 5.	Other Information	4969
	Item 6.	Exhibits	5070

EPR PROPERTIES Consolidated Statements of Changes in Equity (Unaudited) (Dollars in thousands, except per share data)

	EPR Properties Shareholders’ Equity
	Common Stock			Preferred Stock			Additional paid-in capital		Treasury shares			Accumulated other comprehensive income (loss)			Distributions in excess of net income			Total
	Shares	Par		Shares	Par		Additional paid-in capital		Treasury shares			Accumulated other comprehensive income (loss)			Distributions in excess of net income			Total
Balance at December 31, 2018	77,226,443	$	772	14,841,431	$	148	$	3,504,494	$	(130,728	)	$	12,085		$	(521,748	)	$	2,865,023
Restricted share units issued to Trustees	1,156	—		—	—		—		—			—			—			—
Issuance of nonvested shares, net of cancellations	197,755	2		—	—		4,831		(403		)	—			—			4,430
Purchase of common shares for vesting	—	—		—	—		—		(9,499		)	—			—			(9,499		)
Share-based compensation expense	—	—		—	—		3,177		—			—			—			3,177
Share-based compensation included in severance expense	—	—		—	—		103		—			—			—			103
Foreign currency translation adjustment	—	—		—	—		—		—			3,810			—			3,810
Change in unrealized gain on derivatives	—	—		—	—		—		—			(7,498		)	—			(7,498		)
Net income	—	—		—	—		—		—			—			65,349			65,349
Issuances of common shares	1,064,600	11		—	—		78,982		—			—			—			78,993
Stock option exercises, net	111,815	1		—	—		5,543		(6,276		)	—			—			(732		)
Dividends to common shareholders ($1.125 per share)	—	—		—	—		—		—			—			(84,343		)	(84,343		)
Dividends to Series C preferred shareholders ($0.359375 per share)	—	—		—	—		—		—			—			(1,939		)	(1,939		)
Dividends to Series E preferred shareholders ($0.5625 per share)	—	—		—	—		—		—			—			(1,939		)	(1,939		)
Dividends to Series G preferred shareholders ($0.359375 per share)	—	—		—	—		—		—			—			(2,156		)	(2,156		)
Balance at March 31, 2019	78,601,769	$	786	14,841,431	$	148	$	3,597,130	$	(146,906	)	$	8,397		$	(546,776	)	$	2,912,779



Balance at December 31, 2019	81,588,489	$	816	14,841,431	$	148	$	3,834,858	$	(147,435	)	$	7,275		$	(689,857	)	$	3,005,805
Issuance of nonvested shares, net of cancellations	211,549	2		—	—		6,221		(90		)	—			—			6,133
Purchase of common shares for vesting	—	—		—	—		—		(6,769		)	—			—			(6,769		)
Share-based compensation expense	—	—		—	—		3,509		—			—			—			3,509
Foreign currency translation adjustment	—	—		—	—		—		—			(16,495		)	—			(16,495		)
Change in unrealized loss on derivatives	—	—		—	—		—		—			3,931			—			3,931
Credit loss expense for implementation of Current Expected Credit Loss standard	—	—		—	—		—		—			—			(2,163		)	(2,163		)
Net income	—	—		—	—		—		—			—			37,118			37,118
Issuances of common shares	10,368	—		—	—		442		—			—			—			442
Stock option exercises, net	1,410	—		—	—		63		(63		)	—			—			—
Dividends to common shareholders ($1.1325 per share)	—	—		—	—		—		—			—			(88,996		)	(88,996		)
Dividends to Series C preferred shareholders ($0.359375 per share)	—	—		—	—		—		—			—			(1,939		)	(1,939		)
Dividends to Series E preferred shareholders ($0.5625 per share)	—	—		—	—		—		—			—			(1,939		)	(1,939		)
Dividends to Series G preferred shareholders ($0.359375 per share)	—	—		—	—		—		—			—			(2,156		)	(2,156		)
Balance at March 31, 2020	81,811,816	$	818	14,841,431	$	148	$	3,845,093	$	(154,357	)	$	(5,289	)	$	(749,932	)	$	2,936,481

EPR PROPERTIES Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands)

Continued from previous page
	Three Months Ended March 31,
	2020			2019
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents at beginning of the period	$	528,763		$	5,872
Restricted cash at beginning of the period	2,677			12,635
Cash and cash equivalents and restricted cash at beginning of the period	$	531,440		$	18,507

Cash and cash equivalents at end of the period	$	1,225,122		$	11,116
Restricted cash at end of the period	4,583			11,166
Cash and cash equivalents and restricted cash at end of the period	$	1,229,705		$	22,282

Supplemental schedule of non-cash activity:
Transfer of property under development to real estate investments	$	20,089		$	7,330
Issuance of nonvested shares and restricted share units at fair value, including nonvested shares issued for payment of bonuses	$	17,595		$	14,682
Credit loss expense related to adoption of ASC Topic 326	$	2,163		$	—
Amounts related to adoption of ASC Topic 842:
Operating lease right-of-use assets	$	—		$	214,576
Operating lease liabilities	$	—		$	238,614
Sub-lessor straight-line rent receivable	$	—		$	24,454
Acquisition of real estate in exchange for assumption of debt at fair value	$	—		$	14,000
Assumption of debt	$	—		$	18,585
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	28,137		$	28,676
Cash paid during the period for income taxes	$	251		$	695
Interest cost capitalized	$	262		$	3,137
Change in accrued capital expenditures	$	(882	)	$	(6,406	)



					Outstanding principal amount of mortgage		Carrying amount as of				Unfunded commitments
Description	Year of Origination	Interest Rate		Maturity Date	Outstanding principal amount of mortgage		March 31, 2020		December 31, 2019 (1)		March 31, 2020
Attraction property Powells Point, North Carolina	2019	7.75	%	6/30/2025	$	27,423	$	27,090	$	27,423	$	—
Fitness & wellness property Omaha, Nebraska	2016	7.85	%	12/28/2026	5,766		5,799		5,803		—
Fitness & wellness property Omaha, Nebraska	2017	7.85	%	1/3/2027	10,905		10,904		10,977		—
Fitness & wellness property Merriam, Kansas	2019	7.55	%	7/31/2029	7,949		7,968		5,985		1,141
Ski property Girdwood, Alaska	2019	8.25	%	12/31/2029	37,000		36,998		37,000		20,000
Experiential lodging property Nashville, Tennessee	2019	6.99	%	9/30/2031	70,000		68,650		70,396		—
Eat & play property Austin, Texas	2012	11.31	%	6/1/2033	11,488		11,487		11,582		—
Ski property West Dover and Wilmington, Vermont	2007	11.61	%	12/1/2034	51,050		51,038		51,050		—
Four ski properties Ohio and Pennsylvania	2007	10.75	%	12/1/2034	37,562		37,464		37,562		—
Ski property Chesterland, Ohio	2012	11.21	%	12/1/2034	4,550		4,430		4,550		—
Ski property Hunter, New York	2016	8.57	%	1/5/2036	21,000		21,000		21,000		—
Eat & play property Midvale, Utah	2015	10.25	%	5/31/2036	17,505		17,504		17,505		—
Eat & play property West Chester, Ohio	2015	9.75	%	8/1/2036	18,068		18,062		18,068		—
Private school property Mableton, Georgia	2017	8.84	%	4/30/2037	4,674		5,052		5,048		—
Fitness & wellness property Fort Collins, Colorado	2018	7.85	%	1/31/2038	10,292		10,163		10,360		—
Early childhood education center Lake Mary, Florida	2019	7.75	%	5/9/2039	4,200		4,241		4,258		—
Eat & play property Eugene, Oregon	2019	8.13	%	6/17/2039	14,700		14,794		14,800		—
Early childhood education center Lithia, Florida	2017	8.25	%	10/31/2039	3,959		4,022		4,024		—
					$	358,091	$	356,666	$	357,391	$	21,141



	Mortgage notes receivable		Unfunded commitments		Notes receivable		Total
Allowance for credit losses at January 1, 2020	$	2,000	$	114	$	49	$	2,163
Credit loss expense	1,145		29		18		1,192
Charge-offs	—		—		—		—
Recoveries	—		—		—		—
Allowance for credit losses	$	3,145	$	143	$	67	$	3,355



	March 31, 2020		December 31, 2019
Receivable from tenants	$	7,198	$	11,373
Receivable from non-tenants	2,071		2,103
Straight-line rent receivable	63,268		73,382
Total	$	72,537	$	86,858



	Amount
Year:
2019	$	1,704
2020	2,333
2021	2,403
2022	2,475
2023	2,550
Thereafter	24,326
Total	$	35,791



Fixed rate	Notional Amount (in millions)		Index	Maturity
3.1450%	$	116.7	USD LIBOR	February 7, 2022
3.1575%	116.7		USD LIBOR	February 7, 2022
3.1580%	116.6		USD LIBOR	February 7, 2022
3.3450%	50.0		USD LIBOR	February 7, 2022
Total	$	400.0

1.3925%	25.0		USD LIBOR	September 30, 2024
Total	$	25.0



Fixed rate	Notional Amount (in millions, CAD)		Maturity
$1.32 CAD per USD	$	100.0	July 1, 2023
$1.32 CAD per USD	100.0		July 1, 2023
Total	$	200.0



	Number of options		Option price per share					Weighted avg. exercise price
Outstanding at December 31, 2019	118,030		$	44.62	—	$	76.63	$	55.63
Exercised	(1,410	)	44.98		—	44.98		44.98
Granted	2,890		69.19		—	69.19		69.19
Outstanding at March 31, 2020	119,510		$	44.62	—	$	76.63	$	56.09



	March 31, 2019		December 31, 2018
Receivable from tenants	$	6,779	$	12,158
Receivable from non-tenants	5,995		1,379
Receivable from Sullivan County Infrastructure Revenue Bonds	—		11,500
Straight-line rent receivable ⁽¹⁾	98,372		73,332
Total	$	111,146	$	98,369



	March 31, 2019			December 31, 2018
Total minimum lease payments receivable	$	35,791		$	36,352
Estimated unguaranteed residual value of leased assets	16,509			16,509
Less deferred income ⁽¹⁾	(31,684		)	(32,303		)
Investment in direct financing leases, net	$	20,616		$	20,558

Effect of Derivative Instruments on the Consolidated Statements of Changes in Equity and Income for the Three Months Ended March 31, 2019 and 2018 (Dollars in thousands)
Effect of Derivative Instruments on the Consolidated Statements of Changes in Equity and Comprehensive Income for the Three Months Ended March 31, 2020 and 2019 (Dollars in thousands)							Effect of Derivative Instruments on the Consolidated Statements of Changes in Equity and Comprehensive Income for the Three Months Ended March 31, 2020 and 2019 (Dollars in thousands)

	Three Months Ended March 31,						Three Months Ended March 31,
Description	2019			2018			2020			2019
Cash Flow Hedges
Interest Rate Swaps
Amount of (Loss) Gain Recognized in AOCI on Derivative	$	(2,439	)	$	4,778
Amount of Income (Expense) Reclassified from AOCI into Earnings (1)	775			(13		)
Amount of Loss Recognized in AOCI on Derivative							$	(10,642	)	$	(2,439	)
Amount of (Expense) Income Reclassified from AOCI into Earnings (1)							(465		)	775
Cross-Currency Swaps
Amount of (Loss) Gain Recognized in AOCI on Derivative	(311		)	615
Amount of Gain (Loss) Recognized in AOCI on Derivative							1,139			(311		)
Amount of Income Reclassified from AOCI into Earnings (2)	134			554			206			134

Net Investment Hedges
Cross-Currency Swaps
Amount of Loss Recognized in AOCI on Derivative	(3,839		)	—
Amount of Gain (Loss) Recognized in AOCI on Derivative							13,175			(3,839		)
Amount of Income Recognized in Earnings (2) (3)	138			—			162			138
Currency Forward Agreements
Amount of Gain Recognized in AOCI on Derivative	—			4,546
Amount of Expense Reclassified from AOCI into Earnings (2)	—			—

Total
Amount of (Loss) Gain Recognized in AOCI on Derivatives	$	(6,589	)	$	9,939
Amount of Income Reclassified from AOCI into Earnings	909			541
Amount of Gain (Loss) Recognized in AOCI on Derivatives							$	3,672		$	(6,589	)
Amount of (Expense) Income Reclassified from AOCI into Earnings							(259		)	909
Amount of Income Recognized in Earnings	138			—			162			138

Interest expense, net in accompanying consolidated statements of income	33,826			34,337
Other income in accompanying consolidated statements of income	344			630
Interest expense, net in accompanying consolidated statements of income and comprehensive income							$	34,753		$	33,963
Other income in accompanying consolidated statements of income and comprehensive income							$	7,573		$	344


~~(1)~~	~~Included in "Interest expense, net" in the accompanying consolidated statements of income for the three months ended March 31, 2019 and 2018.~~


~~(2)~~	~~Included in "Other income" in the accompanying consolidated statements of income for the three months ended March 31, 2019 and 2018.~~


~~(3)~~	~~Amounts represent derivative gains excluded from the effectiveness testing.~~

Assets and Liabilities Measured at Fair Value on a Recurring Basis at March 31, 2019 and December 31, 2018 (Dollars in thousands)
Assets and Liabilities Measured at Fair Value on a Recurring Basis at March 31, 2020 and December 31, 2019 (Dollars in thousands)									Assets and Liabilities Measured at Fair Value on a Recurring Basis at March 31, 2020 and December 31, 2019 (Dollars in thousands)

Description	Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets Balance at end of period		Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Balance at end of period
March 31, 2019
March 31, 2020
Cross-Currency Swaps*									$	—	$	14,936		$	—	$	14,936
Interest Rate Swap Agreements**									$	—	$	(14,447	)	$	—	$	(14,447	)
December 31, 2019
Cross-Currency Swaps*	$	—	$	1,993	$	—	$	1,993	$	—	$	828		$	—	$	828
Interest Rate Swap Agreements*	$	—	$	1,130	$	—	$	1,130	$	—	$	225		$	—	$	225
December 31, 2018
Cross-Currency Swaps*	$	—	$	6,278	$	—	$	6,278
Interest Rate Swap Agreements*	$	—	$	4,344	$	—	$	4,344
Interest Rate Swap Agreements**									$	—	$	(4,495	)	$	—	$	(4,495	)


	Three Months Ended March 31, 2019						Three Months Ended March 31, 2020
	Income (numerator)			Shares (denominator)	Per Share Amount		Income (numerator)			Shares (denominator)	Per Share Amount
Basic EPS:
Net income	$	65,349					$	37,118
Less: preferred dividend requirements	(6,034		)				(6,034		)
Net income available to common shareholders	$	59,315		74,679	$	0.79	$	31,084		78,467	$	0.40
Diluted EPS:
Net income available to common shareholders	$	59,315		74,679			$	31,084		78,467
Effect of dilutive securities:
Share options	—			46			—			9
Net income available to common shareholders	$	59,315		74,725	$	0.79	$	31,084		78,476	$	0.40



	Three Months Ended March 31, 2018
	Income (numerator)			Shares (denominator)	Per Share Amount
Basic EPS:
Net income	$	29,538
Less: preferred dividend requirements	(6,036		)
Net income available to common shareholders	$	23,502		74,146	$	0.32
Diluted EPS:
Net income available to common shareholders	$	23,502		74,146
Effect of dilutive securities:
Share options	—			34
Net income available to common shareholders	$	23,502		74,180	$	0.32



Exercise price range	Options outstanding	Weighted avg. life remaining	Weighted avg. exercise price		Aggregate intrinsic value (in thousands)
$ 19.02 - 19.99	3,699	0.1
20.00 - 29.99	—	—
30.00 - 39.99	—	—
40.00 - 49.99	33,020	2.8
50.00 - 59.99	32,326	5.2
60.00 - 69.99	51,800	5.9
70.00 - 76.63	4,156	8.8
	125,001	4.8	$	54.47	$	2,804



	Options outstanding						Options exercisable
Exercise price range	Options outstanding	Weighted avg. life remaining	Weighted avg. exercise price		Aggregate intrinsic value (in thousands)		Options outstanding	Weighted avg. life remaining	Weighted avg. exercise price		Aggregate intrinsic value (in thousands)
$ 44.62 - 49.99	30,035	1.9					30,035	1.9
50.00 - 59.99	31,710	4.3					29,793	4.0
60.00 - 69.99	53,609	6.2					50,719	4.9
70.00 - 76.63	4,156	7.8					2,148	7.4
	119,510	4.7	$	56.09	$	—	112,695	3.9	$	55.41	$	—



	Number of shares		Weighted avg. grant date fair value		Weighted avg. life remaining
Outstanding at December 31, 2019	509,338		$	67.88
Granted	211,549		69.09
Vested	(226,476	)	67.75
Forfeited	(1,317	)	68.38
Outstanding at March 31, 2020	493,094		$	68.45	1.56



	Number of Performance Shares
Outstanding at December 31, 2019	—
Granted	61,615
Vested	—
Forfeited	—
Outstanding at March 31, 2020	61,615



Balance Sheet Data:
	As of March 31, 2019
	Entertainment		Recreation		Education		Other		Corporate/Unallocated		Consolidated
Total Assets	$	2,546,385	$	2,308,885	$	1,345,025	$	198,770	$	32,166	$	6,431,231

	As of December 31, 2018
	Entertainment		Recreation		Education		Other		Corporate/Unallocated		Consolidated
Total Assets	$	2,344,855	$	2,187,808	$	1,366,278	$	207,724	$	24,725	$	6,131,390



Operating Data:
	Three Months Ended March 31, 2019
	Entertainment		Recreation		Education		Other		Corporate/Unallocated		Consolidated
Rental revenue	$	80,513	$	40,529	$	26,707	$	2,974	$	—	$	150,723
Other income	10		61		—		—		273		344
Mortgage and other financing income	56		9,312		4,107		—		—		13,475
Total revenue	80,579		49,902		30,814		2,974		273		164,542

Property operating expense	10,625		2,734		1,112		1,089		233		15,793
Total investment expenses	10,625		2,734		1,112		1,089		233		15,793
Net operating income - before unallocated items	69,954		47,168		29,702		1,885		40		148,749

Reconciliation to Consolidated Statements of Income:
General and administrative expense											(12,130		)
Interest expense, net											(33,826		)
Transaction costs											(5,123		)
Depreciation and amortization											(39,743		)
Equity in income from joint ventures											489
Gain on sale of real estate											6,328
Income tax benefit											605
Net income											65,349
Preferred dividend requirements											(6,034		)
Net income available to common shareholders of EPR Properties											$	59,315



	March 31, 2019						December 31, 2018 ⁽²⁾
	Operating leases		Sub-lessor operating ground leases				Operating leases
	Amount ⁽¹⁾		Amount ⁽¹⁾		Total		Amount ⁽¹⁾
Year:
2019	$	398,100	$	16,712	$	414,812	$	520,139
2020	515,418		22,620		538,038		503,344
2021	504,422		22,936		527,358		492,165
2022	489,968		22,327		512,295		477,671
2023	461,749		21,631		483,380		449,686
Thereafter	4,092,159		239,519		4,331,678		3,953,717
Total	$	6,461,816	$	345,745	$	6,807,561	$	6,396,722



	March 31, 2019				December 31, 2018 ⁽³⁾
	Ground Leases ⁽¹⁾		Office lease ⁽²⁾		Ground Leases		Office lease ⁽²⁾
Year:
2019	$	17,125	$	642	$	22,867	$	856
2020	23,236		856		23,236		856
2021	23,600		884		23,600		884
2022	22,998		967		22,996		967
2023	22,304		967		22,303		967
Thereafter	257,454		2,658		257,446		2,658
Total lease payments	$	366,717	$	6,974	$	372,448	$	7,188
Less: imputed interest	136,962		1,117
Present value of lease liabilities	$	229,755	$	5,857



		As of
	Classification	March 31, 2019
Assets:
Operating ground lease assets	Operating lease right-of-use assets	$	205,626
Office lease asset	Operating lease right-of-use assets	5,673
Sub-lessor straight-line rent receivable	Accounts receivable	24,638
Total leased assets		$	235,937

Liabilities:
Operating ground lease liabilities	Operating lease liabilities	$	229,755
Office lease liability	Operating lease liabilities	5,857
Total lease liabilities		$	235,612




	Classification	Three Months Ended March 31, 2019
Lease Cost
Operating ground lease cost	Property operating expense	$	5,938
Operating office lease cost	General and administrative expense	230

Sublease income	Rental revenue	$	(5,723	)
Net lease cost		$	445



Balance Sheet Data:
	As of March 31, 2020
	Experiential		Education		Corporate/Unallocated		Consolidated
Total Assets	$	5,279,936	$	723,750	$	1,251,654	$	7,255,340

	As of December 31, 2019
	Experiential		Education		Corporate/Unallocated		Consolidated
Total Assets	$	5,307,295	$	730,165	$	540,051	$	6,577,511

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Non-accelerated filer

Smaller reporting company

Emerging growth company

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