- Announces Increase in 2012 FFO Guidance -

KANSAS CITY, Mo.--(BUSINESS WIRE)-- Entertainment Properties Trust (EPR) today announced operating results for the second quarter and six months ended June 30, 2012.

Total revenue was $78.9 million for the second quarter of 2012, representing a 6% increase from $74.4 million for the same quarter in 2011. Net income available to common shareholders was $30.8 million, or $0.65 per diluted common share, for the second quarter of 2012 compared to a loss of $7.5 million, or $0.16 per diluted common share, for the same quarter in 2011. Funds From Operations (FFO) for the second quarter of 2012 was $43.1 million, or $0.92 per diluted common share, compared to $38.7 million, or $0.83 per diluted common share, for the same period in 2011. FFO as adjusted for the second quarter of 2012 was $43.2 million, or $0.92 per diluted common share, compared to $38.8 million, or $0.83 per diluted common share, for the same period in 2011, an increase of 11% per share.

Total revenue was $156.8 million for the six months ended June 30, 2012, representing a 6% increase from $148.0 million for the same period in 2011. Net income available to common shareholders was $46.2 million, or $0.98 per diluted common share, for the six months ended June 30, 2012 compared to $26.6 million, or $0.57 per diluted common share, for the same period in 2011. Funds From Operations (FFO) for the six months ended June 30, 2012 was $83.4 million, or $1.77 per diluted common share, compared to $70.1 million, or $1.49 per diluted common share, for the same period in 2011. FFO as adjusted for the six months ended June 30, 2012 was $83.6 million, or $1.77 per diluted common share, compared to $77.8 million, or $1.66 per diluted common share, for the same period in 2011, an increase of 7% per share.

David Brain, President and CEO, commented, As we progress through 2012, operating results are running ahead of our expectations and we have consequently increased our FFO guidance for the year. We have maintained robust investment spending activity across our primary operating segments of Entertainment, Education and Recreation, and have a strong pipeline of new investments for the remainder of the year.

A reconciliation of FFO to FFO as adjusted follows (dollars in thousands, except per share amounts):

				Three Months Ended June 30,
				2012								2011
				Amount				FFO/share				Amount				FFO/share
FFO				$	43,138			$	0.92			$	38,692			$	0.83
	Transaction costs			31								76
FFO as adjusted				$	43,169			$	0.92			$	38,768			$	0.83
Dividends declared per common share								$	0.75							$	0.70
FFO payout ratio, as adjusted								82		%						84		%
				Six Months Ended June 30,
				2012								2011
				Amount				FFO/share				Amount				FFO/share
FFO				$	83,409			$	1.77			$	70,085			$	1.49
	Costs associated with loan refinancing or payoff											6,388				0.14
	Transaction costs			189				0.01				1,349				0.03
FFO as adjusted				$	83,598			$	1.78			$	77,822			$	1.66
Dividends declared per common share								$	1.50							$	1.40
FFO payout ratio, as adjusted								84		%						84		%

Portfolio Update

As of June 30, 2012, the Company's real estate portfolio consisted of 113 megaplex theatres (including two joint venture properties) totaling approximately 8.9 million square feet, and restaurant, retail and other destination recreation and specialty properties totaling 4.7 million square feet. The Company also owned 39 public charter schools (including five public charter school properties under construction), five vineyards totaling approximately 529 plantable acres and eight wineries totaling approximately 640,000 square feet. At June 30, 2012, the Company's overall real estate portfolio was 98% occupied.

As of June 30, 2012, the Company's real estate mortgage loan portfolio had a carrying value of $403.6 million and included financing provided for entertainment, education and recreation properties, including ten metropolitan ski areas covering approximately 6,100 acres in six states. Additionally, the Company had $40.1 million in property under development and $188.9 million in land held for development.

As previously announced, subsequent to quarter end, the Company finalized changes to address potential long term risks regarding three of nine Imagine public charter schools scheduled to lose their charters for the 2012/2013 academic year. These three schools represent a total asset value of $36 million or approximately 50% of the total nine school asset value which is $72 million. The parties have also entered into an agreement to substitute three additional schools subject to underwriting on or before the beginning of the 2012/2013 school year. The schools are included as part of a 27 school master lease that is supported by corporate guarantee and a substantial letter of credit. Accordingly, at this time the Company expects that there will be no monetary default.

Investment Update

The Company's investment spending in the second quarter of 2012 totaled $78.3 million (bringing the year-to-date investment spending to $148.0 million) and included entertainment investments of $53.1 million, education investments of $18.4 million, recreation investments of $2.4 million and other investment spending of $4.4 million. Investment spending to date of $148.0 million combined with the outlook for spending over the remainder of the year puts the Company well on track toward delivering its expected total 2012 investment spending of $250.0 million to $300.0 million.

Investment spending for entertainment included two investments with Frank Theaters including the sale-leaseback of a 10-screen theatre in Southern Pines, North Carolina for $6.5 million as well as the development of a theatre located in Ranson, West Virginia with an initial investment of $1.4 million with commitments to fund an additional $7.4 million in development costs. Also during the quarter, the Company entered into agreements with Regal Theatres to develop a theatre in Albuquerque, New Mexico for a total investment of $11.7 million and with Southern Theatres to develop a theatre in Kenner, Louisiana for a total investment of $8.0 million. Additionally, on June 28, 2012, the Company closed on a $36.0 million mortgage investment related to the John Hancock Observatory in Chicago with Montparnasse 56 USA, a global leader in observation deck management. The John Hancock Observatory has been in existence for over 40 years with over 500,000 visitors annually and is consistent with the Company's strategic focus on admissions and concessions entertainment venues.

Investment spending for education included two new development properties in Buckeye and Queen Creek, Arizona with Portfolio Charter Investments that had an initial investment of $2.8 million. The Company's investment spending also included $15.6 million in funding for public charter school development projects in process that have been previously announced.

The Company continues to make progress toward selling its remaining vineyard and winery investments. During the second quarter of 2012, the Company closed on the sale of a portion of its Buena Vista vineyard property in Sonoma County, California for a purchase price of $13.0 million and recognized a gain on sale of $0.4 million.

Balance Sheet Update

The Company's balance sheet remains strong with a debt to gross assets ratio (defined as total long-term debt to total assets plus accumulated depreciation) of 40% at June 30, 2012. Combined unrestricted cash and credit line capacity at June 30, 2012 was approximately $300.0 million.

Dividend Information

On June 15, 2012, the Company declared a regular quarterly cash dividend of $0.75 per common share, which was paid on July 16, 2012 to common shareholders of record on June 29, 2012. This dividend represents an annualized dividend of $3.00 per common share, an increase of 7% over the prior year. The Company also declared and paid second quarter cash dividends of $0.3594 per share on the 5.75% Series C Convertible Preferred Shares, $0.4609 per share on the 7.375% Series D Preferred Shares and $0.5625 per share on the 9.00% Series E Convertible Preferred Shares.

Guidance Update

The Company is maintaining its 2012 investment spending guidance of $250.0 million to $300.0 million. The Company is increasing its 2012 guidance for FFO as adjusted per diluted share to $3.57 to $3.67, from the previous guidance of $3.50 to $3.70.

Quarterly Supplemental

The Company's supplemental information package for the second quarter and six months ended June 30, 2012 is available on the Company's website at www.eprkc.com.

ENTERTAINMENT PROPERTIES TRUST Consolidated Statements of Income (Unaudited) (Dollars in thousands except per share data)
			Three Months Ended June 30,										Six Months Ended June 30,
			2012					2011					2012					2011
Rental revenue			$	59,211				$	56,024				$	117,494				$	111,406
Tenant reimbursements			4,365					4,515					9,186					9,176
Other income			107					131					133					155
Mortgage and other financing income			15,256					13,747					29,976					27,262
Total revenue			78,939					74,417					156,789					147,999
Property operating expense			5,245					6,579					11,419					12,769
Other expense			431					677					916					1,157
General and administrative expense			5,821					5,105					12,288					10,573
Costs associated with loan refinancing or payoff																		5,339
Interest expense, net			18,459					17,287					36,600					36,031
Transaction costs			31					76					189					1,349
Impairment charges								24,298					8,195					24,298
Depreciation and amortization			12,791					11,782					25,073					23,455
Income before equity in income from joint ventures and discontinued operations			36,161					8,613					62,109					33,028
Equity in income from joint ventures			278					781					324					1,555
Income from continuing operations			$	36,439				$	9,394				$	62,433				$	34,583
Discontinued operations:
Income (loss) from discontinued operations			(59		)			566					(297		)			1,666
Impairment charges								(9,958		)			(4,648		)			(11,758		)
Costs associated with loan refinancing or payoff																		(1,049		)
Gain on sale or acquisition of real estate			438										720					18,293
Net income			36,818					2					58,208					41,735
Add: Net income attributable to noncontrolling interests			(19		)								(37		)			(2		)
Net income attributable to Entertainment Properties Trust			36,799					2					58,171					41,733
Preferred dividend requirements			(6,002		)			(7,551		)			(12,003		)			(15,103		)
Net income (loss) available to common shareholders of Entertainment Properties Trust			$	30,797				$	(7,549	)			$	46,168				$	26,630
Per share data attributable to Entertainment Properties Trust common shareholders:
Basic earnings per share data:
Income from continuing operations			$	0.65				$	0.04				$	1.08				$	0.42
Income (loss) from discontinued operations			0.01					(0.20		)			(0.09		)			0.15
Net income (loss) available to common shareholders			$	0.66				$	(0.16	)			$	0.99				$	0.57
Diluted earnings per share data:
Income from continuing operations			$	0.64				$	0.04				$	1.07				$	0.42
Income (loss) from discontinued operations			0.01					(0.20		)			(0.09		)			0.15
Net income (loss) available to common shareholders			$	0.65				$	(0.16	)			$	0.98				$	0.57
Shares used for computation (in thousands):
Basic			46,826					46,648					46,751					46,576
Diluted			47,068					46,956					47,006					46,880

ENTERTAINMENT PROPERTIES TRUST Reconciliation of Net Income Available to Common Shareholders to Funds From Operations (FFO) (A) (Unaudited, dollars in thousands except per share data)
			Three Months Ended June 30,										Six Months Ended June 30,
			2012					2011					2012					2011
Net income (loss) available to common shareholders of Entertainment Properties Trust			$	30,797				$	(7,549	)			$	46,168				$	26,630
Gain on sale or acquisition of real estate			(438		)								(720		)			(18,293		)
Real estate depreciation and amortization			12,635					11,873					24,832					25,471
Allocated share of joint venture depreciation			144					112					286					221
Impairment charges								34,256					12,843					36,056
FFO available to common shareholders of Entertainment Properties Trust			$	43,138				$	38,692				$	83,409				$	70,085
FFO per common share attributable to Entertainment Properties Trust:
Basic			$	0.92				$	0.83				$	1.78				$	1.50
Diluted			0.92					0.83					1.77					1.49
Shares used for computation (in thousands):
Basic			46,826					46,648					46,751					46,576
Diluted			47,068					46,956					47,006					46,880
Other financial information:
Straight-lined rental revenue			$	493				$	58				$	881				$	576
Dividends per common share			$	0.75				$	0.70				$	1.50				$	1.40

(A)

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

The additional 1.9 million common shares that would result from the conversion of the Company's 5.75% Series C cumulative convertible preferred shares and the additional 1.6 million common shares that would result from the conversion of the Company's 9.00% Series E cumulative convertible preferred shares and the corresponding add-back of the preferred dividends declared on those shares are not included in the calculation of diluted earnings per share and FFO per share for the three and six months ended June 30, 2012 because the effect is anti-dilutive.

ENTERTAINMENT PROPERTIES TRUST Condensed Consolidated Balance Sheets (Dollars in thousands)
			June 30, 2012					December 31, 2011
Assets			(unaudited)
Rental properties, net of accumulated depreciation of $355,945 and   $335,116 at June 30, 2012 and December 31, 2011, respectively			$	1,833,893				$	1,819,176
Rental properties held for sale, net			3,895					4,696
Land held for development			188,874					184,457
Property under development			40,141					22,761
Mortgage notes and related accrued interest receivable, net			403,619					325,097
Investment in a direct financing lease, net			236,157					233,619
Investment in joint ventures			10,577					25,053
Cash and cash equivalents			12,739					14,625
Restricted cash			19,165					19,312
Intangible assets, net			3,871					4,485
Deferred financing costs, net			18,452					18,527
Accounts receivable, net			33,138					35,005
Notes and related accrued interest receivable, net			5,007					5,015
Other assets			24,139					22,167
Total assets			$	2,833,667				$	2,733,995
Liabilities and Equity
Accounts payable and accrued liabilities			$	37,485				$	36,036
Dividends payable			41,130					38,711
Unearned rents and interest			11,982					6,850
Long-term debt			1,270,560					1,154,295
Total liabilities			1,361,157					1,235,892
Entertainment Properties Trust shareholders equity			1,472,204					1,470,049
Noncontrolling interests			306					28,054
Equity			1,472,510					1,498,103
Total liabilities and equity			$	2,833,667				$	2,733,995

About Entertainment Properties Trust

Entertainment Properties Trust is a specialty real estate investment trust (REIT) that invests in properties in select market segments which require unique industry knowledge, while offering the potential for stable and attractive returns. Our total investments exceed $3 billion and our primary investment segments are Entertainment, Education and Recreation. We adhere to rigorous underwriting and investing criteria centered on key industry and property level cash flow standards. We believe our focused niche approach provides a competitive advantage, and the potential for higher growth and better yields. Further information is available at www.eprkc.com or from Brian Moriarty at 888-EPR-REIT.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

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

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

Entertainment Properties Trust
Brian Moriarty, 888-EPR-REIT

Source: Entertainment Properties Trust

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