Company: EPR-PE
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001045450-25-000051
Chunk: 3

Company: EPR PROPERTIES
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 3
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approximately 45 days (versus the previous window of approximately 75 days), which is when most of a film's box office revenue is earned.

Two theatre customers remain on a cash-basis for revenue recognition purposes due to the ongoing uncertainty, including American Multi-Cinema, Inc. ("AMC"). We have experienced vacancies at certain theatre properties and have sold many of these properties. The remaining vacant properties are currently in the process of being sold or we are operating these theatres through third-party managers. We will evaluate the best strategy for any vacancies on a property-by-property basis.

The modern megaplex theatre provides a greatly enhanced audio and visual experience for patrons. Additionally, national and local exhibitors have made significant strides to further enhance the customer experience. These enhancements include reserved, luxury seating and expanded food and beverage offerings, such as the addition of alcohol and more efficient point of sale systems. The evolution of the theatre industry over the last 30 years, from the sloped floor theatre to the megaplex stadium theatre to the expanded amenity theatre, demonstrates that exhibitors and their landlords are willing to make investments in their theatres to take the customer experience to the next level.

Movie-going has been a dominant out-of-home entertainment option for decades, with over 1.2 billion tickets sold in North America during 2019 (prior to the pandemic) according to the Motion Picture Association (MPA) 2019 Theme Report. We believe that the evolution in theatres and enhanced customer experience will continue to bring customers back to enjoy film exhibition. While consumers have the option of watching streaming content at home, data has shown that theatre exhibition and streaming options have successfully coexisted. In fact, a survey published by EY (The Relationship Between Movie Theater Attendance and Streaming Behavior - February, 2020) illustrated that the most frequent moviegoers also spend the most time streaming. This is in part likely due to the fact that the majority of content streamed in-home is series-based content. 

We intend to significantly reduce our investments in theatres in the future and further diversify our other experiential property types. We expect this to occur as we limit new investments in theatres, grow other target experiential property types and pursue opportunistic dispositions of theatre properties. 

As of December 31, 2024, our owned theatre properties were leased to 17 different leading theatre operators. A significant portion of our total revenue was from AMC and Cineworld Group, plc, Regal Entertainment Group