Company: EPR-PE
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001045450-25-000135
Chunk: 32

Company: EPR PROPERTIES
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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, net of write-offs. 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 FASB ASC Topic 842, the Company does not include these lessee payments 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 nine months ended September 30, 2025 and 2024, the Company recognized $1.3 million and $1.4 million, respectively, in tenant reimbursements related to the gross-up of these reimbursed expenses that are included in rental revenue.Certain of the Company's leases, particularly at its multi-tenant entertainment districts, require the tenants to make payments to the Company for property-related expenses such as common area maintenance. In accordance with Topic 842, the Company has elected to combine these non-lease components with the lease components in rental revenue. For the nine months ended September 30, 2025 and 2024, the amounts due for non-lease components included in rental revenue totaled $14.3 million and $13.7 million, respectively. In addition, most of the Company's tenants are subject to additional rents (above base 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 specified triggering events occur as provided by the lease agreement. Rental revenue included percentage rents of $14.9 million and $9.8 million for the nine months ended September 30, 2025 and 2024, respectively.The Company regularly evaluates the collectability 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, projected performance and historical trends of the tenant, as well as the current economic conditions and changes in customer payment terms. When the collectability of lease receivables or future lease payments are no longer probable, the Company records a direct write-off of the receivable to rental revenue and recognizes future rental revenue on a cash basis.Mortgage Notes and Other Notes ReceivableMortgage notes and other notes receivable, including related accrued interest receivable, consist of loans originated by the