David Brain - President and CEO Greg Silvers - COO Mark Peterson - CFO

Dan Altscher - FBR Capital Markets Craig Melman - KeyBanc Capital Markets Anthony Paolone - JPMorgan Dan Donlan - Ladenburg Thalmann Rich Moore - RBC Capital Markets

Thank you Ryan, good afternoon all. We'll start with our call preface, which is, as we begin this afternoon, I need to inform you that this conference call may include forward-looking statements defined in the Private Securities Litigation Reform Act of '95, identified by such words as will be, intend, continue, believe, may, expect, hope, anticipate, or other comparable terms.

The company's actual financial conditions, results of operations may vary materially from those contemplated by such forward-looking statements. A discussion of the factors that could cause actual results to differ materially from those forward-looking statements is contained in the company's SEC filings, including the company's reports on Form 10-K and 10-Q.

Again, good afternoon you all. Thank you for joining us for the earnings call for third quarter of 2014.

This is David Brain, the Company's CEO. And as usual to go further news of the quarter with me are Greg Silvers, the Company's Chief Operating Officer.

Good afternoon.

And Mark Peterson, our Chief Financial Officer.

Good afternoon.

Please remember not already there, there are slides to go with this narrative and they are available via eprkc.com. We'll start with the EPR properties headlines from third quarter of 2014 we have four first record quarter with results consistent with guidance.

Second, key tenant industries demonstrate healthy performance. Third, balance sheet position and transaction capacity bolstered by equity offering.

And fourth, earnings guidance refined for 2014 and presented for 2015. Well, it is good to join me this afternoon report on this third quarter, our first headline this afternoon is much the same as it’s been for several quarters and that is record quarter which brought results consistent with guidance.

This quarter we did achieved record quarterly revenues, this time nearly $99 million, 12% ahead of the same period last year and our reported FFO was adjusted a $58.5 million is 21% ahead of the prior year and on a per diluted share basis up 7%. These results are very much in line with our expectations and guidance I believe they reflect well the very solid business model and progress at EPR.

Our second headline this afternoon as usual deals with some of our clients businesses, it is key tenant industries demonstrate healthy performance. Last quarter, we reported you some softness in the summer box office and that was disappointing.

The trend we expected at that time of a recovery in the latter portion of the year is well underway. Box office has now improved from the deposit compared to the prior year low point down 7% to now only trailing the prior year by less than 4%.

And predictions for the remainder of the year and holiday season or to at least have, if not completely close that gap by the end of the year. Our waterpark investments finished the strong summer season and yielded us participating payments ahead of last year.

Education is another key tenant industry that we usually report on to you on our third quarter call because by this time reliable enrollment data is available from our school operators. I’m pleased to tell you that very healthy increases in our school portfolio enrollment, total enrollment is up over 20% and capacity utilization is up as well.

These statistics are important of course because they are directly related to our tenant’s reimbursements and revenues. Next of note for the company during the quarter is our third headline; balance sheet position and transaction capacity bolstered by equity offering.

Near to end of the third quarter the company executed a successful equity offering that raised approximately $184 million on the sale of almost 3.7 million shares. This was a very much normal course offering that allows us to continue our program of portfolio expansion and increased shareholder returns while keeping our leverage near our general target of 40% on a book basis.

It has been a more turbulent and vital equity market of late so we are pleased to report this as completed. And the demand was strong enough that we upsize the offering from what was originally planned.

Our last headline this afternoon as is often the case, deals with guidance and its earnings guidance refined for 2014 and presented for 2015. Today, we’re announcing some increased near term transaction guidance that Greg will detail but we’re not changing our 2014 earnings guidance due to the limited income statement impact available from the remainder of the year.

We are, however, tightening 2014 earnings guidance now that we’re within months at the end of the year. We are at this time able to tighten our 2014 guidance from between $4 and $4.10 for FFO, as adjusted per diluted share, to a range of $4.03 to $4.07.

Further, we are introducing guidance also for FFO as adjusted per diluted share for 2015; a $4.30 to $4.30, with the transaction volume expectation greater than $500 million. The midpoints of the 2014 and 2015 earning ranges reflected increase in cash flow per share of almost 7.5%.

Mark has details on this; with what is what is not included therein. Now regarding our dividend, with our dividend being paid monthly and adjusted at the beginning of the calendar year, we expect to adjust our dividend before we join you next on a quarterly call.

I ask you all to look for an announcement after the first of the year and although I do not have formal guidance to give you with regard to the dividend and those specific Board action has been yet taken. We expect the company will follow our consistent historical practice of increasing the dividend at a rate commensurate with the increase in per share cash flow expected.

Now with that I’ll turn it over to Greg and then Mark. We’ll detail our financials, and I will join you as we go to questions in a few minutes.

Thanks, David. The third quarter continued our progression of an outstanding year in terms of acquisition volume.

Investment spending for the quarter totaled nearly $152 million and broader year-to-date investment spinning to approximately $472 million. The quarters bid included investments in all of our primary segment.

On today’s call, I would like to spend a few minutes by conducting performance of these segments as well as detailing our third quarter investments. In the Entertainment segment, as we predicted the third quarter beginning the process of turning around the summer’s lackluster performance that stood at 70% down on our last call.

As of this weekend box office performance now stands at slightly under 4% down and is back into the range of our prediction for the year. With remaining slate of titles, we remain hopeful for the year to finish only about 2% down from the prior year after several consecutive record years.

Notwithstanding the box office performance, the same for 2014 will continue to be the widespread demand for and consumer acceptance up expanded amenity theaters. This movement by operators to an increased focus on the customer experience should allow our tenants to diversify and grow their revenues through the use of expanded food and beverage options, including alcohol.

The rapid adoption of this concept by the national contributors continues to drive more and more regional theater operators to follow their link and adopt these new designs. What these new designs mean for EPR is simply more opportunities for both development and redevelopment over the next several years.

For the quarter, investment spending in our Entertainment segment was $10.3 million comprised mainly of investments in five build-to-suit theaters, redevelopment of two existing theaters and the build-to-suit construction of two family entertainment centers. Our portfolio of Entertainment property now stands at a 133 theaters and six family entertainment centers.

We mainly go to source for the theater industry as we are the largest landlord for the three biggest exhibitors in the U.S. AMC, Cinemark and Regal.

These longstanding relationships along with our main regional exhibition partners have and will continue to supply our development pipeline. In our Recreation segment, tenant performance continues to be strong, with Schlitterbahn delivering participating interest greater than we anticipated, which Mark will detail in his comments.

Our TopGolf properties continued their performance as we expand the number of location, which in turn has strengthened the master lease portfolio. During the quarter, our investor spending in the Recreation segment was approximately $65 million related to 12 build-to-suit TopGolf facilities as well as spending on the Waterpark hotel located at the Camelback Mountain Resort.

In connection with the development at Camelback on October 22nd, the Camelback team held media event and hardhat tour at our waterpark hotel which was such a standard for family-oriented recreation resort in the Northeast area. The response was overwhelmingly positive with media outlets from both New York and Philadelphia participating.

The project remains on budget with the planned Phase 1 opening in spring of 2015. With regard to our Education segment, strong demand about in the category and in our development pipeline continued a robust opportunity thing that we previously discussed.

As of the third quarter, we now have nearly 32,000 kids enrolled in our 60 public charter schools. This number represents a year-over-year enrollment increase of 23%.

Additionally, we now have a portfolio of 32 different operators and 19 different states including the District of Columbia. Our school utilization which measures actual enrollment versus school capacity has increased to 88% as of September 2014 versus 85.5% as of September 2013.

These numbers reflect our commitment to continue to diversify our portfolio in terms of both operator and geography while maintaining our position as a leader in financing and delivering quality real estate solutions that tap into this growing demand. For the quarter, investment spending in the Education segment total $75 million related to the build-to-suit construction of 17 public charter schools, three private schools and 10 early childhood education enters.

Our investment pipeline remains robust and we continue to have strong confidence in our ability to grow this segment with quality transactions. Our overall occupancy rate remains strong at 99%.

As I mentioned in my comments today, we continue to see many strong opportunities across our various segments. As a result, we’re increasing our 2014 spending guidance from 550 million to 600 million, to 600 million to 750 million.

We acknowledge that this range is very broad given that we’re already 75% done with the year. However, the size of the ranges primarily driven by planned recreation resort acquisition of approximately $135 million, which we are still negotiating.

We referenced this deal in our last equity offering and we’re currently negotiating the documents relating to the acquisition however as we do not have definitive timing or certainty on the closing of the transaction we thought it appropriate to broaden our range of investment spending. Given the timing of the transaction it should have minimal of any impact of 2014 earnings.

However, should the transaction close we believe that we contribute meaningfully in 2015 and have included it in our 2015 guidance which Mark will discuss. Also in conjunction with this call we’re also introducing 2015 estimated spending guidance of $500 million to $550 million.

Importantly, given our large composition of investments related to build-to-suit projects approximately 50% of this estimated investment spending is related to projects that have already closed the 2014 but will carry over into 2015. With that I’ll turn it over to Mark.

Thank you, Greg. I would like to remind everyone on the call that our quarterly investor supplemental can be downloaded from our Web site.

Now turning to the first slide, FFO for the third quarter increased to $54 million from $47.6 million in the prior year. FFO per share was a $1 this quarter and in the prior year.

FFO is adjusted for the quarter, increased to $58.5 million versus $48.2 million in the prior year and was a $1.08 per share for the quarter versus $1.01 in the prior year, an increase of 7%. Now let me walk through the key line item variances for the quarter versus the prior year.

Our total revenue increased 12% compared to the prior year to another record quarterly amount of $98.7 million. Within the revenue category, rental revenue increased by $12.2 million versus the prior year to $74.4 million and resulted primarily from new investments.

Percentage rents for the quarter included in rental revenue were $1.2 million versus $1.3 million in the prior year. Other income decreased by $1.1 million versus the prior year, this decrease was primarily due to $1.2 million in non-refundable option payments received from Empire Resorts related to the planned Adelaar casino and resort project that was recognizing the income in the third quarter of last year.

Additional non-refundable option payments received since that time totaling $2.75 million through quarter end have been differed and we will be recognizing the income in the future as part of leased accounting should a lease agreement be finalized with Empire on this project. Mortgage and other financing income was $19.5 million for the quarter essentially flat versus the prior year.

As discussed previously, we sold four public charter schools earlier in the year for approximately $46 million. The decrease in financing income as a result of the sale of these schools was offset by the impact of additional real estate lending activities and favorable participating interest income.

We recognized approximately $1.4 million of participating interest income this quarter versus approximately $900,000 in the prior year related to our investment in the Schlitterbahn waterparks due to another strong revenue performance this season. On the expense side, our property operating expense decreased by $631,000 versus the prior year due to primarily to lower bad debt and other non-recoverable expenses at our multi-tenant properties.

G&A expense remains relatively flat quarter-over-quarter at around $6.7 million. Our net interest expense for the quarter increased by $366,000 to $20.8 million.

This increase resulted from an increase in our offsetting borrowings during the quarter and was partially offset by a decrease in our weighted average interest rate. During the third quarter, we also recorded a provision for loan loss of $3.8 million that relates to the full amount outstanding of one note receivable that was originated at the beginning of 2006.

This note was made original as a bridge loan to anticipated larger transactions that company chose not to pursue in the same year and thus the charge is comparable in nature to an abandoned transaction cost. Recent changes in the borrower’s financial status are such that future payments are no longer considered likely although we will continue to pursue recovery.

We have no other relationship with this borrower other than this one note receivable. Finally, income tax expense for the quarter relates to the Canadian tax law change that I’ve discussed on previous calls.

363,000 of these expenses, the non-cash deferred income tax expense that was excluded from FFO as adjusted the remainder is current tax expense. Turning to next slide, I’d now like to review some of the company’s key credit ratios.

As you can see, our coverage ratios are strong with fixed charge coverage at 2.9 times that service coverage is 3.2 times and interest coverage at 3.7 times. Our debt-to-adjusted EBITDA ratio was 4.7 times for the third quarter annualized and our debt to gross assets ratio was 39% at December 30.

As you can tell by these metrics, our balance sheet is in great shape to fund our strong pipeline. Let’s turn to the next slide I’ll provide a capital markets and liquidity update.

At quarter end, we have total outstanding debt of $1.6 billion. All but about $104 million of this debt is either fixed rate debt or debt that is unfixed to interest rate swaps with the blended coupon of approximately 5.4%.

We have $34 million outstanding at quarter end on our line of credit and we had $8.4 million of cash on hand. We are in excellent shape with respect to debt maturities.

As of September 30, we have no scheduled balloon maturities for the remainder of 2014 and less than a $100 million of such maturities in each of the next two years thereafter. Turning to next slide; during the quarter, we issued approximately 3.7 million common shares in a registered public offering for net proceeds of approximately $184.2 million.

This offering was in excess of three times oversubscribed allowing us to exercise the over-allotment. The proceeds from this offering we used to pay down our line of credit which had a balance of $208 million at the time of the offering.

Additionally, during the quarter, we increased the size of our funded term loan from $275 million to $285 million. This loan carries a stated rate of LIBOR plus a 160 basis points and is due in 2018.

Turning to next slide, as Greg mentioned, we are increasing our investment spending guidance for 2014 to a range $600 million to $750 million from a range of $550 million to $600 million. We are also narrowing our guidance for FFO's adjusted per share for 2014 to a range of $4.03 to $4.07 from a range of $4 to $4.10.

We typically do not provide quarterly guidance. However, I would like to mention that this updated guidance implies a range of $1.03 to a $1.07 for the fourth quarter.

In comparing our fourth quarter estimate of FFO's adjust per share to net reported for this quarter, it should be noted that our combined percentage rents and participating interests are expected to be approximately 2.2 million lower in the fourth quarter versus this quarter due to our typical seasonality in these amounts. Furthermore, the fourth quarter will of course include the full impact of our recent equity raised.

During the next slide, we are providing guidance for 2015; FFO's adjusted per share of $4.30 to $4.40 and guidance for investment spending of $500 million to $550 million. Our 2015 guidance assumes that the recreation resort investment opportunity Greg discussed earlier closes by year end 2014.

As Greg mentioned approximately 50% of our 2015 investment spending guidance relates to spending on projects that have already closed in 2014. In addition, because of the vast majority of our expected investment spending relates to build-to-suit projects that generally have nine to 12 month build cycles or longer.

It is important to understand that most of the earnings impact related to our investment spending is in the year following the actual spending we report. Therefore, new build-to-suit projects that we may add to investment spending over the course of the year are not expected to meaningfully impact FFO per share results in 2015.

We think it is helpful to investors to also share key assumptions regarding G&A expense as well as Adelaar project contained in our 2015 guidance. First, we expect G&A expense to be approximately $32 million for 2015.

Our G&A expense is expected to be approximately $550,000 higher in the first quarter than the full year number divided by 4 primarily due to certain employee benefit expenses that are recognized in Q1 as in prior years. Second, our FFO's adjusted per share and investment spending guidance includes the Adelaar project at a status quo pending the outcome of the award of certain casino gaming licenses by the State of New York expected to be announced soon.

We expect to provide the financial details of this project once the final decision has been made and we will update our guidance as needed. Now with that, I will turn it back over to David for his closing remarks.

Thank you Mark thanks Greg. As we go to your questions, I will just add on to a topic Mark raised there that I do not think rose the threshold of being a headline for the quarter because there are no new real developments but is often of interest because of the potential for substantial change and earnings impact and that is the status of licensing of a casino and our land development in Sullivan County now that is Adelaar.

On this topic I want to let you know that we do expect to issue a press release about this whenever the New York State Board decision is rendered and further expect to hold a special conference call to overall the plans and details sometime following that. I warn you though it may take some time to get from the New York Facility Location Board decision to that special conference call.

Because there still will be some specific issues about the license and the development that we expect will still need to be negotiated with the gaming commission following a decision by the citing board. If anyone would like to keep a real time watch on this topic, I invite you to go to gaming.ny.gov.

But we will try to keep you informed on this as best as we are able. So, with that, about that topic, I will open up it to questions.

Brian

Thanks. And I appreciate you taking my call.

Kind of a big-picture question, I guess, as it relates to last night, regarding Regal -- potential M&A on that front. Broadly speaking, any comments you can think about on Regal, or how M&A maybe broadly across the sector might impact the company?

Yes, correct, I think what we’ve talked at least internally is that I think going - two things that are real positive versus moving into this industry right now one being the anticipated two goals in ’15 record year by all standards it's anticipated to be quite large. Second of all, this movement to the -- that new, high-amenity theatres.

So, I think there is a thought process that it’s -- could be a very good comment for somebody to be looking at that and maybe looking at dealing with this position with Regal. For us, we actually see opportunity as someone who is going into the space we have great relationship with Regal, we would anticipate that does relationships we maintain and that someone probably would not want to go into the space without thinking about growing in and having intentions of that.

So we see those as positives.

Okay. And then a question about 2015 guidance.

I think the point, Mark, that you made about how spending on build-to-suit maybe doesn't really come through until the following year -- so, as we think about maybe what 2015, maybe on a pro forma or an adjusted basis, could look like if all that spending was actually being captured, is there a way to maybe parse that out or think about what that full, kind of like, run rate is on a fully-deployed basis?

That’s pretty difficult, I mean new spending, if it takes nine to 12 months we’ll have an average of started to beginning I guess less than six months in the P&L if you think about it. So, you’ll have as that rolls over the full impact of that, but I don’t have that quantified in anyway because the reality is a business suite - business suite does have a delayed earnings impact and lot of the growth year this year is really from the build-to-suit business we did last year.

Yeah. Okay.

And just thinking about fourth quarter as well, certainly, I guess, the implied quarter-over-quarter decline in core FFO really seems to be a lot driven upon the higher share count -- did that predominantly seem like the major delta, or is there any other -- something specific that might pop up in the quarter, that you're contemplating?

Well, like I said I think the other big thing is the percentage rents and participating interest our seasonal nature and we expect the fourth quarter to be $2.2 million lower than that in the third quarter, so that’s a pretty big impact on a fourth quarter on a comparable basis.

Okay. Yeah.

That got -- that makes sense. Sorry.

The call was fading in and out a little bit before, so I probably missed that part, but -- okay. No, that's great.

Great quarter and -- for this one. Thanks much.

Just to follow up on the guidance question, how much of the 500 to $550 is already identified?

It's about well identified or what I said was 50% of it is already close, meaning that the projects that we have started and that we will complete in ’15, so the spending of these projects will carryover in the ’15 and that represents 50% of that. Now there are far more projects than that identified but those are not closed.

The all of the expectation issues [ph] is identified. We do our expectation based on how we want to identified and not speculative project.

So, as Greg said, a lot of them are underway but they are all identified to a very high degree.

No sorry. I apologize.

I had missed the 50%, so that's what I was getting at. I guess I'm just trying to get a sense of, how much do you guys anticipate closing, kind of -- I guess the investment spending's helpful, but as I look at where I was relative to where you guys came out in guidance, I was a little bit ahead.

And a lot of it just comes down to timing of deliveries and yields. So, as you guys look at -- I know the recreation acquisitions a little bit fluid.

It could be -- for all intents and purposes, its first quarter of 15, for when it comes in from an economic perspective. But just, can you give us a sense of -- I know you have from the stuff that -- the 50% that's already closed; but for the balance of the potential spend, how much could hit and when?

Just kind of it over the year and the schedule does change occasionally has to do with a lot of things whether in technical issues associated with specific sites and sometimes it does change a bit Greg but.

And we are not contemplating a lot of acquisition activity in next year's guidance is predominantly as I said the vast majority of it is built-to-suit. So again if you combine page 20 plus what we expect to do in fourth quarter and our guidance for '15 kind of gives a sense of when that goes in service to when we get the full earnings impact.

All right, that's helpful. And are yields being maintained or is there any downward pressure on them?

There is always pressure but we've been pretty successful in maintaining those yields in and around 9, so it’s probably looking as that 8.5 and 9.5 range, but it's not seen the pressure that other categories have had.

Okay. And then just one last one.

Greg, you talked about the redevelopment opportunities as people go to more higher-amenity theaters. As you look at the in-place portfolio today, what do you think is the opportunity embedded that you guys could potentially get at to redevelop?

I think honestly it’s a little different story Craig. So you understand most of these redevelopments are theatre operators redeveloping these and extending for term.

Now what it creates from an opportunity standpoint for us and this is probably a little more detailed question than you want it is almost every theatre parking lot is based upon the number of seats in the theatre. So if you have a 4,000 seat theatre and let's generally call it 2.5 to 3 seats per every parking space; so you have 1,200 to 1,500 seats.

If you change that to a high amenity and you go to 1,800 seats; you effectively then open up a lot of your parking lot for ground lease, for restaurant development, things of that nature. So what we are getting when we are doing the redevelopment is a lot of term extension on our leases so the theatre operator is coming in and doing that or we are actually buying an older theatre and redeveloping and getting that whole new brand new lease.

Okay. Then just one last quick one.

The 500 to 550, what's the breakout for education and entertainment -- kind of, breakout between the categories for all three of them?

I think the best guidance to give you there is probably that it’s fairly even; it’s been fairly even over the last couple of years.

Greg, just on that redevelopment, I wanted to follow up. What -- can you walk through -- trying to understand what you're really making on these -- so, in some of these instances you'll have a theater lease, I assume, that expires and then you're putting the money in to convert it into something different.

I'm just trying to understand, what was, say, the last cash rent, and what would be your new cash rent, to just understand what the incremental return is. Is there a way to put brackets around that?

Sure. I mean if you think about it generally, what we are doing is we are not necessarily, we are not taking a degradation in our rent any more additional money we are putting into the theatre we are getting paid on that rent and we are getting the extension of term.

So what we are seeing there is as theatres are nearing their term, let’s say they have five years or less, our theatre operator approach says they want to convert, they ask us for $2 million of funds because we can't fund FF&E portion of that, then what we will do is we will get paid on the $2 million in addition to the primary rent and we will extend that term out to not less than 10 years.

And Tony just to be clear, I mean you started a question with conversion to another use. It's not what's happened -- that's not is what happening we basically converting these for continued use as, it's just on a redevelop basis.

Got it. I understand.

Understand. And then, in terms of looking at your 2015, you mentioned kind of going evenly across the categories, but if we look at kind of just page 20 of your supplement you're kind of skewed to education at the moment.

Is that just kind of where the deals right now are falling, or -- and that'll even out or, how will that work?

This is Mark. We've said education has really grown at a faster clip than the other segment.

So I’d say it is a little bit more weighted toward education. And in the recreation area the TopGolf client is growing quickly as well.

So probably a little more skewed to those but we will see how the year plays out.

And also even though we look at it a little couple of different ways as we talk about before when theatre properties begin construction and not, as we said technically we have five under construction, two under redevelopment, the next major wing of those probably won’t start until the spring of next year, so you may have more projects but not necessarily as much investment spending related to that. So it all becomes about timing when you want to open those.

And the other parts of the projects are a little less long of a build cycle.

I see. Okay.

And then, again on the 500 to 550, it sounds like most of that is generally identified and relates to build-to-suit-type activities. I was just wondering if you can speak to more regular way acquisitions, and what that environment looks like, because it seems like you did find some things here, late in the year, to do.

Yes. And that's true.

I mean for us though it’s the acquisition is a more opportunistic I mean that doesn’t mean we’re not actively looking and talking with people about acquisition opportunities. We generally just don’t model those and the build-to-suit is actually more regular and recurring and that’s easy for us to conservatively model.

Yes, if you think about this year’s guidance at the top end $750 million well that includes two big acquisitions and add up to about $250 million that goes out you’re at $500 million somewhere to this year’s $500 million to $550 million we’re just not taking in the big acquisitions although they may happen and if so we would likely increase our guidance because the nice thing about those they have immediate accretion.

Okay. And then just last one for me -- I think David mentioned, as you kind of talked around the dividend a bit, to kind of grow in lockstep more or less with cash flow, which has been the historical norm -- but just, any reason to think that cash flow grows differently than FFO, looking out?

No, not really.

Thank you and good afternoon. Just going back to Craig's question, because I also came out a little bit higher on next year versus your guidance -- and then looking at page 20, what you had said in the owned build-to-suit in-service estimates, that number is now -- call it $112 million.

But it had been $151 million. So, kind of, what was the delta there versus last quarter?

Because that's a pretty big driver of kind of why, I think, some people were a little bit higher than maybe where you came out with. Was there a project that just dropped out?

Was it actually delivered in the third quarter? What was the delta?

Yes, I mean I think the primary difference could be deliveries the different period in time that you’re forward from so in the second quarter is different than the end of third quarter. End of third quarter our spending is expected to be about $120 million as we finish the year that number would have been different in the second quarter depending on what we had going.

That’s the primary difference.

Okay, well I guess I’m probably --.

-- Let’s put in the service.

Right, I mean I just --.

You can’t -- from this.

Okay, I just --.

We didn’t lose anything that was in process, so that had to go in service.

I guess how I've been modeling it is, I just assumed that the owned build-to-suit in-service estimates is what you were going to deliver, rent-paying, sometime during the fourth quarter. I guess, is that different -- am I misunderstanding that?

No, that’s correct. During the fourth quarter -- last quarter would have shown third or fourth quarter so it would have had some go in service and there could be some movement between what you plan that going fourth versus third and would actually happens and then this is updated for then what’s in service within the third quarter that we expect to go in thereafter.

Right. I was comparing the -- yes.

I was comparing fourth quarter to fourth quarter. So, I guess the next question would be how much actually was delivered.

How much developments were actually delivered in the third quarter? What was the nominal amount?

I don’t have that handy but I suspect it wasn’t that much different in plan because we pretty much are right on where we though we’re going to be.

Okay.

Then we can get that number for you.

Sure. Sure.

And it was just -- it was $77 million per the supplemental from last -- so, I'm just kind of curious, because it -- again, the difference the fourth quarter this time and the fourth quarter last time just seemed to be a little bit more than I would have expected. And I realize things move around from time to time.

Yes.

So -- and then, what are we thinking on -- or, what are you guys thinking on G&A for next year?

So, I said probably around $32 million.

Okay. Is there as it seems that's up from about I guess it might be almost $28.5 million this year, from -- up from $25.6 million.

It's -- why is that? How come your G&A is not scaling a little bit better than -- just given your side?

Yes, I will say one thing that swings the delta somewhat a stock rent and variable compensation which does vary from year-to-year but I will say that we still expect our G&A expense to be around 7% next year, not much different than this year actually probably a little bit lower than this year so there is a little bit of leverage.

Okay. Okay.

And then lastly, as it pertains to gaming, have you guys -- I know you've talked potentially about looking at doing sale-leasebacks in the gaming space. Is that still an open possibility, or are you still kind of researching that?

How should we think about that, looking out to 2015?

Well, I think it’s still distinct possibility in 2015 I think we have the -- more normal course development of build-to-suit type of business that we’ve exhibited for last couple of years building to our expectations. So that would be really be an [indiscernible].

But we continue to look at that just like we talked about Adelaar, it’s not in the numbers so two and any additional things in gaming. And Dan really going back to your question about scale, scale being achieved part of this really is the company is building scale and some in the recreation and the education categories so it’s not just continuing to scale the same and that’s been a - so the cost is not run forward going through the company but it’s not really scaled a lot because we’re building these businesses for last couple of years have only been 12%, 14% of total revenue.

So those begin to scale and I think you can see some of that advantage as time moves along and those business segments grow.

Hey, guys. Good afternoon.

The note receivable that you guys had the loan last time. What was that again?

Could you remind me?

It's in the education category Rich, it relates to as Mark indicated is about nine years ago it was really whom will begin looking at and have exploring the education category was early transaction that was a prelude a larger transaction, we openly did not get comfortable with, I note the perform for eight plus years and we were never comfortable with this education community. This is the only relationship we had with the - it's a large international education management organization and now there are some changes afoot, that we believe is proven to reserve that note although we do have some collateral, we’re going to pursue against that is not much representative of the current states of affairs, but it hearkens back to the early days of education when we are looking to that category.

Okay. So, you've basically written off the whole thing, in essence, Dave, is that right?

We’ve written off the whole thing, we do think there is a course for recovery potentially as - of to pursue recovery of some the sign we reset the whole thing and - it's fairly unrepresentative and isolated type of and say relates with a number of years ago.

If somewhat I said in my comments to abundant transaction cost was a pretty large transaction again the underwriting suggestion we shouldn’t do it. And then - but we had a performing note now they have additional changes and so we have to reserve it.

I think it's very clear to say it's related - is kind of a transaction cost.

Okay. Good.

I've got you. Thanks.

And then you guys -- you added, I think, what, two private schools in the quarter, and seven charters, as I counted from your press release and so, do you get the same dynamics with the private schools? I mean, you -- I think you mentioned those dynamics -- the numbers for enrollment and all that.

Was that just charter schools, or does that include -

That was just charter schools. Our private schools are also, I don’t have those numbers round the table but they have open very strong and so it was in conformance with what we discussed in a previous call about being in some gateway city.

So, we’re in Brooklyn and San Jose and they both come out equal for the enrollment to our projection. So, we feel very good about where we’re at they are already talking about expansion.

Okay. Good.

And both of those, Greg -- they're talking about expansion?

Yeah, those are.

Okay. Got you.

Then the -- on the theater side of the world, I guess one way around the world, you guys have stuff going on in China, and you include a bit more of that, it looked like, in the supplemental this time. So, you have, I think -- well, you have a 19 theater project you're doing with Shanghai Film -- is that….

We’ve four theaters.

So that another performance continues to do very strong and so there maybe some reported that, but this is the continuation of what we said have kind of continuing or kind of research sizing up the opportunity see that they are involves to a model that we think fits our performance metrics, but the properties - they have actually performed quite well and we continue to build relationships with that country.

So is a pretty modest investment.

Less than 10 million of total.

Okay. And so, were you -- are you thinking of adding more, or [multiple speakers].

No, I think we’re still looking at that, I think we’ll be approached by the operators to do more and we’re evaluating that and see how directionally which way we want to go with that, but it's been very positive.

Okay. Good.

Got you. So, who do you think buys Regal, by the way?

The reason I ask that is, if it's someone like AMC, that's your biggest tenant. That would make that once again…

That’s probably not possible from an antitrust standpoint. This can you think about national operators, I think there is clearly -- with what happen with AMC they are international players who wanting the access this market.

So rather than speculate I think they probably will but I think there is a lot of people who are looking at the opportunity set to get into this kind of media.

Okay. Good.

Thank you. And then on the recreation side of things, the revenue is up big, 2Q to 3Q, and bigger than we had anticipated.

And I'm not sure what I missed there. I mean, what -- why is that so much larger?

Well part of it's the percentage interest that we recognize in the third quarter which was 1.4 million for waterparks, up 500,000 from last year.

But I mean, I think it was bigger than that, wasn't it, Mark?

We are bringing lot of properties online, TopGolf properties online. We now as we said during the quarter, we’re talking about five -- last quarter we announced like 8 that are online.

So yeah we are bringing on more properties that start generating paying rents.

And participating interest was 1.4 million. It just an increase of 500,000 over the prior year.

So I think it’s a combination of those two things. A lot of TopGolf’s going in service and then percentage rent and ongoing income from Schlitterbahn.

Okay, good. Thank you.

And I guess the last thing -- I'm just sort of curious, why do you increase the term loan only $10 million?

We had a local bank with interest and it's really easy to do and it's cheap financing. So we took advantage of that.

We have the ability to take that to 400 million from the current 285, but we had a nice local relationship and that's not unusual on the smaller banks to do it in $10 million, $15 million chunks.

All right we only have really one key closing concept to convey to everybody and we are putting this slide up now and that is you got to stay tuned to the World Series and the team of destiny tonight, and support the Royals for us. We very much want this.

Thank you all very much for tuning in.

Thank you.

Thank you.