EPR Properties (EPR -0.61%)
Q1 2023 Earnings Call
Apr 27, 2023, 8:30 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day, and thank you for standing by. Welcome to the EPR Properties first quarter 2023 earnings conference call. [Operator instructions] Please be advised that today's conference is being recorded. And without further ado, I would like to now hand the conference over to your first speaker today, Brian Moriarty, vice president, corporate communications.
Brian, please go ahead.
Brian Moriarty -- Vice President, Corporate Communications
OK. Thank you, Eric. Thanks for joining us today for our first quarter 2023 earnings call and webcast. Participants on today's call are Greg Silvers, chairman and CEO; and Greg Zimmerman, executive vice president and CIO; and Mark Peterson, executive vice president and CFO.
We'll start the call by informing you that this call may include forward-looking statements as defined in the Private Securities Litigation Act of 1995, identified by such words as will be, intend, continue, believe, may, expect, hope, anticipate, or other comparable terms. The company's actual financial condition and the results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of those factors that could cause results to differ materially from those forward-looking statements are contained in the company's SEC filings, including the company's reports on Form 10-K and 10-Q. Additionally, this call will contain references to certain non-GAAP measures, which we believe are useful in evaluating the company's performance.
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A reconciliation of these measures to the most directly comparable GAAP measures are included in today's earnings release and supplemental information furnished to the SEC under Form 8-K. If you wish to follow along, today's earnings release, supplemental, and earnings call presentation are all available on the investor center page of the company's website, www.eprkc.com. Now I'll turn the call over to Greg Silvers.
Greg Silvers -- Chairman and Chief Executive Officer
Thank you, Brian. Good morning, everyone, and thank you for joining us on today's first quarter 2023 earnings call and webcast. We are pleased to start the year with continued momentum, highlighted by 9% growth in total revenue and 15% growth in FFOAA per share versus the same quarter prior year. We have also collected all scheduled rent from Regal due in 2023 through April, as well as the scheduled deferral payments due from all customers for the same period.
These results provide further evidence of our theme of recovery and highlight the resilience of our experiential investments. Additionally, during the month of April, Cineworld reported that it had entered into a restructuring support agreement with its secured lenders and subsequently filed a plan of reorganization. The proposed timeframe within the plan indicates that Cineworld should emerge from bankruptcy in early July. While we cannot comment on the status of our negotiations, the filing of the proposed plan defines the time frame for resolution.
At an industry level, we are encouraged by the continued substantial growth in box office revenues as content production ramps up. Additionally, we are excited to see the significant news of both Amazon and Apple committing to spend $1 billion a year toward movies with theatrical releases. As we stated many times, this firmly speaks to the importance of theatrical distribution and maximizing economics and building brands. In reviewing our experiential portfolio, we are seeing sustained demand highlighted by our eat and play, experiential lodging, and ski properties.
Additionally, we are pleased to see our overall rent coverage continues to remain above 2019 levels. Our strong liquidity position allows us to deploy capital in a disciplined manner across a variety of experiential properties, including having a committed pipeline that we will fund in the coming quarters. With a durable income stream and ongoing recovery and additional growth from our investment pipeline, we are encouraged by our outlook for the year. Now I'll turn the call over to Greg Zimmerman to review the business in more detail.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Thanks, Greg. At year end, our total investments were approximately $6.7 billion, with 363 properties in service and 98% leased. During the quarter, our investment spending was $66.5 million. 100% of the spending was on our experiential portfolio and included the acquisition of an experiential property and continued funding for experiential development and redevelopment projects commenced in 2022.
Our experiential portfolio comprises 289 properties with 49 operators and accounts for 92% of our total investments or approximately $6.2 billion. And at the end of the quarter, was 98% occupied. Our education portfolio comprises 74 properties with eight operators. And at the end of the quarter, was 100% occupied.
Our value-oriented Drive 2 destinations provide a compelling value proposition for families, and we are confident they will continue to prove resilient. Turning to coverage. The most recent data provided is based on a December trailing 12-month period. Overall portfolio coverage for the trailing 12 months continues to be strong at two times.
Trailing 12-month coverage for theaters is 1.3 times with box office for calendar year 2022 at $7.4 billion. Trailing 12-month coverage for the non-theater portion of our portfolio is 2.7 times. Now I'll update you on the operating status of our tenants. The first quarter was a continuation of box office recovery and acceleration.
Q1 total box office was $1.7 billion, a 28% increase over Q1 2022, led by Avatar: The Way Of Water; Ant-Man and the Wasp: Quantumania; Creed III; and Puss in Boots: The Last Wish. The quarter also had the breakout titles John Wick: Chapter 4 and Cocaine Bear. We were pleased with the performance of the children's offering Puss in Boots and the adult-oriented Tom Hanks film, A Man Called Otto. 11 films grossed over $50 million in the quarter.
Led by the outstanding performance of The Super Mario Bros. Movie, Q2 is off to a robust start. At $146.4 million, Super Mario Bros. generated the second-highest-grossing opening weekend ever for an animated feature film, which, in turn, fueled the biggest five-day opening ever for any film at $204.6 million.
Its outsized performance continues as the highest-grossing 2023 title at $440 million to date and Universal's third-highest-grossing domestic film ever. Through the past weekend, seven titles have grossed over $100 million in 2023. Year-to-date box office growth stands at $2.49 billion and trailing 12-month box office growth is approaching $8 billion. Our high-quality theater portfolio continues to outperform the industry.
The biggest news in 2023 is the widely reported commitment from both Apple and Amazon to spend $1 billion to create content for theatrical release, reinforcing our long-held conviction that theatrical exhibition provides the best platform for Studios to drive revenue, create buzz around the title and secure A-list talent. MGM's Creed III was the highest-grossing film ever for Amazon at $156 million to date. Air, the first-ever theatrical release from Amazon Studios, starring Ben Affleck and Matt Damon, was released over Easter weekend and has grossed over $42 million to date. Air opened on more than 3,500 screens, making it the widest theatrical debut ever for a streaming service.
Amazon reportedly spent over $40 million to market the film. Apple announced that Martin Scorsese's Killers Of The Flower Moon with Leonardo DiCaprio and Ridley Scott's Napoleon with Joaquin Phoenix, which have theatrical releases before moving to Apple TV Plus. With these significant commitments from two of the largest streaming services, we continue to remain confident that the supply of films for theatrical release will continue to grow, driving the ongoing North American box office recovery. Turning now to an update on our other major customer groups.
We continue to see good results and ongoing consumer demand across all segments of our drive to value-oriented destinations. Our eat and play assets continued their strong post-pandemic performance with portfolio revenue up for Q1, 11%, and EBITDARM up 4% over Q1 2022. Most of our attractions are closed or on reduced hours in the winter months. City Museum in St.
Louis and both titanic museums had continued growth in attendance revenue and EBITDARM in Q1 over the same period in 2022. We are commencing construction in Q2 for both the expansion of the Springs Resort and Pagosa Springs and redevelopment of our Murrieta, California conference center into a new Natural Hot Springs resort. Performance across our ski portfolio is good. Despite late season weather impact, December '22 through March 2023 ski season visits were up 11% and revenue was up 8% over the same period in 2021, 2022.
Good early season snowfall helped North Star, but the unseasonably heavy late winter snowfall resulted in closures to much of Lake Tahoe, and our Eastern resorts had an unseasonably warm weather at the end of the quarter. EBITDARM was negatively impacted by expense increases, including wages. Room renovations continue at our Four Season Alyeska Resort in Alaska, Alyeska will join the Icon Pass program for the 2023, 2024 season and to enhance summer offerings, just opened the Veilbreaker Skybridges, two 300-foot suspended bridges spanning two peaks at the resort. Our Margaritaville Hotel in Nashville, proximate to all of Nashville's famous downtown destinations, continues its upward trajectory with increases in all metrics.
With renovations complete at both the Beachcomber and Bellwether resorts in St. Petersburg, we saw occupancy, RevPAR, and EBITDARM growth in the quarter. Our education portfolio continues to perform well with year-over-year increases across the portfolio through Q4 2022 of 11% in revenue, 7% in EBITDARM, and 18% in enrollment. We noted on our last quarter call that KinderCare acquired Creme de la Creme, and we anticipated KinderCare would execute a preexisting lease termination right for five early education properties.
KinderCare has notified us of their intent to terminate those leases at the end of the school year in late June. We have begun marketing all five properties for sale and plan to redeploy the proceeds in experiential assets. Turning to a quick update on capital recycling. During the quarter, we sold a vacant former main event for net proceeds of $4 million.
We continue discussions with multiple parties on our two remaining vacant theaters. In Q1, our investment spending was $66.5 million. In addition to the continued funding of Experiential development and redevelopment projects commenced in 2022, we acquired a newly constructed vital climbing gym in Williamsburg, Brooklyn, on a triple net lease for $46.7 million. Vital Climbing is our second investment in the climbing gym space.
Both are in very strong markets with well-positioned real estate. We're maintaining our investment spending guidance for funds to be deployed in 2023 in a range of $200 million to $300 million. As of the end of Q1, we have committed an additional approximately $245 million in experiential development and redevelopment projects, which we expect to fund over the next two years without the need to raise additional capital. We anticipate approximately $132 million of that $245 million will be deployed over the remainder of 2023, and that is the amount included at the midpoint of our '23 guidance range.
In 2023, cap rates continue to be in the 8% range. In most of our Experiential categories, we are seeing high-quality opportunities for both acquisition and build-to-suit redevelopment and expansion. We continue to have a good pipeline with new and existing customers and concepts. Likewise, we continue to exercise discipline, reducing our near-term investment spending and funding the investments primarily from cash on hand, cash from operations, and with our borrowing availability under our unsecured revolving credit facility.
As we have said for the last several quarters, we are limited by the recovery of our cost of capital, not by opportunity. I now turn it over to Mark for a discussion of the financials.
Mark Peterson -- Executive Vice President, Chief Financial Officer
Thank you, Greg. Today, I will discuss our financial performance for the first quarter and provide an update on our balance sheet. We had another strong quarter of results with FFO as adjusted of $1.26 per share versus $1.10 in the prior year, up 15%, and AFFO of $1.30 per share, compared to $1.16 in the prior year, up 12%. Now moving to the key variances by line item.
Total revenue for the quarter was $171.4 million versus $157.5 million in the prior year. This increase was due primarily to improve collections from certain customers, which continue to be recognized in revenue on a cash basis. During the quarter, we, once again, collected all scheduled deferred rent and interest from our customers and recognized $6.5 million as additional revenue from those on cash basis accounting. At quarter end, we had approximately $110 million of deferred rent owed to us, not on the books, which will continue to be recognized only as cash is received.
Regal makes up approximately $82 million of this balance and is subject to the bankruptcy negotiation. Note also, as Greg mentioned, we have already received full rent and deferral payments from Regal in April and have collected all non-Regal deferral amounts owed for April as well. During the quarter per court order, we also received a portion of Regal's September rent totaling approximately $1.9 million that was recognized as additional revenue. Finally, also contributing to the increase for the quarter versus prior year with scheduled rent increases, as well as the effect of acquisitions and developments completed over the past year.
This increase was partially offset by the impact of property dispositions. Percentage rents for the quarter totaled $1.8 million versus $3.4 million in the prior year. The decrease versus prior year related to less percentage rent from an early education tenant based on a restructured lease and the timing of certain other percentage rent recognized in the prior year. Lastly, FFO as adjusted from joint ventures decreased by $1.3 million versus prior year to $70,000 due to the fact that we have more RV park investments this year, and they generate losses during their off-season in the first quarter.
In addition, although we had better operating performance versus the prior year at our experiential lodging properties in St. Petersburg, Florida, this income was more than offset by a nonrecurring government incentive received in the prior year. Turning to the next slide, I'll review some of the company's key ratios. As you can see, our coverage ratios continue to be strong with fixed charge coverage at 3.4 times in both interest and debt service coverage ratios at four times.
Our net debt to adjusted EBITDAre was five times, and our net debt to gross assets was 39% on a book basis at March 31. Lastly, our common dividend continues to be very well covered with an AFFO payout ratio for the first quarter of 63%. Now let's move to our balance sheet, which is in great shape. At quarter end, we had consolidated debt of $2.8 billion, all of which is either fixed-rate debt or debt that has been fixed through interest rate swaps with a blended coupon of approximately 4.3%.
Additionally, our weighted average consolidated debt maturity is five years with no scheduled debt maturities in 2023 and only $136.6 million due in 2024. We had nearly $100 million of cash on hand at quarter end and no balance drawn on our $1 billion revolver. Again, this quarter, we are not providing 2023 guidance for FFO as adjusted due to the continued uncertainty related to Regal's bankruptcy. We will provide this guidance subsequent to the resolution of these proceedings.
As we have discussed previously, given our cost of capital and the current inflationary environment, we have consciously decided to continue to limit our near-term investment spending and fund these investments primarily from cash on hand, cash from operations, and borrowings under our unsecured revolving credit facility. Accordingly, we are confirming our 2023 investment spending guidance range of $200 million to $300 million, and we do not anticipate the need to raise additional capital to fund these amounts. Guidance for percentage rent and G&A is unchanged from that provided last quarter. Guidance details can be found on Page 24 of our supplemental.
Now with that, I'll turn it back over to Greg for his closing remarks.
Greg Silvers -- Chairman and Chief Executive Officer
Thank you, Mark. As we shared with you today, the experienced economy continues to demonstrate its strength and resilience. Additionally, content providers are again recognizing the power of theatrical exhibition to drive revenues and brand recognition. We now have all the major studios and two of the largest -- two of the three largest streaming groups committed to theatrical release, which should bode well for further recovery of box office.
For those who bet on the debt of the cinema business, I think you're going to be sadly disappointed. We believe our experiential focus thesis is well supported by a consumer that continues to demonstrate their preference for experience. And we offer the only diversified portfolio to take advantage of those trends. With that, why don't I open it up for questions? Eric?
Questions & Answers:
Operator
Yes. Thank you. At this time, we'll conduct a question-and-answer session. [Operator instructions] And our first question comes from the line of Todd Thomas with KeyBanc Capital Markets.
Todd, you are live.
Todd Thomas -- KeyBanc Capital Markets -- Analyst
Hi. Thanks. Good morning. I guess, first, Greg, you talked about Amazon and Apple's commitment to theatrical exhibition.
As you think about the release pipeline, I guess, do we start to see that release schedule accelerate in 2024. Or is it a little bit more of an extended time frame than that? And any sense on whether they're just targeting a lot more volume in content? Or will these be sort of larger tempo-type releases? Any sense there?
Greg Silvers -- Chairman and Chief Executive Officer
Well, I think our thought process, Todd, is that, yeah, the volume of overall releases will continue to grow. We're very excited about what 2024 looks like is getting back to kind of more traditional-type numbers. I think when you -- if you look at their numbers and they say 10 to 12 films, $1 billion a year, you're talking $100 million production on average. So I'm sure they will -- as Greg mentioned, the Killers Of The Flower Moon is a $200 million production.
So I'm sure there'll be some balance in there of some smaller, some bigger, but they clearly have not hesitated from going after big production numbers. So we're excited about seeing them come to the table. Greg, do you have anything to add?
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Well, I would also add, Todd, Air with Matt Damon and Ben Affleck probably won't get that close to $100 million, but it's still a solid film with 40 -- over $40 million to date.
Greg Silvers -- Chairman and Chief Executive Officer
It's type of adult products that we've missed candidly over the last several years.
Todd Thomas -- KeyBanc Capital Markets -- Analyst
OK. And then just in terms of Regal, you disclosed that 12.8% exposure from Regal that does not include the deferral rent payments. But I'm just curious if there's anything else when we think about Regal's FFO contribution that might be sort of baked in the model, any operating expenses or other expenses, any other noncash items, or any considerations to the model that we should think about?
Greg Silvers -- Chairman and Chief Executive Officer
I don't think so at this point, Todd. Other than -- I would say the one that's probably really kind of out of period beyond the deferral was, as Mark mentioned, in September kind of payment for which their court order to continue to pay that stub rent period, which I think was $1.8 million for the quarter.
Mark Peterson -- Executive Vice President, Chief Financial Officer
Yeah, $1.9 million. And we backed that out also, as noted on that schedule, deferrals and sub-renters backed out of that 12.8%. But -- so going forward, it's more about the Regal negotiations in the bankruptcy proceedings and where that ends up.
Todd Thomas -- KeyBanc Capital Markets -- Analyst
OK. But it's a pretty clean one-for-one move from revenue to FFO in terms of Regal's exposure. That's the way we should think about it.
Greg Silvers -- Chairman and Chief Executive Officer
Yeah.
Todd Thomas -- KeyBanc Capital Markets -- Analyst
OK. And then again, I realized the situation is very fluid and that there's some uncertainty around the outcome. But you're negotiating now, they're preparing to emerge in a few months. It seems like balance sheet is in good shape, and you've limited investment spend at $200 million to $300 million for the year.
Are you anticipating a ramp in investment spend perhaps once you have a better handle on your cost of capital? And have a clear sense of how the resolution plays out with Regal.
Greg Silvers -- Chairman and Chief Executive Officer
Again, I think, Todd, what we would like to think will happen is once we have -- we've heard a lot of feedback that this is what has depressed our multiple and that if we get resolution of this, that hopefully, that will correspond to an expansion in our multiple, which, as Greg mentioned, is really the thing that's holding us back, not really opportunity, it's our cost of capital. And I think if we saw that reverse and we had the ability to have a more competitive cost of capital that we would get more aggressive on the investment pipeline, the execution of it.
Todd Thomas -- KeyBanc Capital Markets -- Analyst
OK. And just last question, I guess, around the time line, for you, for EPR reinstating guidance and the mechanics around that. How should we expect that to play out? Will there be a resolution filed from Regal or Cineworld with a defined outcome for all locations, and you'll have full certainty around that outcome, and we should expect EPR to file an 8-K with an update surrounding the company's portfolio and reinstate an outlook or guidance for the year? Is that how we should be thinking about it?
Greg Silvers -- Chairman and Chief Executive Officer
Yes. I think given the importance of this, probably our thinking is we would probably have a conference call to go over the resolution of it so that everybody would be perfectly clear. Not only how it ended up, but why and our thinking on that. So I think it would not just simply be a press release, I think, given the importance that people are placing on this, it would be important -- we've maintained all the way through this to be as transparent as possible.
So I think it would behoove us to continue that process. and kind of have a full disclosure of not only the why but the how and why we are supportive of whatever resolution that we get to.
Todd Thomas -- KeyBanc Capital Markets -- Analyst
OK, great. All right. Thank you.
Greg Silvers -- Chairman and Chief Executive Officer
Thanks, Todd.
Operator
[Operator instructions] And our next question comes from the line of Rob Stevenson with Janney Montgomery Scott. Rob, your line is open. Please go ahead.
Rob Stevenson -- Janney Montgomery Scott -- Analyst
Good morning, guys. Greg, given your comments about having more opportunity cost-effective capital today, how should we be thinking about the education segment? Is there an opportunity there to sell chunks of that portfolio at reasonable prices? Or is the cash flow to use still more valuable than the cap rates you could sell the assets at today?
Greg Silvers -- Chairman and Chief Executive Officer
I think it's got to be kind of a balance, Rob, and I'll let Greg comment -- this is Greg Silvers. I'm going to jump in. I think we feel like we're very close to one way or another, given the emergence that their plan is to getting resolution on Cineworld one way or the other. And hopefully, I think we'll see us if we have a positive impact to our multiple, then we can be a little more thoughtful of either raising capital or selling.
I think we'll see if we don't have that, we'll probably explore that education recycling a little more aggressively. But Greg?
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Yeah. And Rob, we're obviously constantly evaluating the market on the education portfolio. And then as I mentioned in my comments, we are anticipating getting these five back from KinderCare, and we're already marketing those, and we're fairly comfortable that those will transact.
Rob Stevenson -- Janney Montgomery Scott -- Analyst
OK. And then I guess, how are you on the board thinking about using some of the cash from this and/or any other sales to buy back some of the preferreds or even maybe some of the common versus making incremental investment these days given the implied yield of the securities as well in excess of what you could probably get on acquisitions?
Greg Silvers -- Chairman and Chief Executive Officer
Well, again, I think we always look at it. Again, it's like an investment. And I think what most people forget is that buying your own shares back is not leverage neutral. And therefore, you have to kind of look at the total impact.
But in every investment committee and in every kind of board discussion, we are having those discussions about what is the right deployment of capital to drive value. So those are all things that are taken into consideration.
Mark Peterson -- Executive Vice President, Chief Financial Officer
The other thing just to comment on that, as we invest more, we continue to diversify our portfolio, reduce our theater exposure on a relative basis. And secondly, we maintain relationships with our tenants because we have ongoing programs with several of them. And to be there for them is important so that when we get to the other side and our cost of capital improves, we can do even more with them.
Rob Stevenson -- Janney Montgomery Scott -- Analyst
OK. That's helpful. And then last one for me, Mark, while I've got you. Is AMC still on cash basis accounting? And if so, how close are we to hitting the point where it reverts back to normal accrual accounting?
Mark Peterson -- Executive Vice President, Chief Financial Officer
Yeah. They are still on cash basis accounting. They don't have any receivables on or off the balance sheet. As far as getting back on accrual, really want to see continued performance.
The box office is undergoing a nice recovery. We're monitoring that. We're monitoring the credit situation of AMC and of course, Regal, who is emerging from bankruptcy. So I think we just want to see this play out, make sure see the continued box office recovery and see their credit improve as that improves before we make any moves.
From an AFFO point of view, it really doesn't make much difference because the difference would be recording some straight-line rent, and most analysts kind of look at more cash flow. So we're not in a rush to start recording a bunch of straight-line rent or even an initial straight-line rent entry. So that's kind of our thoughts on how we look at that.
Rob Stevenson -- Janney Montgomery Scott -- Analyst
OK. I mean, I think more so than anything else people looking at it is a signaling impact as to when AMC is maybe not off the watch list, but basically moved off of the accruals -- of the cash stuff. And so it sounds like that that's probably more like a '24 event than a '23 event at this point, would you say?
Mark Peterson -- Executive Vice President, Chief Financial Officer
Yeah. They're just going through the approval, which is subject to the court ruling to -- I'm talking about AMC, to issue additional equity. So of course, we'd like to see that and reduce their debt. So we're monitoring that.
Hard to predict when exactly that happens, but I think that we have some good prospects with box office improving and the ability to issue capital on their part going forward. So we'll just have to monitor that.
Rob Stevenson -- Janney Montgomery Scott -- Analyst
OK. Thanks, guys. I appreciate the time.
Greg Silvers -- Chairman and Chief Executive Officer
Thanks, Rob.
Operator
Thank you very much. [Operator instructions] And our next question comes from the line of Eric Wolfe with Citibank. Eric, your line is open. Please go ahead.
Eric Wolfe -- Citi -- Analyst
Hi. Thanks for taking my questions. First question, just assuming the Regal capital structure gets cleaned up as proposed. I mean, do you think that sort of afterwards, there will be a sales market for some of those assets? And just in general, what do you think it takes to sort of get a more liquid market for some of these theater assets?
Greg Silvers -- Chairman and Chief Executive Officer
I think what we're seeing generally is the recovery. I think there's no doubt that we'll see better liquidity in the Regal name if they have a better credit profile and emerge from this because what they're proposing is a dramatic reduction in debt that they'll have. And so I think if you take that backstop against an improving market, I think you'll begin to see liquidity. It will probably be much better in '24 as box office, we continue to believe will continue to ramp up.
And as the narrative changes from -- there's an industry issue to there were a guy that had a -- or a company that had a balance sheet problem and over levered themselves, then I think there'll be more interest in the space.
Eric Wolfe -- Citi -- Analyst
Got it. That's helpful. And then I guess as we should think about sort of the quality of different theater assets. I mean, what do you think we primarily should look to? Should we mainly look to coverage sort of being in dense market locations? And I guess within your own portfolio, would you say that there's sort of a wide range of quality or everything sort of consistent around a certain level of quality?
Greg Silvers -- Chairman and Chief Executive Officer
I would say it's not as wide as people -- it's not as diverse. I think generally speaking, we're in more major markets and secondary markets. We're not really in the highly rural markets. So I think it's one of the things which people always talk about, there's 40,000 screens in the U.S.
The reality about 15,000 to 20,000 of those matter, the other 20,000 of those, Eric, are in small towns all across America that no one -- they don't really affect box office. And what we have always looked at is high grossing, meaning that if you're driving top-line numbers that's something that's important not only to the exhibitor, but it's also important to the studio and you have a lot of alignment. So top-line revenue generation has always been kind of a key metric for success of a theater. Greg, do you want to add?
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Well, the other thing I would add, Eric, is that as we repeatedly say, we have 3% of the theaters and generate 8.5% of the box office. And I would also say that there are plenty of middle-market theaters that cover extremely well.
Eric Wolfe -- Citi -- Analyst
Makes sense. And then, I guess, just last question. As you think about sort of how to improve your equity cost of capital and sort of hopefully improves after there's a resolution around Regal. But I guess if not -- I mean, has there been any thought to sort of spinning off sort of percentage of the portfolio, whether theaters or other non-sort of noncore areas.
Simply just sort of try to help the rest of the portfolio, achieve the multiple that would allow you to grow.
Greg Silvers -- Chairman and Chief Executive Officer
Yeah. I mean, I think we're always looking at ways to create value. Again, I think that's part of the board's not only their task but their purview. I don't think we have anything to comment on that, Eric.
But I think our job and the board's job is to drive value to shareholders. And any avenue to do that, we're going to look at. And if it makes sense, we will look at it very diligently. Just we have no comment on that now.
Eric Wolfe -- Citi -- Analyst
OK. Thank you.
Greg Silvers -- Chairman and Chief Executive Officer
Thanks, Eric.
Operator
Thank you very much. Standby for our next question. And our next question comes from Joshua Dennerlein with BofA Securities. Joshua, your line is open.
Please go ahead.
Joshua Dennerlein -- Bank of America Merrill Lynch -- Analyst
Yeah. Good morning, everyone.
Greg Silvers -- Chairman and Chief Executive Officer
Hi, Josh.
Joshua Dennerlein -- Bank of America Merrill Lynch -- Analyst
I was kind of curious on the -- you mentioned Regal negotiations. I guess just what is the focus? Is it on those three leases that they we're all going to project or is it like rent or kind of just kind of what's the scope of that negotiation?
Greg Silvers -- Chairman and Chief Executive Officer
I guess the easy thing would say all of the above. I think it's -- I wish I could tell you that it's one issue that we're incrementally a part of on, but there's not one thing, Greg, you're it's holistic. We're just trying to come to a resolution. It's kind of like in everything.
They have a position, we have a position and leverage, and who's moving to that, and we'll see. I think we feel very comfortable with our approach. We think the market is supporting our approach with continued box office growth. So I think we'll see.
In the end, we've tried to create what we think is a reasonable invariably, we think we're reasonable and sometimes they don't necessarily agree with that. But we think our approach is thoughtful and holistic as Greg said.
Joshua Dennerlein -- Bank of America Merrill Lynch -- Analyst
I appreciate that. And then maybe moving over to KinderCare. You mentioned that they're terminating private leases at the end of the school year. I guess just what's driving that?
Greg Silvers -- Chairman and Chief Executive Officer
I think there's a lot of things, Josh, that can be into that. I mean, remember, this is really about KinderCare buying another entity. So I think they're rationalizing their store set. Do they have multiple stores in the same market, what makes sense.
So I think there's a lot of things that go into kind of how they want -- now as we said, we announced this last -- at our year-end call on what we were talking about because we wanted to be very transparent, but there's a substantial number -- vast number they took. So I think this is what you see kind of any major M&A activity and they had the ability to do that. As Mark talked about, I think, in the last quarter, we also have a kind of a rent reset coming into next year, which we think will allow us to kind of move our higher. So hopefully, we recover some or all of this that we lost in this, and then we'll have the use of the proceeds, as Greg talked about, from selling these properties to drive additional investment.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
And, Josh, as I mentioned, we're already marketing them, and we've already had expressions of interest on all of them. So we're very comfortable that we'll be able to transact these.
Joshua Dennerlein -- Bank of America Merrill Lynch -- Analyst
OK. Thanks, guys.
Greg Silvers -- Chairman and Chief Executive Officer
Thank you.
Operator
OK. Please stand by for our next question. [Operator instructions] And our next question comes from the line of John Massocca with Ladenburg Thalmann. John, please go ahead.
Your line is open.
John Massocca -- Ladenburg Thalmann and Company -- Analyst
Good morning.
Greg Silvers -- Chairman and Chief Executive Officer
Good morning, John.
So as we think about the $245 million, you kind of have locked up to invest over the next two years, what's kind of the rough split of that by property type?
Greg, you may by property side -- by segment.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Yeah. No, I understand. I'm just trying to do the math in my head. Fitness and wellness, theater portion, eat and play, experiential lodging, less so cultural.
No gaming, no theaters.
Greg Silvers -- Chairman and Chief Executive Officer
Yeah. So across the other groups, it's pretty balanced.
John Massocca -- Ladenburg Thalmann and Company -- Analyst
OK. So basically kind of -- roughly kind of an even maybe not even split, but kind of a split between eat and play and kind of experiential lodging is kind of what we should expect?
Greg Silvers -- Chairman and Chief Executive Officer
Well, in fitness and wellness.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Fitness and wellness, too. Pagosa Springs and Murrieta.
John Massocca -- Ladenburg Thalmann and Company -- Analyst
That makes sense. And then as we kind of think about -- I mean, I know it's not a huge number, but the kind of stub rent that you were paid in the quarter by -- I'm sorry, by Regal, for September, is that something you could receive more of going forward? Is that just a one-time thing? I know there was kind of a mention of the stub rent in prior quarters. I don't know if it's kind of getting paid in increments. Just trying to think if we could expect kind of an additional kind of number to kind of fulfill all that they owed in September.
Mark Peterson -- Executive Vice President, Chief Financial Officer
Yeah. So the court order provided four stub payments. We got one in December and three this quarter. So the court-ordered stub payments are over.
This quarter, the total amount of those deferred -- those stub payments was $2.3 million, $1.9 million of rent and the other $0.4 million is deferral repayment. What that leaves is a post-petition receivable for rent from them from Regal of about $3.4 million. So we don't expect sub payments, but upon resolution of the bankruptcy, there's $3.4 million of post-petition rent that will -- we'll see how that gets paid, but that's the amount remaining.
John Massocca -- Ladenburg Thalmann and Company -- Analyst
OK. And then big picture, you talked a bit about the ski resort properties performance. And apologies if I missed this detail in the prepared remarks. But I guess given some of the weather pushes and pulls at the end of the ski season, how does that impact maybe coverage? And I guess, how do those tenants look in terms of their off-season reserves?
Greg Silvers -- Chairman and Chief Executive Officer
I think the coverage was -- again, I think what Greg was talking about was, this is one of the weird season, especially in the West where we had too much snow. So again, these -- but the beginning of the season was so good, it outbalanced it. So essentially coverage was very similar to what we've seen in previous years, and all reserves are full.
John Massocca -- Ladenburg Thalmann and Company -- Analyst
OK. That makes sense. That's it for me. Thank you very much.
Greg Silvers -- Chairman and Chief Executive Officer
Thanks.
Operator
And our next question, lining up right now. OK. Our next question is from Mitch Germain with JMP Securities. Mitch, your line is open.
Please go ahead.
Mitch Germain -- JMP Securities -- Analyst
Hey, guys. Good morning. Just a quick question about the non-balance sheet deferrals. I guess you kind of talked about it just recently in the last answer, but is there some sort of schedule for that $100 or so million that's still owed? I mean, how should we think about that coming in overtime?
Mark Peterson -- Executive Vice President, Chief Financial Officer
Yes. So the $82.4 million of the $110 million is Regal related. So we'll see how that all shakes out in the bankruptcy. The remaining, what, $38 million -- 30-ish.
Yes, $38 million. That -- most of that is subject to a schedule that we're getting paid quarterly. It's running about $500,000 to $600,000 per month. And you see that we got that the last several quarters.
So that continues on -- the largest part of that really continues on through '24 primarily. And then in addition to that, there's one tenant that's in that deferral that repayment is more EBITDA based. So that one, we'll see how the EBITDA shakes out and sort of how that comes in, but it's not subject to a schedule.
Mitch Germain -- JMP Securities -- Analyst
Great. Thank you for that. Anything you could share about the acquisition this quarter?
Greg Silvers -- Chairman and Chief Executive Officer
Again, Greg, why don't you --
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Well, yeah, Mitch, we're very enthusiastic about the Climbing Gym space. It provides a great opportunity for people to come together. We're equally as excited to do business with Vital, which is one of the best climbing gyms in the country. The other one we have is Movement.
And then lastly, we're very excited about the real estate. The Movement is in Lincoln Park, and this one is in Williamsburg, Brooklyn. So tremendous real estate and we're really excited with the opportunity to do more business with both Movement and Vital.
Mark Peterson -- Executive Vice President, Chief Financial Officer
And by the way, I just want to update one thing. My non-Regal number for that deferral is $28 million, I was doing some bad math. $110 million total, $82 million of which is Regal and $28 million of which is non-Regal.
Mitch Germain -- JMP Securities -- Analyst
Thank you.
Mark Peterson -- Executive Vice President, Chief Financial Officer
You're welcome.
Greg Silvers -- Chairman and Chief Executive Officer
Thanks, Mitch.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Thanks, Mitch.
Operator
And our next question comes from the line of R.J. Milligan with Raymond James. R.J., your line is open. Please go ahead.
R.J. Milligan -- Raymond James -- Analyst
Great. Good morning, guys. I wanted to focus on the non-theater portfolio. And it sounds like all the segments have seen good revenue growth.
And I'm just curious if there's anybody in the non-theater portfolio, whether it be people that popped up on a watch list or credit issues? I'm curious how bad debt is trending relative to budget.
Greg Silvers -- Chairman and Chief Executive Officer
Again, I'll let Mark talk about debt because I don't think there are any issues. But again, performance-wise, we've not seen any sort of degradation either in coverage or in performance. As Greg talked about, we've seen strong revenue growth, strong EBITDARM growth. So I think we're still -- as I talked about in my comments, the consumer continues to be very supportive of these experiences.
But Mark, I'll let you comment to that.
Mark Peterson -- Executive Vice President, Chief Financial Officer
Yeah. I mean, as Greg said, our coverage on the non-theater portfolio at 2.7 is versus 2.2 in 2019 pre-pandemic. So it's very strong, and we're not seeing really any credit issues in the non-theater business.
R.J. Milligan -- Raymond James -- Analyst
OK. That's helpful. And then I'm curious just if you're seeing any theaters transact and at what cap rates or what -- if there is a buyer pool, who is that made up of?
Greg Silvers -- Chairman and Chief Executive Officer
Again, we are not still seeing -- I mean, you're seeing theaters being bought by theater companies. We've started to see some of that. But we haven't necessarily seen real estate kind of transactions yet. I don't.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
No. And I think we'll see that as the box office continues to recover. I mean, all the news this year is just so positive that we expect to see that loosen up. I mean, last year, we had $1,800 million releases.
This year, we're going to have 26. Last year, we had 71 films open on 2,000 screens and more. This year, we're going to have over 100. Next year, we'll have even more.
Then we have the Apple news, the Amazon news, and then the outsized performance of a lot of films. So I think it's very positive right now.
Greg Silvers -- Chairman and Chief Executive Officer
I think what we would say, R.J., is the narrative had to change. And now the narratives changed that this industry is not only going to recover, but it's going to be valued by studios and by streamers. And when that -- when people start to see that, then the productivity of the boxes will matter, and there will be a transaction market. But we're coming out of several years, which these boxes were effectively shut down and people question the viability.
Well, that's now being disproven. We now have support. The support is coming from the content side. That's got to filter into the real estate side to where they now hear that and believe that.
And when the numbers start to demonstrate that, then transactions will occur.
R.J. Milligan -- Raymond James -- Analyst
That's it for me, guys. Thank you.
Greg Silvers -- Chairman and Chief Executive Officer
Thank you, R.J.
Operator
Standby for our next question, which will also be our last question comes from the line of Michael Carroll with RBC. Michael, your line is open. Please go ahead.
Michael Carroll -- RBC Capital Markets -- Analyst
Yeah, thanks. I jumped on late. So hopefully, these questions haven't been asked already. So can you talk a little bit about just the transaction market in general, and how has it changed over the past six months? I mean, have you seen, I guess, different or better opportunities kind of with the capital markets dislocation that's been going on?
Greg Silvers -- Chairman and Chief Executive Officer
I'll let Greg talk about this, but I think generally, the answer is yes. I think not only are we seeing -- kind of other opportunities with our core group of people that we've dealt with for long-standing relationships, but also new relationships. We talked about Vital. We talked about things that are -- I think what is really difficult for people to understand is the private market is really challenged right now with the debt, the way it is.
So if you are out -- what we used to see is a lot of competition from kind of private or family office, and we're just not seeing that much but Greg.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
No, I think you've covered it.
Michael Carroll -- RBC Capital Markets -- Analyst
And then, Greg, how are you looking at new deals today? I know you're a little tight on, I guess, your capital availability given where your cost of capital is. I mean, so what type of deals are you willing to pursue? And how much can you kind of get done here this year if things don't change?
Greg Silvers -- Chairman and Chief Executive Officer
Yeah. I think, again, we're kind of very much stick into what we've said all along, and Greg highlighted this quality real estate with quality relationships, I mean, we're buying 20 -- 15, 20-year relationships. So we're wanting -- the actual stretching for more yield is less important than the quality. And so now we're able to get nice attractive yields, as Greg said, but always focused on something we want to be happy with for 20-plus years.
I think as it regards to the capital, I think we're encouraged that as we get resolution of this that our multiple will see kind of a resolution, and we'll get that pop that we think we've been told by a lot of investors is the overhang for us. I think it could help us to drive further growth as we go forward. I think everybody to a little bit degree has kind of taken a little more long-term view of how much growth they want right now. But I think for us, the thing that's so really positive is the consumer is still heavily supporting this.
And so our tenants are growing organically. It's not necessarily what we are doing by buying that asset off of somebody who needs to raise capital. Greg and his team are forming these long-lasting relationships, and it's more important to us to get not only a deal, but a view toward future deals so that we're not only filling the pipeline for '23 but for '24 and '25. And so I think that's part of its focus --
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Yeah. And I mean, just to give you data points. I mean, we announced last quarter, we did a deal with Gravity Haus. We have a go-forward arrangement with them.
We're very excited about it. I think ultimately, the fact that we did the Movement Gym led us to the Vital Climbing Gym. So we're being to Greg's point, very strategic. And to Mark's point earlier, focused on helping our existing clients grow.
Mark Peterson -- Executive Vice President, Chief Financial Officer
In terms of volume, you said how much can you get done in our guidance is $200 million to $300 million. We can do that, as I said, without raising capital, but as importantly, maintaining leverage kind of that low five. So all that's consistent with that. And that's really because of our significant cash flow and the way we set our dividend payout ratio is so low, we're able to reinvest that cash flow and still grow, but without raising capital and maintaining that low leverage.
Michael Carroll -- RBC Capital Markets -- Analyst
OK, great. And then just last one. I know you talked a little bit about like the theater, I guess, private market valuations. I mean, have you had any discussions with potential JV partners or somebody that might be interested in acquiring a part of your portfolio?
Greg Silvers -- Chairman and Chief Executive Officer
It's a great question, Mike, but we would not discuss it on an earnings call. So I'm going to leave that -- not meaning that we have or haven't, but it's not the venue we had to disclose that anyway.
Michael Carroll -- RBC Capital Markets -- Analyst
OK, great. Thank you.
Greg Silvers -- Chairman and Chief Executive Officer
All right. I think Eric said that was our last call. So I want to thank everyone for joining us. I hope everyone takes the opportunity tonight for -- we're based in Kansas City, and we're on display today for today's NFL draft.
So please take the time to let our city show proud. So thanks for joining us, and have a great day.
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Thank you.
Mark Peterson -- Executive Vice President, Chief Financial Officer
Thank you.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Brian Moriarty -- Vice President, Corporate Communications
Greg Silvers -- Chairman and Chief Executive Officer
Greg Zimmerman -- Executive Vice President, Chief Investment Officer
Mark Peterson -- Executive Vice President, Chief Financial Officer
Todd Thomas -- KeyBanc Capital Markets -- Analyst
Rob Stevenson -- Janney Montgomery Scott -- Analyst
Eric Wolfe -- Citi -- Analyst
Joshua Dennerlein -- Bank of America Merrill Lynch -- Analyst
John Massocca -- Ladenburg Thalmann and Company -- Analyst
Mitch Germain -- JMP Securities -- Analyst
R.J. Milligan -- Raymond James -- Analyst
Michael Carroll -- RBC Capital Markets -- Analyst