EPR Properties (EPR) 2025 Q4 法說會逐字稿

Hello and welcome to the EPR Properties Q4 and year-end 2025 earnings call. (Operator Instructions) Also as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time.

I will now hand the call over to Brian Moriarty, Senior Vice President of Corporate Communications.

Okay. Thank you, Jenny. Thanks for joining us today for our fourth-quarter and year-end 2025 earnings call and webcast. Participants on today's call are Greg Silvers, Chairman and CEO; Greg Zimmerman, Executive Vice President and CIO; Mark Peterson, Executive Vice President and CFO; and Ben Fox, Executive Vice President.

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 these 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 contains references to certain non-GAAP measures, which we believe are useful in evaluating the company's performance. 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.

Thank you, Brian. Good morning, everyone, and welcome to our fourth-quarter and year-end 2025 earnings call and webcast. The fourth quarter capped a year of solid execution and clear progress toward accelerated growth. Our resilient portfolio benefited from durable tenant performance and steady consumer demand contributing to strong financial performance, including FFO as adjusted per share increase of 5.1% and AFFO per share increase of 6.2%. During the fourth quarter, we announced transactions, which significantly expanded our portfolio of championship golf courses along with premier regional water park acquisition, further diversifying our attraction sector.

As we move into 2026, we expect to build on our strong industry relationships while substantially increasing our investment spending. We are actively pursuing opportunities across multiple target property types with a flexible approach that encompasses both potential portfolio scale acquisitions and smaller strategic transactions, positioning us to capitalize on attractive opportunities as they arise.

Turning to industry and tenant performance, our portfolio of properties continues to demonstrate broad stability. For the year, North American box office grew 1% and we anticipate further growth in 2026, supported by an increased number of wide release titles. Performance across our other property sectors remained steady, demonstrating the strength and resilience of our diversified portfolio.

As we expand the diversity of our experiential portfolio, we're seeing a balancing effect, strength in certain sectors helping to offset periodic softness in others, reinforcing overall portfolio resilience. Our strategic capital recycling program continued to deliver meaningful results in 2025. By executing targeted dispositions, we strengthened portfolio qualities, reduce concentration and unlock capital to deploy into higher returning experiential investments. We will continue to use disciplined opportunistic recycling as a proven lever for driving value creation.

Our balance sheet remains one of our most important competitive strengths. During the fourth quarter, we successfully closed a $550 million public debt offering and established a $400 million at-the-market equity program, two significant capital market initiatives that bolster our financial flexibility and fund our growing investment pipeline. Reflecting the confidence we have in our earnings trajectory and conservative payout ratio, we are also pleased to announce a 5.1% increase to our monthly dividend to common shareholders.

In summary, we built a robust pipeline of high quality experiential investments. Our strong balance sheet and expanded operator relationships now give us access to larger opportunities and our disciplined approach to capital allocation positions us to capitalize on the significant investment opportunities we anticipate in 2026.

Now, I'll turn the call over to Greg Zimmerman to go over the business in greater detail.

Thanks, Greg. At the end of the quarter, our total investments were approximately $7 billion with 333 properties that are 99% leased or operated. During the quarter, our investment spending was $147.7 million. 100% of the spending was in our experiential portfolio. Our experiential portfolio comprises 278 properties with 54 operators and accounts for 94% of our total investments or approximately $6.6 billion.

And at the end of the quarter was 99% leased or operated. Our education portfolio comprises 55 properties with 5 operators, and at the end of the quarter, was 100% leased.

Turning to coverage, the most recent data provided is based on the December trailing 12-month period. Overall portfolio coverage remains strong at two times.

Turning to the operating status of our tenants, 2025 box office was $8.7 billion, a 1% increase over 2024. Q4 box office was $2.2 billion compared to $2.4 billion in Q4 2024. Q4 performance was led by strong results from Zootopia 2 which gross $337 million in Q4 and has exceeded $420 million to date. Wicked: For Good gross $335 million. Avatar: Fire and Ash gross $250 million in Q4 and picked up an additional $147 million after the first of the year. Five Nights at Freddy's 2 also outperformed.

The slate for 2026 looks solid with the Super Mario Galaxy Movie, The Mandalorian and Grogu, Toy Story 5, The Minions 3, Moana, The Odyssey, Spider-Man: Brand New Day, Avengers: Doomsday and Dune Messiah. Analysts expect box office to increase in 2026. Going forward, we will be moving away from providing annual estimates for box office performance. We initiated the practice after the pandemic as theaters reopening, box office was recovering, and we were navigating the writers and actor strikes. With all the dislocation, we thought it was helpful to share our perspective. The business is stabilizing, so this is no longer necessary.

Additionally, it's important to highlight that the bulk of our theater rent is not tied to fluctuations in box office. The only significant percentage rent component of our theater rent comes from Regal, which is based on a lease year rather than a calendar year, and our estimate of Regal percentage rent is embedded in our percentage rent guidance.

A couple of points related to box office. First, higher-margin F&B spending increasingly constitutes a higher percentage of exhibitors overall revenue. As such, it is not necessary to reach 2019 box office levels for us to have comparable coverage.

Second, as we have consistently noted the number of major releases directly correlates to box office, an increased number of major releases typically drives increased box office growth. Over time, major releases tend to generate an average performance in the range of $70 million.

Turning now to an update on our other major customer groups, our East Coast ski and Midwest key operators got off to a great start with above-average snow, and that strength continued through the winter. Our Northern California asset opened late because of lack of snow, but conditions have improved significantly with recent snowfall. We will see if snowfall continues to hold throughout the season. Alyeska has had strong demand throughout the season augmented by its membership program and inclusion in the iConnetwork.

Our Eat & Play coverage remains strong even with some continuing macro pressures on consumers and expense increases. In Andretti Karting, Kansas City location opened well in mid-November, Schonburg, Illinois is expected to open in the second quarter of 2026. Our second Penn Stack located in Northern Virginia is also expected to open in Q2. Of note, in early January, Topgolf Callaway announced the completion of its sale of a 60% interest in Topgolf to Leonard Green Partners, the transaction value TopGolf at around $1.1 billion. We view this positively because Topgolf now has a focused private equity majority owner.

Many of our attractions are closed for the season. The Cartes Outdoor Winter Park and Hotel de Glace opened in December and are benefiting from sustained domestic travel within Canada. We are quite pleased with the performance metrics at Enchanted Forest Water Safari in our operator's first full year of ownership. With the indoor water park and family entertainment center fully opened at Bavarian Inn, we saw significant year-over-year increases in revenue and EBITDARM. We are bullish on the fitness and wellness space.

Since 2024, we have invested approximately $150 million in this vertical including golf, Fitness and Hot Springs. All three of our Hot Springs assets delivered strong year-over-year performance. Our education portfolio continues to perform well. Our customers' trailing 12-month revenue for Q3 was essentially flat with EBITDARM down due to expense increases. Coverage remains strong.

Our investment spending continues to be entirely within our broadening range of experiential asset types. In Q4, we invested $147.7 million, bringing our total for 2025 to $288.5 million. This includes funding for projects that we have closed on but are not yet open. In addition, we have committed approximately $85 million to experiential development and redevelopment projects, which we expect to fund in 2026. Q4 investment spending was anchored by our acquisition of a 5-property portfolio of championship golf courses in the Dallas Metroplex for approximately $90.7 million.

The properties will be leased and operated by Advance Golf Partners, a leading golf course operator. This investment follows our extensive research into the golf space and adds to the additional golf investment we made earlier in 2025.

Given our deep relationships, the increased focus on fitness and wellness among multiple generations and demographics and the wide range of investment opportunities, including golf, climbing gyms, traditional gyms, hot springs and spas, we are excited about the potential for continued growth in this space.

We also acquired the Ocean Breeze Water Park in Virginia Beach, Virginia, in a sale-leaseback transaction for approximately $23.2 million. Ocean Breeze will be leased and operated by an affiliate of Premier Parks, a long-time strategic partner. We kicked off investment spending for 2026 with the first quarter acquisition of the Vital climbing Lower East Side in Essex Crossing for approximately $34 million.

As I noted before, we are particularly bullish on the fitness and wellness space and excited to grow our relationship with this outstanding operator by adding a high-quality Manhattan location along with our existing vital climbing location in Williamsburg, Brooklyn. As demonstrated by our investments in Q4 and already in Q1, we are increasing our investment spending cadence. We are seeing high-quality opportunities for both acquisition and build-to-suit development in our targeted experiential categories.

Our disciplined deployment strategy has enabled us to expand the depth and breadth of our portfolio of experiential properties over the past several years. Our investment spending throughout 2025 and heading into 2026 reflects our deep relationships and high-quality opportunities. We are announcing investment spending guidance for funds to be deployed in 2026 in the range of $400 million to $500 million.

During the quarter, we sold 2 leased theater properties for alternative uses and 2 land parcels for net proceeds of $16.1 million and recognized a gain of $5.3 million. Additionally, as announced on our Q3 call, we received $18.4 million in proceeds from a partial paydown on a mortgage note relating to the Gravity Haus and Steamboat Springs. In the past 5 years, we have sold 33 theaters. We had one remaining vacant theater. Disposition proceeds totaled $168.3 million in 2025.

We are announcing 2025 -- 2026 disposition guidance in the range of $25 million to $75 million. I'll now turn it over to Mark for a discussion of the financials.

Thank you, Greg. Today, I'll discuss our financial performance for the fourth quarter and the year, provide an update on our balance sheet and close with introducing 2026 guidance. FFO as adjusted for the quarter was $1.30 per share versus $1.23 in the prior year, an increase of 5.7%. And AFFO for the quarter was also $1.30 per share compared to $1.22 in the prior year, an increase of 6.6%.

Before I walk through the key variances, I want to point out that we had disposition proceeds totaling $34.5 million for the quarter and recognized a gain on sale of $5.3 million, for the year, we had disposition proceeds totaling $168.3 million and recognized a gain on sale of $39.5 million as we continue to make progress reducing our investments in theater and education properties and recycling those proceeds into other experiential assets. Note that these gains are excluded from FFO adjusted and AFFO.

Now moving to the key variances. Total revenue for the quarter was $183 million versus $177.2 million in the prior year. Within total revenue, rental revenue increased $7.9 million versus the prior year, mostly due to the impact of investment spending, rent and interest bumps and higher percentage rents and participating interest. Percentage rents and participating interest for the quarter were $7.8 million versus $4.9 million in the prior year, and the increase was due primarily to higher percentage rent recognized from our attraction and cultural properties as well as from one of our early childhood education tenants. We also had higher participating interest related to our Northeast Ski property.

Both other income and other expense relate primarily to our consolidated operating properties, including the Kartrite Hotel & Indoor Water Park and our 4 operating theaters. The decrease in other income and other expense versus prior year is due primarily to the sale of 3 operating theater properties in the first half of 2025.

On the expense side, G&A expense for the quarter increased to $14.6 million versus $12.2 million in the prior year due primarily to higher payroll and benefit expense, particularly incentive compensation. Equity and loss from joint ventures for the quarter was $2.4 million compared to $3.4 million in the prior year. This better performance is due to our decision to exit our joint venture in Breaux Bridge, Louisiana in late 2024 as well as improved results at our two remaining RV Park joint ventures.

Shifting to full-year results, FFO as adjusted was $5.12 per share at the high end of guidance versus $4.87 in the prior year, an increase of 5.1% and AFFO was $5.14 per share compared to $4.84 in the prior year, an increase of 6.2%.

Turning to the next slide, I'll review some of the company's key credit ratios. As you can see, our coverage ratios continue to be very strong with fixed charge coverage at 3.4 times and both interest and debt service coverage ratios at 4 times. Our net debt to annualized adjusted EBITDAre was 4.9 times at year-end, which is below the lower end of our targeted range. Additionally, our net debt to gross assets was 39% on a book basis at year-end, and our common dividend continues to be very well covered with an AFFO payout ratio of 68% for the fourth quarter and the full year.

Now let's move on to our capital market activities and balance sheet, which is in great shape to support our expected growth. At year-end, we had consolidated debt of $2.9 billion of which all is either fixed rate debt or debt that has been fixed through interest rate swaps with an overall blended coupon of approximately 4.4%.

In November, we closed on $550 million of new 5-year senior unsecured notes at a coupon of 4.75%. And at year-end, we had $90.6 million of cash on hand and no balance drawn on our $1 billion revolver. Additionally, in December, we finalized our new ATM program. While no equity issuance is required to fund our plan for 2026, given that we project to be below the midpoint of our target leverage range at year-end without any such issuance.

This program provides us with an additional tool in our toolbox to issue equity opportunistically, including forward sales. We are introducing our 2026 FFO as adjusted per share guidance of $5.28 to $5.48, representing an increase versus the prior year of 5.1% at the midpoint. We expect a similar percentage increase in AFFO per share. Note that due primarily to the timing of expected percentage rents, which are heavily weighted to the last 3 quarters of the year, as well as the fact that the first quarter is off-season for our operating properties, we expect results for the first quarter of '26 to be lower than the full year divided by 4 by about $0.11 per share. We are also providing our 2026 guidance for investment spending of $400 million to $500 million and disposition proceeds of $25 million to $75 million.

We expect percentage rent and participating interest of $18.5 million to $22.5 million. As you can see on the slide, I have provided a reconciliation of the prior year amount to the midpoint of this guidance. The changes include out-of-period percentage rents and participating interest of $3.5 million recognized in 2025 that does not repeat lower projected percentage rents in 2026 of $1.1 million related to our Northern California ski property due to delayed snowfall for the season and lower projected percentage rents of $0.4 million related to certain properties having base rent increases in '26, causing the breakpoint for percentage rents to increase. These decreases were offset by a projected net increase of $1 million in percentage rent for other tenants, including Regal. We expect G&A expense of $56 million to $59 million.

In addition, guidance for our consolidated operating properties is provided by giving a range for other income and other expense. Guidance details can be found on page 23 of our supplemental. Finally, based on our expected 2026 performance, we are pleased to announce a 5.1% increase in our monthly dividend, beginning with the dividend payable April 15 to shareholders of record as of March 31. We expect our 2026 dividend to be well covered with an AFFO per share payout continuing to be about 70% based on the midpoint of guidance.

Now, with that, I'll turn it back over to Greg for his closing remarks.

Thank you, Mark. 2025 was a very solid year as we delivered strong per share earnings and our portfolio delivered the resilience that we anticipated. In 2026, we expect to increase our investment spending materially over the levels we achieved in 2025, which should result in another year of strong per share earnings growth. As we begin the year, we are excited about our investment pipeline, our balance sheet and the team to create value out of this combination.

I would also like to take a minute to express my sincere appreciation to Greg Zimmerman, who is participating in his last earnings call as he is retiring from EPR. Greg provided leadership and a steady hand as we navigated COVID and then emerged on the other side. He is my business partner, colleague and friend, and he will be missed. Ben Fox will now officially take over the role of Chief Investment Officer, and we are excited about his leadership and vision for our future.

With that, why don't I open it up for questions? Jenny?

(Operator Instructions) Michael Goldsmith, UBS. (Operator Instructions)

Consistent with last quarter, where you pointed to $400 million to $500 million in acquisitions, you put this out formally with your guidance. Can you just talk a little bit about what you're targeting, what you have line of sight in because it represents an acceleration. So just trying to get a sense of what you're looking at, what you have line of sight and just your confidence level of hitting that $400 million to $500 million in acquisitions?

Clearly, I think line of sight or anything, while we don't want to comment on specific. We wouldn't put it out there if we didn't have great confidence in it. Again, if you look historically, we've been successful in not only hitting our numbers, but raising those throughout the year. So I think -- and I'll let Greg comment that we feel really good about where we're positioning for the beginning of the year. I think we're looking at opportunities across most, if not all of our sectors.

I think, again, we feel like we have particular unique access to the areas that we invest in. But let Greg talk about --

No, I agree, Greg. And I would also say that developing a pipeline is usually a multiyear process. So we've been building up to this with line of sight to the fact that we turn on investment spending this year. So again, as Greg mentioned, we're very confident about it, and that's why we're --

Got it. And then second question, just Topgolf is one of your top tenants and they've been taken private by private equity. Have you had conversations with Leonard Green and just trying to get an understanding of what they're going to do with the company now that they have their hands on it and just the path and your comfort level with your specific locations that you own?

Yes. Michael, and we've had multiple conversations with them. So as you can imagine, both as they were evaluating it as an opportunity and now subsequently I think the thing that we're encouraged is, in fact, what they've told us is they're very much aligned with what we have said that the growth pattern needs to slow down to three to five units a year where they can hit kind of the demographic and location requirements that we kind of agree with them.

As we said all along, our units continue to demonstrate very, very strong coverage I think it's an integral part of the value equation that they saw. I think there are opportunities that they're going to very much look at being -- they have a long history of multi-unit retail and even in the fitness and wellness space. So I think they're very, very focused on kind of the food and beverage and promotional opportunity sets. And you've seen that those early impacts of the second half of last year, where Topgolf was already addressing some of those and saw some very, very positive numbers going into the second half of the year and the fourth quarter.

And I would also add, Michael, they're going to -- we're very pleased they're going to continue their refresh program, which benefits us greatly. They do a handful of our units every year with a nice refresh to keep them up.

John Kilichowski, Wells Fargo. (Operator Instructions)

My first question is just on where you see your cost of capital today. You're trading back close to a range where we were end of the third quarter. When does it start making sense to tap the ATM.

Sure, John. Great question. I'll join in and I'll ask Mark. I think we probably see it now in the kind of upper 50s or low 60s at kind of low 7s, low mid-7s. I think that works.

We can make that work. we're doing things in the low to mid-8s. So there's 100 basis points of spread. I think it's important for us to let people know that we can execute that way and get back on that flywheel of issuing equity.

As Mark talked about in his comments, we don't need to. And in fact, we'll still be not even near the midpoint of our leverage range doing the plan that we have executed. But what it does mean is maybe we can do more, maybe we could even further delever. I think it gives us a lot of options, and we are clearly entering the zone where it makes sense, but Mark?

I think, as Greg said, I think we'll be kind of opportunistic about it, particularly if we're headed to the higher end of spending, investment spending. As Greg said, I think as you get to the high 50s, low 60s, you're low to mid-7s type of cost of capital. And as Greg said, you get nearly 100 basis points out of the gate. And then, of course, on an IRR basis, it's quite a bit higher than that. when you factor in our rent bumps, so I feel good about that and the opportunity that lies ahead.

That was very helpful. And maybe just along the same lines, if we could do sort of a sensitivity analysis, let's say, if your cost of capital got 50 bps better from here on a blended basis, where does that take maybe the high end of your investment guide, if this is a better buying opportunity here. I'm just curious how much more you think you could do if you just had a little bit of improvement on that cost of capital?

Yes. Clearly, there's -- we think there's opportunity out there, John, I think, again, it's probably not as linear as we're laying it out that it's 50 basis points. It's really about are the right opportunities in the risk and reward. I think overall, you're hearing our excitement about the opportunity set out there. I think there are there continues to be good opportunities.

I think we're excited about those. We're excited about where our cost of equity seems to be trending. And so hopefully, that combination will allow us to continue to grow and grow that base. But to speculate on a kind of a sensitivity table would probably be not productive for us right now.

Smedes Rose, Citi Global Markets. (Operator Instructions)

I was just wondering if you had any updates on what's going on in Sullivan County in terms of the ability to sell the ground lease that kind of came up a while ago? That would be my first question.

Thanks, Smedes. I would say we've not had really any meaningful conversations with them. I mean, again, this is the -- when I say that, meaning our operator. It's their call on how they want to proceed. It's not built into our plan.

Our plan is utilizing our existing kind of cash flow dispositions, things that we've done. But the easiest thing to say, Smedes, is no, we've not had any meaningful conversations with the operator.

Okay. And then I was just wondering, when we look in a sort of theme park world, there seems to be I guess, a certain amount of disruption going on and some new management changes. I'm just wondering, are they kind of showing up on your radar screen as a possible solution to some of the issues they might be facing?

I think that's a very reasonable approach. I mean, if you think about the names that are being dropped around we partner with many, if not all, of those names that are being dropped around. So I think it's something -- we think that business is actually very, very -- if you look over time, very stable cash cow kind of business. It needs to be a smart, thoughtful, well-covered kind of thoughtful business. But again, we play in that field.

I don't know, Greg, if you want to --

Well, I agree. And as we announced, we acquired something in the fourth quarter. So yes, we're enthusiastic about the attraction space.

All right. Thank you. And best wishes to you, Greg, going forward.

Anthony Paolone, JPMorgan. (Operator Instructions)

Just, Greg, going back to the opportunity set that you talked about, can you be a little bit more specific and maybe how much of it is development, redevelopment versus buying existing assets? And maybe kind of the range of cap rates and like what would take you into the 8s versus where you'd probably be maybe in the 7s if something is perhaps a bit higher quality or different?

Sure. And I think it's going to gear at least early part of this year, going to be more on the acquisition side. So I would say, and I'm looking at Greg and Ben, probably 70-30 acquisitions. Right now, I think, again, where you would look at most of our stuff has been in the 8s where you would look at something below that potentially would be a much lower advance rate. It's really going to be risk return or if you had a credit, you had a much, much higher credit scenario to where you would think lower 7s, but better growth profile. But I would say most of our stuff are -- right now that we're looking at has at least an initial 8 handle on it.

And, Tony, obviously, development deals are going to carry a higher cap rate because there's more risk adjusted, there's more risk. So that's kind of what we look at --

Okay. Got it. And then my only other question, maybe for Mark and just on the spending here. If I look at page 19 of the supplemental, there's about $63 million of spending outlined there. Is that different than the $85 million that you guys talked about in the presentation, or do you put those together?

The $63 million is only related to those projects that have been started at the end of the year. So and then the difference between that and the $85 million is projects that haven't been started, but that we have commitments and line of sight to. So if you're looking at kind of spending sort of what's spoken for kind of heading into the year, $85 million is the number to use. And then if you add, for example, the VITAL Climbing Gym that we did, we're sort of sitting at around $119 million right now and sort of spoken for spending. And as Greg said, I think the amounts that we will add to get to the midpoint of guidance of $450 million will be mostly acquisition-oriented.

Michael Carroll, RBC Capital Markets. (Operator Instructions)

I guess, Mark, just sticking with the guidance ranges that you provided in the investment. With that remaining investments to get back up to that $450 million with guidance, when do you assume that gets completed? Is it just kind of ratably throughout the year, or do you kind of have a back-end weighted? What's kind of implied in that guidance range?

Yes, it's actually, frankly, weighted more towards the first half of the year, the way we see things kind of laying out.

Okay. And then on the Regal percentage rents what you put in guidance, what did you assume would be the box office, at least for the Regal lease year ended July 2026 versus the prior year? Is it kind of a similar box office, so we're expecting percentage rents for Regal to be kind of in line with what it was last year?

No, I think it's slightly up, consistent with kind of analysts. But as you can see, it's probably kind of up 2% over where they were last year as our number is up slightly over there.

Yes. When we lay out that percentage rent slide, you can see once you cut through the prior period and so forth, you get to about $1 million of net growth amongst all our tenants and a good chunk of that is Regal because we do expect box office to be higher next year. And again, Mike, the Regal lease year ends in July. So you're not going to have the advantage of the fall season.

Yes. And then just last one for me. I know, Greg, you mentioned and talked a little bit about the investment opportunities you have across all your property types. I mean are there any specific property types where you're seeing bigger opportunities or other types of activity that you could pursue?

I think as we've talked about, we've hit several things. I would say the top three continue to be fitness and wellness attractions and Eat & play. Again, when you look at those, we're still seeing an occasional opportunity in gaming, but not as much. Ski is more opportunistic. So those other three, I think, are going to be where the anchor part of what our investment is going to come from.

And Mike, again, I would -- when we say fitness and wellness, that's a very broad category for us. So obviously, we've done a couple of golf deals now. We did a climbing gym deal this quarter. We did a regular fitness deal last quarter, and we have done hot springs deals. So we see a lot of opportunity to expand the aperture in that space.

Upal Rana, KeyBanc Capital Markets. (Operator Instructions)

Just curious on how the transaction market looks like in terms of larger deals. Are you seeing more or less out there?

Again, I think we're starting to see, as we said, I don't know we're seeing more. We're seeing our ability to participate in larger deals more. And, Upal, I think -- so that's beneficial to us. But I think it feeds into what -- when you look at what we've done, we're talking about 2 years in a row of delivering 5% plus kind of earnings growth. It's getting back into what is our kind of normal trajectory of delivering outsized value for our shareholders.

And now we're going to be able, as we, A, one, generated a lot of proceeds from dispositions or, two, getting close to our ability to issue equity through our ATM program, it's going to allow us to participate in some of these deals, which will further that growth so that the idea that we've been done -- we did 5% last year, we're doing 5% this year. Let's get on that track of what we delivered 20 years before COVID.

Great. That was helpful. And then it looks like negotiations start to begin to start up again on SAG-AFTRA with the contracts that were negotiated in '23, expiring in May for writers and in tune for the actors. So the environment is certainly much different today than it was three years ago. So I just wanted to get your take on those negotiations and how that could play out?

Again, I think we think it's still really early, but I think you're correct. I think the -- it's really early. I think it's going to still be about AI and the ability to do that, but they set a nice framework to deal with that. And everybody, I think, at this point, saw how negatively the market was impacted by a strike. And much like what we've seen in some other areas like baseball, people have tried to avoid strikes because they have long-lasting effects and everybody is saying the right thing about wanting to avoid that.

Jana Galan, Bank of America Merrill Lynch. (Operator Instructions)

I know this is a much smaller part of your portfolio, but curious if you could just provide an update on the education portfolio and kind of any changing trends there between early childhood and the private school.

Again, I think if anything, the strength of that portfolio has continued to be demonstrated over the last several years. I think one area that as we think about dispositions this year, maybe an area that we start to think about. I mean last year was all about kind of cleaning up the theater portfolio and getting through that I think the strength of that will allow us to capture good value if we want to do that and could be another lever that we pull to accelerate growth.

Great. And also wanted to congratulate Greg.

There are no more questions. So I will now turn the call back over to Greg Silvers, Chairman and CEO, for any closing remarks.

I just want to thank you all. As we said, we're excited about the year. I look forward to talking through the year and look forward to delivering on the guidance that we've set forth. Thanks, everyone. Thank you.