ENTERTAINMENT RETURN ON INSIGHT RECREATION ANNUAL REPORT 2016 EDUCATION ANNUAL REPORT 909 WALNUT, SUITE 200, KANSAS CITY, MO 64106 EPRKC.COM 2016 CORPORATE INFORMATION BOARD OF TRUSTEES EXECUTIVE OFFICERS ROBERT J. DRUTEN GREGORY K. SILVERS Chairman of the Board of Trustees President & Chief Executive Officer THOMAS M. BLOCH MARK A. PETERSON Trustee Executive Vice President, Chief Financial Officer & Treasurer BARRETT BRADY MORGAN G. EARNEST II Trustee Senior Vice President & Chief Investment Officer PETER C. BROWN CRAIG L. EVANS Trustee Senior Vice President, General Counsel & Secretary JACK A. NEWMAN, JR. MICHAEL L. HIRONS Trustee Senior Vice President – Strategy and Asset Management ROBIN P. STERNECK THOMAS B. WRIGHT III Trustee Senior Vice President – Human Resources and Administration GREGORY K. SILVERS TONYA L. MATER Trustee Vice President & Chief Accounting Officer President & Chief Executive Officer ANNUAL SHAREHOLDERS STOCK MARKET MEETING INFORMATION The annual meeting of shareholders will be held at The Company’s common shares of 11:00 a.m. (CST), May 31, 2017, in the Company’s beneficial interest are traded on the office at 909 Walnut, Suite 200, Kansas City, MO. New York Stock Exchange under the symbol EPR. INVESTOR TRANSFER AGENT INDEPENDENT RELATIONS AND REGISTRAR AUDITORS For further information regarding Computershare Trust Company, N.A. KPMG LLP EPR Properties, please direct P.O. Box 43078 1000 Walnut Street inquiries to: Providence, RI 02940-3078 Suite 1000 EPR Properties Kansas City, MO 64106 Investor Relations Department 909 Walnut, Suite 200 Kansas City, MO 64106 [email protected] FOR ACCESS TO ADDITIONAL FINANCIAL INFORMATION, VISIT OUR WEBSITE AT WWW.EPRKC.COM LETTER FROM THE PRESIDENT DEAR FELLOW SHAREHOLDER: I’m pleased to report that 2016 was the strongest year in the Company’s history in terms of revenue, earnings and investment spending. For the year, we delivered a 17% year-over-year increase in top line revenue along with a 9% year-over-year increase in our FFO as adjusted per share. Additionally, our investment spending totaled LIFETIME TOTAL RETURN TO SHAREHOLDERS* over $800 million. In 2016, we increased our monthly common dividend by almost 6%, EPR - 1,432% representing an annualized dividend of $3.84 per MSCI US REIT (RMS) - 445% 253% common share and are currently on pace to pay RUSSELL 1000 - $4.08 in 2017, a 6.25% increase. Finally, we delivered a top tier 29% total shareholder return. Our dedicated team and differentiated business model have enabled us to deliver 1997 2017 these strong results. I’m also thankful to our business partners and shareholders for their 3 YEAR 5 YEAR 10 YEAR LIFETIME* continued commitment and trust. EPR 75% 121% 142% 1,432% We’re proud of our ability to deliver superior RMS 45% 74% 62% 445% shareholder returns consistently over the longer term. From the inception of the RUSSELL 28% 96% 98% 253% company in 1997 we chose to take a different 1000 path. Initially, we saw the opportunity to focus Source: SNL All data through 12/31/16 on the movie exhibition property segment and * Lifetime Data: 11/15/97 - 12/31/16 for several years we focused our investments only in theatre properties. In subsequent years we not only added to theatres, creating what we now refer to as TOTAL INVESTMENTS our Entertainment segment, we’ve also (IN MILLIONS) added Recreation and Education as primary investment segments. $5,307 OTHER $4,606 178 RECREATION EDUCATION 203 The basis of our expansion into broadened $4,040 1,148 ENTERTAINMENT $3,562 207 944 segments was, and continues to be, supported $3,211 $3,120 696 $2,969 212 by our overall investment thesis of focusing on $2,844 1,303 $2,717 267 550 395 1006 select, non-commodity real estate segments 335 421 728 $2,271 382 342 318 337 538 that are highly enduring. 312 374 67 280 230 286 234 174 44 170 2,678 2,453 2,411 2,177 2,148 2,262 1,926 1,925 1,976 2,011 In deploying over $800 million in investment spending in 2016, we continued to see strength across each of our tenant industries and 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 investment segments. LETTER FROM THE PRESIDENT (cont.) ENTERTAINMENT Supported by the transformation of the movie-going experience, in 2016 the U.S. Box Office exceeded expectations and had yet another record-setting year, with revenues of approximately $11.4 billion. We continue to see quality opportunities within the Entertainment segment with the acceleration of exhibitors’ migration to expanded amenity theatres. These opportunities involve the purchase and conversion of existing theatres as well as the build-to-suit construction of new theatres. Through the end of 2016, 25% of our theatre portfolio had been renovated to reflect the new design and within 36 months we expect these renovations to exceed 50% of our existing theatre portfolio. These renovations have benefited the Company not only in terms of extending lease term, but also from a performance standpoint. For renovated properties which have been open for a full year, our tenants have seen a 40% average improvement in total revenues, which translates into higher rent coverages and greater opportunities for percentage rent. During the year we invested over $266 million in our Entertainment segment. RECREATION In our Recreation segment, we have seen the centuries old game of golf evolve into a new experience with Topgolf. The strong performance of these properties has continued with overall lease coverage in excess of three times. We are encouraged by the strong consumer acceptance, rapid ramp-up and reliable performance of our Topgolf investments. Our ski and waterpark investments continue to demonstrate that the combination of family and friends with fun outdoor activities is an essential part of our social fabric, and is only enhanced by technological advances rather than threatened. While Mother Nature may introduce variability into the results of our operators, our underwriting takes this variability into consideration, and the investments continue to deliver durable results for the long term. During the year we invested over $198 million in our Recreation segment. LETTER FROM THE PRESIDENT (cont.) EDUCATION Our Education segment continues to experience significant demand-driven growth across each of our property types. This growth recognizes the enormous power of educational choice and the increasing focus parents have on both educational curriculum and environments. National public charter school enrollment achieved a new record with approximately 3.1 million students for the 2016/17 school year, a 7% increase over the previous year. We continue to believe that growth opportunities with public charter schools will remain strong as the category continues to garner increased acceptance among both students and parents. Separately, we saw substantial growth in both our early childhood education and private school property types. We invested over $73 million in our private school portfolio, adding eight additional schools and two additional operators. During the year we invested over $338 million in our Education segment. BALANCE SHEET CAPITAL STRUCTURE* (IN MILLIONS) Our disciplined approach to financial management has remained an SECURED Total Market Cap = $7.4B DEBT, $200 3% COMMON important priority. As a result we 61% EQUITY, ended the year in a strong financial $4,568 Fixed Rate Debt = 97% Weighted Average = 5.06% position, providing us with financial Unsecured Debt = 92% flexibility and access to capital. 31% UNSECURED DEBT, $2,286 Leverage = 5.48X on Net Debt to Adjusted EBITDA * As of December 31, 2016. See the supplemental 5% for the quarter ended December 31, 2016 for reconciliation of certain Non-GAAP financial PREFERRED EQUITY, $346 measures at www.eprkc.com LOOKING AHEAD As a leader in experiential real estate, we remain committed to executing our strategy and believe that we are well positioned for growth in the “Experience Economy.” While we see significant opportunity across each of our investing segments, we will remain selective in our investments, focused on those that deliver accretive long term value. We will also continue to make solid advancements in the quality of our portfolio through our strategic asset disposition and capital recycling program. While we are pleased with our 2016 results, our orientation has been, and will remain, with a focus on the long term. We have a uniquely qualified team of professionals and we have the opportunity to continue to grow in unique real estate segments, yet we must do so with deliberate and thoughtful execution to sustain the long term. THANK YOU FOR YOUR SUPPORT. GREGORY SILVERS PRESIDENT AND CHIEF EXECUTIVE OFFICER UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2016 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-13561 EPR PROPERTIES (Exact name of registrant as specified in its charter) Maryland 43-1790877 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 909 Walnut Street, Suite 200 Kansas City, Missouri 64106 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (816) 472-1700 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common shares of beneficial interest, par value $.01 per share New York Stock Exchange 5.75% Series C cumulative convertible preferred shares of beneficial New York Stock Exchange interest, par value $.01 per share 9.00% Series E cumulative convertible preferred shares of beneficial interest, New York Stock Exchange par value $.01 per share 6.625% Series F cumulative redeemable preferred shares of beneficial New York Stock Exchange interest, par value $.01 per share Securities registered pursuant to Section 12(g) of the Act: None.