LTC Properties, Inc. (NYSE: LTC), a real estate investment trust
that primarily invests in seniors housing and health care
properties, today announced operating results for its second
quarter ended June 30, 2016 and recent investment
activity.
Funds from Operations (“FFO”) increased 21.8% to
$29.2 million for the 2016 second quarter, up from
$24.0 million for the comparable 2015 period. FFO per diluted
common share was $0.77 and $0.66 for the quarters ended
June 30, 2016 and 2015, respectively, which represents a
16.7% per share increase. Normalized FFO increased 19.8% to $29.2
million for the 2016 second quarter, up from $24.4 million in the
same period in 2015. Normalized FFO per diluted common share
increased 14.9% to $0.77 for the quarter ended June 30, 2016, up
from $0.67 in the same period in 2015. Net income available to
common stockholders was $22.1 million, or $0.58 per diluted
share, for the 2016 second quarter compared with $17.0 million, or
$0.48 per diluted share, for the same period in 2015. The increase
in FFO, normalized FFO and net income available to common
stockholders was primarily due to higher revenues from recent
acquisitions, mortgage loan originations and completed development
projects, partially offset by higher interest expense resulting
from the sale of senior unsecured notes and increased utilization
of LTC’s line of credit.
LTC completed the following during the second quarter of
2016:
- Acquisition of two memory care
communities in Kansas totaling 120 units for an aggregate purchase
price of $25.0 million;
- Acquisition of a newly constructed
60-unit memory care community in Kentucky for $14.3 million;
- Acquisition of a newly constructed
70-unit assisted living and memory care community in Georgia for
$14.3 million;
- Completed construction of and opened a
56-unit memory care community in Texas;
- Origination of a $12.3 million
four-year term mortgage loan secured by two skilled nursing centers
in Michigan, funding $7.8 million at closing, with a commitment to
fund an additional $4.5 million for approved capital improvement
projects;
- Sale of two skilled nursing centers in
Texas totaling 235 beds for an aggregate price of $6.8 million
resulting in a net gain on sale of $1.8 million;
- Sale of $37.5 million of 4.15% senior
unsecured notes due May 20, 2028; and
- Sale of 1,157,775 shares of its common
stock for $56.2 million in net proceeds under its equity
distribution agreement.
Subsequent to June 30, 2016, LTC completed the following:
- Completed construction of a 66-unit
memory care community in Illinois;
- Sale of $40.0 million of 3.99% senior
unsecured notes due July 20, 2031 to an insurance company;
- Sale of 152,623 shares of common stock
for $7.7 million in net proceeds under its equity distribution
agreement; and
- Sale of a school in New Jersey for $3.9
million, resulting in a loss of approximately $200,000.
Conference Call
Information
LTC will conduct a conference call on Tuesday, August 2, 2016,
at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to provide
commentary on its performance and operating results for the quarter
ended June 30, 2016. The conference call is accessible by
telephone and the internet. Telephone access will be available by
dialing 877-510-2862 (domestically) or 412-902-4134
(internationally). To participate in the webcast, go to LTC’s
website at www.LTCreit.com 15 minutes before the call to download
the necessary software.
An audio replay of the conference call will be available from
August 3 through August 16, 2016 and may be accessed by dialing
877-344-7529 (domestically) or 412-317-0088 (internationally) and
entering conference number 10090386. Additionally, an audio archive
will be available on LTC’s website on the “Presentations” page of
the “Investor Information” section, which is under the “Investors”
tab. LTC’s earnings release and supplemental information package
for the current period will be available on its website on the
“Press Releases” and “Presentations” pages, respectively, of the
“Investor Information” section which is under the “Investors”
tab.
About LTC
LTC is a self-administered real estate investment trust that
primarily invests in seniors housing and health care properties
primarily through sale-leaseback transactions, mortgage financing
and structured finance solutions including mezzanine lending. At
June 30, 2016, LTC had 225 investments located in 30
states comprising 109 assisted living communities, 98 skilled
nursing centers, 7 range of care communities, 1 school, 1
behavioral health care hospital, 5 parcels of land under
development and 4 parcels of land held-for-use. Assisted living
communities, independent living communities, memory care
communities and combinations thereof are included in the assisted
living property type. Range of care communities consist of
properties providing skilled nursing and any combination of
assisted living, independent living and/or memory care services.
For more information on LTC Properties, Inc., visit the Company’s
website at www.LTCreit.com.
Forward Looking
Statements
This press release includes statements that are not purely
historical and are “forward looking statements” within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding the Company’s expectations, beliefs,
intentions or strategies regarding the future. All statements other
than historical facts contained in this press release are forward
looking statements. These forward looking statements involve a
number of risks and uncertainties. Please see LTC’s most recent
Annual Report on Form 10-K, its subsequent Quarterly Reports on
Form 10-Q, and its other publicly available filings with the
Securities and Exchange Commission for a discussion of these and
other risks and uncertainties. All forward looking statements
included in this press release are based on information available
to the Company on the date hereof, and LTC assumes no obligation to
update such forward looking statements. Although the Company’s
management believes that the assumptions and expectations reflected
in such forward looking statements are reasonable, no assurance can
be given that such expectations will prove to have been correct.
The actual results achieved by the Company may differ materially
from any forward looking statements due to the risks and
uncertainties of such statements.
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands,
except per share amounts) Three Months Ended Six Months
Ended June 30, June 30, 2016 2015 2016 2015 Revenues: Rental income
$ 33,072 $ 27,116 $ 64,952 $ 53,794 Interest income from mortgage
loans 6,811 5,053 13,389 9,660 Interest and other income 113
218 259 413 Total revenues 39,996
32,387 78,600 63,867 Expenses: Interest
expense 6,750 3,854 12,750 7,620 Depreciation and amortization
8,907 6,977 17,468 13,756 Provision for doubtful accounts 118 429
202 432 Transaction costs 4 14 94 62 General and administrative
expenses 4,117 3,938 8,400 7,386 Total
expenses 19,896 15,212 38,914 29,256
Operating income 20,100 17,175 39,686 34,611 Income from
unconsolidated joint ventures 278 753 550 869 Gain on sale of real
estate, net 1,802 — 1,802 — Net income 22,180
17,928 42,038 35,480 Income allocated to participating securities
(105) (126) (206) (249) Income allocated to preferred stockholders
—
(818)
— (1,636) Net income available to common stockholders
$ 22,075 $ 16,984 $ 41,832 $ 33,595
Earnings per common
share: Basic $ 0.58 $ 0.48 $ 1.11 $ 0.95 Diluted $ 0.58 $ 0.48
$ 1.11 $ 0.94
Weighted average shares used to calculate
earnings per common share: Basic 37,969
35,299 37,707 35,288 Diluted 38,164
37,311 37,720 37,302 Dividends declared and
paid per common share $ 0.54 $ 0.51 $ 1.08 $ 1.02
Supplemental Reporting
Measures
FFO, adjusted FFO (“AFFO”), and Funds Available for Distribution
(“FAD”) are supplemental measures of a real estate investment
trust’s (“REIT”) financial performance that are not defined by U.S.
generally accepted accounting principles (“GAAP”). Investors,
analysts and the Company use FFO, AFFO and FAD as supplemental
measures of operating performance. The Company believes FFO, AFFO
and FAD are helpful in evaluating the operating performance of a
REIT. Real estate values historically rise and fall with market
conditions, but cost accounting for real estate assets in
accordance with GAAP assumes that the value of real estate assets
diminishes predictably over time. We believe that by excluding the
effect of historical cost depreciation, which may be of limited
relevance in evaluating current performance, FFO, AFFO and FAD
facilitate like comparisons of operating performance between
periods. Additionally the Company believes that normalized FFO,
normalized AFFO and normalized FAD provide useful information
because they allow investors, analysts and our management to
compare the Company’s operating performance on a consistent basis
without having to account for differences caused by unanticipated
items.
FFO, as defined by the National Association of Real Estate
Investment Trusts (“NAREIT”), means net income available to common
stockholders (computed in accordance with GAAP) excluding gains or
losses on the sale of real estate and impairment write-downs of
depreciable real estate, plus real estate depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures. Normalized FFO represents FFO adjusted for
certain items detailed in the reconciliations. The Company’s
computation of FFO may not be comparable to FFO reported by other
REITs that do not define the term in accordance with the current
NAREIT definition or have a different interpretation of the current
NAREIT definition from that of the Company; therefore, caution
should be exercised when comparing our Company’s FFO to that of
other REITs.
We define AFFO as FFO excluding the effects of straight-line
rent, amortization of lease inducement, effective interest income
and deferred income from unconsolidated joint ventures. GAAP
requires rental revenues related to non-contingent leases that
contain specified rental increases over the life of the lease to be
recognized evenly over the life of the lease. This method results
in rental income in the early years of a lease that is higher than
actual cash received, creating a straight-line rent receivable
asset included in our consolidated balance sheet. At some point
during the lease, depending on its terms, cash rent payments exceed
the straight-line rent which results in the straight-line rent
receivable asset decreasing to zero over the remainder of the lease
term. Effective interest method, as required by GAAP, is a
technique for calculating the actual interest rate for the term of
a mortgage loan based on the initial origination value. Similar to
the accounting methodology of straight-line rent, the actual
interest rate is higher than the stated interest rate in the early
years of the mortgage loan thus creating an effective interest
receivable asset included in the interest receivable line item in
our consolidated balance sheet and reduces down to zero when, at
some point during the mortgage loan, the stated interest rate is
higher than the actual interest rate. By excluding the non-cash
portion of rental income, interest income from mortgage loans and
income from unconsolidated joint ventures, investors, analysts and
our management can compare AFFO between periods. Normalized AFFO
represents AFFO adjusted for certain items detailed in the
reconciliations.
We define FAD as AFFO excluding the effects of non-cash
compensation charges, capitalized interest and non-cash interest
charges. FAD is useful in analyzing the portion of cash flow that
is available for distribution to stockholders. Investors, analysts
and the Company utilize FAD as an indicator of common dividend
potential. The FAD payout ratio, which represents annual
distributions to common shareholders expressed as a percentage of
FAD, facilitates the comparison of dividend coverage between REITs.
Normalized FAD represents FAD adjusted for certain items detailed
in the reconciliations.
While the Company uses FFO, Normalized FFO, AFFO, Normalized
AFFO, FAD and Normalized FAD as supplemental performance measures
of our cash flow generated by operations and cash available for
distribution to stockholders, such measures are not representative
of cash generated from operating activities in accordance with
GAAP, and are not necessarily indicative of cash available to fund
cash needs and should not be considered an alternative to net
income available to common stockholders.
Reconciliation of FFO, AFFO and
FAD
The following table reconciles GAAP net income available to
common stockholders to each of NAREIT FFO attributable to common
stockholders and normalized FFO attributable to common
stockholders, as well as normalized AFFO and normalized FAD
(unaudited, amounts in thousands, except per share amounts):
Three
Months Ended Six Months Ended June 30, June 30, 2016 2015
2016 2015 GAAP net income available to common
stockholders $22,075 $16,984 $41,832 $33,595 Add: Depreciation and
amortization 8,907 6,977 17,468 13,756 Less: Gain on sale of real
estate, net (1,802) — (1,802) — NAREIT FFO attributable to common
stockholders 29,180 23,961 57,498 47,351 Add: Non-recurring
one-time items — 400 (1) — 400 (1) Normalized FFO attributable to
common stockholders 29,180 24,361 57,498 47,751 Less:
Non-cash rental income (2,160) (1,795) (4,477) (3,718) Less:
Effective interest income from mortgage loans (1,293) (934) (2,555)
(1,485) Less: Deferred income from unconsolidated joint ventures —
(502) — (579) Normalized adjusted FFO (AFFO) 25,727 21,130 50,466
41,969 Add: Non-cash compensation charges 1,029 1,099 2,019
2,081 Add: Non-cash interest related to earn-out liabilities 166 55
315 109 Less: Capitalized interest (256) (150) (942) (297)
Normalized funds available for distribution (FAD) $26,666 $22,134
$51,858 $43,862 (1) Represents a $400 provision for loan
loss reserve related to additional loan proceeds funded under an
existing mortgage loan.
NAREIT Basic FFO attributable to common stockholders
per share $0.77 $0.68 $1.52 $1.34 NAREIT Diluted FFO attributable
to common stockholders per share $0.77 $0.66 $1.52 $1.31
NAREIT Diluted FFO attributable to common stockholders $29,285
$24,905 $57,704 $49,236 Weighted average shares used to calculate
NAREIT diluted 38,164 37,563 37,902 37,546 FFO per share
attributable to common stockholders
Basic normalized FFO attributable to
common stockholders per share $0.77 $0.69 $1.52 $1.35 Diluted
normalized FFO attributable to common stockholders per share $0.77
$0.67 $1.52 $1.32 Diluted normalized FFO attributable to
common stockholders $29,285 $25,305 $57,704 $49,636 Weighted
average shares used to calculate diluted normalized 38,164 37,563
37,902 37,546 FFO per share attributable to common stockholders
Basic
normalized AFFO per share $0.68 $0.60 $1.34 $1.19 Diluted
normalized AFFO per share $0.68 $0.59 $1.34 $1.17 Diluted
normalized AFFO $25,832 $22,074 $50,672 $43,854 Weighted average
shares used to calculate diluted normalized 38,164 37,563 37,902
37,546 AFFO per share
Basic normalized FAD per share $0.70 $0.63 $1.38
$1.24 Diluted normalized FAD per share $0.70 $0.61 $1.37 $1.22
Diluted normalized FAD $26,771 $23,078 $52,064 $45,747
Weighted average shares used to calculate
diluted normalized FAD per share
38,164 37,563 37,902 37,546
LTC PROPERTIES, INC. CONSOLIDATED BALANCE
SHEETS (amounts in thousands, except per share)
June 30, 2016 December 31, 2015
ASSETS Investments: Land $
113,746 $ 106,741 Buildings and improvements 1,168,370 1,082,675
Accumulated depreciation and amortization (260,971 )
(246,170 ) Operating real estate property, net 1,021,145 943,246
Properties held-for-sale, net of accumulated depreciation and
amortization: 2016—$5,248; 2015—$5,095 4,022
4,175 Real estate property investments, net 1,025,167
947,421 Mortgage loans receivable, net of loan loss reserve:
2016—$2,346; 2015—$2,190 232,897 217,529
Real estate investments, net 1,258,064 1,164,950 Investments
in unconsolidated joint ventures 24,036 24,042
Investments, net 1,282,100 1,188,992 Other assets:
Cash and cash equivalents 17,756 12,942 Debt issue costs related to
bank borrowings 2,375 2,865 Interest receivable 7,087 4,536
Straight-line rent receivable, net of allowance for doubtful
accounts: 2016—$880; 2015—$833 47,373 42,685 Prepaid expenses and
other assets 21,119 21,443 Notes receivable 2,315
1,961 Total assets $ 1,380,125 $ 1,275,424
LIABILITIES Bank borrowings $ 122,000 $
120,500 Senior unsecured notes, net of debt issue costs:
2016—$1,066; 2015—$1,095 484,734 451,372 Accrued interest 4,046
3,974 Accrued incentives and earn-outs 13,717 12,722 Accrued
expenses and other liabilities 24,885 27,654
Total liabilities 649,382 616,222
EQUITY
Stockholders’ equity: Common stock: $0.01 par value; 60,000 shares
authorized; shares issued and outstanding: 2016—39,069; 2015—37,548
391 375 Capital in excess of par value 829,228 758,676 Cumulative
net income 970,366 928,328 Accumulated other comprehensive income
13 47 Cumulative distributions (1,069,255 )
(1,028,224 ) Total equity 730,743 659,202
Total liabilities and equity $ 1,380,125 $ 1,275,424
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version on businesswire.com: http://www.businesswire.com/news/home/20160801006172/en/
LTC Properties, Inc.Wendy SimpsonPam Kessler(805) 981-8655
LTC Properties (NYSE:LTC)
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