LTC Properties, Inc. (NYSE: LTC) (“LTC” or the “Company”)
announces today operating results for the quarter ended March 31,
2014. The Company reported an increase of 23.0% in Funds from
Operations (“FFO”) to $22.4 million in the quarter ended March
31, 2014, from $18.2 million in the comparable 2013 period.
FFO per diluted common share was $0.63 and $0.59 for the quarters
ended March 31, 2014 and 2013, respectively. Normalized FFO
increased by 17.7% to $22.4 million in the first quarter of
2014 from $19.0 million in the first quarter of 2013.
Normalized FFO per diluted common share was $0.63 and $0.61 for the
quarters ended March 31, 2014 and 2013, respectively. Net income
available to common stockholders increased by 33.3% to
$16.1 million in the first quarter of 2014, or $0.46 per
diluted share, from $12.1 million, or $0.40 per diluted share,
for the same period in 2013. The increase in FFO, normalized FFO
and net income available to common stockholders was due to higher
revenues from mortgage loan originations, acquisitions and
completed property developments with 2014 FFO and net income
available to common stockholders benefitting from lower general and
administrative expense due to one-time charges in 2013.
Conference Call
Information
The Company will conduct a conference call on Wednesday, May 7,
2014, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to
provide commentary on the Company’s performance and operating
results for the quarter ended March 31, 2014. The conference call
is accessible by telephone and the internet. Telephone access will
be available by dialing 888-317-6016 (domestically) or 412-317-6016
(internationally). To participate in the webcast, log on to the
Company’s website at www.LTCProperties.com 15 minutes before the
call to download the necessary software.
An audio replay of the conference call will be available from
May 7 through May 22, 2014 and may be accessed by dialing
877-344-7529 (domestically) or 412-317-0088 (internationally) and
entering conference number 10044392. Additionally, an audio archive
will be available on the Company’s website in the “Presentations”
section of the “Investor Information” tab. The Company’s earnings
release and supplemental information package for the current period
will be available on the Company’s website in the “Press Releases”
and “Presentations” sections, respectively, of the “Investor
Information” tab.
About LTC
At March 31, 2014, LTC had 227 investments located in 30 states
comprising of 101 skilled nursing properties, 106 assisted living
properties, 9 range of care properties, two schools, five
parcels of land under development and four parcels of land
held-for-use. Assisted living properties, independent living
properties, memory care properties and combinations thereof are
included in the assisted living property type. Range of care
properties consist of properties providing skilled nursing and any
combination of assisted living, independent living and/or memory
care services. The Company is a self-administered real estate
investment trust that primarily invests in senior housing and
long-term care facilities through facility lease transactions,
mortgage loans and other investments. For more information on LTC
Properties, Inc., visit the Company’s website at
www.LTCProperties.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 our most recent
Annual Report on Form 10-K, our subsequent Quarterly Reports on
Form 10-Q, and our 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 the Company 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 EndedMarch 31, 2014 2013 (unaudited)
Revenues: Rental income $ 25,252 $ 24,511 Interest income from
mortgage loans 4,093 1,059 Interest and other income 93
93 Total revenues 29,438
25,663 Expenses: Interest expense 3,187 3,133
Depreciation and amortization 6,298 6,136 General and
administrative expenses 2,949 3,418
Total expenses 12,434 12,687 Net income
17,004 12,976 Income allocated to participating securities
(103 ) (98 ) Income allocated to preferred stockholders (818
) (818 ) Net income available to common stockholders $
16,083 $ 12,060
Earnings per common
share: Basic $ 0.47 $ 0.40 Diluted $ 0.46
$ 0.40
Weighted average shares used to calculate
earnings per common share: Basic 34,586
30,365 Diluted 36,611 30,399
Dividends declared and paid per common share $ 0.510
$ 0.465
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 U.S. 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 U.S. 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 and amortization of lease inducement. U.S. 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. By excluding the non-cash portion of straight-line rental
revenue and amortization of lease inducement, 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. 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, normalized AFFO 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 U.S. 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, Normalized FFO,
Normalized AFFO and Normalized FAD
The following table reconciles each of net income, FFO and
normalized FFO available to common stockholders, as well as
normalized AFFO and normalized FAD (unaudited, amounts in
thousands, except per share amounts):
Three Months EndedMarch 31, 2014 2013 Net income
available to common stockholders $ 16,083 $ 12,060 Add:
Depreciation and amortization 6,298 6,136
FFO available to common stockholders 22,381 18,196 Add:
Non-cash interest related to earn-out liabilities — 110 Add:
Non-recurring one-time items — 707
(1)
Normalized FFO available to common stockholders 22,381 19,013 Less:
Non-cash rental income (474 ) (772 ) Normalized
adjusted FFO (AFFO) 21,907 18,241 Add: Non-cash compensation
charges 666 528 Less: Capitalized interest (307 )
(177 ) Normalized funds available for distribution (FAD) $ 22,266
$ 18,592
___________________
(1) Represents the one-time severance and
accelerated restricted stock vesting charges related to the
retirement of our former Senior Vice President, Marketing and
Strategic Planning.
Basic FFO available to
common stockholders per share $ 0.65 $ 0.60 Diluted
FFO available to common stockholders per share $ 0.63 $ 0.59
Diluted FFO available to common stockholders $ 23,302
$ 19,112 Weighted average shares used to calculate
diluted FFO per share available to common stockholders
36,806 32,609
Basic normalized FFO available to common stockholders
per share $ 0.65 $ 0.63 Diluted normalized FFO
available to common stockholders per share $ 0.63 $ 0.61
Diluted normalized FFO available to common
stockholders $ 23,302 $ 19,929 Weighted average
shares used to calculate diluted normalized FFO per share available
to common stockholders 36,806 32,609
Basic normalized AFFO per
share $ 0.63 $ 0.60 Diluted normalized AFFO per share
$ 0.62 $ 0.59 Diluted normalized AFFO $ 22,828
$ 19,157 Weighted average shares used to calculate
diluted normalized AFFO per share 36,806
32,609 Basic
normalized FAD per share $ 0.64 $ 0.61 Diluted
normalized FAD per share $ 0.63 $ 0.60 Diluted
normalized FAD $ 23,187 $ 19,508 Weighted average
shares used to calculate diluted normalized FAD per share
36,806 32,609
LTC PROPERTIES, INC. CONSOLIDATED BALANCE
SHEETS
(amounts in thousands)
March 31, 2014 December 31, 2013
ASSETS
(unaudited) (audited) Real estate investments: Land $ 80,993 $
80,993 Buildings and improvements 870,498 856,624 Accumulated
depreciation and amortization (224,966 ) (218,700 )
Net real estate property 726,525 718,917 Mortgage loans receivable,
net of allowance for doubtfulaccounts: 2014 — $1,691; 2013 — $1,671
167,472 165,444 Real estate
investments, net 893,997 884,361 Other assets: Cash and cash
equivalents 7,542 6,778 Debt issue costs, net 2,276 2,458 Interest
receivable 677 702 Straight-line rent receivable, net of allowance
for doubtfulaccounts: 2014 — $1,548; 2013 — $1,541 30,393 29,760
Prepaid expenses and other assets 6,761 6,756 Notes receivable
595 595 Total assets $ 942,241 $
931,410
LIABILITIES Bank borrowings $ 41,000 $
21,000 Senior unsecured notes 251,633 255,800 Bonds payable 1,400
2,035 Accrued interest 2,350 3,424 Accrued expenses and other
liabilities 14,088 16,713 Total
liabilities 310,471 298,972
EQUITY Stockholders'
equity: Preferred stock $0.01 par value; 15,000 shares authorized;
shares issued and outstanding: 2014 — 2,000; 2013 — 2,000 38,500
38,500 Common stock: $0.01 par value; 60,000 shares
authorized;shares issued and outstanding: 2014 — 34,817; 2013 —
34,746 348 347 Capital in excess of par value 689,551 688,654
Cumulative net income 798,852 781,848 Accumulated other
comprehensive income 108 117 Cumulative distributions
(895,589 ) (877,028 ) Total equity 631,770 632,438
Total liabilities and equity $ 942,241 $ 931,410
LTC Properties, Inc.Wendy L. SimpsonPam Kessler(805)
981-8655
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