Current Report Filing (8-k)
August 06 2014 - 5:01PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report: August 6, 2014
(Date of earliest event reported)
LTC PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
Maryland |
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1-11314 |
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71-0720518 |
(State or other jurisdiction of |
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(Commission file number) |
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(I.R.S. Employer |
incorporation or organization) |
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Identification No) |
2829 Townsgate Road, Suite 350
Westlake Village, CA 91361
(Address of principal executive offices)
(805) 981-8655
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On August 6, 2014, LTC Properties, Inc. announced the operating results for the six months ended June 30, 2014. The text of the press release and the supplemental information package are furnished herewith as Exhibits 99.1 and 99.2, respectively, and are specifically incorporated by reference herein.
The information in this Form 8-K and the related information in the exhibits attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of LTC under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits
99.1 Press Release issued August 6, 2014.
99.2 LTC Properties, Inc. Supplemental Information Package for the period ending June 30, 2014.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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LTC PROPERTIES, INC. |
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Dated: August 6, 2014 |
By: |
/s/ WENDY L. SIMPSON |
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Wendy L. Simpson |
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Chairman, CEO & President |
2
Exhibit 99.1
![](g182721mmi001.jpg) |
FOR IMMEDIATE RELEASE
For more information contact: Wendy L. Simpson Pam Kessler (805) 981-8655 |
LTC REPORTS SECOND QUARTER 2014 RESULTS
WESTLAKE VILLAGE, CALIFORNIA, August 6, 2014 LTC Properties, Inc. (NYSE: LTC) (LTC or the Company) announces today operating results for the quarter ended June 30, 2014. The Company reported an increase of 17.6% in Funds from Operations (FFO) to $22.5 million in the quarter ended June 30, 2014, from $19.1 million in the comparable 2013 period. FFO per diluted common share was $0.64 and $0.57 for the quarters ended June 30, 2014 and 2013, respectively. Normalized FFO increased by 16.9% to $22.5 million in the second quarter of 2014 from $19.2 million in the second quarter of 2013. Normalized FFO per diluted common share was $0.64 and $0.57 for the quarters ended June 30, 2014 and 2013, respectively. The increase in FFO and normalized FFO was due to higher revenues from 2013 mortgage loan originations, acquisitions and completed property developments.
During the quarter ended June 30, 2014, the Company sold two assisted living properties with a total of 133 units and one school generating net proceeds of $7.7 million, resulting in a net gain on sale of $1.1 million.
Net income available to common stockholders increased by 44.6% to $17.3 million in the second quarter of 2014, or $0.50 per diluted share, from $12.0 million, or $0.36 per diluted share, for the same period in 2013. The increase in net income available to common stockholders was due to higher revenues from 2013 mortgage loan originations, acquisitions and completed property developments, and a gain on sale.
Subsequent to June 30, 2014, the Company locked rate on $30.0 million of senior unsecured notes under its private shelf agreement with affiliates and managed accounts of Prudential Investment Management, Inc. and expect to close on the transaction in August 2014. The notes will bear interest at 4.50% and mature on July 31, 2026.
Conference Call Information
The Company will conduct a conference call on Thursday, August 7, 2014, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to provide commentary on the Companys performance and operating results for the quarter ended June 30, 2014. 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, log on to the Companys 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 August 7 through August 21, 2014 and may be accessed by dialing 877-344-7529 (domestically) or 412-317-0088 (internationally) and entering conference number 10049113. Additionally, an audio archive will be available on the Companys website in the Presentations section of the Investor Information tab. The Companys earnings release and supplemental information package for the current period will be available on the Companys website in the Press Releases and Presentations sections, respectively, of the Investor Information tab.
1
About LTC
At June 30, 2014, LTC had 224 investments located in 29 states comprising of 101 skilled nursing properties, 104 assisted living properties, nine range of care properties, one school, 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 Companys 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 Companys 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 Companys 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.
2
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited amounts in thousands, except per share amounts)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2014 |
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2013 |
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2014 |
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2013 |
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Revenues: |
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Rental income |
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$ |
25,025 |
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$ |
24,539 |
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$ |
50,277 |
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$ |
49,015 |
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Interest income from mortgage loans |
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4,139 |
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1,050 |
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8,232 |
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2,109 |
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Interest and other income |
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63 |
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92 |
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156 |
|
185 |
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Total revenues |
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29,227 |
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25,681 |
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58,665 |
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51,309 |
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Expenses: |
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Interest expense |
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3,088 |
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2,798 |
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6,275 |
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5,931 |
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Depreciation and amortization |
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6,302 |
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6,124 |
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12,600 |
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12,250 |
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General and administrative expenses |
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2,704 |
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2,869 |
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5,653 |
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6,287 |
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Total expenses |
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12,094 |
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11,791 |
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24,528 |
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24,468 |
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Operating income |
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17,133 |
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13,890 |
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34,137 |
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26,841 |
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Gain on sale of real estate, net |
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1,140 |
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1,140 |
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Income from continuing operations |
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18,273 |
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13,890 |
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35,277 |
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26,841 |
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Discontinued operations: |
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Income from discontinued operations |
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27 |
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52 |
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Loss on sale of real estate, net |
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(1,014 |
) |
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(1,014 |
) |
Net loss from discontinued operations |
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(987 |
) |
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(962 |
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Net income |
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18,273 |
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12,903 |
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35,277 |
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25,879 |
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Income allocated to participating securities |
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(117 |
) |
(91 |
) |
(220 |
) |
(189 |
) |
Income allocated to preferred stockholders |
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(818 |
) |
(818 |
) |
(1,636 |
) |
(1,636 |
) |
Net income available to common stockholders |
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$ |
17,338 |
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$ |
11,994 |
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$ |
33,421 |
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$ |
24,054 |
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Basic earnings per common share: |
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Continuing operations |
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$ |
0.50 |
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$ |
0.39 |
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$ |
0.97 |
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$ |
0.79 |
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Discontinued operations |
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$ |
0.00 |
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$ |
(0.03 |
) |
$ |
0.00 |
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$ |
(0.03 |
) |
Net income available to common stockholders |
|
$ |
0.50 |
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$ |
0.36 |
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$ |
0.97 |
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$ |
0.76 |
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Diluted earnings per common share: |
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Continuing operations |
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$ |
0.50 |
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$ |
0.39 |
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$ |
0.96 |
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$ |
0.79 |
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Discontinued operations |
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$ |
0.00 |
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$ |
(0.03 |
) |
$ |
0.00 |
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$ |
(0.03 |
) |
Net income available to common stockholders |
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$ |
0.50 |
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$ |
0.36 |
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$ |
0.96 |
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$ |
0.76 |
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Weighted average shares used to calculate earnings per common share: |
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Basic |
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34,597 |
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32,913 |
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34,592 |
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31,645 |
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Diluted |
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36,621 |
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32,946 |
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36,617 |
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31,679 |
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3
Supplemental Reporting Measures
FFO, adjusted FFO (AFFO), and Funds Available for Distribution (FAD) are supplemental measures of a real estate investment trusts (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 Companys 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 Companys 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 Companys 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.
4
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):
|
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Three Months Ended June 30, |
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Six Months Ended June 30, |
|
|
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2014 |
|
2013 |
|
2014 |
|
2013 |
|
Net income available to common stockholders |
|
$ |
17,338 |
|
$ |
11,994 |
|
$ |
33,421 |
|
$ |
24,054 |
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Add: Depreciation and amortization (continuing and discontinued operations) |
|
6,302 |
|
6,131 |
|
12,600 |
|
12,267 |
|
(Less) add: (Gain) loss on sale of real estate, net |
|
(1,140 |
) |
1,014 |
|
(1,140 |
) |
1,014 |
|
FFO available to common stockholders |
|
22,500 |
|
19,139 |
|
44,881 |
|
37,335 |
|
|
|
|
|
|
|
|
|
|
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Add: Non-cash interest related to earn-out liabilities |
|
|
|
110 |
|
|
|
220 |
|
Add: Non-recurring one-time items |
|
|
|
|
|
|
|
707 |
(1) |
Normalized FFO available to common stockholders |
|
22,500 |
|
19,249 |
|
44,881 |
|
38,262 |
|
|
|
|
|
|
|
|
|
|
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Less: Non-cash rental income |
|
(443 |
) |
(758 |
) |
(917 |
) |
(1,530 |
) |
Normalized adjusted FFO (AFFO) |
|
22,057 |
|
18,491 |
|
43,964 |
|
36,732 |
|
|
|
|
|
|
|
|
|
|
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Add: Non-cash compensation charges |
|
783 |
|
523 |
|
1,449 |
|
1,051 |
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Less: Capitalized interest |
|
(435 |
) |
(323 |
) |
(742 |
) |
(500 |
) |
Normalized funds available for distribution (FAD) |
|
$ |
22,405 |
|
$ |
18,691 |
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$ |
44,671 |
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$ |
37,283 |
|
(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.
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|
|
|
|
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Basic FFO available to common stockholders per share |
|
$ |
0.65 |
|
$ |
0.58 |
|
$ |
1.30 |
|
$ |
1.18 |
|
Diluted FFO available to common stockholders per share |
|
$ |
0.64 |
|
$ |
0.57 |
|
$ |
1.27 |
|
$ |
1.16 |
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO available to common stockholders |
|
$ |
23,435 |
|
$ |
20,048 |
|
$ |
46,737 |
|
$ |
39,160 |
|
Weighted average shares used to calculate diluted FFO per share available to common stockholders |
|
36,848 |
|
35,139 |
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36,828 |
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33,881 |
|
|
|
|
|
|
|
|
|
|
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Basic normalized FFO available to common stockholders per share |
|
$ |
0.65 |
|
$ |
0.58 |
|
$ |
1.30 |
|
$ |
1.21 |
|
Diluted normalized FFO available to common stockholders per share |
|
$ |
0.64 |
|
$ |
0.57 |
|
$ |
1.27 |
|
$ |
1.18 |
|
|
|
|
|
|
|
|
|
|
|
Diluted normalized FFO available to common stockholders |
|
$ |
23,435 |
|
$ |
20,158 |
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$ |
46,737 |
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$ |
40,087 |
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Weighted average shares used to calculate diluted normalized FFO per share available to common stockholders |
|
36,848 |
|
35,139 |
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36,828 |
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33,881 |
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|
|
|
|
|
|
|
|
|
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Basic normalized AFFO per share |
|
$ |
0.64 |
|
$ |
0.56 |
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$ |
1.27 |
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$ |
1.16 |
|
Diluted normalized AFFO per share |
|
$ |
0.62 |
|
$ |
0.55 |
|
$ |
1.24 |
|
$ |
1.14 |
|
|
|
|
|
|
|
|
|
|
|
Diluted normalized AFFO |
|
$ |
22,992 |
|
$ |
19,400 |
|
$ |
45,820 |
|
$ |
38,557 |
|
Weighted average shares used to calculate diluted normalized AFFO per share |
|
36,848 |
|
35,139 |
|
36,828 |
|
33,881 |
|
|
|
|
|
|
|
|
|
|
|
Basic normalized FAD per share |
|
$ |
0.65 |
|
$ |
0.57 |
|
$ |
1.29 |
|
$ |
1.18 |
|
Diluted normalized FAD per share |
|
$ |
0.63 |
|
$ |
0.56 |
|
$ |
1.26 |
|
$ |
1.15 |
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|
|
|
|
|
|
|
|
|
|
Diluted normalized FAD |
|
$ |
23,340 |
|
$ |
19,600 |
|
$ |
46,527 |
|
$ |
39,108 |
|
Weighted average shares used to calculate diluted normalized FAD per share |
|
36,848 |
|
35,139 |
|
36,828 |
|
33,881 |
|
5
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
|
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June 30, 2014 |
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December 31, 2013 |
|
|
|
(unaudited) |
|
(audited) |
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ASSETS |
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|
|
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Real estate investments: |
|
|
|
|
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Land |
|
$ |
79,211 |
|
$ |
80,993 |
|
Buildings and improvements |
|
877,305 |
|
856,624 |
|
Accumulated depreciation and amortization |
|
(228,323 |
) |
(218,700 |
) |
Net real estate property |
|
728,193 |
|
718,917 |
|
Mortgage loans receivable, net of allowance for doubtful accounts: 2014 $1,698; 2013 $1,671 |
|
168,068 |
|
165,444 |
|
Real estate investments, net |
|
896,261 |
|
884,361 |
|
Other assets: |
|
|
|
|
|
Cash and cash equivalents |
|
8,064 |
|
6,778 |
|
Debt issue costs, net |
|
2,114 |
|
2,458 |
|
Interest receivable |
|
655 |
|
702 |
|
Straight-line rent receivable, net of allowance for doubtful accounts: 2014 $714; 2013 $1,541 |
|
30,913 |
|
29,760 |
|
Prepaid expenses and other assets |
|
6,569 |
|
6,756 |
|
Notes receivable |
|
612 |
|
595 |
|
Total assets |
|
$ |
945,188 |
|
$ |
931,410 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Bank borrowings |
|
$ |
42,000 |
|
$ |
21,000 |
|
Senior unsecured notes |
|
251,633 |
|
255,800 |
|
Bonds payable |
|
1,400 |
|
2,035 |
|
Accrued interest |
|
3,450 |
|
3,424 |
|
Accrued expenses and other liabilities |
|
14,429 |
|
16,713 |
|
Total liabilities |
|
312,912 |
|
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 34,845; 2013 34,746 |
|
348 |
|
347 |
|
Capital in excess of par value |
|
690,373 |
|
688,654 |
|
Cumulative net income |
|
817,125 |
|
781,848 |
|
Accumulated other comprehensive income |
|
99 |
|
117 |
|
Cumulative distributions |
|
(914,169 |
) |
(877,028 |
) |
Total equity |
|
632,276 |
|
632,438 |
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
945,188 |
|
$ |
931,410 |
|
6
Exhibit
99.2
![GRAPHIC](g182721moi001.gif)
|
Supplemental
Operating and Financial Data June 30, 2014 (Unaudited) Skilled Nursing
Property Slinger, WI Operated by Fundamental Long Term Care
|
![GRAPHIC](g182721moi002.gif)
|
Table of
Contents 2 CORPORATE Company Information 3 Additional Information 4
Forward-Looking Statements & Non-GAAP Information 5 Real Estate
Activities 6-9 Real Estate Portfolio Summary 10 Real Estate Portfolio Metrics
11 Real Estate Portfolio Diversification 12-14 Top Ten Operators 15
Extendicare Inc. and Enlivant, formerly Assisted Living Concepts, LLC 16 Real
Estate Portfolio Maturity 17 Enterprise Value 18 Debt Maturity 19 Financial
Data Summary 20-21 Consolidated Statements of Income 22 Consolidated Balance
Sheets . 23 Funds from Operations . 24-25 Glossary . 26-28
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3 Company
Information CORPORATE Wendy Simpson Boyd Hendrickson Edmund King Chairman
Lead Director James Pieczynski Devra Shapiro Timothy Triche, MD Wendy Simpson
Pam Kessler Clint Malin Chairman, Chief Executive Officer and President
Executive Vice President, CFO, and Secretary Executive Vice President and
Chief Investment Officer Brent Chappell Cece Chikhale Mark Hemingway Senior
VP, Investment and Portfolio Management Vice President, Controller and
Treasurer Vice President of Marketing Peter Lyew Vice President and Director
of Taxes Corporate Office Investor Relations www.LTCProperties.com 2829
Townsgate Road, Suite 350 Investor.Relations@LTCProperties.com (805) 981-8655
phone Westlake Village, CA 91361 (805) 981-8655 (805) 981-8663 fax Board of
Directors Management Contact Information Company Founded in 1992, LTC
Properties, Inc. ("LTC") is a self-administered real estate
investment trust that primarily invests in senior housing and long-term care
properties through facility lease transactions, mortgage loans, and other investments.
Our primary objectives are to sustain and enhance stockholder equity value
and provide current income for distribution to stockholders through real
estate investments in long-term care and other health care related properties
leased to qualified, experienced operators. To meet these objectives, we
attempt to invest in properties that provide opportunity for additional value
and current returns to our stockholders and diversify our investment
portfolio by geographic location , operator , and form of investment . For
more information on LTC , visit the Companys website at
www.LTCProperties.com .
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4 CORPORATE
Additional Information J.J. B. Hilliard, W.L. Lyons, Inc. JMP Securities, LLC
KeyBanc Capital Markets, Inc. John Roberts Peter Martin Karin Ford MLV &
Co RBC Capital Markets Corporation Stifel, Nicolaus & Company, Inc. Paul
Morgan Mike Carroll Dan Bernstein Wells Fargo Securities, LLC Todd Stender
Analyst Coverage Any opinions, estimates, or forecasts regarding LTC's
performance made by the analysts listed above do not represent the opinions,
estimates, or forecasts of LTC or its management.
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5
Forward-Looking Statements This supplemental information contains
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, adopted pursuant to the Private Securities Litigation
Reform Act of 1995. Statements that are not purely historical may be
forward-looking. You can identify some of the forward-looking statements by
their use of forward-looking words, such as believes, expects,
may, will, should, seeks, approximately, intends,
plans, estimates or anticipates, or the negative of those words
or similar words. Forward- looking statements involve inherent risks and
uncertainties regarding events, conditions and financial trends that may
affect our future plans of operation, business strategy, results of
operations and financial position. A number of important factors could cause
actual results to differ materially from those included within or
contemplated by such forward-looking statements, including, but not limited
to, the status of the economy, the status of capital markets (including prevailing
interest rates), and our access to capital; the income and returns available
from investments in health care related real estate, the ability of our
borrowers and lessees to meet their obligations to us, our reliance on a few
major operators; competition faced by our borrowers and lessees within the
health care industry, regulation of the health care industry by federal,
state and local governments, (including as a result of the Patient Protection
and Affordable Care Act of 2010 and the Health Care and Education
Reconciliation Act of 2010), changes in Medicare and Medicaid reimbursement
amounts (including due to federal and state budget constraints), compliance
with and changes to regulations and payment policies within the health care
industry, debt that we may incur and changes in financing terms, our ability
to continue to qualify as a real estate investment trust, the relative
illiquidity of our real estate investments, potential limitations on our
remedies when mortgage loans default, and risks and liabilities in connection
with properties owned through limited liability companies and partnerships.
For a discussion of these and other factors that could cause actual results
to differ from those contemplated in the forward-looking statements, please see
the discussion under Risk Factors and other information contained in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and in
our publicly available filings with the Securities and Exchange Commission.
We do not undertake any responsibility to update or revise any of these
factors or to announce publicly any revisions to forward-looking statements,
whether as a result of new information, future events or otherwise. Non-GAAP
Information This supplemental information contains certain non-GAAP
information including EBITDA, normalized EBITDA, FFO, normalized FFO,
normalized interest coverage ratio, and normalized fixed charges coverage
ratio. A reconciliation of this non-GAAP information is provided on pages 21,
24, and 25 of this supplemental information, and additional information is
available under the Non-GAAP Financial Measures subsection under the
Selected Financial Data section of our website at www.LTCProperties.com.
CORPORATE
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6 Real Estate
Activities REAL ESTATE PORTFOLIO (dollar amounts in thousands) ACQUISITIONS
See page 7 for Development Activities. Simultaneous with the purchase, we
entered into a lease agreement and development commitments totaling $30.3
million. See page 7 for Development Activities. The property was included in
a master lease at an incremental initial cash yield of 8.75%. The GAAP yield
on the master lease is 10.7%. LOAN ORIGINATIONS LEASE-UP Represents a newly
developed 120-bed skilled nursing property in Texas which replaces a skilled
nursing property in our existing portfolio. GAAP rent began in 3Q13.
Represents a newly developed 60-unit memory care property in Colorado. GAAP
rent began in 3Q13. Represents a newly developed 77-unit assisted living and
memory care property in Kansas. GAAP rent began in 4Q13. Represents a
mortgage and construction loan secured by a newly constructed 106-bed
property which replaced a closed skilled nursing property. Funding was
completed in 2Q14. Date # of Properties # Beds/Units Location Operator Date
of Construction Purchase Price Annual GAAP Revenue GAAP Lease Yield 9/13/2013
1 UDP (1) 60 units Littleton, CO Under Development Property 2013-2014 (1)
1,200 $ - (1) - (1)(2) 9/20/2013 1 UDP (1) 48 units Aurora, CO Under
Development Property 2013-2015 (1) 850 - (1) - (1)(2) 10/31/2013 4 Land N/A
Various cities in MI Prestige Healthcare N/A 1,163 - - 11/1/2013 1 SNF 120
beds Trinity, FL Traditions Management 2008 (3) 14,402 - (3) - (3) 12/20/2013
1 UDP (1) 60 units Westminster, CO Under Development Property 2013-2015 (1)
1,425 (1) - (1)(2) Total 8 120 beds/168 units 19,040 $ Property Type Date
Opened Occupancy at June 30, 2014 Commitment Year Project Type Location # of
Projects Property Type Approximate Cash Lease/Loan Yield # Beds/Units Jul-13
84% 2011 Redevelopment (1) Amarillo, TX 1 SNF 9.00% 120 beds 9,094 $ - $ 8,635 $ Jul-13 100% 2012 Development (2) Littleton, CO 1 MC 9.25% 60 units
9,925 - 9,851 Oct-13 74% 2012 Development (3) Wichita, KS 1 ALF/MC 9.25% 77
units 10,585 - 10,125 Feb-14 45% 2012 Redevelopment (4) Slinger, WI 1 SNF
10.08% 106 beds 10,600 441 10,600 4 226 beds/137 units 40,204 $ 441 $ 39,211
$ Total Commitment 2Q14 Funding Total Funded to Date Date # of Properties
Property Type # Beds/Units Location Borrower Operator Origination 10/31/13 15
SNF 2,058 beds Various cities in MI Affiliates of Madison Healthcare Prestige
Healthcare 124,387 $ 697 $ 125,084 $ 11,892 $ 9.5% Interest Rate Annual
Revenue Development Funding Funded to Date
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7 Real Estate
Activities REAL ESTATE PORTFOLIO (dollar amounts in thousands) Includes land
and excludes capitalized interest on our open commitment. Based on Treasury
rate and/or Treasury rate plus spread but not less than the rate shown.
Interest on additional loan proceeds (see footnote 4 below) begins upon funding.
Under the mortgage loan, the commitment to fund additional loan proceeds for
approved capital improvement projects expires on March 31, 2016. Mortgage
loan originated on October 31, 2013 provides for a $12.0 million commitment
to fund renovations and/or expansions at certain properties securing the
mortgage loan. DEVELOPMENT ACTIVITIES Project Type Location # of Projects
Property Type # Beds/Units 3Q14 2012 Expansion Arvada, CO 1 ALF/MC 7.75% (2)
- 6,600 $ 2,372 $ 6,107 $ 493 $ 3Q14 2012 Renovation Sacramento, CA 1 SNF
9.00% - 1,700 - 2 1,698 4Q14 2012 Renovation Roswell, NM 1 SNF 9.00% - 1,540
- 1,058 482 4Q14 2012 Renovation Alamagordo, NM 1 SNF 9.00% - 710 - 374 336
4Q14 2012 Development Frisco, TX 1 ALF/MC 9.25% 81 units 5,800 908 4,965 835
4Q14 2012 Expansion Ft. Collins, CO 1 ALF/MC 7.75% (2) - 4,683 847 2,764
1,919 4Q14 2012 Renovation Ft. Collins, CO 1 ALF/MC 7.75% (2) - 3,317 699
1,874 1,443 4Q14 2012 Development Coldspring, KY 1 SNF 8.50% 143 beds 23,500
2,413 13,904 9,596 4Q14 2013 Renovation Hillview, TN 1 SNF 7.00% - 1,100 5
882 218 4Q14 2013 Renovation Lauderdale, TN 1 SNF 7.00% - 1,100 115 827 273
4Q14 2013 Renovation St. Petersburg, FL 1 SNF 8.75% - 500 - - 500 4Q14 2013
Development Littleton, CO 1 MC 9.25% 60 units 9,931 3,270 8,376 1,555 12 141
units/143 beds 60,481 $ 10,629 $ 41,133 $ 19,348 $ 1Q15 2013 Development
Aurora, CO 1 MC 9.25% 48 units 9,622 $ 1,735 $ 4,588 $ 5,034 $ 2Q15 2013
Development Westminster, CO 1 MC 9.25% 60 units 10,703 1,597 4,774 5,929 -
(3) 2013 Renovation (4) Various cities in MI 15 SNF 9.41% - 12,000 697 697
11,303 17 108 units 32,325 $ 4,029 $ 10,059 $ 22,266 $ Total 29 WA 8.78% 249
units/143 beds 92,806 $ 14,658 $ 51,192 $ 41,614 $ Estimated Rent Inception
Date Commitment Year Approximate Cash Lease Yield Investment Commitment (1)
2Q14 Funding (1) Total Funded to Date (1) Remaining Commitment (1)
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8 REAL ESTATE
PORTFOLIO Rendering Real Estate Activities Lease-Up in Wichita, KS The Oxford
Grand 77-unit assisted living and memory care property Certificate of Occupancy
October 30, 2013 Operated by Oxford Senior Living
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9 REAL ESTATE
PORTFOLIO Real Estate Activities Rendering Development in Coldspring, KY
143-bed skilled nursing property To be operated by Carespring Health Care
Mgmt, LLC
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10 Real Estate
Portfolio Summary REAL ESTATE PORTFOLIO (dollar amounts in thousands) Real
Estate Portfolio Snapshot Includes rental income and interest income from
mortgage loans. Excludes rental income from two assisted living properties
and one school sold in 2Q14. Includes a mortgage and construction loan
secured by a closed skilled nursing property and a newly constructed 106-bed
replacement property. Includes three MC developments with a total of 168
units, a combination ALF and MC developments with a total of 81 units, and a
SNF development with 143 beds. Includes one school property and four parcels
of land held-for-use. Includes eight months of interest from a $124,387
mortgage loan originated in 4Q13 and $697 of renovation funding on this loan.
Assuming a full year of interest income from this mortgage loan, total
portfolio interest income would be $16,394. Type of Property Gross
Investments SNF Beds ALF Units Skilled Nursing (2) $ 614,757 54.6% $ 49,914 $ 11,025 55.0% 101 12,183 - $50.46 Assisted Living 417,066 37.0% 42,169 1,096
39.0% 104 - 4,707 $88.61 Range of Care 46,367 4.1% 5,057 299 4.8% 9 733 348
$42.89 Under Development (3) 37,659 3.4% - - - - - - Other (4) 10,433 0.9%
1,286 - 1.2% 1 - - Total $ 1,126,282 100.0% $ 98,426 $12,420 (5) 100.0% 215
12,916 5,055 % of Investments Investment per Bed/Unit Trailing Twelve Months
Ended June 30, 2014 Rental Income (1) Interest Income (1) % of Revenues (1) #
of Properties Gross Asset Type Investment % Real Property 956,516 $ 84.9%
Loans Receivable 169,766 15.1% Total 1,126,282 $ 100.0%
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11 Same
Property Portfolio Statistics (1) Real Estate Portfolio Metrics REAL ESTATE
PORTFOLIO Stabilized Property Portfolio Quality Mix Owned Properties 1Q14
4Q13 1Q14 4Q13 1Q14 4Q13 Assisted Living (2) 80.4% 80.5% 1.40 1.41 1.18 1.19
Assisted Living (3) 89.2% 89.1% 1.64 1.63 1.40 1.39 Skilled Nursing 79.9%
79.9% 2.29 2.29 1.69 1.69 Range of Care 83.6% 83.6% 1.81 1.85 1.31 1.35 (1)
(2) (3) Includes properties leased to Extendicare Inc. and Enlivant, formerly
Assisted Living Concepts, LLC Excludes properties leased to Extendicare Inc.
and Enlivant, formerly Assisted Living Concepts, LLC Occupancy Normalized
EBITDAR Coverage Normalized EBITDARM Coverage Information is for the trailing
twelve months through March 31, 2014 and December 31, 2013 and is from
property level operator financial statements which are unaudited and have not
been independently verified by us. Owned Properties Payor Source (1) For the
Twelve Months Ended March 31, 2014 Private Pay 58.9% Medicare 15.0% Medicaid
26.1% (1) Quality mix for our skilled nursing portfolio, for the twelve
months presented, is 25.4% Private Pay, 27.6% Medicare, and 47.0% Medicaid.
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LTC owns or
holds mortgages on 215 properties, five parcels of land under development,
and four parcels of land held-for-use in 29 states. 12 Real Estate Portfolio
Diversification REAL ESTATE PORTFOLIO ME 1 WA 8 NV WY MI IL AR LA KY WV ND NY
34 2 1 2 3 5 2 2 3 2 2 2 2 2 6 20 3 5 4 9 11 4 5 2 6 1 4 2 9 7 4 3 3 8 1 1 1
1 1 2 2 1 1 OR CA AZ NM TX UT ID MT SD NE KS OK MS MN WI FL AL GA SC TN MO IA
IN OH PA NJ NC VA CO Skilled Nursing Properties (Total: 101) Assisted Living
Properties (Total: 104) Schools (Total: 1) Range of Care Properties (Total:
9) Under Development Properties (Total: 5) 1 3 15 1 Land Held-For-Use (Total:
4) 4
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13 Real Estate
Portfolio Diversification REAL ESTATE PORTFOLIO State Diversification By
Property Type - Owned and Loan Portfolio The MSA rank by population as of
July 1, 2012, as estimated by the United States Census Bureau. Due to master
leases with properties in multiple states, revenue by state is not available.
(dollar amounts in thousands) State (2) # of Props SNF % ALF % ROC % UDP %
OTH % Gross Investment % Texas 55 194,052 $ 31.6% 37,611 $ 9.0% 2,994 $ 6.5%
5,152 $ 13.7% - $ - 239,809 $ 21.3% Michigan 15 125,084 20.3% - - - - - -
1,163 11.1% 126,247 11.2% Ohio 13 54,000 8.8% 44,647 10.7% - - - - - - 98,647
8.8% Colorado 12 6,037 1.0% 62,939 15.1% 2,007 4.3% 18,036 47.9% - - 89,019
7.9% Florida 17 40,966 6.7% 36,589 8.8% - - - - - - 77,555 6.9% New Jersey 5
- - 61,397 14.7% - - - - 9,270 88.9% 70,667 6.3% California 5 20,651 3.3%
28,070 6.7% 2,461 5.3% - - - - 51,182 4.5% New Mexico 7 50,308 8.2% - - - - -
- - - 50,308 4.4% Arizona 7 36,092 5.9% 5,120 1.2% - - - - - - 41,212 3.7% Kansas
8 14,111 2.3% 17,044 4.1% - - - - - - 31,155 2.8% All Others 71 73,456 11.9%
123,649 29.7% 38,905 83.9% 14,471 38.4% - - 250,481 22.2% Total 215 614,757 $ 100.0% 417,066 $ 100.0% 46,367 $ 100.0% 37,659 $ 100.0% 10,433 $ 100.0%
1,126,282 $ 100.0%
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14 Real Estate
Portfolio Diversification REAL ESTATE PORTFOLIO Operator Diversification
Owned and Loan Portfolio We have investments in 29 states leased or mortgaged
to 38 different operators. Includes annualized GAAP rent for leased
properties and trailing twelve months interest income from properties secured
by mortgage loans, except for Prestige Healthcare which originated in 4Q13.
Prestige Healthcare includes annualized GAAP rent for leased properties and
annualized interest income from properties secured by a mortgage loan. Also,
Prestige Healthcare includes additional interest from capital improvement
funding under the mortgage loan. Annual income excludes GAAP rent from a
lease related to four assisted living properties which are being transitioned
to a new lessee and GAAP rent from two assisted living properties and one
school sold in 2Q14. Formerly Assisted Living Concepts, LLC. (dollar amounts
in thousands) Operators (1) % % Prestige Healthcare 17 138,437 $ 12.3% 13,154
$ 11.4% Senior Care Centers, LLC 9 114,539 10.2% 12,284 10.6% Brookdale
Senior Living, Inc. 35 95,101 8.4% 11,167 9.7% Extendicare Inc. and Enlivant
(3) 37 88,034 7.8% 10,963 9.5% Juniper Communities, LLC 6 87,088 7.7% 7,027
6.1% Preferred Care 29 83,645 7.4% 11,310 9.8% Carespring Health Care Mgt,
LLC 2 68,471 6.1% 5,431 4.7% Traditions Senior Management, Inc. 5 62,902 5.6%
6,761 5.8% Fundamental Long Term Care Holdings 7 45,820 4.1% 4,642 4.0%
Skilled Healthcare Group, Inc. 5 40,270 3.6% 4,501 3.9% All Others 63 301,975
26.8% 28,359 24.5% Total 215 1,126,282 $ 100.0% 115,599 $ 100.0% # of
Properties Gross Investment Annual Income (2)
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15 Top Ten
Operators REAL ESTATE PORTFOLIO Preferred Care, Inc. (privately held)
operates 106 facilities comprised of skilled nursing, assisted living, and
independent living facilities, as well as five specialty care facilities, in
12 states. As of June 30, 2014, the LTC portfolio consisted of 27 skilled
nursing and two range of care properties in six states with a gross
investment balance of $83.6 million. They also operate one skilled nursing
facility under a sub-lease with another lessee in our portfolio which is not
included in the Preferred Care rental revenue. Traditions Senior Management,
Inc. and other affiliated entities (privately held) operate 21 facilities
consisting of independent living, assisted living, and skilled nursing
facilities in eight states. As of June 30, 2014, the LTC portfolio consisted
of four skilled nursing properties and one range of care property operated by
Traditions and another affiliate in three states with a gross investment
balance of $62.9 million. They also operate two skilled nursing properties
under a sub-lease with Preferred Care, Inc. which is not included in the
Traditions rental revenue. Fundamental Family of Companies (privately held)
includes skilled nursing facilities, assisted living facilities, long term
acute care hospitals, hospices, outpatient clinics, behavioral health
services and other healthcare services at 77 locations in 9 states. As of June
30, 2014, the LTC portfolio consisted of seven skilled nursing properties in
three states, with a gross investment balance of $45.8 million. Skilled
Healthcare Group, Inc. (NYSE: SKH) is a holding company with subsidiaries
that operate skilled nursing facilities, assisted living facilities, a
rehabilitation therapy business, and a hospice business. Skilled Healthcare
operates 72 skilled nursing and 22 assisted living facilities in eight
states. As of June 30, 2014, the LTC portfolio consisted of five skilled
nursing properties in New Mexico with a gross investment balance of $40.3
million. Carespring Health Care Mgmt, LLC (privately held) provides skilled
nursing, assisted living, and independent living services, and other
rehabilitative and healthcare services at 10 facilities in two states. As of
June 30, 2014, the LTC portfolio consisted of two skilled nursing properties
in Ohio and a parcel of land under development in Kentucky with a gross
investment balance of $68.5 million. Prestige Healthcare (privately held)
provides skilled nursing, assisted living, and independent living services,
and other rehabilitative and healthcare services at 35 facilities in seven
states. As of June 30, 2014, the LTC portfolio consisted of 15 skilled
nursing properties and four parcels of land held-for-use in Michigan and two
range of care properties in South Carolina with a gross investment balance of
$138.4 million. Senior Care Centers, LLC (privately held) provides skilled
nursing care, memory care, assisted living, and independent living services
in 82 facilities exclusively in Texas. As of June 30, 2014, the LTC portfolio
consisted of nine skilled nursing properties in Texas with a gross investment
balance of $114.5 million. Extendicare Inc. and Enlivant (privately held), formerly
known as Assisted Living Concepts, LLC operate 37 of our assisted living
properties in 10 states with a gross investment balance of $88.0 million as
of June 30, 2014. Extendicare Inc. (TSX: EXE) operates 251 senior care
centers in North America with the capacity to care for approximately 27,800
residents. EXE offers a continuum of health care services that includes
skilled nursing care, rehabilitative therapies and home health care services.
Privately held Enlivant and its subsidiaries own or operate over 200 senior
living residences with over 9,000 units in 20 states. Juniper Communities,
LLC (privately held) operates 18 facilities comprised of skilled nursing,
assisted living, memory care, and independent living facilities in four
states. As of June 30, 2014, the LTC portfolio consisted of six assisted
living and memory care properties in three states with a gross investment
balance of $87.1 million. Brookdale Senior Living, Inc. (NYSE: BKD) operates
647 independent living, assisted living, and memory care communities and
continuing care retirement centers, with the ability to serve approximately
66,000 residents. As of June 30, 2014, the LTC portfolio consisted of 35
assisted living properties in eight states with a gross investment balance of
$95.1 million.
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16 Extendicare
Inc. (TSX: EXE) and Enlivant (privately held) (1) REAL ESTATE PORTFOLIO
Photos of our properties leased to Extendicare/Enlivant are available on the
Companys website at www.LTCProperties.com in the Enlivant/EXE Properties
subsection under the Property Photos section of the Properties tab.
Formerly Assisted Living Concepts, LLC Twelve Months Ended March 31, 2014 (1)
Co-lessee Extendicare Inc. and Enlivant Total # of Properties 37 properties
Total # of Units 1,430 units Lease Expiration December 31, 2014 Normalized
EBITDARM Coverage (2) 0.80x Normalized EBITDAR Coverage (2) 0.64x % of
Portfolio Income 9.5% of Annual Income States States Idaho 4 148 Arizona 2 76
Iowa 1 35 Indiana 2 78 New Jersey 1 39 Nebraska 4 158 Ohio 5 191 Oregon 3 119
Texas 7 278 Washington 8 308 Total 18 691 Total 19 739 Master Lease II # of
Properties # of Units Master Lease I # of Properties # of Units
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17 Real Estate
Portfolio Maturity FINANCIAL (dollar amounts in thousands) Includes
annualized GAAP rent for leased properties and trailing twelve months
interest income from properties secured by mortgage loans, except for
Prestige Healthcare which originated in 4Q13. Prestige Healthcare includes
annualized GAAP rent for leased properties and annualized interest income
from properties secured by a mortgage loan. Also, Prestige Healthcare
includes additional interest from capital improvement funding under the
mortgage loan. Excludes GAAP rent from a lease related to four assisted
living properties which are being transitioned to a new lessee. (As a % of
Total Annual Income(1)) % of Total % of Total Annual Income (1) % of Total
2014 13,047 $ 13.1% 1,197 $ 7.3% 14,244 $ 12.3% 2015 - - 299 1.8% 299 0.3%
2016 2,540 2.6% 68 0.4% 2,608 2.3% 2017 1,653 1.7% 1,027 6.3% 2,680 2.3% 2018
10,637 10.7% 997 6.1% 11,634 10.1% 2019 1,596 1.6% 139 0.8% 1,735 1.5% 2020
12,069 12.2% - - 12,069 10.4% 57,663 58.1% 12,667 77.3% 70,330 60.8% Total
99,205 $ 100.0% 16,394 $ 100.0% 115,599 $ 100.0% Year Rental Income (1)(2) Interest
Income (1) Thereafter
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18 Enterprise
Value FINANCIAL Includes amortization of debt issue cost. Includes letter of
credit fees. Non-traded shares. Two million shares outstanding with a face
rate of 8.5% and a liquidation value of $19.25 per share, convertible into
common stock on a one-for-one basis. Our Series C preferred stock is not
redeemable by us. Traded on NYSE. Closing price of our common stock as
reported by the NYSE on June 30, 2014, the last trading day of second quarter
2014. Normalized EBITDA for the twelve months ended June 30, 2014. (In
thousands, except per share amounts and number of shares) Capitalization Bank
borrowings 42,000 $ Senior unsecured notes -weighted average rate 4.79% (1)
251,633 Bonds payable - weighted average rate 3.29% (2) 1,400 Total debt
295,033 17% 6/30/14 No. of shares Preferred stock - Series C (3) 38,500 2%
Common stock (4) 34,844,551 39.04 $ (5) 1,360,331 81% Total equity 1,398,831
83% 1,693,864 $ 100% Less: Cash and cash equivalents (8,064) 1,685,800 $ Debt
to Enterprise Value 17.5% Debt & Preferred to Enterprise Value 19.8% Debt
to Normalized EBITDA (6) 2.9x Enterprise Value At June 30, 2014 Debt Equity
Closing Price Total Market Value
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19 Debt
Maturity (in thousands) FINANCIAL (dollar amounts in thousands) Reflects
scheduled principal payments. $ - $ 29,166 $ 1,400 $ 30,566 42,000 26,667 -
68,667 - 26,167 - 26,167 - 28,167 - 28,167 - 25,666 - 25,666 - 32,160 -
32,160 - 32,160 - 32,160 - 51,480 - 51,480 $ 42,000 $ 251,633 $ 1,400 $ 295,033 Year Unsecured Line of Credit Senior Unsecured Notes (1) Bonds
Payable (1) Total 2020 2017 2016 2015 2019 2018 Total Thereafter 2021
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20 Financial
Data Summary FINANCIAL (dollar amounts in thousands) Balance Sheet, Leverage
Ratios and Coverage Ratios 6/30/14 12/31/13 12/31/12 12/31/11 Balance Sheet:
Gross real estate assets $1,126,282 $1,104,732 $940,176 $779,033 Net real
estate assets 896,261 884,361 740,846 599,916 Gross asset value 1,173,511
1,150,110 988,140 825,293 Total debt 295,033 278,835 303,935 159,200 Total
liabilities 312,912 298,972 326,484 178,387 Preferred stock 38,500 38,500
38,500 38,500 Total equity 632,276 632,438 463,108 468,710 Leverage Ratios:
Debt to gross asset value 25.1% 24.2% 30.8% 19.3% Debt & preferred stock
to gross asset value 28.4% 27.6% 34.7% 24.0% Debt to total enterprise value
17.5% 18.1% 21.6% 14.1% Debt & preferred stock to total enterprise value
19.8% 20.6% 24.3% 17.5% Coverage Ratios: Debt to normalized EBITDA 2.9x 2.9x
3.7x 2.1x Normalized EBITDA / interest incurred 7.9x 7.7x 8.3x 11.7x
Normalized EBITDA / fixed charges 6.3x 6.1x 6.2x 6.3x Trailing Twelve Months
Ended
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21 Financial
Data Summary FINANCIAL FINANCIAL (dollar amounts in thousands) Non-Cash
Rental Revenue Components For leases in place at June 30, 2014, excluding
leases on non-accrual status and no modification or replacement of existing
leases, no lease renewals including the Extendicare/Enlivant (formerly
Assisted Living Concepts, LLC) lease, and no new leased investments are added
to our portfolio. Reconciliation of Normalized EBITDA and Fixed Charges
Represents a $1,244 provision for loan loss reserve on a $124,387 mortgage
loan origination and an $869 non-cash write off of straight-line rent offset
by revenue from the Sunwest bankruptcy settlement distribution of $133.
Represents the one-time severance and accelerated restricted stock vesting
charge of $707 related to the retirement of the Companys former Senior Vice
President, Marketing and Strategic Planning and (1) above. Represents revenue
from the Sunwest bankruptcy settlement distribution. 2Q14 (1) 3Q14 (1) 4Q14
(1) 1Q15 (1) 2Q15 (1) 608 $ 543 $ 446 $ 554 $ 506 $ (165) (165) (165) (165)
(165) 443 $ 378 $ 281 $ 389 $ 341 $ Straight-line rent Amort of lease
inducement Net Net income 67,213 $ 57,815 $ 51,327 $ 49,443 $ Less: Gain on
sale of real estate, net (3,759) (1,605) (16) - Add: Interest expense 11,708
11,364 9,932 6,434 Add: Depreciation and amortization 25,039 24,706 22,153
19,623 Adjusted EBITDA 100,201 92,280 83,396 75,500 Add back/(deduct): Non-recurring
one-time items 1,980 (1) 2,687 (2) (347) (3) - Normalized EBITDA 102,181 $ 94,967 $ 83,049 $ 75,500 $ Interest expense: 11,708 $ 11,364 $ 9,932 $ 6,434
$ Add: Capitalized interest 1,174 932 129 45 Interest incurred 12,882 12,296
10,061 6,479 Interest incurred 12,882 12,296 10,061 6,479 Preferred stock
dividend 3,273 3,273 3,273 5,512 Fixed Charges 16,155 $ 15,569 $ 13,334 $ 11,991 $ Trailing Twelve Months Ended 6/30/14 12/31/13 12/31/11 12/31/12
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Consolidated
Statements of Income 22 FINANCIAL FINANCIAL (unaudited amounts in thousands,
except per share amounts) 2014 2013 2014 2013 Revenues Rental income 25,025 $ 24,539 $ 50,277 $ 49,015 $ Interest income from mortgage loans 4,139 1,050
8,232 2,109 Interest and other income 63 92 156 185 Total revenues 29,227
25,681 58,665 51,309 Expenses Interest expense 3,088 2,798 6,275 5,931
Depreciation and amortization 6,302 6,124 12,600 12,250 General and
administrative expenses 2,704 2,869 5,653 6,287 Total expenses 12,094 11,791
24,528 24,468 Operating Income 17,133 13,890 34,137 26,841 Gain on sale of
real estate, net 1,140 - 1,140 - Income from continuing operations 18,273
13,890 35,277 26,841 Discontinued operations: Income from discontinued
operations - 27 - 52 Loss on sale of real estate, net - (1,014) - (1,014) Net
loss from discontinued operations - (987) - (962) Net Income 18,273 12,903
35,277 25,879 Income allocated to participating securities (117) (91) (220)
(189) Income allocated to preferred stockholders (818) (818) (1,636) (1,636)
Net income available to common stockholders 17,338 $ 11,994 $ 33,421 $ 24,054
$ Basic earnings per common share: $0.50 $0.36 $0.97 $0.76 Diluted earnings
per common share: $0.50 $0.36 $0.96 $0.76 Weighted average shares used to
calculate earnings per common share: Basic 34,597 32,913 34,592 31,645
Diluted 36,621 32,946 36,617 31,679 Three Months Ended Six Months Ended June
30, June 30,
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Consolidated
Balance Sheets 23 FINANCIAL FINANCIAL (amounts in thousands, unaudited)
December 31, 2013 December 31, 2013 ASSETS LIABILITIES Real estate
investments: Bank borrowings 42,000 $ 21,000 $ Land 79,211 $ 80,993 $ Senior
unsecured notes 251,633 255,800 Buildings and improvements 877,305 856,624
Bonds payable 1,400 2,035 Accumulated depreciation and amortization (228,323)
(218,700) Accrued interest 3,450 3,424 Net real estate property 728,193
718,917 Accrued expenses and other liabilities 14,429 16,713 Mortgage loans
receivable, net of allowance for Total liabilities 312,912 298,972 doubtful
accounts: 2014 - $1,698; 2013 - $1,671 168,068 165,444 Real estate
investments, net 896,261 884,361 EQUITY Other assets: Stockholders' equity:
Cash and cash equivalents 8,064 6,778 Preferred stock (1) 38,500 38,500 Debt
issue costs, net 2,114 2,458 Common stock (2) 348 347 Interest receivable 655
702 Capital in excess of par value 690,373 688,654 Straight-line rent
receivable , net of allowance for Cumulative net income 817,125 781,848
doubtful accounts: 2014 - $714; 2013 - $1,541 30,913 29,760 Other 99 117
Prepaid expenses and other assets 6,569 6,756 Cumulative distributions
(914,169) (877,028) Notes receivable 612 595 Total equity 632,276 632,438
Total assets 945,188 $ 931,410 $ Total liabilities and equity 945,188 $ 931,410 $ (1) Preferred stock $0.01 par value; 15,000 shares authorized; shares
issued and outstanding: 2014 - 2,000; 2013 - 2,000 (2) Common stock $0.01 par
value; 60,000 shares authorized; shares issued and outstanding: 2014 -
34,845; 2013 - 34,746 June 30, 2014 June 30, 2014
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Funds from
Operations 24 FINANCIAL FINANCIAL (unaudited, dollar amounts in thousands,
except per share amounts) Reconciliation of Normalized FFO, Normalized AFFO,
and Normalized FAD Represents the one-time severance and accelerated
restricted stock vesting charges related to the retirement of the Companys
former Senior Vice President, Marketing and Strategic Planning. 2014 2013
2014 2013 Net income available to common stockholders 17,338 $ 11,994 $ 33,421 $ 24,054 $ Add: Depreciation and amortization (continuing and
discontinued operations) 6,302 6,131 12,600 12,267 (Less) add: (Gain) loss on
sale of real estate, net (1,140) 1,014 (1,140) 1,014 FFO available to common
stockholders 22,500 19,139 44,881 37,335 Add: Non-cash interest related to
earn-out liabilities - 110 - 220 Add: Non-recurring one-time items - - - 707
(1) Normalized FFO available to common stockholders 22,500 19,249 44,881
38,262 Less: Non-cash rental income (443) (758) (917) (1,530) Normalized
adjusted FFO (AFFO) 22,057 18,491 43,964 36,732 Add: Non-cash compensation
charges 783 523 1,449 1,051 Less: Capitalized interest (435) (323) (742)
(500) Normalized funds available for distribution (FAD) 22,405 $ 18,691 $ 44,671 $ 37,283 $ $0.64 $0.57 $1.27 $1.16 $0.64 $0.57 $1.27 $1.18 $0.62 $0.55
$1.24 $1.14 $0.63 $0.56 $1.26 $1.15 Diluted normalized FAD per share Six
Months Ended June 30, June 30, Three Months Ended Diluted FFO available to
common stockholders per share Diluted normalized FFO available to common
stockholders per share Diluted normalized AFFO per share
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Funds from
Operations 25 FINANCIAL FINANCIAL Reconciliation of Normalized FFO Per Share
(unaudited, dollar amounts in thousands, except per share amounts) 2013 2013
Normalized FFO available to common stockholders $ 22,500 $ 19,249 $ 44,881 $ 38,262 Effect of dilutive securities: Participating securities 117 91 220 189
Convertible preferred securities 818 818 1,636 1,636 Diluted normalized FFO
available to common stockholders $ 23,435 $ 20,158 $ 46,737 $ 40,087 34,597
32,913 34,592 31,645 Effect of dilutive securities: Stock options 24 33 25 34
Participating securities 227 193 211 202 Convertible preferred securities
2,000 2,000 2,000 2,000 Shares for diluted FFO per share 36,848 35,139 36,828
33,881 $0.65 $0.58 $1.30 $1.21 $0.64 $0.57 $1.27 $1.18 Diluted normalized FFO
per share Shares for basic FFO per share Basic normalized FFO per share 2014
2014 Three Months Ended June 30, Six Months Ended June 30,
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26 GLOSSARY
Glossary Adjusted Funds From Operations (AFFO): FFO excluding the effects
of non - cash rental income. Assisted Living Properties (ALF) : The ALF
portfolio consists of assisted living, independent living, and/or memory care
properties. (See Independent Living and Memory Care) Assisted living
properties are s enior housing properties serving elderly persons who require
assistance with activities of daily living, but do not require the constant
supervision skilled nursing properties provide. Services are usually
available 24 hours a day and include personal supervision and assistance with
eating , bathing, grooming and administering medication. The facilities prov
ide a combination of housing, supportive services, personalized assistance
and health care designed to respond to individual needs . Contractual Lease
Rent: Rental revenue as defined by the lease agreement between us and the
operator for the lease year . Core Based Statistical Area ( CBSA ): Based
on the U.S. Census Bureau, CBSA is a collective term for both metro and micro
areas. Each metro or micro area consists of one or more counties and includes
the counties containing the core urban area, as well a s any adjacent
counties that have a high degree of social and economic integration (as
measured by commuting to work) with the urban core. EBITDA: Earnings before
interest, taxes, depreciation and amortization . Funds Available for
Distribution (FAD): FFO excluding the effects of non - cash rental income
and non - cash compensation charges . Funds From Operations (FFO): A s
defined by the National Association of Real Estate Investment Trusts (NAREIT),
net income available to common stockholder s (compu ted 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 ven tures. GAAP Lease Yield: GAAP rent divided by the
p urchase p rice. GAAP Rent: Total rent we will receive as a fixed amount
over the life of the lease and recognize d evenly over that life. GAAP rent
recorded in the early years of a lease is higher than the cash rent received
and during the later years of the lease , the cash rent received is higher
than GAAP rent recognized . GAAP rent is commonly referred to as straight -
line rental income. Gross Asset Value: Represents undepreciated book value.
Gross Investment: Original price paid for an asset plus capital improvements
funded by LTC Properties, Inc. (LTC) , without any deprec i ation
deductions. Gross Investment is commonly referred to as undepreciated book
value. Independent Living Properties (ILF) : Senior housing properties
offer ing a sense of community and numerous levels of service, such as
laundry, housekeeping, dining options/meal plans, exercise and wellness
programs, transportation , social , cultural and recreational activities , on
- site security and emergency response programs. Many offer on - site
conveniences like beauty/barber shops, fitness facilities, game r ooms,
libraries and activity centers. ILFs are also known as retirement communities
or senior apartments . Interest Income: Represents interest income from
mortgage loans. Licensed Beds/Units: The number of beds and/or units tha t an
operator is authorized to operate at senior housing and long - term care
propert ies . Licensed b eds and/or u nits may differ from the number of beds
and/or units in service at any given time.
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27 GLOSSARY
Glossary Memory Care Properties (MC) : Senior housing properties offe ring
specialized options for seniors with Alzheimers disease and other forms of
dementia. These facilities offer dedicated care and specialized programming
for various conditions relating to memory loss in a secured envir onment that
is typically smaller in scale and more residential in nature than traditional
assisted living facilities. These facilities have staff available 24 hours a
day to respond to the unique needs of their residents. Metropolitan
Statistical Areas ( MSA ) : Based on the U.S. Census Bureau, MSA is a
geographic entity defined by the Office of Management and Budget (OMB) for
use by Federal statistical agencies in collecting, tabulating, and publishing
Federal statistics. A metro area contains a core urban area of 50,000 or m
ore population. (See Core Based Statistical Area) Micropolitan Statistical
Areas ( Micro - SA ) : Based on the U.S. Census Bureau, Micro - SA is a
geographic entity defined by the Office of Manageme nt and Budget (OMB) for
use by Federal statistical agencies in collecting, tabulating, and publishing
Federal statistics. A micro area contains an urban core of at least 10,000
(but less than 50,000) population. (See Core Based Statistical Area) Net Rea
l Estate Assets: G ross investment less accumulated depreciation. Net Real
Estate Asset is commonly referred to as Net Book Value (NBV) . Non - cash
Rental I ncome: Straight - line rental income and amortization of lease
inducement. Non - cash C ompens ation C harges: Vesting expense relating to
stock option s and restricted stock. Normalized AFFO: FFO adjusted for non -
recurring, infrequent or unusual items and excludes the non - cash rental
income. Normalized EBITDAR Coverage: The trailing twelve months earnings
from the operator financial statements adjusted for non - recurring,
infrequent, or unusual items and before interest, taxes, depreciation,
amortization, and rent divided by the operators contractual lease rent. Man
ag ement fees are imputed at 5% of revenues. Normalized EBITDARM Coverage:
The trailing twelve months earnings from the operator financial statements
adjusted for non - recurring, infrequent, or unusual items and before
interest, taxes, depreciation, amortiz ation, rent, and management fees
divided by the operators contractual lease rent. Normalized FAD: FFO
adjusted for non - recurring, infrequent or unusual items and excludes the
non - cash rental income and non - cash compensation charges. Normalized FFO:
FF O adjusted for non - recurring, infrequent or unusual items. Occupancy:
The weighted average percentage of all beds and/or units that are occupied at
a given time. The calculation uses the trailing twelve months and is based on
licensed beds and/or units which may differ from the number of beds and/or
units in service at any given time. Operator Financial Statements: Property
level operator financial statements are unaudited and have not been
independently verified by us. Private Pay: Private pay incl udes private
insurance, HMO, VA, and other payors . Purchase Price: Represents the fair
value price of an asset that is exchanged in an orderly transaction between
market participants at the me asurement date. An orderly transaction is a
transaction that assumes exposure to the market for a period prior to the
measurement date to allow for marketing activities that are usual an d
customary for transactions involving such assets; it is not a forced
transaction (for example, a forced liquidation or distress s ale).
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28 GLOSSARY
Glossary Glossary Quality Mix: LTC revenue by operator underlying payor
source for the quarter presented. LTC is not a Medicaid or a Medicare
recipient. Statistics repre sent LTC's rental revenues times operators'
underlying payor source revenue percentage. Underlying payor source revenue
percentage is calculated from property level operator financial statements
which are unaudited and have not been independently verified by us. Range of
Care ( ROC ): Range of care properties consist of properties providing
skilled nursing and any combination of assisted living, independent living
and/or memory care services. Rental Income: Represents GAAP rent net of
amortized lease inducement cost from continuing and discontinued operations.
Same Property Portfolio (SPP) : S ame property statistics allow management
to evaluate the performance of LTCs leased property portfolio under a consistent
population, which eliminates the changes in the composition of our portfolio
of properties. We identif y our same property portfolio as s tabilized
properties that are , and remained , in operations for the duration of the
quarter - over quarter comparison periods presented . Accordingly, it takes a
stabilized property a mi nimum of 12 months in operations to be inclu ded in
our same property portfolio. Schools: An institution for educatin g students
which include private and charter schools. Private schools are not
administered by local, state or national governments; therefore, funded in
whole or part by student tuit ion rather than government funded. Charter
schools provide an alternative to the traditional public school. Charter
schools are generally autonomous entities authorized by the state or locality
to conduct operations independent from the surr ounding public school
district. Laws vary by state, but generally charters are granted by state
boards of education either directly or in conjunction with local school di
stricts or public universities. Operators are granted charters to establish
and operate scho ols based on the goals and objectives set forth in the
charter. Upon receipt of a charter, schools receive an annuity from t he
state for each student enrolled. Skilled Nursing Properties (SNF) : Senior
housing properties providing restorative, rehabili tative and nursing care
for people not requiring the more extensive and sophisticated treatment
available at acute care hospitals. Many SNF s provide ancillary services that
include occupational, speech, physical, respiratory and IV therapies, as well
as s ub - acute care services which are paid either by the patient, the
patients family, private health insurance, or through the fede ral Medicare
or state Medicaid programs. Stabilized: Newly acquired operating assets are
generally considered sta bilized at th e earlier of lease - up (typically
when occupancy reaches 80% at a SNF or 90% at an ALF) or 12 months from the
acquisition date. Newly completed developments, including redevelopments,
major renovations, and property additions, are considered stabilized at the
earlier of lease - up or 24 months from the date the property is placed in
service. Under Development Properties (UDP): Development project s to
construct senior housing propert ies .
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