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
fourth quarter ended December 31, 2020.
Net income available to common stockholders was $17.5 million,
or $0.45 per diluted share, for the 2020 fourth quarter, compared
with $12.4 million, or $0.31 per diluted share, for the same period
in 2019. Funds from Operations (“FFO”) was $30.4 million, or $0.78
per share, for the 2020 fourth quarter, compared with $32.4
million, or $0.81 per share, for the comparable 2019 period.
Excluding the prior year’s $2.1 million gain from property
insurance proceeds related to a previously sold property, FFO was
$30.3 million for the quarter ended December 31, 2019. Funds
available for distribution (“FAD”) was $30.7 million for the 2020
fourth quarter, compared with $29.5 million for the 2019 fourth
quarter.
Fourth quarter 2020 results were impacted by the following:
- Collected 98% of contractual rent and mortgage interest, which
includes the application of Senior Lifestyle’s letter of credit and
deposit discussed below;
- Lower interest and property tax expense;
- A $3.0 million impairment loss related to a memory care
community located in Colorado leased to Senior Lifestyle;
- Decreased rental income from abated and deferred rent, net of
repayment, and decreased rent from properties sold in 2020,
partially offset by higher rental income from acquisitions,
completed development projects and lease escalations; and
- Senior Lifestyle Update
- Rent: paid LTC $3.9 million (83%) of its $4.7 million
contractual rent due during the 2020 fourth quarter;
- Letter of Credit: LTC applied Senior Lifestyle’s letter of
credit and deposits totaling $3.7 million to accrued 2020 second
quarter rent receivable of $2.5 million and notes receivable of
$125,000, and the remaining $1.1 million to third and fourth
quarter rent. As of December 31, 2020, Senior Lifestyle’s unaccrued
delinquent rent balance was $1.0 million.
During the fourth quarter of 2020, LTC completed the
following:
- Funded $5.0 million of a $13.0 million preferred equity
commitment to develop a 267-unit independent and assisted living
community in Washington. This commitment was finalized in the third
quarter 2020; and
- Funded $6.4 million in development and capital improvement
projects at a weighted average rate of 8.0%.
Subsequent to December 31, 2020, LTC completed the
following:
- Transitioned 11 assisted living communities previously leased
to Senior Lifestyle to two operators. These communities are located
in Wisconsin, Ohio, and Illinois. Total cash rent expected under
these master lease agreements is $5.2 million for the first lease
year, $7.1 million for the second lease year, and $7.3 million for
the third lease year, escalating by 2% annually thereafter;
- As previously announced, reduced 2021 rent escalations by 50%
to support eligible operators during the continuing COVID-19
crisis. The rent escalation reduction was given in the form of a
rent credit and is expected to have an approximate $530,000 impact
on LTC’s 2021 GAAP revenue, and an approximate $1.3 million impact
on 2021 funds available for distribution;
- To date in 2021, rent deferrals were $689,000, net of $14,000
of deferred rent repayments. Excluding the rent credit related to
the rent escalation reduction discussed above, abated rent to date
in 2021 is $360,000. Senior Lifestyle did not pay any of their
monthly contractual rent of $1.6 million in January or February
2021. LTC received $545,000 under the new master leases related to
the transitioned assisted living communities discussed above;
- Received $936,000 related to the payoff of a note
receivable;
- Paid $7.0 million in regular scheduled principal payments under
its 4.5% senior unsecured notes; and
- Borrowed $9.0 million under its unsecured revolving line of
credit at 1.3%.
Conference Call
Information
LTC will conduct a conference call on Friday, February 19, 2021,
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 December 31, 2020. The conference call is accessible by
telephone and the internet. Interested parties may access the live
conference call via the following:
Webcast
www.LTCreit.com
USA Toll-Free Number
1-877-510-2862
International Toll-Free Number
1-412-902-4134
Canada Toll-Free Number
1-855-669-9657
Additionally, an audio replay of the call
will be available one hour after the live call and through March 5,
2021 via the following:
USA Toll-Free Number
1-877-344-7529
International Toll-Free Number
1-412-317-0088
Canada Toll-Free Number
1-855-669-9658
Conference Number
10151170
About LTC
LTC is a real estate investment trust (REIT) investing in
seniors housing and health care properties primarily through
sale-leasebacks, mortgage financing, joint-ventures and structured
finance solutions including preferred equity and mezzanine lending.
LTC holds 181 properties in 27 states with 29 operating partners.
The portfolio is comprised of approximately 50% seniors housing and
50% skilled nursing properties. Learn more 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
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
(unaudited)
(audited)
Revenues:
Rental income
$
37,774
$
38,189
$
126,094
$
152,755
Interest income from mortgage loans
7,909
7,683
31,396
29,991
Interest and other income
590
591
1,847
2,558
Total revenues
46,273
46,463
159,337
185,304
Expenses:
Interest expense
7,088
7,578
29,705
30,582
Depreciation and amortization
9,839
9,817
39,071
39,216
Impairment loss from real estate
investments
3,036
—
3,977
—
(Recovery) provision for doubtful
accounts
(2
)
13
(3
)
166
Transaction costs
102
90
299
365
Property tax expense
3,380
4,189
15,065
16,755
General and administrative expenses
5,216
4,541
19,710
18,453
Total expenses
28,659
26,228
107,824
105,537
Other operating income:
Gain (loss) on sale of real estate,
net
44
(4,630
)
44,117
2,106
Operating income
17,658
15,605
95,630
81,873
Gain from property insurance proceeds
—
2,111
373
2,111
Loss on unconsolidated joint ventures
(138
)
—
(758
)
—
Impairment loss from investments in
unconsolidated joint ventures
—
(5,500
)
—
(5,500
)
Income from unconsolidated joint
ventures
145
415
432
2,388
Net income
17,665
12,631
95,677
80,872
Income allocated to non-controlling
interests
(92
)
(89
)
(384
)
(346
)
Net income attributable to LTC Properties,
Inc.
17,573
12,542
95,293
80,526
Income allocated to participating
securities
(103
)
(93
)
(422
)
(391
)
Net income available to common
stockholders
$
17,470
$
12,449
$
94,871
$
80,135
Earnings per common share:
Basic
$
0.45
$
0.31
$
2.42
$
2.03
Diluted
$
0.45
$
0.31
$
2.42
$
2.02
Weighted average shares used to
calculate earnings per
common share:
Basic
39,062
39,588
39,179
39,571
Diluted
39,147
39,775
39,264
39,759
Dividends declared and paid per common
share
$
0.57
$
0.57
$
2.28
$
2.28
Supplemental Reporting
Measures
FFO 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 and FAD as supplemental measures of operating
performance. The Company believes FFO 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 and FAD facilitate like comparisons of
operating performance between periods. Occasionally, the Company
may exclude non-recurring items from FFO and FAD in order to 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. 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 FAD as FFO excluding the effects of straight-line
rent, amortization of lease inducement, effective interest income,
deferred income from unconsolidated joint ventures, non-cash
compensation charges, capitalized interest and non-cash interest
charges. 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. 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.
While the Company uses FFO and 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 and
FAD
The following table reconciles GAAP net income available to
common stockholders to each of NAREIT FFO attributable to common
stockholders and FAD (unaudited, amounts in thousands, except per
share amounts):
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
GAAP net income available to common
stockholders
$
17,470
$
12,449
$
94,871
$
80,135
Add: Impairment loss from investments
3,036
5,500
3,977
5,500
Add: Depreciation and amortization
9,839
9,817
39,071
39,216
Add: Loss on unconsolidated joint
ventures
138
—
758
—
(Less)/Add: (Gain) loss on sale of real
estate, net
(44
)
4,630
(44,117
)
(2,106
)
NAREIT FFO attributable to common
stockholders
30,439
32,396
94,560
122,745
Add: Non-recurring items
—
(2,111
)(1)
22,841
(1)(2)
(1,535
)(3)(4)
FFO attributable to common stockholders,
excluding non-recurring items
$
30,439
$
30,285
$
117,401
$
121,210
NAREIT FFO attributable to common
stockholders
$
30,439
$
32,396
$
94,560
$
122,745
Non-cash income:
Less: straight-line rental income
(77
)
(889
)
(1,778
)
(4,487
)
Add: amortization of lease costs
109
104
611
385
Add: Other non-cash expense
—
—
23,029
(2)
1,926
(3)
Less: Effective interest income from
mortgage loans
(1,506
)
(1,481
)
(6,154
)
(5,842
)
Less: Deferred income from unconsolidated
joint ventures
—
—
—
(18
)
Net non-cash income
(1,474
)
(2,266
)
15,708
(8,036
)
Non-cash expense:
Add: Non-cash compensation charges
1,781
1,627
7,012
6,565
Less: Capitalized interest
—
(167
)
(354
)
(608
)
Net non-cash expense
1,781
1,460
6,658
5,957
Funds available for distribution (FAD)
30,746
31,590
$
116,926
$
120,666
Less: Non-recurring income
—
(2,111
)(1)
(373
)(1)
(3,461
)(4)
Funds available for distribution (FAD),
excluding non-recurring items
$
30,746
$
29,479
$
116,553
$
117,205
(1) Represents the gain from insurance
proceeds related to previously sold properties.
(2) Represents the write-off of
straight-line rent related to Senior Lifestyle, Genesis Healthcare,
Inc. and another operator.
(3) Represents the write-off of
straight-line rent due to a lease termination and transition of two
senior housing communities to a new operator.
(4) Represents deferred rent repayment
from an operator and (1) above
NAREIT Basic FFO attributable to common
stockholders per share
$
0.78
$
0.82
$
2.41
$
3.10
NAREIT Diluted FFO attributable to common
stockholders per share
$
0.78
$
0.81
$
2.41
$
3.08
NAREIT Diluted FFO attributable to common
stockholders
$
30,542
$
32,489
$
94,560
$
123,136
Weighted average shares used to calculate
NAREIT diluted FFO per share
attributable to common stockholders
39,327
39,939
39,269
39,921
Diluted FFO attributable to common
stockholders, excluding non-recurring items
$
30,542
$
30,378
$
117,823
$
121,601
Weighted average shares used to calculate
diluted FFO, excluding
non-recurring items, per share
attributable to common stockholders
39,327
39,939
39,438
39,921
Diluted FAD
$
30,849
$
31,683
$
117,348
$
121,057
Weighted average shares used to calculate
diluted FAD per share
39,327
39,939
39,438
39,921
Diluted FAD, excluding non-recurring
items
$
30,849
$
29,572
$
116,975
$
117,596
Weighted average shares used to calculate
diluted FAD, excluding
non-recurring items, per share
39,327
39,939
39,438
39,921
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE
SHEETS
(audited, amounts in thousands,
except per share)
December 31, 2020
December 31, 2019
ASSETS
Investments:
Land
$
127,774
$
126,703
Buildings and improvements
1,324,227
1,295,899
Accumulated depreciation and
amortization
(349,643
)
(312,642
)
Operating real estate property, net
1,102,358
1,109,960
Properties held-for-sale, net of
accumulated depreciation: 2020—$0; 2019—$35,113
—
26,856
Real property investments, net
1,102,358
1,136,816
Mortgage loans receivable, net of loan
loss reserve: 2020—$2,592; 2019—$2,560
257,251
254,099
Real estate investments, net
1,359,609
1,390,915
Notes receivable, net of loan loss
reserve: 2020—$146; 2019—$181
14,465
17,927
Investments in unconsolidated joint
ventures
11,340
19,003
Investments, net
1,385,414
1,427,845
Other assets:
Cash and cash equivalents
7,772
4,244
Debt issue costs related to bank
borrowings
1,324
2,164
Interest receivable
32,746
26,586
Straight-line rent receivable
24,452
45,703
Lease incentives
2,462
2,552
Prepaid expenses and other assets
5,316
5,115
Total assets
$
1,459,486
$
1,514,209
LIABILITIES
Bank borrowings
$
89,900
$
93,900
Senior unsecured notes, net of debt issue
costs: 2020—$658; 2019—$812
559,482
599,488
Accrued interest
4,216
4,983
Accrued expenses and other liabilities
30,082
30,412
Total liabilities
683,680
728,783
EQUITY
Stockholders’ equity:
Common stock: $0.01 par value; 60,000
shares authorized; shares issued and outstanding: 2020—39,242;
2019—39,752
392
398
Capital in excess of par value
852,780
867,346
Cumulative net income
1,388,775
1,293,482
Cumulative distributions
(1,474,545
)
(1,384,283
)
Total LTC Properties, Inc. stockholders’
equity
767,402
776,943
Non-controlling interests
8,404
8,483
Total equity
775,806
785,426
Total liabilities and equity
$
1,459,486
$
1,514,209
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210218005861/en/
Wendy L. Simpson Pam Kessler (805) 981-8655
LTC Properties (NYSE:LTC)
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