LTC Properties, Inc. (NYSE: LTC) ("LTC" or the "Company"), a
real estate investment trust that primarily invests in seniors
housing and health care properties, today announced operating
results for the second quarter ended June 30, 2021.
Net income available to common stockholders was $18.1 million,
or $0.46 per diluted share, for the 2021 second quarter, compared
with $1.8 million, or $0.05 per diluted share, for the same period
in 2020. Funds from Operations (“FFO”) was $22.2 million for the
2021 second quarter, compared with $12.0 million for the comparable
2020 period. FFO per diluted common share was $0.57 and $0.31 for
the quarters ended June 30, 2021 and 2020, respectively. Excluding
non-recurring items, FFO was $22.2 million and $29.7 million for
the quarters ended June 30, 2021 and 2020, respectively. Funds
available for distribution (“FAD”) was $22.8 million for the 2021
second quarter compared with $29.3 million for the 2020 second
quarter.
Second quarter 2021 results were impacted by the following:
- Higher rental income due to a $17.7 million write-off in the
2020 second quarter related to Senior Lifestyle Corporation’s
(“Senior Lifestyle”) straight-line and lease incentive balances
partially offset by the following:
- Decreased rental income as a result of Senior Lifestyle’s
non-payment of lease obligations during the 2021 second quarter,
partially offset by the re-leasing of 11 properties in the
portfolio;
- Decreased rental income as a result of Senior Care Centers,
LLC’s and Abri Health Services, LLC unpaid lease obligations;
and
- Decreased rental income from abated and deferred rent partially
offset by higher rental income from completed developments.
- Higher income from unconsolidated joint ventures; and
- Net gain on sale of $5.5 million compared with a net gain on
sale of $189,000 during the second quarter of 2020;
During the second quarter of 2021, LTC completed the
following:
- Sold three Wisconsin communities and a closed community in
Nebraska for a total sale price of $35.9 million. These communities
were previously leased to Senior Lifestyle. LTC received total
combined proceeds of $34.8 million and recorded a net gain on sale
of $5.4 million;
- Transitioned a memory care community in Colorado previously
operated by Senior Lifestyle to an operator new to LTC. The lease
has a 5-year term and provides a purchase option for $5.5 million
which is exercisable after the first year of the lease. Cash rent
starting in the second lease year will be $150,000, increasing to
$300,000 in the third lease year and escalating by 2% annually
thereafter; and
- Paid down $41.0 million under its unsecured revolving line of
credit.
Subsequent to June 30, 2021, LTC completed the following:
- Transitioned an assisted living community in Wisconsin
previously operated by Senior Lifestyle to a regionally based
operator new to LTC. The lease has a 10-year term with three 5-year
renewal terms. Cash rent under the new lease is $920,000 in the
first lease year, $1.2 million in the second lease year, $1.3
million in the third lease year, escalating 2% annually
thereafter;
- Entered into a lease agreement with an existing operator
covering three assisted living communities in the Senior Lifestyle
portfolio. Two properties are located in Pennsylvania, and one in
New Jersey. The lease has a 2-year term with zero cash rent for the
first three months then cash rent will be based on mutually agreed
fair market rent;
- Entered into a lease agreement with an existing operator
covering three assisted living communities in Nebraska in the
Senior Lifestyle portfolio. The lease has a 2-year term with zero
cash rent for the first three months then cash rent will be based
on mutually agreed fair market rent;
- Sold a skilled nursing center in Washington for $7.7 million.
LTC received proceeds of $7.2 million and expects to recognize a
gain on sale of approximately $2.6 million;
- Paid $25.2 million in regular scheduled principal payments
under its senior unsecured notes;
- Borrowed $19.0 million under its unsecured revolving line of
credit at 1.2%; and
- Provided $366,000 of deferred rent and $323,000 of rent
abatement in July 2021. LTC has agreed to provide rent deferrals up
to $493,000 and abatements up to $319,000 for each of August and
September 2021.
Conference Call
Information
LTC will conduct a conference call on Friday, July 30, 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 June 30, 2021. 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 August
13, 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
10158029
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 owns or holds first mortgages on 176 investments in 27 states
with 31 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
(unaudited, amounts in thousands,
except per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Revenues:
Rental income
$
29,804
$
20,275
$
61,777
$
58,310
Interest income from mortgage loans
7,933
7,820
15,855
15,597
Interest and other income
392
386
777
984
Total revenues
38,129
28,481
78,409
74,891
Expenses:
Interest expense
6,860
7,546
13,832
15,256
Depreciation and amortization
9,508
9,797
19,385
19,466
(Recovery) provision for credit losses
—
—
(9
)
1
Transaction costs
133
64
225
134
Property tax expense
3,800
4,111
7,781
8,334
General and administrative expenses
5,337
4,580
10,370
9,680
Total expenses
25,638
26,098
51,584
52,871
Other operating income:
Gain on sale of real estate, net
5,463
189
4,690
44,043
Operating income
17,954
2,572
31,515
66,063
Loss on unconsolidated joint ventures
—
(620
)
—
(620
)
Income from unconsolidated joint
ventures
376
—
665
231
Net income
18,330
1,952
32,180
65,674
Income allocated to non-controlling
interests
(91
)
(82
)
(179
)
(171
)
Net income attributable to LTC Properties,
Inc.
18,239
1,870
32,001
65,503
Income allocated to participating
securities
(113
)
(97
)
(233
)
(278
)
Net income available to common
stockholders
$
18,126
$
1,773
$
31,768
$
65,225
Earnings per common share:
Basic
$
0.46
$
0.05
$
0.81
$
1.66
Diluted
$
0.46
$
0.05
$
0.81
$
1.66
Weighted average shares used to
calculate earnings per
common share:
Basic
39,169
39,055
39,135
39,298
Diluted
39,170
39,137
39,136
39,380
Dividends declared and paid per common
share
$
0.57
$
0.57
$
1.14
$
1.14
Supplemental Reporting
Measures
FFO and 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. The Company believes 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 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 the Company’s FFO to that of other REITs.
The Company defines 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 the Company’s
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 the
Company’s 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 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
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
GAAP net income available to common
stockholders
$
18,126
$
1,773
$
31,768
$
65,225
Add: Depreciation and amortization
9,508
9,797
19,385
19,466
Add: Loss on unconsolidated joint
ventures
—
620
—
620
Less: Gain on sale of real estate, net
(5,463
)
(189
)
(4,690
)
(44,043
)
NAREIT FFO attributable to common
stockholders
22,171
12,001
46,463
41,268
Add: Non-recurring items
—
17,742
(1) (2)
758
(3)
17,742
(1) (2)
FFO attributable to common stockholders,
excluding non-recurring items
$
22,171
$
29,743
$
47,221
$
59,010
NAREIT FFO attributable to common
stockholders
$
22,171
$
12,001
$
46,463
$
41,268
Non-cash income:
Less: straight-line rental income
19
(634
)
(663
)
(1,473
)
Add: amortization of lease costs
116
293
(1)
228
394
(1)
Add: Other non-cash expense
—
17,557
(2)
758
(3)
17,557
(2)
Less: Effective interest income from
mortgage loans
(1,483
)
(1,555
)
(3,227
)
(3,078
)
Net non-cash income
(1,348
)
15,661
(2,904
)
13,400
Non-cash expense:
Add: Non-cash compensation charges
1,958
1,762
3,810
3,539
Less: Capitalized interest
—
(86
)
—
(277
)
Net non-cash expense
1,958
1,676
3,810
3,262
Funds available for distribution (FAD)
$
22,781
$
29,338
$
$47,369
$
$57,930
(1) Includes the write-off of Senior
Lifestyle lease incentives.
(2) Represents the write-off of Senior
Lifestyle straight-line rent.
(3) Represents a straight-line rent
receivable write-off.
NAREIT Basic FFO attributable to common
stockholders per share
$
0.57
$
0.31
$
1.19
$
1.05
NAREIT Diluted FFO attributable to common
stockholders per share
$
0.57
$
0.31
$
1.19
$
1.05
NAREIT Diluted FFO attributable to common
stockholders
$
22,171
$
12,001
$
46,696
$
41,268
Weighted average shares used to calculate
NAREIT diluted FFO per share
attributable to common stockholders
39,170
39,137
39,333
39,380
Diluted FFO attributable to common
stockholders, excluding non-recurring items
$
22,171
$
29,840
$
47,454
$
59,010
Weighted average shares used to calculate
diluted FFO, excluding
non-recurring items, per share
attributable to common stockholders
39,170
39,309
39,333
39,380
Diluted FAD
$
22,894
$
29,435
$
47,602
$
57,930
Weighted average shares used to calculate
diluted FAD per share
39,369
39,309
39,333
39,380
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE
SHEETS
(amounts in thousands, except per
share)
June 30, 2021
December 31, 2020
ASSETS
(unaudited)
(audited)
Investments:
Land
$
123,239
$
127,774
Buildings and improvements
1,281,066
1,324,227
Accumulated depreciation and
amortization
(355,745
)
(349,643
)
Operating real estate property, net
1,048,560
1,102,358
Properties held-for-sale, net of
accumulated depreciation: 2021—$3,512; 2020—$0
4,512
—
Real property investments, net
1,053,072
1,102,358
Mortgage loans receivable, net of loan
loss reserve: 2021—$2,590; 2020—$2,592
257,051
257,251
Real estate investments, net
1,310,123
1,359,609
Notes receivable, net of loan loss
reserve: 2021—$139; 2020—$146
13,730
14,465
Investments in unconsolidated joint
ventures
19,340
11,340
Investments, net
1,343,193
1,385,414
Other assets:
Cash and cash equivalents
5,714
7,772
Debt issue costs related to bank
borrowings
918
1,324
Interest receivable
35,977
32,746
Straight-line rent receivable
24,357
24,452
Lease incentives
2,414
2,462
Prepaid expenses and other assets
3,899
5,316
Total assets
$
1,416,472
$
1,459,486
LIABILITIES
Bank borrowings
$
65,900
$
89,900
Senior unsecured notes, net of debt issue
costs: 2021—$581; 2020—$658
552,559
559,482
Accrued interest
4,093
4,216
Accrued expenses and other liabilities
31,540
30,082
Total liabilities
654,092
683,680
EQUITY
Stockholders’ equity:
Common stock: $0.01 par value; 60,000
shares authorized; shares issued and outstanding: 2021—39,374;
2020—39,242
394
392
Capital in excess of par value
852,959
852,780
Cumulative net income
1,420,776
1,388,775
Cumulative distributions
(1,520,153
)
(1,474,545
)
Total LTC Properties, Inc. stockholders’
equity
753,976
767,402
Non-controlling interests
8,404
8,404
Total equity
762,380
775,806
Total liabilities and equity
$
1,416,472
$
1,459,486
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210729006104/en/
Wendy L. Simpson Pam Kessler (805) 981-8655
LTC Properties (NYSE:LTC)
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