February 24, 2024

WESTLAKE VILLAGE, Calif.–()–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, 2022.
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
June 30,
 
 
 
2022
 
2021
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
Net income available to common stockholders
 
$
54,065
 
$
18,126
 
Diluted earnings per common share
 
$
1.36
 
$
0.46
 
NAREIT funds from operations (“FFO”) attributable to common stockholders
 
$
25,350
 
$
22,171
 
NAREIT diluted FFO per common share
 
$
0.64
 
$
0.57
 
FFO attributable to common stockholders, excluding non-recurring items
 
$
24,491
 
$
22,304
 
Funds available for distribution (“FAD”)
 
$
26,779
 
$
22,781
 
FAD, excluding non-recurring items
 
$
25,598
 
$
22,914
 
 
 
 
 
 
 
 
 
Second quarter 2022 results were impacted by:
During the second quarter of 2022, LTC completed the following:
Subsequent to June 30, 2022, LTC completed the following:
Conference Call Information
LTC will conduct a conference call on Friday, July 29, 2022, 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, 2022. 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
1-844-200-6205
Canada Toll-Free Number
1-833-950-0062
Conference Access Code
898490
Additionally, an audio replay of the call will be available one hour after the live call and through August 12, 2022 via the following:
USA Toll-Free Number
1-866-813-9403
Canada Local Number
1-226-828-7578
International Toll-Free Number
+44 204 525 0658
Conference Number
214260
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’s investment portfolio includes 202 properties in 29 states with 32 operating partners. Based on its gross real estate investments, LTC’s investment 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,
 
 
 
2022
 
2021
 
2022
 
2021
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental income
 
$
31,628
 
$
29,804
 
$
61,952
 
$
61,777
 
Interest income from mortgage loans
 
 
10,097
 
 
7,933
 
 
19,733
 
 
15,855
 
Interest and other income
 
 
1,299
 
 
392
 
 
2,126
 
 
777
 
Total revenues
 
 
43,024
 
 
38,129
 
 
83,811
 
 
78,409
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
7,523
 
 
6,860
 
 
14,666
 
 
13,832
 
Depreciation and amortization
 
 
9,379
 
 
9,508
 
 
18,817
 
 
19,385
 
Provision (recovery) for credit losses
 
 
305
 
 

 
 
659
 
 
(9)
 
Transaction costs
 
 
67
 
 
133
 
 
99
 
 
225
 
Property tax expense
 
 
4,019
 
 
3,800
 
 
8,001
 
 
7,781
 
General and administrative expenses
 
 
5,711
 
 
5,337
 
 
11,519
 
 
10,370
 
Total expenses
 
 
27,004
 
 
25,638
 
 
53,761
 
 
51,584
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other operating income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on sale of real estate, net
 
 
38,094
 
 
5,463
 
 
38,196
 
 
4,690
 
Operating income
 
 
54,114
 
 
17,954
 
 
68,246
 
 
31,515
 
Income from unconsolidated joint ventures
 
 
376
 
 
376
 
 
751
 
 
665
 
Net income
 
 
54,490
 
 
18,330
 
 
68,997
 
 
32,180
 
Income allocated to non-controlling interests
 
 
(107)
 
 
(91)
 
 
(202)
 
 
(179)
 
Net income attributable to LTC Properties, Inc.
 
 
54,383
 
 
18,239
 
 
68,795
 
 
32,001
 
Income allocated to participating securities
 
 
(318)
 
 
(113)
 
 
(407)
 
 
(233)
 
Net income available to common stockholders
 
$
54,065
 
$
18,126
 
$
68,388
 
$
31,768
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.37
 
$
0.46
 
$
1.74
 
$
0.81
 
Diluted
 
$
1.36
 
$
0.46
 
$
1.73
 
$
0.81
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares used to calculate earnings per
 
 
 
 
 
 
 
 
 
 
 
 
 
common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
39,492
 
 
39,169
 
 
39,347
 
 
39,135
 
Diluted
 
 
39,665
 
 
39,170
 
 
39,520
 
 
39,136
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. 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
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
June 30,
 
 
 
2022
 
 
2021
 
 
 
2022
 
 
2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net income available to common stockholders
$
54,065
 
$
18,126
 
 
$
68,388
 
$
31,768
 
Add: Depreciation and amortization
 
9,379
 
 
9,508
 
 
 
18,817
 
 
19,385
 
Less: Gain on sale of real estate, net
 
(38,094)
 
 
(5,463)
 
 
 
(38,196)
 
 
(4,690)
 
NAREIT FFO attributable to common stockholders
 
25,350
 
 
22,171
 
 
 
49,009
 
 
46,463
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Add: Non-recurring items
 
(859)
(1)
 
133
(3)
 
 
(436)
(4)
 
1,183
(6)
FFO attributable to common stockholders, excluding non-recurring items
$
24,491
 
$
22,304
 
 
$
48,573
 
$
47,646
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NAREIT FFO attributable to common stockholders
$
25,350
 
$
22,171
 
 
$
49,009
 
$
46,463
 
Non-cash income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: straight-line rental adjustment (income)
 
293
 
 
19
 
 
 
527
 
 
(663)
(7)
Add: amortization of lease incentives
 
206
 
 
116
 
 
 
602
(5)
 
228
 
Add: Other non-cash expense
 

 
 

 
 
 

 
 
758
(8)
Less: Effective interest income from mortgage loans
 
(1,387)
 
 
(1,483)
 
 
 
(2,789)
 
 
(3,227)
(7)
Net non-cash income
 
(888)
 
 
(1,348)
 
 
 
(1,660)
 
 
(2,904)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-cash expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Add: Non-cash compensation charges
 
2,012
 
 
1,958
 
 
 
3,937
 
 
3,810
 
Less: Provision (recovery) for credit losses
 
305
 
 

 
 
 
659
 
 
(9)
 
Net non-cash expense
 
2,317
 
 
1,958
 
 
 
4,596
 
 
3,801
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funds available for distribution (FAD)
$
26,779
 
$
22,781
 
 
$
51,945
 
$
47,360
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Add: Non-recurring items
 
(1,181)
(2)
 
133
(3)
 
 
(1,181)
(2)
 
1,337
(9)
FAD, excluding non-recurring items
$
25,598
 
$
22,914
 
 
$
50,764
 
$
48,697
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents (2) below partially offset by the provision for credit losses related to the origination of two mortgage loans during 2022 second quarter ($322).
(2) Represents the lease termination fee received in connection with the sale of a 74-unit assisted living community ($1,181).
(3) Represents the GAAP and cash impact of the 50% reduction of 2021 rent escalation.
(4) Represents (2) from above partially offset by the provision for credit losses related to the origination of two mortgage loans during the second quarter of 2022 and a $25,000 mezzanine loan during the first quarter of 2022 ($572) and (5) below.
(5) Includes a lease incentive balance write-off of $173 related to a closed property and subsequent lease termination.
(6) Represents the GAAP impact of the 50% reduction of 2021 rent and interest escalation.
(7) Includes the impact of the 50% reduction of 2021 rent and interest escalation on straight-line rent and effective interest.
(8) Represents a straight-line rent receivable write-off due to transitioning rental revenue to cash basis.
(9) Represents the cash impact of the 50% reduction of 2021 rent and interest escalation.
 
Reconciliation of FFO and FAD (continued)
The following table continues the reconciliation between GAAP net income available to common stockholders and 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,
 
 
 
2022
 
 
2021
 
 
 
2022
 
 
2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NAREIT Basic FFO attributable to common stockholders per share
$
0.64
 
$
0.57
 
 
$
1.25
 
$
1.19
 
NAREIT Diluted FFO attributable to common stockholders per share
$
0.64
 
$
0.57
 
 
$
1.24
 
$
1.19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NAREIT Diluted FFO attributable to common stockholders
$
25,350
 
$
22,171
 
 
$
49,009
 
$
46,696
 
Weighted average shares used to calculate NAREIT diluted FFO per share
 
 
 
 
 
 
 
 
 
 
 
 
 
attributable to common stockholders
 
39,665
 
 
39,170
 
 
 
39,520
 
 
39,333
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted FFO attributable to common stockholders, excluding non-recurring items
$
24,491
 
$
22,417
 
 
$
48,573
 
$
47,879
 
Weighted average shares used to calculate diluted FFO, excluding
 
 
 
 
 
 
 
 
 
 
 
 
 
non-recurring items, per share attributable to common stockholders
 
39,665
 
 
39,369
 
 
 
39,520
 
 
39,333
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted FAD
$
26,779
 
$
22,894
 
 
$
51,945
 
$
47,593
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares used to calculate diluted FAD per share
 
39,665
 
 
39,369
 
 
 
39,520
 
 
39,333
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted FAD, excluding non-recurring items
$
25,598
 
$
23,027
 
 
$
50,764
 
$
48,930
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares used to calculate diluted FAD, excluding non-recurring items, per share
 
39,665
 
 
39,369
 
 
 
39,520
 
 
39,333
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2022
 
December 31, 2021
 
ASSETS
 
(unaudited)
 
(audited)
 
Investments:
 
 
 
 
 
 
 
Land
 
$
125,786
 
$
123,239
 
Buildings and improvements
 
 
1,284,151
 
 
1,285,318
 
Accumulated depreciation and amortization
 
 
(374,170)
 
 
(374,606)
 
Real property investments, net
 
 
1,035,767
 
 
1,033,951
 
Mortgage loans receivable, net of loan loss reserve: 2022—$3,830; 2021—$3,473
 
 
379,817
 
 
344,442
 
Real estate investments, net
 
 
1,415,584
 
 
1,378,393
 
Notes receivable, net of loan loss reserve: 2022—$588; 2021—$286
 
 
58,206
 
 
28,337
 
Investments in unconsolidated joint ventures
 
 
19,340
 
 
19,340
 
Investments, net
 
 
1,493,130
 
 
1,426,070
 
 
 
 
 
 
 
 
 
Other assets:
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
6,401
 
 
5,161
 
Debt issue costs related to revolving line of credit
 
 
2,681
 
 
3,057
 
Interest receivable
 
 
42,713
 
 
39,522
 
Straight-line rent receivable
 
 
22,689
 
 
24,146
 
Lease incentives
 
 
1,910
 
 
2,678
 
Prepaid expenses and other assets
 
 
8,703
 
 
4,191
 
Total assets
 
$
1,578,227
 
$
1,504,825
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
Revolving line of credit
 
$
56,000
 
$
110,900
 
Term loans, net of debt issue costs: 2022—$563; 2021—$637
 
 
99,437
 
 
99,363
 
Senior unsecured notes, net of debt issue costs: 2022—$1,549; 2021—$524
 
 
579,431
 
 
512,456
 
Accrued interest
 
 
3,946
 
 
3,745
 
Accrued expenses and other liabilities
 
 
28,917
 
 
33,234
 
Total liabilities
 
 
767,731
 
 
759,698
 
 
 
 
 
 
 
 
 
EQUITY
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2022—40,380; 2021—39,374
 
 
404
 
 
394
 
Capital in excess of par value
 
 
893,155
 
 
856,895
 
Cumulative net income
 
 
1,513,431
 
 
1,444,636
 
Accumulated other comprehensive income (loss)
 
 
6,139
 
 
(172)
 
Cumulative distributions
 
 
(1,610,155)
 
 
(1,565,039)
 
Total LTC Properties, Inc. stockholders’ equity
 
 
802,974
 
 
736,714
 
Non-controlling interests
 
 
7,522
 
 
8,413
 
Total equity
 
 
810,496
 
 
745,127
 
Total liabilities and equity
 
$
1,578,227
 
$
1,504,825
 
 
Mandi Hogan
(805) 981-8655
Mandi Hogan
(805) 981-8655

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