LTC Reports First Quarter 2013 Results

  LTC Reports First Quarter 2013 Results

Business Wire

WESTLAKE VILLAGE, Calif. -- April 30, 2013

LTC Properties, Inc. (NYSE: LTC) (“LTC” or the “Company”) announced operating
results for the quarter ended March 31, 2013. The Company reported a 10.1%
increase in normalized Funds from Operations (“FFO”) to $19.0million for the
quarter ended March 31, 2013, from $17.3 million for the comparable 2012
period. Normalized FFO per diluted common share was $0.61 for the quarter
ended March 31, 2013, an increase of 8.9% from $0.56 for the comparable 2012
period. Normalized FFO for the quarter ended March 31, 2013, excludes $0.7
million of one-time severance and accelerated restricted stock vesting charges
related to the retirement of our Senior Vice President, Marketing and
Strategic Planning and $0.1 million of non-cash interest related to earn-out
liabilities. The increase in normalized FFO and normalized FFO per diluted
common share was due to higher revenues from acquisitions partially offset by
an increase in interest expense and higher weighted average shares
outstanding.

FFO was $18.2million for the first quarter of 2013 compared to $17.2 million
for the first quarter of 2012. FFO per diluted common share was $0.59 for the
first quarter of 2013 compared to $0.56 for the first quarter of 2012. The
increase in FFO and FFO per diluted common share was due to higher revenues
from acquisitions partially offset by an increase in interest expense, general
and administrative expenses and higher weighted average shares outstanding.

Net income available to common stockholders for the quarter ended March 31,
2013 was $12.1million or $0.40 per diluted share. For the same period in
2012, net income available to common stockholders was $12.0million or $0.40
per diluted share. The increase in net income available to common stockholders
was due primarily to higher revenues from acquisitions partially offset by an
increase in interest expense, higher depreciation and amortization expense,
the one-time charges related to our Senior Vice President’s retirement and
higher weighted average shares outstanding.

Conference Call Information

The Company will conduct a conference call on Wednesday, May 1, 2013, at 7:00
a.m. Pacific Time, in order to comment on the Company’s performance and
operating results for the quarter ended March 31, 2013. The conference call is
accessible by dialing 888-317-6016. The international number is 412-317-6016.
An audio replay of the conference call will be available from May 1 through
May 17, 2013. Callers can access the replay by dialing 877-344-7529 or
412-317-0088 and entering conference number 10027691. The earnings release
will be available on our website. The Company’s supplemental information
package for the current period will also be available on the Company’s website
at www.LTCProperties.com in the “Presentations” section of the “Investor
Information” tab.

About LTC

At March 31, 2013, LTC had investments in 90 skilled nursing properties, 104
assisted living properties, 9range of care properties, two schools and five
parcels of land under development. These properties are located in 29 states.
Assisted living properties, independent living properties, memory care
properties and combinations thereof are included in the assisted living
property type. Range of care properties consist of properties providing
skilled nursing and any combination of assisted living, independent living
and/or memory care services. The Company is a self-administered real estate
investment trust that primarily invests in senior housing and long-term care
facilities through facility lease transactions, mortgage loans and other
investments. For more information on LTC Properties, Inc., visit the Company’s
website at www.LTCProperties.com.

Forward Looking Statements

This press release includes statements that are not purely historical and are
“forward looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements regarding the Company’s
expectations, beliefs, intentions or strategies regarding the future. All
statements other than historical facts contained in this press release are
forward looking statements. These forward looking statements involve a number
of risks and uncertainties. Please see our most recent Annual Report on Form
10-K, our subsequent Quarterly Reports on Form 10-Q, and in our other publicly
available filings with the Securities and Exchange Commission for a discussion
of these and other risks and uncertainties. All forward looking statements
included in this press release are based on information available to the
Company on the date hereof, and the Company assumes no obligation to update
such forward looking statements. Although the Company’s management believes
that the assumptions and expectations reflected in such forward looking
statements are reasonable, no assurance can be given that such expectations
will prove to have been correct. The actual results achieved by the Company
may differ materially from any forward looking statements due to the risks and
uncertainties of such statements.

LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share amounts, unaudited)

                                            Three Months Ended
                                             March 31,
                                             2013                2012
Revenues:
Rental income                                $24,511              $20,872
Interest income from mortgage loans          1,059                1,532
Interest and other income                    93                   236
Total revenues                               25,663               22,640
                                                                  
Expenses:
Interest expense                             3,133                2,033
Depreciation and amortization                6,136                5,167
General and administrative expenses          3,418                2,524
Total expenses                               12,687               9,724
                                                                  
Income from continuing operations            12,976               12,916
                                                                  
Discontinued operations:
Gain on sale of assets, net                  —                    16
Net income from discontinued                 —                    16
operations
                                                                  
Net income                                   12,976               12,932
Income allocated to non-controlling          —                    (11)
interests
Net income attributable to LTC               12,976               12,921
Properties, Inc.
                                                                  
Income allocated to participating            (98)                 (94)
securities
Income allocated to preferred                (818)                (818)
stockholders
Net income available to common               $12,060              $12,009
stockholders
                                                                  
Basic earnings per common share:
Continuing operations                        $0.40                $0.40
Discontinued operations                      $0.00                $0.00
Net income available to common               $0.40                $0.40
stockholders
                                                                  
Diluted earnings per common share:
Continuing operations                        $0.40                $0.40
Discontinued operations                      $0.00                $0.00
Net income available to common               $0.40                $0.40
stockholders
                                                                  
Weighted average shares used to
calculate earnings per common
share:
Basic                                        30,365               30,189
Diluted                                      30,399               30,234

NOTE: Computations of per share amounts from continuing operations,
discontinued operations and net income are made independently. Therefore, the
sum of per share amounts from continuing operations and discontinued
operations may not agree with the per share amounts from net income allocable
to common stockholders.

Supplemental Reporting Measures

FFO, adjusted FFO (“AFFO”), and Funds Available for Distribution (“FAD”) are
supplemental measures of a real estate investment trust’s (“REIT”) financial
performance that are not defined by U.S. generally accepted accounting
principles (“GAAP”). Investors, analysts and the Company use FFO, AFFO and FAD
as supplemental measures of operating performance and we believe they 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 comparisons of
operating performance between periods. Additionally the Company believes that
normalized FFO, normalized AFFO and normalized FAD provide useful information
because they allow investors, analysts and our management to compare the
Company’s operating performance on a consistent basis without having to
account for differences caused by unanticipated items.

FFO, as defined by the National Association of Real Estate Investment Trusts
(“NAREIT”), means net income available to common stockholders (computed in
accordance with U.S. GAAP) excluding gains or losses on the sale of real
estate and impairment write-downs of depreciable real estate plus real estate
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Normalized FFO represents FFO adjusted for
certain items detailed in the reconciliations. The Company’s computation of
FFO may not be comparable to FFO reported by other REITs that do not define
the term in accordance with the current NAREIT definition or that have a
different interpretation of the current NAREIT definition from the Company;
therefore, caution should be exercised when comparing our company’s FFO to
that of other REITs.

We define AFFO as FFO excluding the effects of straight-line rent and
amortization of lease inducement. U.S. GAAP requires rental revenues related
to non-contingent leases that contain specified rental increases over the life
of the lease to be recognized evenly over the life of the lease. This method
results in rental income in the early years of a lease that is higher than
actual cash received, creating a straight-line rent receivable asset included
in our consolidated balance sheet. At some point during the lease, depending
on its terms, cash rent payments exceed the straight-line rent which results
in the straight-line rent receivable asset decreasing to zero over the
remainder of the lease term. By excluding the non-cash portion of
straight-line rental revenue and amortization of lease inducement, investors,
analysts and our management can compare AFFO between periods. Normalized AFFO
represents AFFO adjusted for certain items detailed in the reconciliations.

We define FAD as AFFO excluding the effects of non-cash compensation charges.
FAD is useful in analyzing the portion of cash flow that is available for
distribution to stockholders. Investors, analysts and the Company utilize FAD
as an indicator of common dividend potential. The FAD payout ratio, which
represents annual distributions to common shareholders expressed as a
percentage of FAD, facilitates the comparison of dividend coverage between
REITs. Normalized FAD represents FAD adjusted for certain items detailed in
the reconciliations.

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. FFO, normalized FFO,
normalized AFFO and normalized FAD do not represent cash generated from
operating activities in accordance with U.S. GAAP, and are not necessarily
indicative of cash available to fund cash needs and should not be considered
an alternative to net income available to common stockholders.

Reconciliation of FFO, Normalized FFO, Normalized AFFO and Normalized FAD

The following table reconciles net income available to common stockholders to
FFO available to common stockholders, normalized FFO available to common
stockholders, normalized AFFO and normalized FAD (unaudited, amounts in
thousands, except per share amounts):

                                  Three Months Ended
                                   March 31,
                                   2013                       2012
Net income available to            $12,060                     $12,009
common stockholders
Add: Depreciation and              6,136                       5,167
amortization
Less: Gain on sale of real         —                          (16        )
estate, net
FFO available to common            18,196                      17,160
stockholders
                                                                          
Add: Non-cash interest
related to earn-out                110                         110
liabilities
Add: Non-recurring one-time        707            ^(1)        —          
items
Normalized FFO available to        19,013                      17,270
common stockholders
                                                                          
Less: Non-cash rental income       (772       )                (482       )
Normalized adjusted FFO            18,241                      16,788
(AFFO)
                                                                          
Add: Non-cash compensation         528                        452        
charges
Normalized funds available         $18,769                    $17,240    
for distribution (FAD)
_______________
(1) Represents the one-time severance and accelerated restricted stock vesting
charges related to the retirement of our Senior Vice President, Marketing and
Strategic Planning.

Basic FFO available to
common stockholders per            $0.60                      $0.57      
share
Diluted FFO available to
common stockholders per            $0.59                      $0.56      
share
                                                               
Diluted FFO available to           $19,112                    $18,083    
common stockholders
Weighted average shares used
to calculate diluted FFO per       32,609                     32,470     
share available to common
stockholders

Basic normalized FFO
available to common                $0.63                      $0.57      
stockholders per share
Diluted normalized FFO
available to common                $0.61                      $0.56      
stockholders per share
                                                               
Diluted normalized FFO
available to common                $19,929                    $18,193    
stockholders
Weighted average shares used
to calculate diluted
normalized FFO per share           32,609                     32,470     
available to common
stockholders

Basic normalized AFFO per          $0.60                      $0.56      
share
Diluted normalized AFFO per        $0.59                      $0.55      
share
                                                               
Diluted normalized AFFO            $19,157                    $17,711    
Weighted average shares used
to calculate diluted               32,609                     32,470     
normalized AFFO per share

Basic normalized FAD per           $0.62                      $0.57      
share
Diluted normalized FAD per         $0.60                      $0.56      
share
                                                               
Diluted normalized FAD             $19,685                    $18,163    
Weighted average shares used
to calculate diluted               32,609                     32,470     
normalized FAD per share


LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)

                                           March 31, 2013  December 31, 2012
                                            (unaudited)      (audited)
ASSETS
Real estate investments:
Land                                        $ 75,407         $ 75,407
Buildings and improvements                  831,175          824,688
Accumulated depreciation and amortization   (204,646   )     (198,548     )
Net real estate property                    701,936          701,547
Mortgage loans receivable, net of
allowance for doubtful accounts: 2013 —     39,741          39,299       
$401; 2012 — $782
Real estate investments, net                741,677          740,846
Other assets:
Cash and cash equivalents                   9,621            7,191
Debt issue costs, net                       2,854            3,040
Interest receivable                         802              789
Straight-line rent receivable, net of
allowance for doubtful accounts: 2013 —     27,925           26,998
$1,567; 2012 — $1,557
Prepaid expenses and other assets           6,656            7,548
Notes receivable                            3,129           3,180        
Total assets                                $792,664        $789,592     
                                                             
LIABILITIES
Bank borrowings                             $117,500         $115,500
Senior unsecured notes                      185,800          185,800
Bonds payable                               2,035            2,635
Accrued interest                            2,285            3,279
Earn-out liabilities                        6,854            6,744
Accrued expenses and other liabilities      11,379          12,526       
Total liabilities                           325,853          326,484
                                                             
EQUITY
Stockholders' equity:
Preferred stock $0.01 par value; 15,000
shares authorized; shares issued and        38,500           38,500
outstanding: 2013 — 2,000; 2012 — 2,000
Common stock: $0.01 par value; 60,000
shares authorized; shares issued and        307              305
outstanding: 2013 — 30,713; 2012 — 30,544
Capital in excess of par value              516,011          510,236
Cumulative net income                       737,009          724,033
Accumulated other comprehensive income      143              152
Cumulative distributions                    (825,159   )     (810,125     )
Total LTC Properties, Inc. stockholders'    466,811          463,101
equity
                                                             
Non-controlling interests                   —               7            
Total equity                                466,811         463,108      
Total liabilities and equity                $792,664        $789,592     

Contact:

LTC Properties, Inc.
Wendy L. Simpson
Pam Kessler
805-981-8655
 
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