LTC Reports Second Quarter 2013 Results Business Wire WESTLAKE VILLAGE, Calif. -- August 8, 2013 LTC Properties, Inc. (NYSE: LTC) (“LTC” or the “Company”) announced operating results for the quarter ended June 30, 2013. The Company reported a 9.0% increase in Funds from Operations (“FFO”) to $19.1million in the quarter ended June 30, 2013, from $17.6million in the comparable 2012 period. FFO per diluted common share was $0.57 for the quarters ended June 30, 2013 and 2012. Normalized FFO was $19.2million in the second quarter of 2013 compared to $17.3million in the second quarter of 2012. Normalized FFO per diluted common share was $0.57 for the second quarter of 2013 compared to $0.56 for the second quarter of 2012. The increase in normalized FFO and normalized FFO per diluted common share was due to higher revenues resulting from acquisitions partially offset by an increase in interest expense and higher weighted average shares outstanding. FFO for the six months ended June 30, 2013 increased 7.5% to $37.3million from $34.7million in the comparable 2012 period. FFO per diluted common share for the six months ended June 30, 2013 increased 2.7% to $1.16 from $1.13 in the comparable 2012 period. The Company reported a 10.6% increase to $38.3 million in normalized FFO for the six months ended June 30, 2013 from $34.6 million in the comparable 2012 period. The six month 2013 normalized adjustment excludes a $0.7 million non-recurring charge related to the retirement of the Company’s former Senior Vice President, Marketing and Strategic Planning. Normalized FFO for the six months ended June 30, 2012 excludes a $0.3million non-recurring bankruptcy settlement distribution from Sunwest Management, Inc. Normalized FFO per diluted common share was $1.18 for the six months ended June 30, 2013, an increase of 5.4% from $1.12 for the comparable 2012 period. The increase in FFO, normalized FFO, FFO per diluted common share and normalized FFO per diluted common share was due to higher revenues resulting 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 June 30, 2013 was $12.0million or $0.36 per diluted share. For the same period in 2012, net income available to common stockholders was $12.2million or $0.40 per diluted share. Net income available to common stockholders for the six months ended June 30, 2013 was $24.1million or $0.76 per diluted share. For the same period in 2012, net income available to common stockholders was $24.2million or $0.80 per diluted share. The decrease in net income available to common stockholders was due primarily to the loss on sale of a 47-bed skilled nursing property, increases in expenses and the non-recurring charges related to the retirement of the Company’s former Senior Vice President, Marketing and Strategic Planning offset by higher revenues from acquisitions. As previously announced on August 7, 2013, the Company entered into a $141.0million mortgage loan agreement secured by 15 properties with a total of 2,092 skilled nursing beds and 24 independent living units in Michigan. The loan is for a term of 30 years and will bear interest at an initial rate of 9.41% for five years, escalating annually thereafter by 2.25%. Payments will be interest-only for a period of three years, after which the borrower will make interest along with annual principal payments of $1.0million. Conference Call Information The Company will conduct a conference call on Friday, August 9, 2013, at 8:00 a.m. Pacific Time, in order to comment on the Company’s performance and operating results for the quarter ended June 30, 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 August 9 through August 26, 2013. Callers can access the replay by dialing 877-344-7529 or 412-317-0088 and entering conference number 10031879. 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 June 30, 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 Six Months Ended June 30, June 30, 2013 2012 2013 2012 Revenues: Rental income $ 24,539 $ 21,139 $ 49,015 $ 41,975 Interest income from mortgage 1,050 1,431 2,109 2,963 loans Interest and 92 485 185 722 other income Total revenues 25,681 23,055 51,309 45,660 Expenses: Interest 2,798 2,004 5,931 4,037 expense Depreciation and 6,124 5,355 12,250 10,509 amortization General and administrative 2,869 2,604 6,287 5,128 expenses Total expenses 11,791 9,963 24,468 19,674 Income from continuing 13,890 13,092 26,841 25,986 operations Discontinued operations: Net Income from discontinued 27 21 52 43 operations (Loss) gain on real estate (1,014 ) — (1,014 ) 16 assets, net Net (loss) income from (987 ) 21 (962 ) 59 discontinued operations Net income 12,903 13,113 25,879 26,045 Income allocated to — (10 ) — (21 ) non-controlling interests Net income attributable to 12,903 13,103 25,879 26,024 LTC Properties, Inc. Income allocated to (91 ) (91 ) (189 ) (185 ) participating securities Income allocated to (818 ) (818 ) (1,636 ) (1,636 ) preferred stockholders Net income available to $ 11,994 $ 12,194 $ 24,054 $ 24,203 common stockholders Basic earnings per common share: Continuing $ 0.39 $ 0.40 $ 0.79 $ 0.80 operations Discontinued ($0.03 ) $ 0.00 ($0.03 ) $ 0.00 operations Net income available to $ 0.36 $ 0.40 $ 0.76 $ 0.80 common stockholders Diluted earnings per common share: Continuing $ 0.39 $ 0.40 $ 0.79 $ 0.80 operations Discontinued ($0.03 ) $ 0.00 ($0.03 ) $ 0.00 operations Net income available to $ 0.36 $ 0.40 $ 0.76 $ 0.80 common stockholders Weighted average shares used to calculate earnings per common share: Basic 32,913 30,213 31,645 30,201 Diluted 32,946 30,258 31,679 30,246 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 Six Months Ended June 30, June 30, 2013 2012 2013 2012 Net income available to $ 11,994 $ 12,194 $ 24,054 $ 24,203 common stockholders Add: Depreciation and amortization 6,131 5,369 12,267 10,536 (continuing and discontinued operations) Add (Less): Loss (gain) on sale of 1,014 — 1,014 (16 ) real estate, net FFO available to common 19,139 17,563 37,335 34,723 stockholders Add: Non-cash interest related to 110 110 220 220 earn-out liabilities Less: Non-recurring — (347 ) ^(2) 707 ^(1) (347 ) ^(2) one time items Normalized FFO available 19,249 17,326 38,262 34,596 to common stockholders Less: Non-cash (758 ) (521 ) (1,530 ) (1,003 ) rental income Normalized adjusted FFO 18,491 16,805 36,732 33,593 (AFFO) Add: Non-cash compensation 523 458 1,051 910 charges Normalized funds available for $ 19,014 $ 17,263 $ 37,783 $ 34,503 distribution (FAD) (1) Represents the one-time severance and accelerated restricted stock vesting charges related to the retirement of the Company’s former Senior Vice President, Marketing and Strategic Planning. (2) Represents revenue from the Sunwest bankruptcy settlement distribution. Basic FFO available to common $ 0.58 $ 0.58 $ 1.18 $ 1.15 stockholders per share Diluted FFO available to common $ 0.57 $ 0.57 $ 1.16 $ 1.13 stockholders per share Diluted FFO available to $ 20,048 $ 18,482 $ 39,160 $ 36,565 common stockholders Weighted average shares used to calculate diluted FFO 35,139 32,488 33,881 32,479 per share available to common stockholders Basic normalized FFO available $ 0.58 $ 0.57 $ 1.21 $ 1.15 to common stockholders per share Diluted normalized FFO available $ 0.57 $ 0.56 $ 1.18 $ 1.12 to common stockholders per share Diluted normalized FFO available $ 20,158 $ 18,245 $ 40,087 $ 36,438 to common stockholders Weighted average shares used to calculate diluted 35,139 32,488 33,881 32,479 normalized FFO per share available to common stockholders Basic normalized $ 0.56 $ 0.56 $ 1.16 $ 1.11 AFFO per share Diluted normalized $ 0.55 $ 0.55 $ 1.14 $ 1.09 AFFO per share Diluted normalized $ 19,400 $ 17,724 $ 38,557 $ 35,435 AFFO Weighted average shares used to calculate 35,139 32,488 33,881 32,479 diluted normalized AFFO per share Basic normalized $ 0.58 $ 0.57 $ 1.19 $ 1.14 FAD per share Diluted normalized $ 0.57 $ 0.56 $ 1.17 $ 1.12 FAD per share Diluted normalized $ 19,923 $ 18,182 $ 39,608 $ 36,345 FAD Weighted average shares used to calculate 35,139 32,488 33,881 32,479 diluted normalized FAD per share LTC PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (amounts in thousands) June 30, 2013 December 31, 2012 (unaudited) (audited) ASSETS Real estate investments: Land $ 75,094 $ 75,094 Buildings and 836,934 822,618 improvements Accumulated depreciation (209,581 ) (197,407 ) and amortization Net real estate property 702,447 700,305 Properties held-for-sale, net of accumulated depreciation 210 1,242 and amortization: 2013 — $804; 2012 — $1,141 Net real estate property 702,657 701,547 Mortgage loans receivable, net of allowance for doubtful 39,272 39,299 accounts: 2013 — $396; 2012 — $782 Real estate investments, 741,929 740,846 net Other assets: Cash and cash 63,315 7,191 equivalents Debt issue costs, net 2,701 3,040 Interest receivable 741 789 Straight-line rent receivable, net of allowance for doubtful 28,839 26,998 accounts: 2013 — $1,532; 2012 — $1,557 Prepaid expenses and 6,262 7,548 other assets Notes receivable 1,277 3,180 Total assets $ 845,064 $ 789,592 LIABILITIES Bank borrowings $ — $ 115,500 Senior unsecured notes 185,800 185,800 Bonds payable 2,035 2,635 Accrued interest 3,296 3,279 Earn-out liabilities 6,963 6,744 Accrued expenses and 11,712 12,492 other liabilities Accrued expenses and other liabilities 33 34 related to properties held-for-sale Total liabilities 209,839 326,484 EQUITY Stockholders' equity: Preferred stock $0.01 par value; 15,000 shares authorized; shares 38,500 38,500 issued and outstanding: 2013 — 2,000; 2012 — 2,000 Common stock: $0.01 par value; 60,000 shares authorized; shares 348 305 issued and outstanding: 2013 — 34,752; 2012 — 30,544 Capital in excess of par 687,841 510,236 value Cumulative net income 749,912 724,033 Accumulated other 134 152 comprehensive income Cumulative distributions (841,510 ) (810,125 ) Total LTC Properties, Inc. stockholders' 635,225 463,101 equity Non-controlling — 7 interests Total equity 635,225 463,108 Total liabilities and $ 845,064 $ 789,592 equity Contact: LTC Properties, Inc. Wendy L. Simpson Pam Kessler 805-981-8655
LTC Reports Second Quarter 2013 Results
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