LTC Reports First Quarter 2014 Results

  LTC Reports First Quarter 2014 Results

Business Wire

WESTLAKE VILLAGE, Calif. -- May 6, 2014

LTC Properties, Inc. (NYSE: LTC) (“LTC” or the “Company”) announces today
operating results for the quarter ended March 31, 2014. The Company reported
an increase of 23.0% in Funds from Operations (“FFO”) to $22.4million in the
quarter ended March 31, 2014, from $18.2million in the comparable 2013
period. FFO per diluted common share was $0.63 and $0.59 for the quarters
ended March 31, 2014 and 2013, respectively. Normalized FFO increased by 17.7%
to $22.4million in the first quarter of 2014 from $19.0million in the first
quarter of 2013. Normalized FFO per diluted common share was $0.63 and $0.61
for the quarters ended March 31, 2014 and 2013, respectively. Net income
available to common stockholders increased by 33.3% to $16.1million in the
first quarter of 2014, or $0.46 per diluted share, from $12.1million, or
$0.40 per diluted share, for the same period in 2013. The increase in FFO,
normalized FFO and net income available to common stockholders was due to
higher revenues from mortgage loan originations, acquisitions and completed
property developments with 2014 FFO and net income available to common
stockholders benefitting from lower general and administrative expense due to
one-time charges in 2013.

Conference Call Information

The Company will conduct a conference call on Wednesday, May 7, 2014, at 8:00
a.m. Pacific Time (11:00 a.m. Eastern Time), to provide commentary on the
Company’s performance and operating results for the quarter ended March 31,
2014. The conference call is accessible by telephone and the internet.
Telephone access will be available by dialing 888-317-6016 (domestically) or
412-317-6016 (internationally). To participate in the webcast, log on to the
Company’s website at www.LTCProperties.com 15 minutes before the call to
download the necessary software.

An audio replay of the conference call will be available from May 7 through
May 22, 2014 and may be accessed by dialing 877-344-7529 (domestically) or
412-317-0088 (internationally) and entering conference number 10044392.
Additionally, an audio archive will be available on the Company’s website in
the “Presentations” section of the “Investor Information” tab. The Company’s
earnings release and supplemental information package for the current period
will be available on the Company’s website in the “Press Releases” and
“Presentations” sections, respectively, of the “Investor Information” tab.

About LTC

At March 31, 2014, LTC had 227 investments located in 30 states comprising of
101 skilled nursing properties, 106 assisted living properties, 9range of
care properties, two schools, five parcels of land under development and four
parcels of land held-for-use. 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 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)
                                                     
                                                       Three Months Ended
                                                       March 31,
                                                       2014        2013
                                                       (unaudited)
Revenues:
Rental income                                          $ 25,252     $ 24,511
Interest income from mortgage loans                      4,093        1,059
Interest and other income                               93         93     
Total revenues                                          29,438     25,663 
                                                                    
Expenses:
Interest expense                                         3,187        3,133
Depreciation and amortization                            6,298        6,136
General and administrative expenses                     2,949      3,418  
Total expenses                                          12,434     12,687 
Net income                                               17,004       12,976
                                                                    
Income allocated to participating securities             (103   )     (98    )
Income allocated to preferred stockholders              (818   )    (818   )
Net income available to common stockholders            $ 16,083    $ 12,060 
                                                                    
Earnings per common share:
Basic                                                  $ 0.47      $ 0.40   
Diluted                                                $ 0.46      $ 0.40   
                                                                    
Weighted average shares used to calculate earnings
per common share:
Basic                                                   34,586     30,365 
Diluted                                                 36,611     30,399 
                                                                    
Dividends declared and paid per common share           $ 0.510     $ 0.465  

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. The Company believes FFO,
AFFO 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 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 like 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 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 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.

While 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, such measures are not
representative of 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 each of net income, FFO and normalized FFO
available to common stockholders, as well as normalized AFFO and normalized
FAD (unaudited, amounts in thousands, except per share amounts):

                                 Three Months Ended
                                  March 31,
                                  2014                  2013
Net income available to           $    16,083            $   12,060
common stockholders
Add: Depreciation and                 6,298               6,136    
amortization
FFO available to common                22,381                18,196
stockholders
Add: Non-cash interest
related to earn-out                    —                     110
liabilities
Add: Non-recurring one-time           —                   707         ^(1)
items
Normalized FFO available to            22,381                19,013
common stockholders
Less: Non-cash rental income          (474      )          (772     )
Normalized adjusted FFO                21,907                18,241
(AFFO)
Add: Non-cash compensation             666                   528
charges
Less: Capitalized interest            (307      )          (177     )
Normalized funds available        $    22,266           $   18,592   
for distribution (FAD)
___________________
(1) Represents the one-time severance and accelerated restricted stock
vesting charges related to the retirement of our former Senior Vice
President, Marketing and Strategic Planning.
                                                                     
Basic FFO available to
common stockholders per           $    0.65             $   0.60     
share
Diluted FFO available to
common stockholders per           $    0.63             $   0.59     
share
                                                                          
Diluted FFO available to          $    23,302           $   19,112   
common stockholders
Weighted average shares used
to calculate diluted FFO per          36,806              32,609   
share available to common
stockholders
                                                                     
Basic normalized FFO
available to common               $    0.65             $   0.63     
stockholders per share
Diluted normalized FFO
available to common               $    0.63             $   0.61     
stockholders per share
                                                                          
Diluted normalized FFO
available to common               $    23,302           $   19,929   
stockholders
Weighted average shares used
to calculate diluted
normalized FFO per share              36,806              32,609   
available to common
stockholders
                                                                     
Basic normalized AFFO per         $    0.63             $   0.60     
share
Diluted normalized AFFO per       $    0.62             $   0.59     
share
                                                                          
Diluted normalized AFFO           $    22,828           $   19,157   
Weighted average shares used
to calculate diluted                  36,806              32,609   
normalized AFFO per share
                                                                     
Basic normalized FAD per          $    0.64             $   0.61     
share
Diluted normalized FAD per        $    0.63             $   0.60     
share
                                                                          
Diluted normalized FAD            $    23,187           $   19,508   
Weighted average shares used
to calculate diluted                  36,806              32,609   
normalized FAD per share


LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
                                                          
                                            March 31, 2014   December 31, 2013
ASSETS                                      (unaudited)      (audited)
Real estate investments:
Land                                        $  80,993        $   80,993
Buildings and improvements                     870,498           856,624
Accumulated depreciation and amortization     (224,966  )      (218,700   )
Net real estate property                       726,525           718,917
Mortgage loans receivable, net of
allowance for doubtful                        167,472         165,444    
accounts: 2014 — $1,691; 2013 — $1,671
Real estate investments, net                   893,997           884,361
Other assets:
Cash and cash equivalents                      7,542             6,778
Debt issue costs, net                          2,276             2,458
Interest receivable                            677               702
Straight-line rent receivable, net of
allowance for doubtful                         30,393            29,760
accounts: 2014 — $1,548; 2013 — $1,541
Prepaid expenses and other assets              6,761             6,756
Notes receivable                              595             595        
Total assets                                $  942,241      $   931,410    
                                                             
LIABILITIES
Bank borrowings                             $  41,000        $   21,000
Senior unsecured notes                         251,633           255,800
Bonds payable                                  1,400             2,035
Accrued interest                               2,350             3,424
Accrued expenses and other liabilities        14,088          16,713     
Total liabilities                              310,471           298,972
                                                             
EQUITY
Stockholders' equity:
Preferred stock $0.01 par value; 15,000
shares authorized; shares issued and           38,500            38,500
outstanding: 2014 — 2,000; 2013 — 2,000
Common stock: $0.01 par value; 60,000
shares authorized;                             348               347
shares issued and outstanding: 2014 —
34,817; 2013 — 34,746
Capital in excess of par value                 689,551           688,654
Cumulative net income                          798,852           781,848
Accumulated other comprehensive income         108               117
Cumulative distributions                      (895,589  )      (877,028   )
Total equity                                   631,770           632,438
                                                            
Total liabilities and equity                $  942,241      $   931,410    

Contact:

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