Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - LTC PROPERTIES INC | tm2037545d1_ex99-2.htm |
| 8-K - FORM 8-K - LTC PROPERTIES INC | tm2037545d1_8k.htm |
Exhibit 99.1
 |
FOR IMMEDIATE RELEASE
For more information contact: Wendy L. Simpson Pam Kessler (805) 981-8655 |
LTC REPORTS 2020 FOURTH QUARTER RESULTS
AND DISCUSSES RECENT ACTIVITIES
WESTLAKE VILLAGE, CALIFORNIA, February 18, 2021-- LTC Properties, Inc. (NYSE: LTC), a real estate investment trust that primarily invests in seniors housing and health care properties, today announced operating results for its fourth quarter ended December 31, 2020.
Net income available to common stockholders was $17.5 million, or $0.45 per diluted share, for the 2020 fourth quarter, compared with $12.4 million, or $0.31 per diluted share, for the same period in 2019. Funds from Operations (“FFO”) was $30.4 million, or $0.78 per share, for the 2020 fourth quarter, compared with $32.4 million, or $0.81 per share, for the comparable 2019 period. Excluding the prior year’s $2.1 million gain from property insurance proceeds related to a previously sold property, FFO was $30.3 million for the quarter ended December 31, 2019. Funds available for distribution (“FAD”) was $30.7 million for the 2020 fourth quarter, compared with $29.5 million for the 2019 fourth quarter.
Fourth quarter 2020 results were impacted by the following:
| · | Collected 98% of contractual rent and mortgage interest, which includes the application of Senior Lifestyle’s letter of credit and deposit discussed below; |
| · | Lower interest and property tax expense; |
| · | A $3.0 million impairment loss related to a memory care community located in Colorado leased to Senior Lifestyle; |
| · | Decreased rental income from abated and deferred rent, net of repayment, and decreased rent from properties sold in 2020, partially offset by higher rental income from acquisitions, completed development projects and lease escalations; and |
| · | Senior Lifestyle Update |
| o | Rent: paid LTC $3.9 million (83%) of its $4.7 million contractual rent due during the 2020 fourth quarter; |
| o | Letter of Credit: LTC applied Senior Lifestyle’s letter of credit and deposits totaling $3.7 million to accrued 2020 second quarter rent receivable of $2.5 million and notes receivable of $125,000, and the remaining $1.1 million to third and fourth quarter rent. As of December 31, 2020, Senior Lifestyle’s unaccrued delinquent rent balance was $1.0 million. |
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During the fourth quarter of 2020, LTC completed the following:
| · | Funded $5.0 million of a $13.0 million preferred equity commitment to develop a 267-unit independent and assisted living community in Washington. This commitment was finalized in the third quarter 2020; and |
| · | Funded $6.4 million in development and capital improvement projects at a weighted average rate of 8.0%. |
Subsequent to December 31, 2020, LTC completed the following:
| · | Transitioned 11 assisted living communities previously leased to Senior Lifestyle to two operators. These communities are located in Wisconsin, Ohio, and Illinois. Total cash rent expected under these master lease agreements is $5.2 million for the first lease year, $7.1 million for the second lease year, and $7.3 million for the third lease year, escalating by 2% annually thereafter; |
| · | As previously announced, reduced 2021 rent escalations by 50% to support eligible operators during the continuing COVID-19 crisis. The rent escalation reduction was given in the form of a rent credit and is expected to have an approximate $530,000 impact on LTC’s 2021 GAAP revenue, and an approximate $1.3 million impact on 2021 funds available for distribution; |
| · | To date in 2021, rent deferrals were $689,000, net of $14,000 of deferred rent repayments. Excluding the rent credit related to the rent escalation reduction discussed above, abated rent to date in 2021 is $360,000. Senior Lifestyle did not pay any of their monthly contractual rent of $1.6 million in January or February 2021. LTC received $545,000 under the new master leases related to the transitioned assisted living communities discussed above; |
| · | Received $936,000 related to the payoff of a note receivable; |
| · | Paid $7.0 million in regular scheduled principal payments under its 4.5% senior unsecured notes; and |
| · | Borrowed $9.0 million under its unsecured revolving line of credit at 1.3%. |
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Conference Call Information
LTC will conduct a conference call on Friday, February 19, 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 December 31, 2020. 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 March 5, 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 | 10151170 |
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 holds 181 properties in 27 states with 29 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.
(financial tables follow)
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LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (unaudited) | (audited) | |||||||||||||||
| Revenues: | ||||||||||||||||
| Rental income | $ | 37,774 | $ | 38,189 | $ | 126,094 | $ | 152,755 | ||||||||
| Interest income from mortgage loans | 7,909 | 7,683 | 31,396 | 29,991 | ||||||||||||
| Interest and other income | 590 | 591 | 1,847 | 2,558 | ||||||||||||
| Total revenues | 46,273 | 46,463 | 159,337 | 185,304 | ||||||||||||
| Expenses: | ||||||||||||||||
| Interest expense | 7,088 | 7,578 | 29,705 | 30,582 | ||||||||||||
| Depreciation and amortization | 9,839 | 9,817 | 39,071 | 39,216 | ||||||||||||
| Impairment loss from real estate investments | 3,036 | — | 3,977 | — | ||||||||||||
| (Recovery) provision for doubtful accounts | (2 | ) | 13 | (3 | ) | 166 | ||||||||||
| Transaction costs | 102 | 90 | 299 | 365 | ||||||||||||
| Property tax expense | 3,380 | 4,189 | 15,065 | 16,755 | ||||||||||||
| General and administrative expenses | 5,216 | 4,541 | 19,710 | 18,453 | ||||||||||||
| Total expenses | 28,659 | 26,228 | 107,824 | 105,537 | ||||||||||||
| Other operating income: | ||||||||||||||||
| Gain (loss) on sale of real estate, net | 44 | (4,630 | ) | 44,117 | 2,106 | |||||||||||
| Operating income | 17,658 | 15,605 | 95,630 | 81,873 | ||||||||||||
| Gain from property insurance proceeds | — | 2,111 | 373 | 2,111 | ||||||||||||
| Loss on unconsolidated joint ventures | (138 | ) | — | (758 | ) | — | ||||||||||
| Impairment loss from investments in unconsolidated joint ventures | — | (5,500 | ) | — | (5,500 | ) | ||||||||||
| Income from unconsolidated joint ventures | 145 | 415 | 432 | 2,388 | ||||||||||||
| Net income | 17,665 | 12,631 | 95,677 | 80,872 | ||||||||||||
| Income allocated to non-controlling interests | (92 | ) | (89 | ) | (384 | ) | (346 | ) | ||||||||
| Net income attributable to LTC Properties, Inc. | 17,573 | 12,542 | 95,293 | 80,526 | ||||||||||||
| Income allocated to participating securities | (103 | ) | (93 | ) | (422 | ) | (391 | ) | ||||||||
| Net income available to common stockholders | $ | 17,470 | $ | 12,449 | $ | 94,871 | $ | 80,135 | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 0.45 | $ | 0.31 | $ | 2.42 | $ | 2.03 | ||||||||
| Diluted | $ | 0.45 | $ | 0.31 | $ | 2.42 | $ | 2.02 | ||||||||
| Weighted average shares used to calculate earnings per common share: | ||||||||||||||||
| Basic | 39,062 | 39,588 | 39,179 | 39,571 | ||||||||||||
| Diluted | 39,147 | 39,775 | 39,264 | 39,759 | ||||||||||||
| Dividends declared and paid per common share | $ | 0.57 | $ | 0.57 | $ | 2.28 | $ | 2.28 | ||||||||
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Supplemental Reporting Measures
FFO 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 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.
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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 | Twelve Months Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| GAAP net income available to common stockholders | $ | 17,470 | $ | 12,449 | $ | 94,871 | $ | 80,135 | |||||||||
| Add: Impairment loss from investments | 3,036 | 5,500 | 3,977 | 5,500 | |||||||||||||
| Add: Depreciation and amortization | 9,839 | 9,817 | 39,071 | 39,216 | |||||||||||||
| Add: Loss on unconsolidated joint ventures | 138 | — | 758 | — | |||||||||||||
| (Less)/Add: (Gain) loss on sale of real estate, net | (44 | ) | 4,630 | (44,117 | ) | (2,106 | ) | ||||||||||
| NAREIT FFO attributable to common stockholders | 30,439 | 32,396 | 94,560 | 122,745 | |||||||||||||
| Add: Non-recurring items | — | (2,111 | )(1) | 22,841 | (1)(2) | (1,535 | )(3)(4) | ||||||||||
| FFO attributable to common stockholders, excluding non-recurring items | $ | 30,439 | $ | 30,285 | $ | 117,401 | $ | 121,210 | |||||||||
| NAREIT FFO attributable to common stockholders | $ | 30,439 | $ | 32,396 | $ | 94,560 | $ | 122,745 | |||||||||
| Non-cash income: | |||||||||||||||||
| Less: straight-line rental income | (77 | ) | (889 | ) | (1,778 | ) | (4,487 | ) | |||||||||
| Add: amortization of lease costs | 109 | 104 | 611 | 385 | |||||||||||||
| Add: Other non-cash expense | — | — | 23,029 | (2) | 1,926 | (3) | |||||||||||
| Less: Effective interest income from mortgage loans | (1,506 | ) | (1,481 | ) | (6,154 | ) | (5,842 | ) | |||||||||
| Less: Deferred income from unconsolidated joint ventures | — | — | — | (18 | ) | ||||||||||||
| Net non-cash income | (1,474 | ) | (2,266 | ) | 15,708 | (8,036 | ) | ||||||||||
| Non-cash expense: | |||||||||||||||||
| Add: Non-cash compensation charges | 1,781 | 1,627 | 7,012 | 6,565 | |||||||||||||
| Less: Capitalized interest | — | (167 | ) | (354 | ) | (608 | ) | ||||||||||
| Net non-cash expense | 1,781 | 1,460 | 6,658 | 5,957 | |||||||||||||
| Funds available for distribution (FAD) | 30,746 | 31,590 | $ | 116,926 | $ | 120,666 | |||||||||||
| Less: Non-recurring income | — | (2,111 | )(1) | (373 | )(1) | (3,461 | ) (4) | ||||||||||
| Funds available for distribution (FAD), excluding non-recurring items | $ | 30,746 | $ | 29,479 | $ | 116,553 | $ | 117,205 | |||||||||
| (1) Represents the gain from insurance proceeds related to previously sold properties. | |||||||||||||||||
| (2) Represents the write-off of straight-line rent related to Senior Lifestyle, Genesis Healthcare, Inc. and another operator. | |||||||||||||||||
| (3) Represents the write-off of straight-line rent due to a lease termination and transition of two senior housing communities to a new operator. | |||||||||||||||||
| (4) Represents deferred rent repayment from an operator and (1) above | |||||||||||||||||
| NAREIT Basic FFO attributable to common stockholders per share | $ | 0.78 | $ | 0.82 | $ | 2.41 | $ | 3.10 | |||||||||
| NAREIT Diluted FFO attributable to common stockholders per share | $ | 0.78 | $ | 0.81 | $ | 2.41 | $ | 3.08 | |||||||||
| NAREIT Diluted FFO attributable to common stockholders | $ | 30,542 | $ | 32,489 | $ | 94,560 | $ | 123,136 | |||||||||
| Weighted average shares used to calculate NAREIT diluted FFO per share attributable to common stockholders | 39,327 | 39,939 | 39,269 | 39,921 | |||||||||||||
| Diluted FFO attributable to common stockholders, excluding non-recurring items | $ | 30,542 | $ | 30,378 | $ | 117,823 | $ | 121,601 | |||||||||
| Weighted average shares used to calculate diluted FFO, excluding non-recurring items, per share attributable to common stockholders | 39,327 | 39,939 | 39,438 | 39,921 | |||||||||||||
| Diluted FAD | $ | 30,849 | $ | 31,683 | $ | 117,348 | $ | 121,057 | |||||||||
| Weighted average shares used to calculate diluted FAD per share | 39,327 | 39,939 | 39,438 | 39,921 | |||||||||||||
| Diluted FAD, excluding non-recurring items | $ | 30,849 | $ | 29,572 | $ | 116,975 | $ | 117,596 | |||||||||
| Weighted average shares used to calculate diluted FAD, excluding non-recurring items, per share | 39,327 | 39,939 | 39,438 | 39,921 | |||||||||||||
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LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(audited, amounts in thousands, except per share)
| December 31, 2020 | December 31, 2019 | |||||||
| ASSETS | ||||||||
| Investments: | ||||||||
| Land | $ | 127,774 | $ | 126,703 | ||||
| Buildings and improvements | 1,324,227 | 1,295,899 | ||||||
| Accumulated depreciation and amortization | (349,643 | ) | (312,642 | ) | ||||
| Operating real estate property, net | 1,102,358 | 1,109,960 | ||||||
| Properties held-for-sale, net of accumulated depreciation: 2020—$0; 2019—$35,113 | — | 26,856 | ||||||
| Real property investments, net | 1,102,358 | 1,136,816 | ||||||
| Mortgage loans receivable, net of loan loss reserve: 2020—$2,592; 2019—$2,560 | 257,251 | 254,099 | ||||||
| Real estate investments, net | 1,359,609 | 1,390,915 | ||||||
| Notes receivable, net of loan loss reserve: 2020—$146; 2019—$181 | 14,465 | 17,927 | ||||||
| Investments in unconsolidated joint ventures | 11,340 | 19,003 | ||||||
| Investments, net | 1,385,414 | 1,427,845 | ||||||
| Other assets: | ||||||||
| Cash and cash equivalents | 7,772 | 4,244 | ||||||
| Debt issue costs related to bank borrowings | 1,324 | 2,164 | ||||||
| Interest receivable | 32,746 | 26,586 | ||||||
| Straight-line rent receivable | 24,452 | 45,703 | ||||||
| Lease incentives | 2,462 | 2,552 | ||||||
| Prepaid expenses and other assets | 5,316 | 5,115 | ||||||
| Total assets | $ | 1,459,486 | $ | 1,514,209 | ||||
| LIABILITIES | ||||||||
| Bank borrowings | $ | 89,900 | $ | 93,900 | ||||
| Senior unsecured notes, net of debt issue costs: 2020—$658; 2019—$812 | 559,482 | 599,488 | ||||||
| Accrued interest | 4,216 | 4,983 | ||||||
| Accrued expenses and other liabilities | 30,082 | 30,412 | ||||||
| Total liabilities | 683,680 | 728,783 | ||||||
| EQUITY | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2020—39,242; 2019—39,752 | 392 | 398 | ||||||
| Capital in excess of par value | 852,780 | 867,346 | ||||||
| Cumulative net income | 1,388,775 | 1,293,482 | ||||||
| Cumulative distributions | (1,474,545 | ) | (1,384,283 | ) | ||||
| Total LTC Properties, Inc. stockholders’ equity | 767,402 | 776,943 | ||||||
| Non-controlling interests | 8,404 | 8,483 | ||||||
| Total equity | 775,806 | 785,426 | ||||||
| Total liabilities and equity | $ | 1,459,486 | $ | 1,514,209 | ||||
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