Business & Finance
Tue, February 28, 2012 
WESTLAKE VILLAGE, Calif.--([ BUSINESS WIRE ])--[ LTC Properties, Inc. ] (NYSE: LTC) (aLTCa or the aCompanya) announced operating results for the quarter and year ended December 31, 2011. The Company reported a 29.6% increase in normalized Funds from Operations (aFFOa) to $16.9 million for the quarter ended December 31, 2011, from $13.1 million from the comparable 2010 period. Normalized FFO per diluted common share was $0.55 for the quarter ended December 31, 2011, an increase of 12.2% from $0.49 for the comparable 2010 period. The increase in normalized FFO per diluted common share was due to higher revenues resulting primarily from acquisitions partially offset by an increase in interest expense and higher weighted average diluted shares outstanding.
Additionally the Company reported a 32.6% increase in normalized FFO to $64.0 million for the year ended December 31, 2011, from $48.2 million from the comparable 2010 period. Normalized FFO per diluted common share was $2.15 for the year ended December 31, 2011, an increase of 10.8% from $1.94 for the comparable 2010 period. The increase in normalized FFO per diluted common share was due to higher revenues resulting primarily from acquisitions partially offset by a decrease in interest income from amortizing and matured mortgage loans, increases in interest and operating expenses and higher weighted average diluted shares outstanding.
FFO for the quarter ended December 31, 2011 increased 25.0% to $16.8 million from $13.4 million in the comparable 2010 period. FFO per diluted common share for the fourth quarter of 2011 increased 7.8% to $0.55 from $0.51 in the comparable 2010 period. FFO for the year ended December 31, 2011 increased 31.0% to $59.5 million from $45.4 million in the comparable 2010 period. FFO per diluted common share for the year ended December 31, 2011 increased 9.8% to $2.01 from $1.83 in the comparable 2010 period. These increases are primarily due to the factors described above.
Net income available to common stockholders for the quarter ended December 31, 2011 was $11.7million or $0.39 per diluted share. For the same period in 2010, net income available to common stockholders was $9.6million or $0.37 per diluted share. This increase is primarily due to the factors described above. For the year ended December 31, 2011, net income available to common stockholders was $39.8million or $1.36 per diluted share which included a $3.6million charge related to the Companyas redemption of all remaining shares of its 8.0% Series F Cumulative Preferred Stock (aSeries F preferred stocka). For the same period in 2010, net income available to common stockholders was $29.6million or $1.21 per diluted share which included a $2.4million charge related to the Companyas redemption of all of its SeriesE Preferred Stock and 40% of its Series F Preferred Stock and $1.2million provision for doubtful accounts related to two mortgage loans partially offset by a $0.8 million bankruptcy settlement distribution.
Conference Call Information
The Company will conduct a conference call on Tuesday, February 28, 2012, at 10:00 a.m. Pacific time, in order to comment on the Companyas performance and operating results for the quarter ended December 31, 2011. The conference call is accessible by dialing 877-317-6789. The international number is 412-317-6789. An audio replay of the conference call will be available from February28, 2012 through March 14, 2012. Callers can access the replay by dialing 877-344-7529 or 412-317-0088 and entering conference number 10010121. The earnings release will be available on our website. The Companyas supplemental information package for the current period will also be available on the Companyas website at [ www.LTCProperties.com ] in the aPresentationsa section of the aInvestor Informationa tab.
About LTC
At December 31, 2011, LTC had investments in 89 skilled nursing properties, 102 assisted living properties, 14other senior housing properties, two schools and a parcel of land under development. These properties are located in 30 states. Other senior housing properties consist of independent living properties and properties providing any combination of skilled nursing, assisted living and/or independent living 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 Companyas website at [ www.LTCProperties.com ].
Forward Looking Statements
This press release includes statements that are not purely historical and are aforward looking statementsa 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 Companyas 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 Companyas 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 December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Rental income | $ | 20,504 | $ | 16,996 | $ | 77,643 | $ | 64,351 | ||||||||
| Interest income from mortgage loans | 1,560 | 1,799 | 6,411 | 7,482 | ||||||||||||
| Interest and other income | 234 | 1,025 | 1,106 | 1,863 | ||||||||||||
| Total revenues | 22,298 | 19,820 | 85,160 | 73,696 | ||||||||||||
| Expenses: | ||||||||||||||||
| Interest expense | 1,993 | 981 | 6,434 | 2,653 | ||||||||||||
| Depreciation and amortization | 5,141 | 4,098 | 19,515 | 15,717 | ||||||||||||
| Provisions (recovery) for doubtful accounts | 2 | 380 | (13 | ) | 1,409 | |||||||||||
| Acquisition costs | 168 | 253 | 393 | 370 | ||||||||||||
| Operating and other expenses | 2,358 | 2,073 | 9,158 | 7,687 | ||||||||||||
| Total expenses | 9,662 | 7,785 | 35,487 | 27,836 | ||||||||||||
| Income from continuing operations | 12,636 | 12,035 | 49,673 | 45,860 | ||||||||||||
| Discontinued operations: | ||||||||||||||||
| Loss from discontinued operations | (32 | ) | (54 | ) | (230 | ) | (117 | ) | ||||||||
| Gain on sale of assets, net | a" | 310 | a" | 310 | ||||||||||||
| Net (loss) income from discontinued operations | (32 | ) | 256 | (230 | ) | 193 | ||||||||||
| Net income | 12,604 | 12,291 | 49,443 | 46,053 | ||||||||||||
| Income allocated to non-controlling interests | (47 | ) | (47 | ) | (191 | ) | (191 | ) | ||||||||
| Net income attributable to LTC Properties, Inc. | 12,557 | 12,244 | 49,252 | 45,862 | ||||||||||||
| Income allocated to participating securities | (83 | ) | (75 | ) | (342 | ) | (230 | ) | ||||||||
| Income allocated to preferred stockholders | (818 | ) | (2,586 | ) | (9,078 | ) | (16,045 | ) | ||||||||
| Net income available to common stockholders | $ | 11,656 | $ | 9,583 | $ | 39,832 | $ | 29,587 | ||||||||
| Basic earnings per common share: | ||||||||||||||||
| Continuing operations | $ | 0.39 | $ | 0.36 | $ | 1.37 | $ | 1.20 | ||||||||
| Discontinued operations | ($0.00 | ) | $ | 0.01 | ($0.01 | ) | $ | 0.01 | ||||||||
| Net income available to common stockholders | $ | 0.39 | $ | 0.37 | $ | 1.36 | $ | 1.21 | ||||||||
| Diluted earnings per common share: | ||||||||||||||||
| Continuing operations | $ | 0.39 | $ | 0.36 | $ | 1.37 | $ | 1.20 | ||||||||
| Discontinued operations | ($0.00 | ) | $ | 0.01 | ($0.01 | ) | $ | 0.01 | ||||||||
| Net income available to common stockholders | $ | 0.39 | $ | 0.37 | $ | 1.36 | $ | 1.21 | ||||||||
| Weighted average shares used to calculate earnings per common share: | ||||||||||||||||
| Basic | 30,141 | 26,090 | 29,194 | 24,495 | ||||||||||||
| Diluted | 30,172 | 26,118 | 29,222 | 24,568 | ||||||||||||
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. Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year.
Supplemental Reporting Measures
FFO, normalized FFO, normalized adjusted FFO (aAFFOa), and normalized Funds Available for Distribution (aFADa) are supplemental measures of a real estate investment trustas (aREITa) financial performance that are not defined by U.S. generally accepted accounting principles (aGAAPa). 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 Companyas 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 (aNAREITa), 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 Companyas 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 companyas 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 FFO adjusted for certain items detailed in the reconciliations and excludes the non-cash portion of straight-line rent and amortization of lease inducement.
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 operating performance between REITs. Normalized FAD represents FFO adjusted for certain items detailed in the reconciliations and excludes the non-cash portion of straight-line rent and amortization of lease inducement and non-cash compensation charges.
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 December 31, | Twelve Months Ended December 31, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Net income available to common stockholders | $ | 11,656 | $ | 9,583 | $ | 39,832 | $ | 29,587 | |||||||||
| Add: Depreciation and amortization (continuing and discontinued operations) | 5,141 | 4,162 | 19,623 | 16,109 | |||||||||||||
| Less: Gain on sale of real estate, net | a" | (310 | ) | a" | (310 | ) | |||||||||||
| FFO available to common stockholders | 16,797 | 13,435 | 59,455 | 45,386 | |||||||||||||
| Add: Preferred stock redemption charge | a" | a" | 3,566 | (1) | 2,383 | (3) | |||||||||||
| Add: Preferred stock redemption dividend | a" | a" | 472 | (2) | a" | ||||||||||||
| Add: Non-cash interest related to earn-out liabilities | 110 | a" | 464 | a" | |||||||||||||
| Add: Non-recurring one-time items | a" | (385 | ) | a" | 467 | (4) | |||||||||||
| Normalized FFO available to common stockholders | 16,907 | 13,050 | 63,957 | 48,236 | |||||||||||||
| Less: Non-cash rental income | (797 | ) | (840 | ) | (3,065 | ) | (3,155 | ) | |||||||||
| Normalized adjusted FFO (AFFO) | 16,110 | 12,210 | 60,892 | 45,081 | |||||||||||||
| Add: Non-cash compensation charges | 372 | 303 | 1,467 | 1,285 | |||||||||||||
| Normalized funds available for distribution (FAD) | $ | 16,482 | $ | 12,513 | $ | 62,359 | $ | 46,366 | |||||||||
(1) Represents the original issue costs related to the redemption of the remaining Series F preferred stock. (2) Represents the dividends on the Series F preferred stock up to the redemption date. (3) Represents the original issue costs related to the redemption of all of the Series E and 40% of the Series F preferred stock. (4) Includes a $1.2 million provision for doubtful accounts charge related to two mortgage loans (one secured by a school property and one secured by land) partially offset by a $0.8 million bankruptcy settlement distribution. | |||||||||||||||||
| Basic FFO available to common stockholders per share | $ | 0.56 | $ | 0.51 | $ | 2.04 | $ | 1.85 | |||||||||
| Diluted FFO available to common stockholders per share | $ | 0.55 | $ | 0.51 | $ | 2.01 | $ | 1.83 | |||||||||
| Diluted FFO available to common stockholders | $ | 17,745 | $ | 14,375 | $ | 63,260 | $ | 49,119 | |||||||||
| Weighted average shares used to calculate diluted FFO per share available to common stockholders | 32,485 | 28,393 | 31,539 | 26,824 | |||||||||||||
| Basic normalized FFO available to common stockholders per share | $ | 0.56 | $ | 0.50 | $ | 2.19 | $ | 1.97 | |||||||||
| Diluted normalized FFO available to common stockholders per share | $ | 0.55 | $ | 0.49 | $ | 2.15 | $ | 1.94 | |||||||||
| Diluted normalized FFO available to common stockholders | $ | 17,855 | $ | 13,990 | $ | 67,762 | $ | 51,969 | |||||||||
| Weighted average shares used to calculate diluted normalized FFO per share available to common stockholders | 32,485 | 28,393 | 31,539 | 26,824 | |||||||||||||
| Basic normalized AFFO per share | $ | 0.53 | $ | 0.47 | $ | 2.09 | $ | 1.84 | |||||||||
| Diluted normalized AFFO per share | $ | 0.53 | $ | 0.46 | $ | 2.05 | $ | 1.82 | |||||||||
| Diluted normalized AFFO | $ | 17,058 | $ | 13,150 | $ | 64,697 | $ | 48,814 | |||||||||
| Weighted average shares used to calculate diluted normalized AFFO per share | 32,485 | 28,393 | 31,539 | 26,824 | |||||||||||||
| Basic normalized FAD per share | $ | 0.55 | $ | 0.48 | $ | 2.14 | $ | 1.89 | |||||||||
| Diluted normalized FAD per share | $ | 0.54 | $ | 0.47 | $ | 2.10 | $ | 1.87 | |||||||||
| Diluted normalized FAD | $ | 17,430 | $ | 13,453 | $ | 66,164 | $ | 50,099 | |||||||||
| Weighted average shares used to calculate diluted normalized FAD per share | 32,485 | 28,393 | 31,539 | 26,824 | |||||||||||||
| LTC PROPERTIES, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
(amounts in thousands) | ||||||||
| December 31, 2011 | December 31, 2010 | |||||||
| ASSETS | ||||||||
| Real estate investments: | ||||||||
| Land | $ | 57,093 | $ | 43,031 | ||||
| Buildings and improvements | 662,300 | 567,017 | ||||||
| Accumulated depreciation and amortization | (177,583 | ) | (158,204 | ) | ||||
| Net operating real estate property | 541,810 | 451,844 | ||||||
| Properties held-for-sale, net of accumulated depreciation and amortization: 2011 a" $613; 2010 a" $505 | 5,025 | 5,113 | ||||||
| Net real estate property | 546,835 | 456,957 | ||||||
| Mortgage loans receivable, net of allowance for doubtful accounts: 2011 a" $921; 2010 a" $981 | 53,081 | 59,026 | ||||||
| Real estate investments, net | 599,916 | 515,983 | ||||||
| Other assets: | ||||||||
| Cash and cash equivalents | 4,408 | 6,903 | ||||||
| Debt issue costs, net | 2,301 | 743 | ||||||
| Interest receivable | 1,494 | 1,571 | ||||||
| Straight-line rent receivable, net of allowance for doubtful accounts: 2011 a" $680; 2010 a" $634 | 23,772 | 20,090 | ||||||
| Prepaid expenses and other assets | 7,852 | 8,162 | ||||||
| Other assets related to properties held-for-sale, net of allowance for doubtful accounts: 2011 a" $839; 2010 a" $839 | 52 | 51 | ||||||
| Notes receivable | 817 | 1,283 | ||||||
| Marketable securities | 6,485 | 6,478 | ||||||
| Total assets | $ | 647,097 | $ | 561,264 | ||||
| LIABILITIES | ||||||||
| Bank borrowings | $ | 56,000 | $ | 37,700 | ||||
| Senior unsecured notes | 100,000 | 50,000 | ||||||
| Bonds payable | 3,200 | 3,730 | ||||||
| Accrued interest | 1,356 | 675 | ||||||
| Earn-out liabilities | 6,305 | a" | ||||||
| Accrued expenses and other liabilities | 11,400 | 9,737 | ||||||
| Accrued expenses and other liabilities related to properties held-for-sale | 126 | 132 | ||||||
| Distributions payable | a" | 1,768 | ||||||
| Total liabilities | 178,387 | 103,742 | ||||||
| EQUITY | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock $0.01 par value; 15,000 shares authorized; shares issued and outstanding: 2011 a" 2,000; 2010 a" 5,536 | 38,500 | 126,913 | ||||||
| Common stock: $0.01 par value; 45,000 shares authorized; shares issued and outstanding: 2011 a" 30,346; 2010 a" 26,345 | 303 | 263 | ||||||
| Capital in excess of par value | 507,343 | 398,599 | ||||||
| Cumulative net income | 672,743 | 623,491 | ||||||
| Other | 199 | 264 | ||||||
| Cumulative distributions | (752,340 | ) | (693,970 | ) | ||||
| Total LTC Properties, Inc. stockholders' equity | 466,748 | 455,560 | ||||||
| Non-controlling interests | 1,962 | 1,962 | ||||||
| Total equity | 468,710 | 457,522 | ||||||
| Total liabilities and equity | $ | 647,097 | $ | 561,264 | ||||
