LTC Announces Fourth Quarter and Annual Operating Results
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- LTC Properties, Inc. (NYSE:LTC) released results of operations for the three and twelve months ended December 31, 2010 and announced that net income allocable to common stockholders for the fourth quarter was $9.6 million or $0.37 per diluted share which included $0.8 million from the Sunwest Management, Inc. (or Sunwest) bankruptcy settlement distribution partially offset by a $0.4 million provision for doubtful account charge related to a mortgage loan secured by land in Oklahoma. For the same period in 2009, net income allocable to common stockholders was $7.2 million or $0.31 per diluted share. Revenues for the three months ended December 31, 2010, were $20.0 million versus $17.3 million for the same period last year.
For the twelve months ended December 31, 2010, net income allocable to common stockholders was $29.6 million or $1.21 per diluted share. Included in these results was a $2.4 million charge related to the Company's redemption of all of its 8.5% Series E Cumulative Convertible Preferred Stock ("Series E Preferred Stock") and 40% of its 8.0% Series F Cumulative Preferred Stock ("Series F Preferred Stock"), a $1.2 million provision for doubtful accounts charge for two mortgage loans (one secured by a private school property in Minnesota and one secured by land in Oklahoma) partially offset by a $0.8 million bankruptcy settlement distribution relating to Sunwest. In the first quarter of 2010, LTC acquired a school property located in Minnesota via deed-in-lieu of foreclosure as a result of the borrower filing for Chapter 7 bankruptcy. The school property has been classified as held-for-sale and the Company is actively marketing to sell it. For calendar 2009, net income allocable to common stockholders was $29.4 million or $1.27 per diluted share which included $0.6 million of allocated income from the repurchase of 109,484 shares of its Series F Preferred Stock. Revenues for the twelve months ended December 31, 2010, were $74.3 million versus $69.4 million for the same period last year.
The Company will conduct a conference call on Thursday, February 24, 2011, at 10:00 a.m. Pacific time, in order to comment on the Company's performance and operating results for the quarter ended December 31, 2010. The conference call is accessible by dialing 877-317-6789. The international number is 412-317-6789. The earnings release will be available on our website. An audio replay of the conference call will be available from February 24, 2011 through March 8, 2011. Callers can access the replay by dialing 877-344-7529 or 412-317-0088 and entering conference number 448106. 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 "Presentation" section of the "Investor Information" tab.
At December 31, 2010, LTC had investments in 89 skilled nursing properties, 103 assisted living properties, 12 other senior housing properties and two schools. 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 mortgage loans, facility lease transactions and other investments. For more information on LTC Properties, Inc., visit the Company's website at www.LTCProperties.com.
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)
Three Months Ended Twelve Months Ended
December 31, December 31,
2010 2009 2010 2009
(unaudited) (audited)
Revenues:
Rental income $ 17,154 $ 14,933 $ 64,952 $ 59,487
Interest income
from mortgage 1,799 2,020 7,482 8,558
loans
Interest and other 1,026 382 1,868 1,331
income
Total revenues 19,979 17,335 74,302 69,376
Expenses:
Interest expense 981 372 2,653 2,418
Depreciation and 4,162 3,659 15,963 14,529
amortization
Provisions for 538 202 2,010 775
doubtful accounts
Operating and 2,338 2,102 8,155 7,519
other expenses
Total expenses 8,019 6,335 28,781 25,241
Income from
continuing 11,960 11,000 45,521 44,135
operations
Discontinued
operations:
Income from
discontinued 21 56 222 225
operations
Gain on sale of 310 -- 310 --
assets, net
Net income from
discontinued 331 56 532 225
operations
Net income 12,291 11,056 46,053 44,360
Income allocated
to non-controlling (47 ) (67 ) (191 ) (296 )
interests
Net income
attributable to 12,244 10,989 45,862 44,064
LTC Properties,
Inc.
Income allocated
to participating (75 ) (34 ) (230 ) (139 )
securities
Income allocated
to preferred (2,586 ) (3,785 ) (16,045 ) (14,515 )
stockholders
Net income
allocable to $ 9,583 $ 7,170 $ 29,587 $ 29,410
common
stockholders
Basic earnings per
common share:
Continuing $ 0.35 $ 0.31 $ 1.19 $ 1.26
operations
Discontinued $ 0.01 $ 0.00 $ 0.02 $ 0.01
operations
Net income
allocable to $ 0.37 $ 0.31 $ 1.21 $ 1.27
common
stockholders
Diluted earnings
per common share:
Continuing $ 0.35 $ 0.31 $ 1.18 $ 1.26
operations
Discontinued $ 0.01 $ 0.00 $ 0.02 $ 0.01
operations
Net income
allocable to $ 0.37 $ 0.31 $ 1.21 $ 1.27
common
stockholders
Weighted average
shares used to
calculate earnings
per common share:
Basic 26,090 23,148 24,495 23,099
Diluted 26,118 23,240 24,568 23,182
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.
Reconciliation of Funds From Operations ("FFO")
FFO is a supplemental measure of a real estate investment trust's ("REIT") financial performance that is not defined by U.S. generally accepted accounting principles ("GAAP"). The Company uses FFO as a supplemental measure of our operating performance and we believe FFO is 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 and normalized FFO facilitate comparisons of operating performance between periods.
FFO is defined as net income allocable to common stockholders (computed in accordance with U.S. GAAP) excluding gains or losses on the sale of assets plus real estate depreciation and amortization, with adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. Normalized FFO represents FFO adjusted from 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 National Association of Real Estate Investment Trusts' ("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.
The Company uses FFO, normalized FFO, normalized FFO excluding non-cash rental income and normalized FFO excluding non-cash rental income and non-cash compensation charges as supplemental performance measures of our cash flow generated by operations and cash available for distribution to stockholders. FFO, normalized FFO , normalized FFO excluding non-cash rental income and normalized FFO excluding non-cash rental income and non-cash compensation charges 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 allocable to common stockholders.
The following table reconciles net income allocable to common stockholders to FFO allocable to common stockholders, normalized FFO allocable to common stockholders, normalized FFO allocable to common stockholders excluding non-cash rental income and normalized FFO allocable to common stockholders excluding non-cash rental income and non-cash compensation charges (unaudited, amounts in thousands, except per share amounts):
Three Months Ended Twelve Months Ended
December 31, December 31,
2010 2009 2010 2009
Net income
allocable to common $ 9,583 $ 7,170 $ 29,587 $ 29,410
stockholders
Add: Depreciation
and amortization
(continuing and 4,162 3,733 16,109 14,822
discontinued
operations)
Less: Gain on sale (310 ) -- (310 ) --
of assets, net
FFO allocable to 13,435 10,903 45,386 44,232
common stockholders
Add: Preferred
stock redemption -- -- 2,383 --
charge
Less: Allocation of
income from -- -- -- (626 )
preferred stock
buyback
(Less) Add:
Non-recurring one (385 ) -- 467 (1) (198 )(2)
time items
Normalized FFO
allocable to common 13,050 10,903 48,236 43,408
stockholders
Less: Non-cash (840 ) (833 ) (3,155 ) (3,588 )
rental income
Normalized FFO
excluding non-cash 12,210 10,070 45,081 39,820
rental income
Add: Non-cash
compensation 303 364 1,285 1,389
charges
Normalized FFO
excluding non-cash
rental income and $ 12,513 $ 10,434 $ 46,366 $ 41,209
non-cash
compensation
charges
Includes a $1.2 million provision for doubtful accounts charge related to
(1) for two mortgage loans (one secured by a private school property located in
Minnesota and once secured by land located in Oklahoma) partially offset by
a $0.8 million bankruptcy settlement distribution relating to Sunwest.
(2) Income received in conjunction with a mortgage loan prepayment.
Basic FFO allocable
to common $ 0.51 $ 0.47 $ 1.85 $ 1.91
stockholders per
share
Diluted FFO
allocable to common $ 0.51 $ 0.46 $ 1.83 $ 1.89
stockholders per
share
Diluted FFO $ 14,375 $ 11,842 $ 49,119 $ 48,019
Weighted average
shares used to
calculate diluted 28,393 25,489 26,824 25,452
FFO per share
allocable to common
stockholders
Basic normalized
FFO allocable to $ 0.50 $ 0.47 $ 1.97 $ 1.88
common stockholders
per share
Diluted normalized
FFO allocable to $ 0.49 $ 0.46 $ 1.94 $ 1.85
common stockholders
per share
Diluted normalized $ 13,990 $ 11,842 $ 51,969 $ 47,195
FFO
Weighted average
shares used to
calculate diluted 28,393 25,489 26,824 25,452
normalized FFO per
share allocable to
common stockholders
Basic normalized
FFO excluding $ 0.47 $ 0.44 $ 1.84 $ 1.72
non-cash rental
income per share
Diluted normalized
FFO excluding $ 0.46 $ 0.43 $ 1.82 $ 1.71
non-cash rental
income per share
Diluted normalized
FFO excluding $ 13,150 $ 11,009 $ 48,814 $ 43,607
non-cash rental
income
Weighted average
shares used to
calculate diluted
normalized FFO 28,393 25,489 26,824 25,452
excluding non-cash
rental income per
share allocable to
common stockholders
Basic normalized
FFO excluding
non-cash rental $ 0.48 $ 0.45 $ 1.89 $ 1.78
income and non-cash
compensation
charges per share
Diluted normalized
FFO excluding
non-cash rental $ 0.47 $ 0.45 $ 1.87 $ 1.77
income and non-cash
compensation
charges per share
Diluted normalized
FFO excluding
non-cash rental $ 13,453 $ 11,373 $ 50,099 $ 44,996
income and non-cash
compensation
charges
Weighted average
shares used to
calculate diluted
normalized FFO
excluding non-cash
rental income and 28,393 25,489 26,824 25,452
non-cash
compensation
charges per share
allocable to common
stockholders
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(audited)
December 31, 2010 December 31, 2009
ASSETS
Real Estate Investments:
Land $ 42,254 $ 36,205
Buildings and improvements 570,512 476,369
Accumulated depreciation and (158,709 ) (142,839 )
amortization
Net operating real estate 454,057 369,735
property
Properties held-for-sale, net
of accumulated depreciation and 2,900 4,545
amortization: 2010 -- $0; 2009
-- $2,341
Net real estate property 456,957 374,280
Mortgage loans receivable, net
of allowance for doubtful 59,026 69,883
accounts: 2010 -- $981; 2009 --
$704
Real estate investments, net 515,983 444,163
Other Assets:
Cash and cash equivalents 6,903 8,856
Debt issue costs, net 743 476
Interest receivable 1,571 1,964
Straight-line rent receivable,
net of allowance for doubtful 20,090 17,124
accounts: 2010 -- $1,473; 2009
-- $629
Prepaid expenses and other 8,202 8,663
assets
Other assets related to 11 185
properties held-for-sale
Notes receivable 1,283 2,689
Marketable securities 6,478 6,473
Total assets $ 561,264 $ 490,593
LIABILITIES
Bank borrowings $ 37,700 $ 13,500
Senior unsecured notes 50,000 --
Mortgage loan payable -- 7,685
Bonds payable 3,730 4,225
Accrued interest 675 102
Accrued expenses and other 9,869 7,786
liabilities
Accrued expenses and other
liabilities related to -- 15
properties held-for-sale
Distributions payable 1,768 2,967
Total Liabilities 103,742 36,280
EQUITY
Stockholders' equity:
Preferred stock $0.01 par
value; 15,000 shares
authorized; shares issued and 126,913 186,801
outstanding: 2010 -- 5,536;
2009 -- 7,932
Common stock: $0.01 par value;
45,000 shares authorized; 263 233
shares issued and outstanding:
2010 -- 26,345; 2009 -- 23,312
Capital in excess of par value 398,599 326,163
Cumulative net income 623,491 577,629
Other 264 390
Cumulative distributions (693,970 ) (638,884 )
Total LTC Properties, Inc. 455,560 452,332
stockholders' equity
Non-controlling interests 1,962 1,981
Total equity 457,522 454,313
Total liabilities and equity $ 561,264 $ 490,593
Source: LTC Properties, Inc.
Released February 23, 2011