LTC Announces Third Quarter Operating Results

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- LTC Properties, Inc. (NYSE:LTC) released results of operations for the three and nine months ended September 30, 2010 and announced that net income allocable to common stockholders for the third quarter was $5.6 million or $0.22 per diluted share which included 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"). For the same period in 2009, net income allocable to common stockholders was $7.4 million or $0.32 per diluted share. Revenues for the three months ended September 30, 2010, were $18.5 million versus $17.2 million for the same period last year.

The Company announced that during the third quarter it invested $1.6 million, before closing fees of $0.1 million, in a mortgage loan secured by a skilled nursing property located in Missouri to finance an expansion of the property and extend the loan maturity for an additional five years to January 2018. The current interest rate is 10.9%, increasing 0.13% annually. Also, the Company invested $1.3 million in the third quarter of 2010 under agreements to expand and renovate six properties operated by four different operators. These investments are at an average yield of 9.4%.

For the nine months ended September 30, 2010, net income allocable to common stockholders was $20.0 million or $0.83 per diluted share. Included in these results was a $2.4 million charge related to the Company's redemption of all of its Series E Preferred Stock and 40% of its Series F Preferred Stock and $0.9 million of provision for doubtful accounts recorded in the first quarter related to a mortgage loan secured by a private school property in Minnesota. The borrower of the private school property ceased operations and filed for Chapter 7 bankruptcy. During the three months ended September 30, 2010, LTC acquired this private school property via deed in lieu of foreclosure and has classified it as held-for-sale. The Company is actively marketing to sell this property. For the same period in 2009, net income allocable to common stockholders was $22.2 million or $0.96 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 nine months ended September 30, 2010, were $54.3 million versus $52.0 million for the same period last year.

The Company will conduct a conference call on Tuesday, October 26, 2010, at 10:00 a.m. Pacific time, in order to comment on the Company's performance and operating results for the quarter ended September 30, 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 October 26, 2010 through November 10, 2010. Callers can access the replay by dialing 877-344-7529 or 412-317-0088 and entering conference number 445148.

At September 30, 2010, LTC had investments in 95 skilled nursing properties, 99 assisted living properties, 12 other properties and two schools. These properties are located in 29 states. Other 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. 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        Nine Months Ended

                             September 30,             September 30,

                             2010         2009         2010          2009

Revenues:

Rental income                $ 16,384     $ 14,832     $ 47,798      $ 44,554

Interest income from           1,868        2,061        5,683         6,538
mortgage loans

Interest and other income      265          306          842           949

Total revenues                 18,517       17,199       54,323        52,041

Expenses:

Interest expense               852          340          1,672         2,046

Depreciation and               4,073        3,621        11,801        10,870
amortization

Provisions for doubtful        217          202          1,472         573
accounts

Operating and other            1,914        1,766        5,817         5,417
expenses

Total expenses                 7,056        5,929        20,762        18,906

Income from continuing         11,461       11,270       33,561        33,135
operations

Discontinued operations:

Income from discontinued       101          56           201           169
operations

Gain on sale of assets,        --           --           --            --
net

Net income from                101          56           201           169
discontinued operations

Net income                     11,562       11,326       33,762        33,304

Income allocated to            (48    )     (76    )     (144    )     (229    )
non-controlling interests

Net income attributable to     11,514       11,250       33,618        33,075
LTC Properties, Inc.

Income allocated to            (54    )     (34    )     (155    )     (105    )
participating securities

Income allocated to            (5,889 )     (3,785 )     (13,459 )     (10,730 )
preferred stockholders

Net income allocable to      $ 5,571      $ 7,431      $ 20,004      $ 22,240
common stockholders

Basic earnings per common
share:

Continuing operations        $ 0.22       $ 0.32       $ 0.83        $ 0.96

Discontinued operations      $ 0.00       $ 0.00       $ 0.01        $ 0.01

Net income allocable to      $ 0.22       $ 0.32       $ 0.83        $ 0.96
common stockholders

Diluted earnings per
common share:

Continuing operations        $ 0.22       $ 0.32       $ 0.82        $ 0.96

Discontinued operations      $ 0.00       $ 0.00       $ 0.01        $ 0.01

Net income allocable to      $ 0.22       $ 0.32       $ 0.83        $ 0.96
common stockholders

Weighted average shares
used to calculate earnings
per common share:

Basic                          24,930       23,108       23,959        23,083

Diluted                        24,945       23,193       24,055        23,165



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 costs, which may be of limited relevance in evaluating current performance, FFO and FFO per share 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. 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 excluding non-cash rental income and FFO excluding non-cash rental income and non-cash compensation charges as a supplemental performance measure of our cash flow generated by operations and cash available for distribution to stockholders. FFO, FFO excluding non-cash rental income and 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, is 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, FFO allocable to common stockholders
excluding non-cash rental income and 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        Nine Months Ended

                               September 30,             September 30,

                               2010         2009         2010         2009

Net income allocable to        $ 5,571      $ 7,431      $ 20,004     $ 22,240
common stockholders

Add: Depreciation and
amortization (continuing and     4,073        3,694        11,947       11,089
discontinued operations)

FFO allocable to common          9,644        11,125       31,951       33,329
stockholders

Less: Non-cash rental income     (788   )     (872   )     (2,315 )     (2,755 )

FFO excluding non-cash           8,856        10,253       29,636       30,574
rental income

Add: Non-cash compensation       261          360          982          1,025
charges

FFO excluding non-cash
rental income and non-cash     $ 9,117      $ 10,613     $ 30,618     $ 31,599
compensation charges

Basic FFO allocable to
common stockholders per        $ 0.39       $ 0.48       $ 1.33       $ 1.44
share

Diluted FFO allocable to
common stockholders per        $ 0.39       $ 0.47       $ 1.32       $ 1.42
share

Diluted FFO                    $ 9,698      $ 12,073     $ 34,744     $ 36,177

Weighted average shares used
to calculate diluted FFO per     25,090       25,460       26,304       25,436
share allocable to common
stockholders

Basic FFO excluding non-cash   $ 0.36       $ 0.44       $ 1.24       $ 1.32
rental income per share

Diluted FFO excluding
non-cash rental income per     $ 0.36       $ 0.44       $ 1.23       $ 1.31
share

Diluted FFO excluding          $ 8,856      $ 11,201     $ 32,285     $ 33,422
non-cash rental income

Weighted average shares used
to calculate diluted FFO
excluding non-cash rental        24,945       25,460       26,191       25,436
income per share allocable
to common stockholders

Basic FFO excluding non-cash
rental income and non-cash     $ 0.37       $ 0.46       $ 1.28       $ 1.37
compensation charges per
share

Diluted FFO excluding
non-cash rental income and     $ 0.37       $ 0.45       $ 1.27       $ 1.35
non-cash compensation
charges per share

Diluted FFO excluding
non-cash rental income and     $ 9,117      $ 11,561     $ 33,411     $ 34,447
non-cash compensation
charges

Weighted average shares used
to calculate diluted FFO
excluding non-cash rental
income and non-cash              24,945       25,460       26,304       25,436
compensation charges per
share allocable to common
stockholders




                             Three Months Ended    Nine Months Ended

                             September 30,         September 30,

Reconciliation of            2010       2009       2010           2009
Normalized FFO:

FFO allocable to common      $ 9,644    $ 11,125   $ 31,951       $ 33,329
stockholders

Add: Preferred stock           2,383      --         2,383          --
redemption charge

Less: Allocation of income
from preferred stock           --         --         --             (626   )
buyback

Add (Less): Non-recurring      --         --         852    (1)     (198   ) (2)
one time items

Normalized FFO allocable     $ 12,027   $ 11,125   $ 35,186       $ 32,505
to common stockholders

Basic Normalized FFO
allocable to common          $ 0.48     $ 0.48     $ 1.47         $ 1.41
stockholders per share

Diluted Normalized FFO
allocable to common          $ 0.48     $ 0.47     $ 1.44         $ 1.39
stockholders per share

Diluted Normalized FFO       $ 12,947   $ 12,073   $ 37,979       $ 35,353

Weighted average shares
used to calculate diluted
normalized FFO per share       27,203     25,460     26,304         25,436
allocable to common
stockholders




        Provision for doubtful accounts related to closure of a private school
        property located in Minnesota securing a mortgage loan. The borrower
   (1)  ceased operations and filed for Chapter 7 bankruptcy. We acquired the
        property via deed in lieu of foreclosure and have classified it as
        held-for-sale. We are actively marketing to sell this property.

   (2)  Income received in conjunction with a mortgage loan prepayment.




LTC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

                                          September 30, 2010   December 31, 2009

                                          (unaudited)          (audited)

ASSETS

Real Estate Investments:

Buildings and improvements, net of
accumulated depreciation and              $ 361,592            $ 333,530
amortization: 2010 -- $154,566; 2009 --
$142,839

Land                                        38,595               36,205

Properties held-for-sale, net of
accumulated depreciation and                7,299                4,545
amortization: 2010 -- $2,487; 2009 --
$2,341

Mortgage loans receivable, net of
allowance for doubtful accounts: 2010       64,801               69,883
-- $654; 2009 -- $704

Real estate investments, net                472,287              444,163

Other Assets:

Cash and cash equivalents                   12,493               8,856

Debt issue costs, net                       882                  476

Interest receivable                         1,444                1,964

Straight-line rent receivable, net of
allowance for doubtful accounts: 2010       19,294               17,124
-- $1,262; 2009 -- $629

Prepaid expenses and other assets           8,534                8,663

Other assets related to properties          211                  185
held-for-sale

Notes receivable                            1,429                2,689

Marketable securities                       6,477                6,473

Total Assets                              $ 523,051            $ 490,593

LIABILITIES

Bank borrowings                           $ --                 $ 13,500

Senior unsecured notes                      50,000               --

Mortgage loan payable                       --                   7,685

Bonds payable                               3,730                4,225

Accrued interest                            608                  102

Accrued expenses and other liabilities      9,045                7,786

Accrued expenses and other liabilities      35                   15
related to properties held-for-sale

Distributions payable                       1,768                2,967

Total Liabilities                           65,186               36,280

EQUITY

Stockholders' equity:

Preferred stock $0.01 par value; 15,000
shares authorized;

shares issued and outstanding: 2010 --      126,913              186,801
5,537; 2009 -- 7,932

Common stock: $0.01 par value; 45,000
shares authorized; shares issued and        262                  233
outstanding: 2010 -- 26,227; 2009 --
23,312

Capital in excess of par value              397,788              326,163

Cumulative net income                       611,247              577,629

Other                                       307                  390

Cumulative distributions                    (680,614 )           (638,884 )

Total LTC Properties, Inc.                  455,903              452,332
Stockholders' Equity

Non-controlling interests                   1,962                1,981

Total Equity                                457,865              454,313

Total Liabilities and Equity              $ 523,051            $ 490,593




      LTC PROPERTIES, INC.

      SUPPLEMENTAL INFORMATION

      (Unaudited, amounts in thousands)

      Non-Cash Revenue Components

                           3Q10       4Q10(1)    1Q11(1)    2Q11(1)    3Q11(1)

      Straight-line rent   $ 955      $ 897      $ 469      $ 426      $ 379

      Amort. Lease break     (167 )     (167 )     (167 )     (167 )     (167 )
      fee

      Net                  $ 788      $ 730      $ 302      $ 259      $ 212




       __________________________

       (1)  Projections based on current in-place leases and do not assume any
            increase in straight-line rent from additional acquisitions.




   Maturities

                 2010   2011         2012           2013           2014

   Lease                1 lease on   3 leases on    2 leases on    4 leases on
   Maturities      --
                        1 property   3 properties   2 properties   41 properties

   Mortgage
   Loan
   Receivable    $ --   $ 6,646      $ 2,221        $ 15,306       $ 6,996
   Maturities
   (1)

   Debt
   Maturities    $ --   $ --         $ --           $ --           $ --
   (2)




    ___________________________________________

    (1)    Represents principal amount due at maturity.

    (2)    Excludes the Company's unsecured revolving line of credit and
           amortization of bonds and senior unsecured notes payable.

            At September 30, 2010, the Company had a floating rate debt balance
            of $3,730 at an all-in floating rate of 2.03%. This debt amortizes
            to $720 which is due in 2015 and is redeemable at anytime. In
    Note:   addition, at September 30, 2010, the Company had a 5.26% senior
            unsecured term note of $25,000 due in 2015. The Company also had a
            5.74% senior unsecured term note of $25,000 which will be fully
            amortized by 2019.





Portfolio Snapshot

                                         Nine Months Ended
                                                                                       Number   Number   Number   Investment
                                         September 30, 2010

             Gross         % of          Rental     Interest   % of       Number of    of SNF   of ALF   of ALF   per
Type of
Property     Investments   Investments   Income     Income     Revenues   Properties   Beds     Units    Units    Bed/Unit
                                         (6)        (2)        (3)                     (1)      (1)      (1)

Assisted
Living       $ 281,912     44.8  %         22,408   $ 2,107    45.5  %    99           --       4,289    --       $ 65.73
Properties

Skilled
Nursing        280,452     44.5  %         21,192     3,205    45.3  %    95           10,919   --       --       $ 25.68
Properties

Other
Properties     55,460      8.8   %         3,661      294      7.4   %    12           795      290      370      $ 38.12
(4)

Schools(5)     12,170      1.9   %         901        77       1.8   %    2            N/A      N/A      N/A        N/A

Totals       $ 629,994     100.0 %       $ 48,162   $ 5,683    100.0 %    208          11,714   4,579    370





 ______________________________________________________________________________________________________________________________________________________

 (1)  See the Company's Annual Report on Form 10-K for the year ended December 31, 2009, Item 1. Business General - Owned Properties for discussion of
      bed/unit count.

 (2)  Includes interest income from mortgage loans.

 (3)  Includes rental income and interest income from mortgage loans.

 (4)  Includes independent living properties and properties providing any combination of skilled nursing, assisted living and/or independent living
      services.

      The borrower of a private school property located in Minnesota ceased operations and filed for Chapter 7 bankruptcy in the second quarter of
 (5)  2010. This private school property was acquired during the third quarter of 2010 via deed in lieu of foreclosure and has been classified as
      held-for-sale. The Company is actively marketing to sell this private school property.

 (6)  Includes rental income from properties classified as held-for-sale.





LTC PROPERTIES, INC.

SUPPLEMENTAL INFORMATION

(Unaudited, amounts in thousands)

Balance Sheet Metrics

                 Year to   Quarter Ended
                 Date

                 9/30/10   9/30/10       6/30/10       3/31/10       12/31/09       9/30/09

Debt to book
capitalization   10.5 %    10.5 %  (1)   8.9  %  (4)   7.9  %  (4)   5.3  %   (7)   2.6  %
ratio

Debt &
Preferred
Stock to book    35.3 %    35.3 %  (2)   45.8 %  (4)   45.2 %  (4)   44.2 %   (7)   42.6 %
capitalization
ratio

Debt to market
capitalization   6.3  %    6.3  %  (1)   5.5  %  (4)   4.6  %  (4)   3.0  %   (7)   1.6  %
ratio

Debt &
Preferred
Stock to         21.4 %    21.4 %  (2)   28.6 %  (4)   26.1 %  (5)   25.1 %   (7)   25.3 %
market
capitalization
ratio

Interest
coverage ratio   28.3 x    19.4 x  (3)   38.3 x  (5)   37.0 x  (6)   40.8 x   (8)   45.2 x
(9)

Fixed charge
coverage ratio   3.7  x    3.8  x        3.8  x  (5)   3.5  x  (6)   3.6  x   (8)   3.7  x
(9)




 __________________________

 (1)  Increase primarily due to the sale to Prudential of $50.0 million
      aggregate principal amount of the senior unsecured term notes.

 (2)  Decrease primarily due to the Company's redemption of all of its Series E
      Preferred Stock and 40% of its Series F Preferred Stock outstanding.

 (3)  Decrease primarily due to the increase in interest expense related to the
      $50.0 million senior unsecured term notes.

 (4)  Increase primarily due to the increase in bank borrowing.

 (5)  Increase primarily due to additional net income generated from
      acquisitions in 2009 and 2010.

      Decrease primarily due to the increase of $0.9 million in provision for
      doubtful accounts related to a mortgage loan secured by a private school
      property located in Minnesota. The borrower ceased operations and filed
 (6)  for Chapter bankruptcy in the second quarter of 2010. This private school
      property was acquired during the third quarter of 2010 via deed in lieu of
      foreclosure and has been classified as held-for-sale. The Company is
      actively marketing to sell this property.

 (7)  Decrease primarily due to the increase in market capitalization partially
      offset by the increase in bank borrowing.

      Decrease primarily due to the increase in operating and other expenses
 (8)  relating to transaction costs incurred for the acquisition of three
      assisted living properties in November of 2009.

      In calculating our interest coverage and fixed charge coverage ratios
      above, we use EBITDA, which is a financial measure not derived in
      accordance with U.S. generally accepted accounting principles (non-GAAP
      financial measure). Our coverage ratios indicate our ability to service
      interest expense and fixed charges (interest plus preferred dividends).
      Leverage ratios and coverage ratios are widely used by investors, analysts
      and rating agencies in the valuation, comparison, rating and investment
 (9)  recommendations of companies. EBITDA is not an alternative to net income,
      operating income, income from continuing operations or cash flows from
      operating activities as calculated and presented in accordance with U.S.
      GAAP. You should not rely on EBITDA as a substitute for any such U.S. GAAP
      financial measures or consider it in isolation, for the purpose of
      analyzing our financial performance, financial position or cash flows. Net
      income is the most directly comparable GAAP measure to EBITDA. Below are a
      reconciliation of net income to EBITDA and the calculation of the interest
      coverage and fixed charge coverage ratios disclosed above.





               Year to      Quarter Ended
               Date

               9/30/10      9/30/10      6/30/10      3/31/10      12/31/09     9/30/09

Net income     $ 33,762     $ 11,562     $ 11,630     $ 10,570     $ 11,056     $ 11,326

Add:
Interest         1,672        852          419          401          372          340
Expense

Add:
Depreciation
and
amortization     11,801       4,073        3,941        3,787        3,660        3,621
--
continuing
operations

Add:
Depreciation
and
amortization     146          --           73           73           73           73
--
discontinued
operations

Total EBITDA   $ 47,381     $ 16,487     $ 16,063     $ 14,831     $ 15,161     $ 15,360

Interest       $ 1,672      $ 852        $ 419        $ 401        $ 372        $ 340
expense

Interest
coverage       28.3x        19.4x        38.3x        37.0x        40.8x        45.2x
ratio

Interest       $ 1,672      $ 852        $ 419        $ 401        $ 372        $ 340
expense

Preferred
stock
dividends
(excludes        11,076       3,506        3,785        3,785        3,785        3,785
preferred
stock
redemption
charge)

Total fixed    $ 12,748     $ 4,358      $ 4,204      $ 4,186      $ 4,157      $ 4,125
charges

Fixed charge
coverage       3.7      x   3.8      x   3.8      x   3.5      x   3.6      x   3.7      x
ratio




    Source: LTC Properties, Inc.