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, 2009 and announced that net income allocable to common stockholders for the third quarter was $7.4 million or $0.32 per diluted share. For the same period in 2008, net income allocable to common stockholders was $6.7 million or $0.29 per diluted share. Revenues for the three months ended September 30, 2009, were $17.3 million versus $17.0 million for the same period last year.

The Company announced that in the third quarter it repaid an $8.1 million mortgage loan secured by an assisted living property located in California. The retired debt was at an interest rate of 8.43%. Also, the Company invested $0.7 million in the third quarter of 2009 under agreements to expand and renovate eight properties operated by six different operators. These investments are at an average yield of 10.6%. The total commitment remaining under these agreements is $2.9 million as of September 30, 2009.

For the nine months ended September 30, 2009, net income allocable to common stockholders was $22.2 million or $0.96 per diluted share which includes $0.6 million related to the repurchase of 109,484 shares of preferred stock and $0.2 million related to the prepayment of a mortgage loan. For the same period in 2008, net income allocable to common stockholders was $22.5 million or $0.98 per diluted share which includes $1.0 million related to the repurchase of 636,300 shares of preferred stock. Revenues for the nine months ended September 30, 2009, were $52.4 million versus $52.7 million for the same period last year.

The Company will conduct a conference call on Friday, November 6, 2009, 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, 2009. The conference call is accessible by dialing 877-407-4134. The international number is 201-689-8430. The earnings release will be available on our website. An audio replay of the conference call will be available from November 6, 2009 through November 20, 2009. Callers can access the replay by dialing 877-660-6853 or 201-612-7415 and entering account number 356 and encore passcode number 333917.

At September 30, 2009, LTC had investments in 99 skilled nursing properties, 101 assisted living properties and two schools in 29 states. The Company is a self-administered real estate investment trust that primarily invests in long-term care and other health care related 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,

                                2009        2008        2009         2008

Revenues:

Rental income                   $ 14,961    $ 14,080    $ 44,942     $ 43,339

Interest income from mortgage     2,061       2,450       6,538        7,685
loans

Interest and other income         306         469         949          1,673

Total revenues                    17,328      16,999      52,429       52,697

Expenses:

Interest expense                  340         900         2,046        3,161

Depreciation and amortization     3,694       3,745       11,089       11,167

Provisions for doubtful           202         (30    )    573          (40     )
accounts

Operating and other expenses      1,766       1,680       5,417        5,108

Total expenses                    6,002       6,295       19,125       19,396

Income from continuing            11,326      10,704      33,304       33,301
operations

Discontinued operations:

Gain on sale of assets, net       --          --          --           92

Net income from discontinued      --          --          --           92
operations

Net income                        11,326      10,704      33,304       33,393

Income allocated to               (76    )    (76    )    (229    )    (230    )
noncontrolling interests

Net income attributable to LTC    11,250      10,628      33,075       33,163
Properties, Inc.

Income allocated to               (34    )    (36    )    (105    )    (124    )
participating securities

Income allocated to preferred     (3,785 )    (3,844 )    (10,730 )    (10,560 )
stockholders

Net income available to common  $ 7,431     $ 6,748     $ 22,240     $ 22,479
stockholders

Basic earnings per common
share:

Continuing operations           $ 0.32      $ 0.29      $ 0.96       $ 0.98

Discontinued operations         $ 0.00      $ 0.00      $ 0.00       $ 0.00

Net income allocable to common  $ 0.32      $ 0.29      $ 0.96       $ 0.98
stockholders

Diluted earnings per common
share:

Continuing operations           $ 0.32      $ 0.29      $ 0.96       $ 0.97

Discontinued operations         $ 0.00      $ 0.00      $ 0.00       $ 0.00

Net income allocable to common  $ 0.32      $ 0.29      $ 0.96       $ 0.98
stockholders

Weighted average shares used to
calculate earnings per common
share:

Basic                             23,108      23,019      23,083       22,950

Diluted                           23,193      23,142      23,165       23,087



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 REIT's financial performance that is not defined by accounting principles generally accepted in the United States. We define FFO as net income allocable to common stockholders adjusted to exclude the gains or losses on the sale of assets and adjusted to add back impairment charges, real estate depreciation and other non-cash charges. Other REITs may not use this definition of FFO and therefore, caution should be exercised when comparing our company's FFO to that of other REITs. FFO is used in the REIT industry as a supplemental measure of financial performance, but is not a substitute for net income per share allocable to common stockholders determined in accordance with accounting principles generally accepted in the United States.

The following table reconciles net income allocable to common stockholders to funds from operations allocable to common stockholders (unaudited, amounts in thousands, except per share amounts):


                                  Three Months Ended      Nine Months Ended
                                  September 30,           September 30,

                                  2009        2008        2009        2008

Net income allocable to common    $ 7,431     $ 6,748     $ 22,240    $ 22,479
stockholders

Add: Real estate depreciation       3,694       3,745       11,089      11,167

Add: Non-cash compensation          360         306         1,025       923
charges

Add loss / less (gain) on sale of   --          --          --          (92    )
assets, net

FFO allocable to common             11,485      10,799      34,354      34,477
stockholders

Less: Non-cash compensation         (360   )    (306   )    (1,025 )    (923   )
charges

FFO including non-cash            $ 11,125    $ 10,493    $ 33,329    $ 33,554
compensation charges

Basic FFO allocable to common     $ 0.50      $ 0.47      $ 1.49      $ 1.50
stockholders per share

Diluted FFO allocable to common   $ 0.49      $ 0.46      $ 1.46      $ 1.47
stockholders per share

Diluted FFO allocable to common   $ 12,399    $ 11,717    $ 37,097    $ 37,251
stockholders

Weighted average shares used to
calculate diluted FFO per share     25,373      25,322      25,345      25,267
allocable to common stockholders

Basic FFO including non-cash      $ 0.48      $ 0.46      $ 1.44      $ 1.46
compensation charges per share

Diluted FFO including non-cash    $ 0.47      $ 0.45      $ 1.42      $ 1.44
compensation charges per share

Diluted FFO including non-cash    $ 12,039    $ 11,411    $ 36,072    $ 36,328
compensation charges

Weighted average shares used to
calculate diluted FFO per share     25,373      25,322      25,345      25,267
including non-cash compensation
charges




LTC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

                                         September 30, 2009  December 31, 2008

ASSETS                                   (unaudited)         (audited)

Real Estate Investments:

Buildings and improvements, net of
accumulated depreciation and             $ 328,737           $ 337,171
amortization: 2009 -- $141,473; 2008 --
$130,475

Land                                       34,971              34,971

Mortgage loans receivable, net of
allowance for doubtful                     71,548              77,541
accounts: 2009 -- $720; 2008 -- $760

Real estate investments, net               435,256             449,683

Other Assets:

Cash and cash equivalents                  5,076               21,118

Debt issue costs, net                      555                 831

Interest receivable                        1,802               2,010

Straight-line rent receivable, net of
allowance for doubtful                     16,532              13,900

accounts: 2009 -- $413; 2008 -- $140

Prepaid expenses and other assets          8,767               9,148

Notes receivable                           2,553               2,895

Marketable securities                      6,472               6,468

Total Assets                             $ 477,013           $ 506,053

LIABILITIES AND EQUITY

Bank borrowings                          $ --                $ --

Mortgage loans payable                     7,728               32,063

Bonds payable                              4,225               4,690

Accrued interest                           67                  251

Accrued expenses and other liabilities     6,931               5,015

Distributions payable                      2,967               3,022

Total Liabilities                          21,918              45,041

Stockholders' equity:

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

shares issued and outstanding: 2009 --     186,801             189,560
7,932; 2008 -- 8,042

Common stock: $0.01 par value; 45,000
shares authorized;

shares issued and outstanding: 2009 --     232                 231
23,215; 2008 -- 23,136

Capital in excess of par value             323,905             321,979

Cumulative net income                      566,640             533,565

Other                                      418                 735

Cumulative distributions                   (626,035 )          (588,192 )

Total LTC Properties, Inc. Stockholders'   451,961             457,878
Equity

Noncontrolling interests                   3,134               3,134

Total Equity                               455,095             461,012

Total Liabilities and Equity             $ 477,013           $ 506,053




LTC PROPERTIES, INC.

SUPPLEMENTAL INFORMATION

(Unaudited, dollar amounts in thousands)

Non-Cash Revenue Components

                       3Q09       4Q09(1)   1Q10(1)   2Q10(1)   3Q10

Straight-line rent     $ 1,036    $ 993     $ 789     $ 758     $ 670

Amort. Lease break fee   (164  )    (164 )    (164 )    (164 )    (164 )

Net                    $ 872      $ 829     $ 625     $ 594     $ 506

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




Maturities

                       2009  2010        2011        2012          2013

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

Mortgage Loan
Receivable Maturities  $ --  $ 646       $ 7,301     $ 2,221       $ 16,212
(1)

Debt Maturities (1)    $ --  $ 7,581 (2) $ --        $ --          $ --

(1) Represents principal amount due at maturity.

(2) 8.7% fixed prepayable May 1. Represents principal amount due at maturity.

Note: At September 30, 2009, the Company had a floating rate debt balance of
$4,225 at an all-in floating rate of 2.24%. This debt amortizes to $720 which
is due in 2015 and is redeemable at anytime.





Portfolio Snapshot

                                      Nine months ended
                                      9/30/09                                   Number
                                                          % of                  of      Investment
                                                          Revenues  Number of   Beds/   per
Type of     Gross        % of         Rental    Interest  (3)       Properties  Units   Bed/Unit
Property    Investments  Investments  Income    Income                          (1)
                                                (2)


Assisted
Living      $ 282,209    48.9  %      $ 22,484  $ 2,312   48.2  %   101         4,598   $ 61.38
Properties

Skilled
Nursing       282,220    48.9  %        21,573    3,996   49.7  %   99          11,460  $ 24.63
Properties

Schools       13,020     2.2   %        885       230     2.1   %   2           N/A       N/A

Totals      $ 577,449    100.0 %      $ 44,942  $ 6,538   100.0 %   202         16,058

(1) See the Company's Annual Report on Form 10-K for the year ended December 31, 2008, 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.




Balance Sheet Metrics

                        Three Months Ended

                        9/30/09     6/30/09     3/31/09     12/31/08     9/30/08

Debt to book            2.6%    (1) 5.3%    (3) 7.3%        7.4%         7.4%
capitalization ratio

Debt & Preferred Stock
to book capitalization  42.6%   (1) 44.1%   (3) 45.2%       45.5%        45.3%
ratio

Debt to market          1.6%    (1) 3.8%    (3) 5.9%    (5) 5.4%     (5) 4.2%
capitalization ratio

Debt & Preferred Stock
to market               25.3%   (1) 29.5%   (3) 32.8%   (5) 30.1%    (5) 23.0%
capitalization ratio

Interest coverage       45.2x   (2) 18.7x   (2) 17.7x   (4) 15.4x    (6) 17.1x
ratio

Fixed charge coverage   3.7x    (2) 3.3x        3.4x    (4) 3.1x     (6) 3.2x
ratio

(1) Decrease primarily due to the repayment of $23.9 million of mortgage debt in
June and July 2009.

(2) Increase primarily due to the decrease in interest expense relating to the
repayment of debt.

(3) Decrease primarily due to the repayment of $15.8 million on two mortgage
loans secured by 10 assisted living properties located in various states.

(4) Increase primarily due to increases in rental income resulting from lease
restructuring and one-time interest income resulting from the prepayment of a
mortgage loan.

(5) Increase primarily due to the decrease in market capitalization.

(6) Decrease is due primarily to non-payment of rental income and mortgage
interest income from affiliates of Sunwest Management, Inc., loan pay-offs and
lower invested cash balances at lower interest rates, partially offset by lower
interest expense due to debt paid off in 2008. Additionally in the fourth
quarter of 2008, we incurred $0.6 million of one-time charges related primarily
to lease/loan defaults and terminated transactions.




    Source: LTC Properties, Inc.