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Share Name | Share Symbol | Market | Type |
---|---|---|---|
LTC Properties Inc | NYSE:LTC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.38 | 1.18% | 32.56 | 32.66 | 32.2732 | 32.29 | 213,298 | 01:00:00 |
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, 2017.
Net income available to common stockholders was $19.8 million, or $0.50 per diluted share, for the 2017 fourth quarter, compared with $20.6 million, or $0.53 per diluted share, for the same period in 2016. The decrease in net income available to common stockholders was primarily due to: a $1.2 million net loss on the sale of an assisted living community; donation of a skilled nursing center in the fourth quarter of 2017; higher interest expense resulting from the sale of $100.0 million senior unsecured notes in 2017; a reduction in rental income related to the properties sold in 2017; and a defaulted master lease that was placed on a cash basis during the third quarter of 2017, partially offset by higher income from unconsolidated joint ventures and mezzanine loans.
Funds from Operations (“FFO”) was $30.4 million for the 2017 fourth quarter, compared with $30.7 million for the comparable 2016 period. FFO per diluted common share was $0.77 and $0.78 for the quarters ended December 31, 2017 and 2016, respectively. The decrease in FFO and FFO per diluted common share was primarily due to the same factors that impacted net income available to common stockholders, except for the net loss on sale which is added back to FFO.
During the fourth quarter of 2017, LTC completed the following transactions:
Conference Call Information
LTC will conduct a conference call on Friday, March 2, 2018, 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, 2017. The conference call is accessible by telephone and the internet. Telephone access will be available by dialing 877-510-2862 (domestically) or 412-902-4134 (internationally). To participate in the webcast, go to LTC’s website at www.LTCreit.com 15 minutes before the call to download the necessary software.
An audio replay of the conference call will be available from March 2 through March 16, 2018 and may be accessed by dialing 877-344-7529 (domestically) or 412-317-0088 (internationally) and entering conference number 10115647. Additionally, an audio archive will be available on LTC’s website on the “Presentations” page of the “Investor Information” section, which is under the “Investors” tab. LTC’s earnings release and supplemental information package for the current period will be available on its website on the “Press Releases” and “Presentations” pages, respectively, of the “Investor Information” section which is under the “Investors” tab.
About LTC
LTC is a self-administered real estate investment trust that primarily invests in seniors housing and health care properties primarily through sale-leaseback transactions, mortgage financing and structured finance solutions including mezzanine lending. At December 31, 2017, LTC had 202 investments located in 29 states comprising 105 assisted living communities, 96 skilled nursing centers and 1 behavioral health care hospital. Assisted living communities, independent living communities, memory care communities and combinations thereof are included in the assisted living property type. For more information on LTC Properties, Inc., visit the Company’s website at www.LTCreit.com, or connect with us on Twitter @LTCreit and LinkedIn.
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.
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share amounts)
Three Months Ended Twelve Months Ended December 31, December 31, 2017 2016 2017 2016 (unaudited) (audited) Revenues: Rental income $ 34,124 $ 34,822 $ 137,657 $ 133,527 Interest income from mortgage loans 6,719 6,974 26,769 27,321 Interest and other income 886 345 3,639 735 Total revenues 41,729 42,141 168,065 161,583 Expenses: Interest expense 7,683 6,856 29,949 26,442 Depreciation and amortization 9,424 9,309 37,610 35,932 Impairment charges — 766 1,880 766 (Recovery) provision for doubtful accounts (67 ) 212 (206 ) 457 Transaction costs — 83 56 179 General and administrative expenses 4,243 4,548 17,513 17,412 Total expenses 21,283 21,774 86,802 81,188 Operating income 20,446 20,367 81,263 80,395 Income from unconsolidated joint ventures 628 299 2,263 1,138 (Loss) gain on sale of real estate, net (1,240 ) — 3,814 3,582 Net income 19,834 20,666 87,340 85,115 Income allocated to participating securities (81 ) (89 ) (362 ) (385 ) Net income available to common stockholders $ 19,753 $ 20,577 $ 86,978 $ 84,730 Earnings per common share: Basic $ 0.50 $ 0.53 $ 2.21 $ 2.21 Diluted $ 0.50 $ 0.53 $ 2.20 $ 2.21 Weighted average shares used to calculate earnings per common share: Basic 39,429 39,065 39,409 38,388 Diluted 39,645 39,260 39,637 38,597 Dividends declared and paid per common share $ 0.57 $ 0.57 $ 2.28 $ 2.19Supplemental Reporting Measures
FFO, adjusted FFO (“AFFO”), 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, AFFO and FAD as supplemental measures of operating performance. The Company believes FFO, AFFO 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, AFFO and FAD facilitate like 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 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. Normalized FFO represents FFO adjusted for 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 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 AFFO as FFO excluding the effects of straight-line rent, amortization of lease inducement, effective interest income and deferred income from unconsolidated joint ventures. 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. By excluding the non-cash portion of rental income, interest income from mortgage loans and income from unconsolidated joint ventures, investors, analysts and our management can compare AFFO between periods. Normalized AFFO represents AFFO adjusted for certain items detailed in the reconciliations.
We define FAD as AFFO excluding the effects of non-cash compensation charges, capitalized interest and non-cash interest 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 dividend coverage between REITs. Normalized FAD represents FAD adjusted for certain items detailed in the reconciliations.
While the Company uses FFO, Normalized FFO, AFFO, Normalized AFFO, FAD and Normalized 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.
Reconciliation of FFO, AFFO and FAD
The following table reconciles GAAP net income available to common stockholders to each of NAREIT FFO attributable to common stockholders and normalized FFO attributable to common stockholders, as well as normalized AFFO and normalized FAD (unaudited, amounts in thousands, except per share amounts):
Three Months Ended Twelve Months Ended December 30, December 30, 2017 2016 2017 2016 GAAP net income available to common stockholders $ 19,753 $ 20,577 $ 86,978 $ 84,730 Add: Depreciation and amortization 9,424 9,309 37,610 35,932 Add: Impairment charges — 766 1,880 766 Loss (Gain) on sale of real estate, net 1,240 — (3,814 ) (3,582 ) NAREIT FFO attributable to common stockholders 30,417 30,652 122,654 117,846 Less: Non-cash rental income (2,804 ) (4,777 ) (8,485 ) (11,532 ) Less: Non-cash other income — — (842 ) — Less: Effective interest income from mortgage loans (1,398 ) (1,349 ) (5,500 ) (5,256 ) Less: Deferred income from unconsolidated joint ventures (36 ) — (177 ) — Adjusted FFO (AFFO) 26,179 24,526 107,650 101,058 Add: Non-cash compensation charges 1,282 1,131 5,249 4,280 Add: Non-cash interest related to earn-out liabilities 126 146 602 684 Less: Capitalized interest (281 ) (215 ) (908 ) (1,408 ) Funds available for distribution (FAD) $ 27,306 $ 25,588 $ 112,593 $ 104,614 NAREIT Basic FFO attributable to common stockholders per share $ 0.77 $ 0.78 $ 3.11 $ 3.07 NAREIT Diluted FFO attributable to common stockholders per share $ 0.77 $ 0.78 $ 3.10 $ 3.06 NAREIT Diluted FFO attributable to common stockholders $ 30,498 $ 30,741 $ 123,016 $ 118,231 Weighted average shares used to calculate NAREIT diluted FFO per share attributable to common stockholders 39,645 39,260 39,637 38,597 Diluted AFFO $ 26,260 $ 24,615 $ 108,012 $ 101,443 Weighted average shares used to calculate diluted AFFO per share 39,645 39,260 39,637 38,597 Diluted FAD $ 27,387 $ 25,677 $ 112,955 $ 104,999 Weighted average shares used to calculate diluted FAD per share 39,645 39,260 39,637 38,597LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share)
December 31, 2017 December 31, 2016 ASSETS (audited) (audited) Investments: Land $ 124,041 $ 116,096 Buildings and improvements 1,262,335 1,185,467 Accumulated depreciation and amortization (304,117 ) (275,861 ) Operating real estate property, net 1,082,259 1,025,702 Properties held-for-sale, net of accumulated depreciation: 2017—$1,916; 2016—$0 3,830 — Real property investments, net 1,086,089 1,025,702 Mortgage loans receivable, net of loan loss reserve: 2017—$2,255; 2016—$2,315 223,907 229,801 Real estate investments, net 1,309,996 1,255,503 Notes receivable, net of loan loss reserve: 2017—$166; 2016—$166 16,402 16,427 Investments in unconsolidated joint ventures 29,898 25,221 Investments, net 1,356,296 1,297,151 Other assets: Cash and cash equivalents 5,213 7,991 Debt issue costs related to bank borrowings 810 1,847 Interest receivable 15,050 9,683 Straight-line rent receivable, net of allowance for doubtful accounts: 2017—$814; 2016—$960 64,490 55,276 Prepaid expenses and other assets 23,711 22,948 Total assets $ 1,465,570 $ 1,394,896 LIABILITIES Bank borrowings $ 96,500 $ 107,100 Senior unsecured notes, net of debt issue costs: 2017—$1,131; 2016—$1,009 571,002 502,291 Accrued interest 5,276 4,675 Accrued incentives and earn-outs 8,916 12,229 Accrued expenses and other liabilities 25,228 28,553 Total liabilities 706,922 654,848 EQUITY Stockholders’ equity: Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2017—39,570; 2016—39,221 396 392 Capital in excess of par value 856,992 839,005 Cumulative net income 1,100,783 1,013,443 Cumulative distributions (1,203,011 ) (1,112,792 ) Total LTC Properties, Inc. stockholders’ equity 755,160 740,048 Non-controlling interests 3,488 — Total equity 758,648 740,048 Total liabilities and equity $ 1,465,570 $ 1,394,896
View source version on businesswire.com: http://www.businesswire.com/news/home/20180301006313/en/
LTC Properties, Inc.Wendy L. SimpsonPam Kessler(805) 981-8655
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