LTC Reports 2024 Second Quarter Results

LTC Properties, Inc. (NYSE: LTC) (“LTC” or the “Company”), a real estate investment trust that primarily invests in seniors housing and health care properties, today announced operating results for the second quarter ended June 30, 2024.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240729715504/en/

 

 

Three Months Ended

 

 

June 30,

(unaudited, amounts in thousands, except per share data)

 

2024

 

2023

Total revenues

 

$

50,116

 

$

48,246

Net income available to common stockholders

 

$

19,188

 

 

 

6,028

 

Diluted earnings per common share

 

$

0.44

 

 

$

0.15

 

NAREIT funds from operations ("FFO") attributable to common stockholders(1)

 

$

28,244

 

 

$

27,178

 

NAREIT diluted FFO per common share(1)

 

$

0.65

 

 

$

0.66

 

FFO attributable to common stockholders, excluding non-recurring items(1)

 

$

29,266

 

 

$

27,178

 

Funds available for distribution ("FAD")(1)

 

$

29,548

 

 

$

27,935

 

FAD, excluding non-recurring items(1)

 

$

28,662

 

 

$

27,935

 

_______________

(1)

NAREIT FFO and FAD are non-GAAP financial measures. A reconciliation of these measures is included in the tables at the end of this press release.

More detailed financial information is available in the tables at the end of this press release, the Company’s Supplemental Operating and Financial Data presentation for the 2024 second quarter, and its Form 10-Q, as filed with the Securities and Exchange Commission, both of which can be found on LTC’s investor relations website at ir.LTCreit.com.

Second Quarter 2024 Financial Results:

• Total revenues increased as the result of higher interest income from mortgage and mezzanine loan originations in 2023, construction loan funding in 2024, interest rate escalations, and insurance proceeds related to sold properties.
• Expenses decreased primarily due to the impairment loss in the year-ago period, a decrease in interest expense due to scheduled principal paydowns on the Company’s senior unsecured notes, partially offset by an increase in general and administrative expense, and an increase in provisions for credit losses.
• Income from unconsolidated joint ventures increased as a result of a 2024 mortgage loan origination.

2024 Second Quarter Portfolio Update:

Investment

• As previously announced, originated a $12.7 million mortgage loan secured by a skilled nursing and assisted living campus with 78 units and 104 beds in Texas. The five-year mortgage loan is interest only at a current rate of 9.15%. The investment is accounted for as an unconsolidated joint venture, and is expected to generate approximately $884,000 of revenue in 2024.

Operator Update – ALG Senior (“ALG”)

• LTC deferred a total of $1.5 million in rent from ALG for May and June of 2024 on a portfolio of 11 assisted living communities in North Carolina that the Company owns through a joint venture accounted for as a financing receivable, with a balance of $121.4 million at June 30, 2024. Additionally, LTC agreed to defer up to approximately $250,000 in rent per month for July through December 2024, or a total of up to $1.5 million.
• LTC also amended a lease on another assisted living community operated by ALG. Under the amendment, no rent is due for May through September 2024, with quarterly market-based rent resets thereafter. Previous annualized rent was approximately $900,000. LTC wrote-off $321,000 of straight-line rent receivable related to this lease during the 2024 second quarter.
• LTC funded $8.3 million under two mortgage loans receivable due from affiliates of ALG.
• Concurrently with the mortgage loans receivable funding, LTC entered into two joint venture investments related to 17 properties operated by ALG in North and South Carolina, as follows:
  • Exchanged its $64.5 million mortgage loan receivable for 53% interest in a joint venture that owns 13 assisted living communities in North Carolina (12) and South Carolina (1).
  • Exchanged its $38.0 million mortgage loans receivable for 93% interest in a joint venture that owns four assisted living communities and a parcel of land in North Carolina.
  • Each of the joint ventures concurrently leased the properties to an affiliate of ALG under separate 10-year master leases maturing at the end of June 2034, with purchase options available through June 2028. Combined contractual annualized cash income under the leases is $7.4 million, compared with $6.9 million of annualized cash interest under the previous mortgage loans, as a result of the additional $8.3 million in cash LTC invested. Due to the purchase options given to the seller, these investments are being accounted for as financing receivables.
• All of LTC’s investments with ALG are now cross-defaulted and cross-collateralized, providing the Company with added security.

Asset Sales and Payoff

• Sold two closed properties located in Texas for $500,000, as previously disclosed, and received $397,000 of proceeds, net of transaction cost.
• Received $2.0 million from the payoff of a mortgage loan secured by a parcel of land in Missouri.

Transition

• As previously announced, transitioned a 56-unit assisted living community in Texas to an operator new to LTC.

Amendments and Extensions

• Amended a master lease with HMG Healthcare (“HMG”) covering 11 skilled nursing centers in Texas to extend the term through December 2028. As a condition of the amendment, HMG agreed to repay $11.9 million on its $13.5 million working capital note during the 2024 second quarter, which was subsequently amended to July 11, 2024. During and subsequent to the second quarter, the $11.9 million was paid in full. HMG’s current working capital note repayment obligation is $1.6 million, which is interest free and will be repaid ratably through the end of 2028.
• An operator exercised its renewal option through February 2030. Annual cash rent for 2024 is $8.0 million, escalating 2.5% annually.

Activities Subsequent to June 30, 2024:

• Committed to fund a $26.1 million mortgage loan for the construction of a 116-unit independent living, assisted living and memory care community in Illinois. The borrower contributed $12.3 million of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, expected in early 2025, LTC will begin funding the commitment. The loan term is approximately six years at a current rate of 9.0% and IRR of 9.5%;
• Sold an 80-unit assisted living community in Texas to the operator for $8.0 million. LTC anticipates recording a gain on sale of approximately $3.6 million. The operator paid $441,000 in rent through the remainder of the initial lease term.
• Recorded $2.6 million of income from former operators related to portfolio transitions in prior years.

Balance Sheet and Liquidity at June 30, 2024:

LTC had total liquidity of $189.3 million, including $6.2 million of cash on hand, $118.2 million available under the Company’s unsecured revolving line of credit, and the potential ability to access the capital markets through the issuance of $64.9 million of common stock under LTC’s equity distribution agreements.

Conference Call Information

LTC will conduct a conference call on Tuesday, July 30, 2024, 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 June 30, 2024. The conference call is accessible by telephone and the internet. Interested parties may access the live conference call via the following:

Webcast

 

www.LTCreit.com

USA Toll-Free Number

 

(888) 506‑0062

International Number

 

(973) 528‑0011

Conference Access Code

 

927824

Additionally, an audio replay of the call will be available one hour after the live call through August 13, 2024 via the following:

USA Toll-Free Number

 

(877) 481‑4010

International Number

 

[phone]

Conference Number

 

50745

About LTC

LTC is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint-ventures and structured finance solutions including preferred equity and mezzanine lending. LTC’s investment portfolio includes 194 properties in 26 states with 31 operating partners. Based on its gross real estate investments, LTC’s investment portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties. Learn more at www.LTCreit.com.

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

(unaudited, amounts in thousands, except per share amounts)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

31,657

 

 

$

31,537

 

 

$

65,206

 

 

$

63,272

 

Interest income from financing receivables(1)

 

 

3,830

 

 

 

3,830

 

 

 

7,660

 

 

 

7,581

 

Interest income from mortgage loans

 

 

12,661

 

 

 

11,926

 

 

 

25,109

 

 

 

23,170

 

Interest and other income

 

 

1,968

 

 

 

953

 

 

 

3,507

 

 

 

3,723

 

Total revenues

 

 

50,116

 

 

 

48,246

 

 

 

101,482

 

 

 

97,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

10,903

 

 

 

11,312

 

 

 

21,948

 

 

 

21,921

 

Depreciation and amortization

 

 

9,024

 

 

 

9,376

 

 

 

18,119

 

 

 

18,586

 

Impairment loss

 

 

—

 

 

 

12,076

 

 

 

—

 

 

 

12,510

 

Provision for credit losses

 

 

703

 

 

 

187

 

 

 

727

 

 

 

1,918

 

Transaction costs

 

 

380

 

 

 

91

 

 

 

646

 

 

 

208

 

Property tax expense

 

 

3,247

 

 

 

3,187

 

 

 

6,630

 

 

 

6,480

 

General and administrative expenses

 

 

6,760

 

 

 

6,091

 

 

 

13,251

 

 

 

12,385

 

Total expenses

 

 

31,017

 

 

 

42,320

 

 

 

61,321

 

 

 

74,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating income:

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) gain on sale of real estate, net

 

 

(32

)

 

 

302

 

 

 

3,219

 

 

 

15,675

 

Operating income

 

 

19,067

 

 

 

6,228

 

 

 

43,380

 

 

 

39,413

 

Income from unconsolidated joint ventures

 

 

671

 

 

 

376

 

 

 

1,047

 

 

 

752

 

Net income

 

 

19,738

 

 

 

6,604

 

 

 

44,427

 

 

 

40,165

 

Income allocated to non-controlling interests

 

 

(377

)

 

 

(430

)

 

 

(836

)

 

 

(857

)

Net income attributable to LTC Properties, Inc.

 

 

19,361

 

 

 

6,174

 

 

 

43,591

 

 

 

39,308

 

Income allocated to participating securities

 

 

(173

)

 

 

(146

)

 

 

(338

)

 

 

(293

)

Net income available to common stockholders

 

$

19,188

 

 

$

6,028

 

 

$

43,253

 

 

$

39,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.44

 

 

$

0.15

 

 

$

1.01

 

 

$

0.95

 

Diluted

 

$

0.44

 

 

$

0.15

 

 

$

1.00

 

 

$

0.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used to calculate earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

43,171

 

 

 

41,145

 

 

 

43,030

 

 

 

41,113

 

Diluted

 

 

43,463

 

 

 

41,232

 

 

 

43,322

 

 

 

41,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared and paid per common share

 

$

0.57

 

 

$

0.57

 

 

$

1.14

 

 

$

1.14

 

_______________

(1)

Represents rental income from acquisitions through sale-leaseback transactions, subject to leases that contain purchase options. In accordance with GAAP, the properties are required to be presented as financing receivables on the Consolidated Balance Sheets and the rental income to be presented as Interest income from financing receivables on the Consolidated Statements of Income.

LTC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

June 30, 2024

 

December 31, 2023

 

 

(unaudited)

 

(audited)

ASSETS

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

Land

 

$

119,141

 

 

$

121,725

 

Buildings and improvements

 

 

1,216,774

 

 

 

1,235,600

 

Accumulated depreciation and amortization

 

 

(390,863

)

 

 

(387,751

)

Operating real estate property, net

 

 

945,052

 

 

 

969,574

 

Properties held-for-sale, net of accumulated depreciation: 2024—$1,906; 2023—$3,616

 

 

4,248

 

 

 

18,391

 

Real property investments, net

 

 

949,300

 

 

 

987,965

 

Financing receivables,(1) net of credit loss reserve: 2024—$3,615; 2023—$1,980

 

 

357,910

 

 

 

196,032

 

Mortgage loans receivable, net of credit loss reserve: 2024—$3,927; 2023—$4,814

 

 

389,448

 

 

 

477,266

 

Real estate investments, net

 

 

1,696,658

 

 

 

1,661,263

 

Notes receivable, net of credit loss reserve: 2024—$590; 2023—$611

 

 

58,405

 

 

 

60,490

 

Investments in unconsolidated joint ventures

 

 

30,504

 

 

 

19,340

 

Investments, net

 

 

1,785,567

 

 

 

1,741,093

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

Cash and cash equivalents

 

 

6,174

 

 

 

20,286

 

Debt issue costs related to revolving line of credit

 

 

1,621

 

 

 

1,557

 

Interest receivable

 

 

57,465

 

 

 

53,960

 

Straight-line rent receivable

 

 

18,706

 

 

 

19,626

 

Lease incentives

 

 

3,573

 

 

 

2,607

 

Prepaid expenses and other assets

 

 

17,610

 

 

 

15,969

 

Total assets

 

$

1,890,716

 

 

$

1,855,098

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Revolving line of credit

 

$

281,750

 

 

$

302,250

 

Term loans, net of debt issue costs: 2024—$267; 2023—$342

 

 

99,733

 

 

 

99,658

 

Senior unsecured notes, net of debt issue costs: 2024—$1,138; 2023—$1,251

 

 

479,522

 

 

 

489,409

 

Accrued interest

 

 

4,997

 

 

 

3,865

 

Accrued expenses and other liabilities

 

 

41,957

 

 

 

43,649

 

Total liabilities

 

 

907,959

 

 

 

938,831

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2024—43,491; 2023—43,022

 

 

435

 

 

 

430

 

Capital in excess of par value

 

 

1,005,468

 

 

 

991,656

 

Cumulative net income

 

 

1,677,986

 

 

 

1,634,395

 

Accumulated other comprehensive income

 

 

5,965

 

 

 

6,110

 

Cumulative distributions

 

 

(1,800,715

)

 

 

(1,751,312

)

Total LTC Properties, Inc. stockholders’ equity

 

 

889,139

 

 

 

881,279

 

Non-controlling interests

 

 

93,618

 

 

 

34,988

 

Total equity

 

 

982,757

 

 

 

916,267

 

Total liabilities and equity

 

$

1,890,716

 

 

$

1,855,098

 

_______________

(1)

Represents acquisitions through sale-leaseback transactions, subject to leases that contain purchase options. In accordance with GAAP, the properties are required to be presented as financing receivables on the Consolidated Balance Sheets.

LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, amounts in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2024

 

2023

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

44,427

 

 

$

40,165

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

18,119

 

 

 

18,586

 

Stock-based compensation expense

 

 

4,522

 

 

 

4,226

 

Impairment loss

 

 

—

 

 

 

12,510

 

Gain on sale of real estate, net

 

 

(3,219

)

 

 

(15,675

)

Income from unconsolidated joint ventures

 

 

(1,047

)

 

 

(752

)

Income distributions from unconsolidated joint ventures

 

 

421

 

 

 

—

 

Straight-line rental adjustment

 

 

598

 

 

 

888

 

Exchange of prepayment fee for participating interest in mortgage loan

 

 

—

 

 

 

(1,380

)

Adjustment for collectability of rental income and lease incentives

 

 

321

 

 

 

26

 

Amortization of lease incentives

 

 

438

 

 

 

413

 

Provision for credit losses

 

 

727

 

 

 

1,918

 

Application of interest reserve

 

 

(233

)

 

 

(1,609

)

Amortization of debt issue costs

 

 

535

 

 

 

600

 

Other non-cash items, net

 

 

48

 

 

 

47

 

Change in operating assets and liabilities

 

 

 

 

 

 

Lease incentives funded

 

 

(1,594

)

 

 

(19

)

Increase in interest receivable

 

 

(4,135

)

 

 

(4,593

)

Increase (decrease) in accrued interest payable

 

 

1,132

 

 

 

(1,364

)

Net change in other assets and liabilities

 

 

(3,150

)

 

 

(7,453

)

Net cash provided by operating activities

 

 

57,910

 

 

 

46,534

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

Investment in real estate properties

 

 

(319

)

 

 

(43,759

)

Investment in real estate capital improvements

 

 

(3,635

)

 

 

(3,230

)

Proceeds from sale of real estate, net

 

 

25,664

 

 

 

37,553

 

Investment in financing receivables

 

 

—

 

 

 

(112,712

)

Investment in real estate mortgage loans receivable

 

 

(16,054

)

 

 

(70,603

)

Principal payments received on mortgage loans receivable

 

 

2,393

 

 

 

251

 

Investments in unconsolidated joint ventures

 

 

(11,164

)

 

 

—

 

Advances and originations under notes receivable

 

 

(188

)

 

 

(866

)

Principal payments received on notes receivable

 

 

2,294

 

 

 

5,965

 

Net cash used in investing activities

 

 

(1,009

)

 

 

(187,401

)

FINANCING ACTIVITIES:

 

 

 

 

 

 

Borrowings from revolving line of credit

 

 

19,200

 

 

 

224,950

 

Repayment of revolving line of credit

 

 

(39,700

)

 

 

(28,600

)

Principal payments on senior unsecured notes

 

 

(10,000

)

 

 

(11,000

)

Proceeds from common stock issued

 

 

10,974

 

 

 

1,777

 

Distributions paid to stockholders

 

 

(49,403

)

 

 

(47,162

)

Distributions paid to non-controlling interests

 

 

(109

)

 

 

(812

)

Financing costs paid

 

 

(411

)

 

 

(20

)

Cash paid for taxes in lieu of shares upon vesting of restricted stock

 

 

(1,533

)

 

 

(1,619

)

Other

 

 

(31

)

 

 

—

 

Net cash (used in) provided by financing activities

 

 

(71,013

)

 

 

137,514

 

Decrease in cash and cash equivalents

 

 

(14,112

)

 

 

(3,353

)

Cash and cash equivalents, beginning of period

 

 

20,286

 

 

 

10,379

 

Cash and cash equivalents, end of period

 

$

6,174

 

 

$

7,026

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Interest paid

 

$

20,281

 

 

$

22,685

 

Non-cash investing and financing transactions:

 

 

 

 

 

 

Contribution from non-controlling interest

 

$

61,025

 

 

$

12,964

 

Investment in financing receivables

 

$

(163,460

)

 

$

—

 

Exchange of mezzanine loan and related prepayment fee for participating interest in mortgage loan

 

$

—

 

 

$

(8,841

)

Exchange of mortgage loans for controlling interests in joint ventures accounted for as financing receivables

 

$

102,435

 

 

$

—

 

Reserves withheld at financing and mortgage loan receivable origination

 

$

—

 

 

$

(5,147

)

Accretion of interest reserve recorded as mortgage loan receivable

 

$

233

 

 

$

1,609

 

Increase (decrease) in fair value of interest rate swap agreements

 

$

145

 

 

$

(151

)

Distributions paid to non-controlling interests

 

$

817

 

 

$

—

 

Distributions paid to non-controlling interests related to property sale

 

$

2,305

 

 

$

—

 

Mortgage loan receivable reserve withheld at origination

 

$

—

 

 

$

1,506

 

Supplemental Reporting Measures

FFO and 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 and FAD as supplemental measures of operating performance. The Company believes FFO 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 and FAD facilitate like comparisons of operating performance between periods. Occasionally, the Company may exclude non-recurring items from FFO and FAD in order to allow investors, analysts and 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. 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 the Company’s FFO to that of other REITs.

We define FAD as FFO excluding the effects of straight-line rent, amortization of lease inducement, effective interest income, deferred income from unconsolidated joint ventures, non-cash compensation charges, capitalized interest and non-cash interest charges. 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 the 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 the 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. 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.

While the Company uses FFO and FAD as supplemental performance measures of the 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 and FAD

The following table reconciles GAAP net income available to common stockholders to each of NAREIT FFO attributable to common stockholders and FAD (unaudited, amounts in thousands):

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income available to common stockholders

 

$

19,188

 

 

$

6,028

 

 

$

43,253

 

 

$

39,015

 

 

Add: Impairment loss

 

 

—

 

 

 

12,076

 

 

 

—

 

 

 

12,510

 

 

Add: Depreciation and amortization

 

 

9,024

 

 

 

9,376

 

 

 

18,119

 

 

 

18,586

 

 

Add (Less): Loss (Gain) on sale of real estate, net

 

 

32

 

 

 

(302

)

 

 

(3,219

)

 

 

(15,675

)

 

NAREIT FFO attributable to common stockholders

 

 

28,244

 

 

 

27,178

 

 

 

58,153

 

 

 

54,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Non-recurring items

 

 

1,022

 

(1)

 

—

 

 

 

(1,355

)

(1)

 

262

 

(1)

FFO attributable to common stockholders, excluding non-recurring items

 

$

29,266

 

 

$

27,178

 

 

$

56,798

 

 

$

54,698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NAREIT FFO attributable to common stockholders

 

$

28,244

 

 

$

27,178

 

 

 

58,153

 

 

 

54,436

 

 

Non-cash income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: straight-line rental adjustment

 

 

48

 

 

 

423

 

 

 

598

 

 

 

888

 

 

Add: amortization of lease incentives

 

 

205

 

 

 

230

 

 

 

438

 

 

 

439

 

 

Add: Other non-cash contra-revenue

 

 

321

 

(2)

 

—

 

 

 

321

 

(2)

 

—

 

 

Less: Effective interest income

 

 

(2,293

)

 

 

(2,220

)

 

 

(3,937

)

 

 

(3,828

)

 

Net non-cash income

 

 

(1,719

)

 

 

(1,567

)

 

 

(2,580

)

 

 

(2,501

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Non-cash compensation charges

 

 

2,320

 

 

 

2,137

 

 

 

4,522

 

 

 

4,225

 

 

Add: Provision for credit losses

 

 

703

 

(3)

 

187

 

 

 

727

 

(3)

 

1,918

 

(3)

Net non-cash expense

 

 

3,023

 

 

 

2,324

 

 

 

5,249

 

 

 

6,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds available for distribution (FAD)

 

$

29,548

 

 

$

27,935

 

 

 

60,822

 

 

 

58,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Non-recurring income

 

 

(886

)

(1)

 

—

 

 

 

(3,263

)

(1)

 

(1,570

)

(1)

Funds available for distribution (FAD), excluding non-recurring items

 

$

28,662

 

 

$

27,935

 

 

$

57,559

 

 

$

56,508

 

 

_______________

(1)

See the reconciliation of non-recurring items on the following page for further detail.

(2)

Represents the straight-line rent receivable write-off of $321 related to converting a lease to fair market rent.

(3)

Includes provision for credit losses reserve recorded upon origination of acquisitions accounted for as financing receivables, and mortgage loans, offset by mortgage loan payoffs. See the reconciliation of non-recurring items on the following page for further detail.

Reconciliation of FFO and FAD (continued)

The following table continues the reconciliation between GAAP net income available to common stockholders and each of NAREIT FFO attributable to common stockholders and FAD by reconciling the non-recurring items (unaudited, amounts in thousands):

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2024

 

2023

 

2024

 

2023

 

Reconciliation of non-recurring adjustments to NAREIT FFO:

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses reserve recorded upon origination

 

$

1,635

 

(1)

$

—

 

$

1,635

 

(1)

$

1,832

 

(1)

Provision for credit losses recovery related to loan payoffs

 

 

(934

)

(1)

 

—

 

 

 

(934

)

(1)

 

—

 

 

Add: Total provision for credit losses non-recurring adjustments

 

 

701

 

 

 

—

 

 

 

701

 

 

 

1,832

 

 

Add: Straight-line rent receivable write-off

 

 

321

 

(2)

 

—

 

 

 

321

 

(2)

 

—

 

 

Deduct: Mortgage interest income related to the exit IRR received

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,570

)

(3)

Deduct: Rental income related to the repayment of rent credit

 

 

—

 

 

 

—

 

 

 

(2,377

)

(4)

 

—

 

 

Total non-recurring adjustments to NAREIT FFO

 

$

1,022

 

 

$

—

 

 

$

(1,355

)

 

$

262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of non-recurring adjustments to FAD:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deduct: Mortgage interest income related to the exit IRR received

 

$

(886

)

(3)

$

—

 

 

$

(886

)

(3)

$

(1,570

)

(5)

Deduct: Rental income related to the repayment of rent credit

 

 

—

 

 

 

—

 

 

 

(2,377

)

(4)

 

—

 

 

Total non-recurring cash adjustments to FAD

 

$

(886

)

 

$

—

 

 

$

(3,263

)

 

$

(1,570

)

 

_______________

(1)

A 1% credit loss reserve is taken upon origination of financing transactions, then decreased as the balance is paid down through scheduled principal payments and payoffs.

 

1. During 2024, LTC acquired $163,460 of properties accounted for as financing receivables.
2. During 2023, LTC acquired $121,321 of properties accounted for as financing receivables and originated two mortgage loans totaling $61,861.
3. Received $102,435 from the payoff of three mortgage loans during 2024.

(2)

Represents the straight-line rent receivable write-off related to a lease that converted to fair market rent during 2Q 2024. The straight-line rent write-off is a contra-revenue on the Consolidated Statements of Income.

(3)

The exit IRR income was received upon the payoff of three mortgage loans in 2024. The exit IRR was previously recorded ratably over the term of the loan through effective interest income.

(4)

The rent credit was received in connection with the sale of a 110-unit assisted living community in Wisconsin. The rent credit was provided to the operator during new construction lease-up.

(5)

The exit IRR income was received upon the payoff of two mezzanine loans in 2023 and was not previously recorded.

Reconciliation of FFO and FAD (continued)

The following table continues the reconciliation between GAAP net income available to common stockholders and each of NAREIT FFO attributable to common stockholders and FAD (unaudited, amounts in thousands, except per share amounts):

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

NAREIT Basic FFO attributable to common stockholders per share

 

$

0.65

 

$

0.66

 

$

1.35

 

$

1.32

NAREIT Diluted FFO attributable to common stockholders per share

 

$

0.65

 

 

$

0.66

 

 

$

1.34

 

 

$

1.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NAREIT Diluted FFO attributable to common stockholders

 

$

28,417

 

 

$

27,324

 

 

$

58,491

 

 

$

54,729

 

Weighted average shares used to calculate NAREIT diluted FFO per share attributable to common stockholders

 

 

43,767

 

 

 

41,489

 

 

 

43,613

 

 

 

41,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted FFO attributable to common stockholders, excluding non-recurring items

 

$

29,439

 

 

$

27,324

 

 

$

57,136

 

 

$

54,991

 

Weighted average shares used to calculate diluted FFO, excluding non-recurring items, per share attributable to common stockholders

 

 

43,767

 

 

 

41,489

 

 

 

43,613

 

 

 

41,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted FAD

 

$

29,721

 

 

$

28,081

 

 

$

61,160

 

 

$

58,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used to calculate diluted FAD per share

 

 

43,767

 

 

 

41,489

 

 

 

43,613

 

 

 

41,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted FAD, excluding non-recurring items

 

$

28,835

 

 

$

28,081

 

 

$

57,897

 

 

$

56,801

 

Weighted average shares used to calculate diluted FAD, excluding non-recurring items, per share

 

 

43,767

 

 

 

41,489

 

 

 

43,613

 

 

 

41,454

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240729715504/en/

Mandi Hogan (805) 981‑8655