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LTC Reports 2020 Fourth Quarter Results and Discusses Recent Activities

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LTC Properties (NYSE: LTC) reported a net income of $17.5 million, or $0.45 per diluted share, for Q4 2020, up from $12.4 million, or $0.31 per diluted share, in Q4 2019. Funds from Operations (FFO) decreased to $30.4 million, or $0.78 per share, compared to $32.4 million, or $0.81 per share, in 2019. The quarter was impacted by a $3.0 million impairment loss and decreased rental income from abated and deferred rent. LTC is transitioning 11 assisted living communities to new operators, expecting cash rent of $5.2 million in the first year.

Positive
  • Net income increased to $17.5 million in Q4 2020, reflecting strong performance.
  • Collected 98% of contractual rent and mortgage interest.
  • Funds available for distribution (FAD) rose to $30.7 million in Q4 2020 from $29.5 million in 2019.
  • Completed funding of $5.0 million for a new independent living community in Washington.
Negative
  • Funds from Operations (FFO) decreased to $30.4 million, down from $32.4 million in 2019.
  • Experienced a $3.0 million impairment loss related to a memory care community.
  • Senior Lifestyle paid only 83% of its $4.7 million contractual rent for Q4 2020.
  • Expect a $530,000 impact on 2021 GAAP revenue from reduced rent escalations.

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, 2020.

Net income available to common stockholders was $17.5 million, or $0.45 per diluted share, for the 2020 fourth quarter, compared with $12.4 million, or $0.31 per diluted share, for the same period in 2019. Funds from Operations (“FFO”) was $30.4 million, or $0.78 per share, for the 2020 fourth quarter, compared with $32.4 million, or $0.81 per share, for the comparable 2019 period. Excluding the prior year’s $2.1 million gain from property insurance proceeds related to a previously sold property, FFO was $30.3 million for the quarter ended December 31, 2019. Funds available for distribution (“FAD”) was $30.7 million for the 2020 fourth quarter, compared with $29.5 million for the 2019 fourth quarter.

Fourth quarter 2020 results were impacted by the following:

  • Collected 98% of contractual rent and mortgage interest, which includes the application of Senior Lifestyle’s letter of credit and deposit discussed below;
  • Lower interest and property tax expense;
  • A $3.0 million impairment loss related to a memory care community located in Colorado leased to Senior Lifestyle;
  • Decreased rental income from abated and deferred rent, net of repayment, and decreased rent from properties sold in 2020, partially offset by higher rental income from acquisitions, completed development projects and lease escalations; and
  • Senior Lifestyle Update
    • Rent: paid LTC $3.9 million (83%) of its $4.7 million contractual rent due during the 2020 fourth quarter;
    • Letter of Credit: LTC applied Senior Lifestyle’s letter of credit and deposits totaling $3.7 million to accrued 2020 second quarter rent receivable of $2.5 million and notes receivable of $125,000, and the remaining $1.1 million to third and fourth quarter rent. As of December 31, 2020, Senior Lifestyle’s unaccrued delinquent rent balance was $1.0 million.

During the fourth quarter of 2020, LTC completed the following:

  • Funded $5.0 million of a $13.0 million preferred equity commitment to develop a 267-unit independent and assisted living community in Washington. This commitment was finalized in the third quarter 2020; and
  • Funded $6.4 million in development and capital improvement projects at a weighted average rate of 8.0%.

Subsequent to December 31, 2020, LTC completed the following:

  • Transitioned 11 assisted living communities previously leased to Senior Lifestyle to two operators. These communities are located in Wisconsin, Ohio, and Illinois. Total cash rent expected under these master lease agreements is $5.2 million for the first lease year, $7.1 million for the second lease year, and $7.3 million for the third lease year, escalating by 2% annually thereafter;
  • As previously announced, reduced 2021 rent escalations by 50% to support eligible operators during the continuing COVID-19 crisis. The rent escalation reduction was given in the form of a rent credit and is expected to have an approximate $530,000 impact on LTC’s 2021 GAAP revenue, and an approximate $1.3 million impact on 2021 funds available for distribution;
  • To date in 2021, rent deferrals were $689,000, net of $14,000 of deferred rent repayments. Excluding the rent credit related to the rent escalation reduction discussed above, abated rent to date in 2021 is $360,000. Senior Lifestyle did not pay any of their monthly contractual rent of $1.6 million in January or February 2021. LTC received $545,000 under the new master leases related to the transitioned assisted living communities discussed above;
  • Received $936,000 related to the payoff of a note receivable;
  • Paid $7.0 million in regular scheduled principal payments under its 4.5% senior unsecured notes; and
  • Borrowed $9.0 million under its unsecured revolving line of credit at 1.3%.

Conference Call Information

LTC will conduct a conference call on Friday, February 19, 2021, 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, 2020. 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

1-877-510-2862

International Toll-Free Number

1-412-902-4134

Canada Toll-Free Number

1-855-669-9657

Additionally, an audio replay of the call will be available one hour after the live call and through March 5, 2021 via the following:

USA Toll-Free Number

1-877-344-7529

International Toll-Free Number

1-412-317-0088

Canada Toll-Free Number

1-855-669-9658

Conference Number

10151170

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 holds 181 properties in 27 states with 29 operating partners. The 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

(amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(audited)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

37,774

 

 

$

38,189

 

 

$

126,094

 

 

$

152,755

 

Interest income from mortgage loans

 

 

7,909

 

 

 

7,683

 

 

 

31,396

 

 

 

29,991

 

Interest and other income

 

 

590

 

 

 

591

 

 

 

1,847

 

 

 

2,558

 

Total revenues

 

 

46,273

 

 

 

46,463

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FAQ

What were LTC Properties' earnings for Q4 2020?

LTC Properties reported a net income of $17.5 million, or $0.45 per diluted share, for Q4 2020.

How much did LTC Properties collect in rent during Q4 2020?

LTC Properties collected 98% of contractual rent and mortgage interest during Q4 2020.

What is LTC Properties' expected cash rent from new operators?

LTC expects approximately $5.2 million in cash rent from new operators for the first lease year.

How did LTC Properties' FFO change in Q4 2020?

LTC Properties' Funds from Operations (FFO) decreased to $30.4 million, or $0.78 per share, compared to $32.4 million, or $0.81 per share in Q4 2019.

What impact did Senior Lifestyle have on LTC Properties' Q4 results?

Senior Lifestyle paid only 83% of its $4.7 million contractual rent during Q4 2020, contributing to decreased rental income.

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