LTC Properties Q2 2024: Assets $4.35B, Liabilities $4.30B

TL;DR

LTC Properties Q2: $4.35B assets vs $4.30B liabilities. REIT balance sheet update.

AI Summary

LTC Properties Inc. reported its financial results for the quarter ending June 30, 2024. The company's balance sheet shows total assets of $4,349,100,000 and total liabilities of $4,302,200,000. Key equity components include common stock, additional paid-in capital, and retained earnings.

Why It Matters

This filing provides a snapshot of LTC Properties' financial health, indicating a significant asset base and corresponding liabilities as of the end of the second quarter of 2024.

Risk Assessment

Risk Level: low — The filing is a standard quarterly report with no immediate red flags or significant negative events disclosed.

Key Numbers

• $4.35B — Total Assets (As of June 30, 2024)
• $4.30B — Total Liabilities (As of June 30, 2024)

Key Players & Entities

• LTC PROPERTIES INC (company) — Filer
• 20240630 (date) — Reporting Period End Date
• 20240729 (date) — Filing Date
• $4,349,100,000 (dollar_amount) — Total Assets
• $4,302,200,000 (dollar_amount) — Total Liabilities

FAQ

Filing Documents

• ltc-20240630x10q.htm (10-Q) — 4535KB
• ltc-20240630xex31d1.htm (EX-31.1) — 11KB
• ltc-20240630xex31d2.htm (EX-31.2) — 11KB
• ltc-20240630xex32.htm (EX-32) — 9KB
• ltc-20240630x10q028.jpg (GRAPHIC) — 40KB
• 0001558370-24-010291.txt ( ) — 17950KB
• ltc-20240630.xsd (EX-101.SCH) — 102KB
• ltc-20240630_cal.xml (EX-101.CAL) — 73KB
• ltc-20240630_def.xml (EX-101.DEF) — 516KB
• ltc-20240630_lab.xml (EX-101.LAB) — 765KB
• ltc-20240630_pre.xml (EX-101.PRE) — 737KB
• ltc-20240630x10q_htm.xml (XML) — 3981KB

-- Financial Information

PART I -- Financial Information Page Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Income 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Equity 6 Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 52 Item 4.

Controls and Procedures

Controls and Procedures 52

-- Other Information

PART II -- Other Information Item 1.

Legal Proceedings

Legal Proceedings 52 Item 1A.

Risk Factors

Risk Factors 52 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 53 Item 5. Other Information 53 Item 6. Exhibits 54 Table of Contents LTC PROPERTIES, INC. CONSOLIDATED BALANCE SHEET S (amounts in thousands, except per share) 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, 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 i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Genera l LTC Properties, Inc., a health care real estate investment trust ("REIT"), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily 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. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers ("SNF"), assisted living communities ("ALF"), independent living communities ("ILF"), memory care communities ("MC") and combinations thereof. We also invest in other ("OTH") types of properties, such as land parcels, projects under development ("UDP") and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment. We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accou

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) The following table summarizes our investments in owned properties at June 30, 2024 (dollar amounts in thousands) : Average Percentage Number Number of Investment Gross of of SNF ALF per Type of Property Investment Investment Properties (1) Beds Units Bed/Unit Assisted Living $ 732,398 54.6 % 74 — 4,421 $ 165.66 Skilled Nursing 597,666 44.5 % 50 6,113 236 $ 94.14 Other (2) 12,005 0.9 % 1 118 — — Total $ 1,342,069 100.0 % 125 6,231 4,657 (1) We own properties in 23 states that are leased to 24 different operators. (2) Includes three parcels of land held-for-use, and one behavioral health care hospital. Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater or less than that currently being paid. During 2023, Brookdale Senior Living Communities, Inc. ("Brookdale") elected not to exercise its renewal option under a master lease that matured on December 31, 2023. The 35 - property assisted living portfolio was apportioned as follows (dollar amounts in thousands) : Type Number Number First Lease of of of Year Lease Commencement

Properties

Properties Units Rent Term November 2023 OK ALF 5 (1) 184 $ 960 Three years January 2024 CO, KS, OH, TX ALF 17 (2) 738 9,325 Six years January 2024 NC ALF 5 (3) 210 3,300 Six years 27 1,132 $ 13,585 Type Number Number of of of Sales Net Year sold

Properties

Properties Units Price Proceeds (4) 2023 FL ALF 4 176 $ 18,750 $ 14,310 (5) 2023 OK ALF 1 37 800 769 2023 SC ALF 3 128 8,409 8,153 8 341 $ 27,959 $ 23,232 Total 35 1,473 (1) These communities were transitioned to an existing LTC operator. The new master lease includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option. Rent increases to $ 984 in the second year, and $ 1,150 in the third year. (2) These communities were re-leased to Brookdale under a new master lease. Rent escalates by approximately 2.0 % annually. The new master lease includes a purchase option that can be exercised in 2029. We also agreed to fund $ 7,200 for capital expenditures for the first two years of the lease at an initial rate of 8.0 % escalating by approximately 2.0 % annually thereafter. (3) These communities were transitioned to an operator new to us. Rent escalates by approximately 3.0 % annually. (4) Net of transaction costs and seller financing, if any. (5) We provided seller financing collateralized by two of the Florida properties, with a total of 92 units. The $ 4,000 seller-financed mortgage loan has a two-year term, with a one-year extension, at an interest rate of 8.75 % . 9 Table of Contents LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) During the three months ended March 31, 2024, a master lease covering 11 skilled nursing centers, that was scheduled to mature in January 2024, was renewed for seven months extending the maturity to August 2024. The centers have a total of 1,444 beds and are located in Texas. During the three months ended June 30, 2024, this master lease was amended to extend the lease term to December 31, 2028, with two five-year renewal options. The annual rent increased from $ 8,000,000 to $ 9,000,000 for 2024. Rent will increase to $ 9,500,000 for 2025, and $ 10,000,000 for 2026, escalating 3.3 % annually thereafter. As a condition of the amended master lease, the operator paid $ 1,544,000 during the three months ended June 30, 2024, and $ 10,376,000 subsequent to June 30, 2024, towards its $ 13,531,000 working capital note. The remaining $ 1,611,000 balance of the working capital note is interest-free and will be repaid in installments through 2028. Additionally, during the six months ended June 30, 2024, another operator exercised its renewal option under its master lease for five years, from March 2025 through February 2030. Annual cash rent for 2024 is $ 8,004,000 escalating 2.5 % annually. The master lease covers 666 beds across four skilled nursing centers, three in Texas and one in Wisconsin, and a behavioral health care hospital in Nevada. We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible operator receivable balances, including straight- line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a "straight-line" basis for those customer receivable balances deemed uncollectible. Du

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED (Unaudited) Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands): Type Number of of Gross Net Book Option

Properties

Properties Investments (1) Value Window California ALF/MC 2 $ 38,895 $ 32,307 2023-2029 Colorado/Kansas/Ohio/Texas ALF/MC 17 59,492 26,371 2029 (2) Florida SNF 3 76,647 76,647 2025-2027 Georgia/South Carolina ALF/MC 2 31,754 24,789 2027 North Carolina ALF/MC 11 121,419 121,419 2025-2028 (3) North Carolina ALF 5 14,404 6,736 2029 (4) North Carolina ALF 4 41,000 41,000 2024-2028 (5) North Carolina/ South Carolina ALF/MC 13 122,460 122,460 2024-2028 (6) Ohio MC 1 16,161 13,268 2024-2025 Ohio ILF/ALF/MC 1 54,758 52,399 2025-2027 Oklahoma ALF/MC 5 11,221 4,251 2027-2029 (7) Tennessee SNF 2 5,275 2,192 2023-2024 Texas SNF 4 52,726 49,684 2027-2029 (8) Texas MC 1 12,743 9,520 2026-2028 (9) Total $ 658,955 $ 583,043 (1) Gross investments include previously recorded impairment losses, if any. (2) During 2023, we released 17 ALFs with a total of 738 units to Brookdale under a new six-year master lease. The new master lease commenced in January 2024 and includes a purchase option that can be exercised in 2029. See above for more information. (3) During 2023, we entered into a JV that purchased 11 ALFs and MCs with a total of 523 units and leased the communities under a 10-year master lease. The master lease provides the operator with the option to buy up to 50 % of the properties at the beginning of the third lease year, and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return ("IRR") of 9.0 % on any portion of the properties being purchased. For more information regarding this transaction see Financing Receivables below. (4) During 2023, we transferred five ALFs with a total of 210 units from Brookdale to an operator new to us. The new master lease commenced in January 2024 and includes a purchase option that can be exercis

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