LTC Properties Files Q3 2024 10-Q

TL;DR

LTC Properties Q3 2024 10-Q filed. Financials look steady.

AI Summary

LTC Properties Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third quarter. Key financial figures and changes in equity accounts like Additional Paid-In Capital and Common Stock are presented for the periods ending September 30, 2024, and September 30, 2023.

Why It Matters

This filing provides investors with a detailed look at LTC Properties' financial health and operational status during the third quarter of 2024, crucial for investment decisions.

Risk Assessment

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

Key Numbers

• 45034000 — Financial Metric (A key financial figure reported for the period ending 20240930.)
• 43022000 — Financial Metric (A key financial figure reported for the period ending 20240930.)

Key Players & Entities

• LTC PROPERTIES INC (company) — Filer of the 10-Q report
• 20240930 (date) — End of the reporting period
• 20241028 (date) — Date of filing
• 45034000 (dollar_amount) — Financial figure for the period
• 43022000 (dollar_amount) — Financial figure for the period

FAQ

Filing Documents

• ltc-20240930x10q.htm (10-Q) — 4916KB
• ltc-20240930xex31d1.htm (EX-31.1) — 11KB
• ltc-20240930xex31d2.htm (EX-31.2) — 11KB
• ltc-20240930xex32.htm (EX-32) — 9KB
• ltc-20240930x10q030.jpg (GRAPHIC) — 37KB
• 0001558370-24-013751.txt ( ) — 19407KB
• ltc-20240930.xsd (EX-101.SCH) — 104KB
• ltc-20240930_cal.xml (EX-101.CAL) — 79KB
• ltc-20240930_def.xml (EX-101.DEF) — 537KB
• ltc-20240930_lab.xml (EX-101.LAB) — 793KB
• ltc-20240930_pre.xml (EX-101.PRE) — 762KB
• ltc-20240930x10q_htm.xml (XML) — 4456KB

-- 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 31 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 54 Item 4.

Controls and Procedures

Controls and Procedures 54

-- Other Information

PART II -- Other Information Item 1.

Legal Proceedings

Legal Proceedings 55 Item 1A.

Risk Factors

Risk Factors 55 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 55 Item 5. Other Information 55 Item 6. Exhibits 56 Table of Contents LTC PROPERTIES, INC. CONSOLIDATED BALANCE SHEET S (amounts in thousands, except per share) September 30, 2024 December 31, 2023 (unaudited) (audited) ASSETS Investments: Land $ 118,382 $ 121,725 Buildings and improvements 1,217,954 1,235,600 Accumulated depreciation and amortization ( 398,080 ) ( 387,751 ) Operating real estate property, net 938,256 969,574 Properties held-for-sale, net of accumulated depreciation: 2024—$ 1,794 ; 2023—$ 3,616 4,058 18,391 Real property investments, net 942,314 987,965 Financing receivables, net of credit loss reserve: 2024—$ 3,615 ; 2023—$ 1,980 357,889 196,032 Mortgage loans receivable, net of credit loss reserve: 2024—$ 3,638 ; 2023—$ 4,814 360,776 477,266 Real estate investments, net 1,660,979 1,661,263 Notes receivable, net of credit loss reserve: 2024—$ 482 ; 2023—$ 611 47,691 60,490 Investments in unconsolidated joint ventures 30,602 19,340 Investments, net 1,739,272 1,741,093 Other assets: Cash and cash equivalents 35,040 20,286 Debt issue costs related to revolving line of credit 1,548 1,557 Interest receivable 58,421 53,960 Straight-line rent receivable 18,677 19,626 Lease incentives 3,584 2,607 Prepaid expenses and other assets 15,095 15,969 Total assets $ 1,871,637 $ 1,855,098 LIABILITIES Revolving line of credit $ 240,150 $ 302,250 Term loans, net of debt issue costs: 2024—$ 229 ; 2023—$ 342 99,771 99,658 Senior unsecured notes, net of debt issue costs: 2024—$ 1,098 ; 2023—$ 1,251 445,402 489,409 Accrued interest 3,757 3,865 Accrued expenses and other liabilities 41,120 43,649 Total liabilities 830,200 938,831 EQUITY Stockholders' equity: Common stock: $ 0.01 par value; 60,000 shares authorized; sh

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 September 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 $ 732,120 54.5 % 73 — 4,341 $ 168.65 Skilled Nursing 598,063 44.6 % 50 6,113 236 $ 94.20 Other (2) 12,005 0.9 % 1 118 — — Total $ 1,342,188 100.0 % 124 6,231 4,577 (1) We own properties in 23 states that are leased to 23 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 $ 11,986,000 during 2024, towards its $ 13,531,000 working capital note. The remaining $ 1,545,000 balance of the working capital note is interest-free and will be repaid in installments through 2028. Additionally, during 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. During the three months ended September 30, 2024 and 2023, we had no uncollectible lease incentives or straig

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 $ 32,072 2020-2029 Colorado/Kansas/Ohio/Texas ALF/MC 17 63,576 29,928 2029 (2) Florida SNF 3 76,625 76,625 2025-2027 Georgia/South Carolina ALF/MC 2 31,904 24,721 2027 North Carolina ALF/MC 11 121,419 121,419 2025-2028 (3) North Carolina ALF 5 14,654 6,876 2029 (4) North Carolina ALF 4 41,000 41,000 2024-2028 (5) North Carolina/ South Carolina ALF

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