LTC Properties Inc. (NYSE:LTC) Q3 2015 Earnings Conference Call - Final Transcript

Nov 03, 2015 • 11:00 am ET


LTC Properties Inc. (NYSE:LTC) Q3 2015 Earnings Conference Call - Final Transcript


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Good day, and welcome to the LTC Properties, Inc. 3Q15 Analyst and Investor Call and Webcast. All participants will be in listen-only mode. (Operator Instructions).

(Forward-Looking Cautionary Statements). Please also note this event is being recorded.

I would now like to turn the conference over to Ms. Wendy Simpson, Chairman, CEO and President. Please go ahead.

Wendy Simpson

Thank you, Kate. Good morning, everyone, and thank you for joining us today. I'm very pleased to be able to report another active quarter for 2015 and the beginnings of an active fourth quarter.

Year-to-date, we have underwritten $90.5 million in new construction and expansion projects. $75.7 million of that amount is projected to begin generating lease revenue in 2016, and $14.8 million in 2017. Year-to-date, we have completed sale leaseback transactions totaling $179.4 million, with lease rates between 6.5% and 10.3%. Year-to-date, we have underwritten loan originations of $91 million, of which $59 million has been funded. Year-to-date, we have invested $20.1 million in a joint venture at a 15% preferred return, currently paying 5% cash with 10% deferred. Year-to-date, we have invested $6.1 million in improvement and expansion projects at portfolio properties at lease rate between 6.8% and 9%.

The first of October, we increased our monthly dividend from $0.17 to $0.18 per month. Yesterday, we announced the expansion of our unsecured line of credit to $600 million and welcomed two new banks, Citizen's Bank and Mizuho into the line. Pam did a great job on this and she'll have additional comments about the expanded line and our comfortable liquidity and investment grade-worthy financial ratios. Pam will also talk about locking rate on $100 million of senior unsecured notes and how those proceeds will be put to productive use.

Subsequent to the quarter and disclosed in our press release, we have closed on additional transactions and I will not, at this point, steal Clint's opportunity to talk about them during his presentation. After comments from Pam Kessler, our EVP and CFO, and Clint Malin, our EVP and CIO, I look forward to giving guidance for full 2015.

At this time, I'll turn the call over to Pam.

Pam Kessler

Thank you, Wendy. Normalized FFO increased 18.2% for the third quarter of 2015 to $26.6 million, or $0.73 on a fully diluted per share basis from $22.5 million, or $0.64 on a fully diluted share a year ago. Normalized results for the quarter exclude $537,000 of one-time costs associated with the acquisition of a $142 million 10-property senior housing portfolio that we discussed last quarter.

Revenues for the quarter increased 18.3% or $5.4 million year-over-year. The improvement primarily reflects acquisitions, completed development and capital improvement projects, new leases and lease amendments, as well as increase in interest income from mortgage loans resulting from loan originations and the amendment to the Michigan loan, partially offset by a reduction in revenue from properties that were sold at the end of 2014.

Third quarter interest expense was $4.3 million, an increase of $1.1 million over the comparable 2014 quarter