LTC Properties Inc. (NYSE:LTC) Q4 2015 Earnings Conference Call - Final Transcript

Feb 22, 2016 • 01:00 pm ET


LTC Properties Inc. (NYSE:LTC) Q4 2015 Earnings Conference Call - Final Transcript


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Good day and welcome to the LTC Properties Inc. fourth-quarter 2015 analyst conference call. All participants will be in listen-only mode.(Operator Instructions)

(Forward-Looking Cautionary Statements ) . Please note this event is being recorded.I would now like to turn the conference over to Wendy Simpson, CEO and President. Ms. Simpson, please go ahead.

Wendy Simpson

Thank you, Austin. Good morning and good afternoon, everyone, and thank you for joining us today.The year 2015 was a significant year of growth for LTC. During the year, we underwrote a total of $414 million in transactions. Of that amount, $302 million represents accretive transactions at the time of closing the transactions, and $112 million was in new development investments and underwritten commitments that will be accretive upon completion.At year end, we had remaining investment commitments of $89 million, most of which will be spent in 2016 and will become revenue producing during 2016 or the first quarter of 2017.

Our investment profile at year end is 51.2% in skilled nursing assets and 41.3% in assisted living and memory care. All of the $41.6 million expended and classified as under development at year end is related to assisted living and memory care. As a result, we remain fairly balanced in our portfolio of skilled nursing assets and assets more closely identified with the private pay sector.We expanded our line of credit to $600 million, expanded our relationship with AIG with $100 million senior unsecured debt shelf financing agreement, and established a $2 million ATM.

Pam will discuss these activities more fully, but it is these actions plus successes in investments that made 2015 a growth year for LTC. And this growth allowed us to increase our monthly dividend from $0.17 a month to $0.18 per month beginning in October of 2015.During the fourth quarter, National Health Investors, NHI, converted the LTC preferred shares they owned and received 2 million shares of LTC common stock.

By holding the preferred, they were foregoing approximately $1 million in annual dividends, and I'm pleased that NHI made this decision. I believe Eric Mendelsohn, NHI's CEO, commented on their recent call that they've sold some of the shares and maintain over 1 million as of the date of his call.This issuance of shares was not dilutive to us because they have been in our fully diluted numbers for quite awhile.

But the conversion eliminates all preferred shares from our equity structure, and since preferred shares are viewed as debt, it decreases our debt and benefits our already conservative leveraging stats. Plus it adds 2 million shares to market capitalization and 2 million shares into circulation.Subsequent to year end, we closed our first 2016 investment and purchased a new skilled nursing property in Texas for $16 million.

During 2015 and already in 2016, we have done due diligence on larger transactions that were in the $90 million to over $200 million range, but have not been able to meet -- but they've not been able to meet all of our underwriting criteria or