LTC Properties Inc. (NYSE:LTC) Q2 2016 Earnings Conference Call - Final Transcript

Aug 02, 2016 • 11:00 am ET


LTC Properties Inc. (NYSE:LTC) Q2 2016 Earnings Conference Call - Final Transcript


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Good morning and welcome to the LTC Properties Second Quarter 2016 Analyst and Investor Call. All participants will be in listen-only mode. (Operator Instructions) Please note the conference is being recorded. After today's presentation, there will be an opportunity to ask questions. (Operator Instructions).

(Forward-Looking Cautionary Statements)

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

Wendy Simpson

Thank you, Andrew, good morning, everyone, and thank you for joining us today. First, I want to thank you for the great reception you gave our guest speakers on our last call. Dr. Flashner and Mr. Rockwell were very pleased to have the opportunity to talk about their companies and the challenges in their sectors of the healthcare spectrum in the United States. We all appreciated your questions and participation.

But today, the only people joining me on this call are the same old people: Pam Kessler, our CFO, and Clint Malin, our CIO. You'll hear from them both momentarily. LTC had a quiet, but active first half of the year. To date, in 2016, we have invested approximately $82 million. We've termed out $78 million of debt at favorable rates with well-spaced amortizing payments and long-term final maturities, and we've sold approximately $80 million of common shares under our ATM program.

During the first quarter, our average net price per share was $43.07 and our average net price per share in the second quarter was $48.80. Pam and Clint will provide more specifics about these activities during their presentations.

We've sold some non-strategic assets. And as a result of one of those sales, we no longer have investments in schools. The two skilled nursing properties we sold in Texas have participated in the Upper Payment Limit program without our consent and we could either have defaulted them or disposed of them.

The operator was not a core operator within our portfolio and was willing to purchase the properties at a price we were willing to accept. We have a few more assets we may sell, but there is nothing material in that bucket. At the end of the quarter, we had investment commitments totaling about $65 million that will be expended in the remainder of 2016 and some in 2017. These invested dollars will be FFO-producing mostly in 2017.

As we continue to keep our balance sheet at a conservative leverage ratio, we do have and I believe will have sufficient capital available to fund these commitments and do acquisitions that would be accretive to LTC. Clint will discuss our pipeline and our operating statistics.

First though, I will turn the call over to Pam. Pam?

Pam Kessler

Thank you, Wendy. Normalized FFO increased 19.8% year-over-year for the second quarter of 2016 to $29.2 million, or $0.77 on a fully diluted per share basis. Revenues for the quarter increased 23.5% or $7.6 million year-over-year. The improvement primarily reflects acquisitions, completed development and capital improvement projects, lease amendments, as well as an increase in interest income