Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Financial Data and Key Metrics Changes - Net income available to common shareholders decreased by 10.1% due to a decrease in gain on sale, an increase in impairment losses, and higher general and administrative expenses [13] - FFO excluding non-recurring items improved by 2.1% primarily due to lower interest expense and rent increases from fair market rent resets [14] - On a fully diluted per share basis, FFO was $0.72 compared to $0.57 last year, while core FFO was $0.65 per share in Q4 2024 compared to $0.66 per share in Q4 2023 [15] Business Line Data and Key Metrics Changes - The company is targeting $150 million to $200 million in initial gross investment assets to convert from triple net leases to RIDEA structures [11] - Year one NOI from these conversions is expected to offset initial expenses incurred to build the RIDEA platform [11] Market Data and Key Metrics Changes - Occupancy in the portfolio increased by 740 basis points from January of last year to January of this year [24] - The company expects to receive $4.8 million in rent from market-based rent resets in 2025, up from $3.7 million in 2024 [24] Company Strategy and Development Direction - The company is focused on diversifying its portfolio with respect to operator, geography, property type, and investment vehicle [10] - RIDEA is seen as a transformative strategy that will unlock long-term growth potential [12] - The company aims to complete the search for a new Chief Investment Officer by the second quarter to assist in growing the RIDEA platform [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a strong growth strategy driven by RIDEA [5] - The company is in one of the best positions for accretive growth in recent years, having diversified its portfolio and shored up its balance sheet [27] Other Important Information - Total liquidity at the end of the last quarter was approximately $680 million, up from $229 million at the end of September 2024 [17] - The company entered into a new $400 million ATM program and terminated a previous $200 million program [15] Q&A Session Summary Question: Details about the operator not renewing - The operator decided to downsize and exit the states where the properties are located, with credit enhancements in place to secure rent payments [31] Question: Neutral earnings impact from transition to RIDEA - The transition accounts for expected one-time expenses related to setting up the platform, with an in-place yield of about 8% [38] Question: Percentage of portfolio expected to be RIDEA vs. net lease by end of 2025 - Currently about 50-50, but expected to increase more towards RIDEA over time [44] Question: G&A expectations for the shop operating platform - Increased G&A will be provided after establishing the platform, but expected increase in NOI from the shop portfolio to offset expenses this year [46] Question: Circumstances leading to restoring accrual accounting for master leases - Strong operational performance led to higher confidence in receiving contractual rent through maturity [98]

RENEWAL AND SUPPLEMENTAL OPERATING AND FINANCIAL DATA TRANSITION FOURTH QUARTER 2024 Founded in 1992, LTC Properties, Inc. (NYSE: LTC) is a self-administered real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leaseback transactions, mortgage financing and structured finance solutions including preferred equity and mezzanine lending. LTC's portfolio encompasses Skilled Nursing Facilities (SNF), Assisted Living Communities (ALF), Independent Livi ...

Revenue Sources - Approximately 31.3% of the company's revenues from leases and interest income were generated from three operators during the year ended December 31, 2024[78]. - 63.0% of the company's revenue for the year ended December 31, 2024, was derived from operating lease rentals[80]. - The company is dependent on operators for revenue and cash flow, with substantial reliance on operating lease rentals and interest from financing receivables[69]. - The company has two major operators contributing approximately 25.7% of total revenues, with Prestige Healthcare accounting for 15.6% and ALG Senior Living for 10.1%[327]. Financial Performance - Total revenues for 2024 increased to $209,847,000, up 6.5% from $197,244,000 in 2023[267]. - Rental income rose to $132,278,000 in 2024, compared to $127,350,000 in 2023, reflecting a growth of 3.0%[267]. - Net income attributable to LTC Properties, Inc. for 2024 was $91,040,000, a slight increase from $89,735,000 in 2023[267]. - The company reported a comprehensive income of $92,584,000 for 2024, compared to $88,853,000 in 2023, indicating an increase of 3.3%[269]. - Net income for 2024 was $94,879,000, a 4.4% increase from $91,462,000 in 2023[274]. Assets and Liabilities - Total assets decreased to $1,786,142,000 in 2024 from $1,855,098,000 in 2023, representing a decline of 3.7%[265]. - Total liabilities reduced to $733,137,000 in 2024, down from $938,831,000 in 2023, a decrease of 21.9%[265]. - The company’s total equity rose to $1,053,005,000 in 2024, compared to $916,267,000 in 2023, reflecting an increase of 14.9%[265]. Cash Flow and Financing - Cash and cash equivalents decreased significantly to $9,414,000 in 2024 from $20,286,000 in 2023, a drop of 53.6%[265]. - Net cash provided by operating activities increased to $125,172,000 in 2024 from $104,403,000 in 2023, representing a 20% growth[274]. - The company experienced a net cash used in financing activities of $226,724,000 in 2024, compared to a net cash provided of $80,416,000 in 2023[274]. - Borrowings from the revolving line of credit amounted to $27,200,000 in 2024, a decrease from $277,450,000 in 2023[274]. Investments and Joint Ventures - The company has eight active joint ventures with a total LTC equity investment of $378.6 million[102]. - The company entered into partnerships with ALG Senior Living, exchanging three mortgage loan receivables totaling $102.4 million for controlling interests in these partnerships[259]. - The company has committed to fund a $26,120,000 mortgage loan for the construction of a 116-unit community in Illinois, with a current interest rate of 9.0%[361]. - The company had investments in four joint ventures (JVs) that owned 31 properties across three states as of December 31, 2024[375]. Risks and Challenges - The company faces risks associated with public health crises, which could adversely impact occupancy levels and operating costs at health care facilities[70]. - Federal and state health care cost containment measures could reduce reimbursement from third-party payors, adversely affecting operators' ability to make payments[73]. - Increased operating costs due to inflation could adversely affect operators' net income and the company's results of operations[79]. - The company competes for health care property investments with other developers and REITs, which may affect its growth strategy[87]. Compliance and Regulations - The company is required to distribute at least 90% of its taxable income to maintain REIT status[96]. - The company may incur significant compliance costs due to new privacy and cybersecurity laws at federal and state levels[117]. - Regulatory approvals for health care facilities could delay operations, affecting the company's ability to collect lease or loan payments[75]. Market Conditions - The company is exposed to market risks associated with changes in interest rates, which could impact future earnings and cash flows[242]. - Disruptions in capital markets could affect the price of the company's common stock and its ability to obtain financing[112]. - Interest rates for 78.9% of consolidated borrowings were fixed or fixed with interest rate swaps as of December 31, 2024[245]. Impairment and Losses - The company recognized impairment losses of $6,953,000, $15,775,000, and $3,422,000 for the years ended December 31, 2024, 2023, and 2022, respectively, related to real property investments[301]. - The company recorded a significant reduction in impairment loss to $6,953,000 in 2024 from $15,775,000 in 2023, a decrease of 56%[274]. Future Projections - Future minimum base rents receivable for 2025 are projected at $116.2 million, with a gradual decrease to $69.6 million by 2029[334]. - The exit internal rate of return (IRR) for new joint ventures is projected at 8.0%, indicating strong future profitability potential[358].

Financial Performance - Total revenues for Q4 2024 increased to $52.582 million, up 4.8% from $50.195 million in Q4 2023[2] - Net income available to common stockholders decreased to $17.912 million, down 36.1% from $28.057 million in Q4 2023[2] - Diluted earnings per share (EPS) for Q4 2024 was $0.39, a decline of 42.1% compared to $0.67 in Q4 2023[2] - NAREIT funds from operations (FFO) attributable to common stockholders rose to $32.962 million, an increase of 37.8% from $23.902 million in Q4 2023[2] - Net income for the twelve months ended December 31, 2024, was $94,879 thousand, compared to $91,462 thousand in 2023, representing an increase of about 3.4%[19] - Net cash provided by operating activities increased to $125,169 thousand in 2024 from $104,403 thousand in 2023, a rise of approximately 19.9%[19] - Funds available for distribution (FAD) for the twelve months ended December 31, 2024, was $125,772 thousand, up from $115,338 thousand in 2023, reflecting an increase of about 9.5%[24] - NAREIT Basic FFO attributable to common stockholders per share increased to $0.73 for Q4 2024, up from $0.57 in Q4 2023, representing a 28.1% increase[28] - Total NAREIT Diluted FFO attributable to common stockholders was $33,133,000 for Q4 2024, compared to $23,902,000 in Q4 2023, reflecting a 38.7% growth[28] Liquidity and Capital Structure - Total liquidity as of December 31, 2024, was $680.4 million, including $9.4 million in cash and $280.7 million available under the unsecured revolving line of credit[7] - The company repaid $95.8 million under its revolving line of credit during the quarter[8] - Total assets decreased from $1,855,098 thousand in 2023 to $1,786,142 thousand in 2024, a decline of approximately 3.7%[17] - Total liabilities decreased from $938,831 thousand in 2023 to $733,137 thousand in 2024, a reduction of approximately 21.9%[17] - Common stock issued increased from 43,022 shares in 2023 to 45,511 shares in 2024, an increase of about 5.8%[17] - The company’s capital in excess of par value increased from $991,656 thousand in 2023 to $1,082,764 thousand in 2024, an increase of about 9.2%[17] - The total equity increased from $916,267 thousand in 2023 to $1,053,005 thousand in 2024, reflecting a growth of approximately 14.9%[17] Operational Highlights - LTC Properties sold a closed property in Colorado for $5.3 million, recording a gain on sale of $1.1 million[8] - The company reported a gain on sale of real estate, net of $7,979 thousand in 2024, compared to a loss of $37,296 thousand in 2023[19] - LTC's investment portfolio consists of 189 properties across 25 states, with a balanced allocation of approximately 50% in seniors housing and 50% in skilled nursing properties[10] - Dividends declared and paid per common share remained stable at $0.57 for both Q4 2024 and Q4 2023[14] Credit Losses and Adjustments - The company recorded a provision for credit losses reserve of $1,635,000 related to a $163,460,000 acquisition of properties in 2024[27] - The company reported a recovery for credit losses related to loan payoffs of $511,000 for a $51,111,000 mortgage loan paid off during Q4 2024[27] - The company experienced a provision for credit losses recovery of $1,738,000 related to five mortgage loan payoffs totaling $182,892,000 during 2024[27] - The total non-recurring adjustments to NAREIT FFO amounted to $(3,379,000) for Q4 2024, compared to $(8,907,000) for the full year 2023[28] Future Outlook - The company plans to initiate initial transactions under its RIDEA strategy in Q2 2025, which is expected to drive future growth[4]

Group 1: Company Overview - LTC Properties focuses on healthcare properties for older adults, with 45% in assisted living and 55% in skilled nursing [2] - Realty Income is a net-lease REIT primarily focused on retail assets (75%), with additional investments in industrial and unique properties [4] Group 2: Dividend Performance - LTC Properties has maintained a monthly dividend of $0.19 per share since it increased to that level over five years ago, demonstrating resilience during the pandemic [3] - Realty Income has increased its dividend for 30 consecutive years, with 108 quarterly dividend increases, and pays dividends monthly [5] Group 3: Yield Comparison - LTC Properties offers a higher yield of 6.7%, which is approximately 15% more income compared to Realty Income's yield of around 5.8% [6] - Realty Income's dividend has grown nearly 40% over the past decade, while LTC Properties' dividend has remained stagnant since 2017 [7] Group 4: Investment Recommendation - For investors prioritizing dividend growth, Realty Income is recommended despite its lower starting yield, as it is expected to close the income gap over time [8] - Realty Income is suggested as the better choice for most investors seeking high yield, monthly pay dividends, unless specifically looking for a healthcare REIT [9]

Group 1 - LTC Properties, Inc. has significantly outperformed the Vanguard Real Estate Index Fund ETF Shares in 2024, delivering a ~17% gain compared to the ~3% total return for the broad US REIT ETF [1] - The investment strategy includes a focus on REITs, preferred stocks, and high-yield bonds, indicating a long-term fundamental approach to investing [1] - The company has been combining long stock positions with covered calls and cash secured puts, showcasing a strategic investment methodology [1]

Company Overview - LTC Properties has been a trusted investor in needs-based seniors housing and care for over 30 years, developing expertise to navigate various real estate cycles and adapt to market conditions [1] - The company has a diverse portfolio with investments in 191 properties across 25 states [2] Performance and Strategy - Improved performance in the third quarter was driven by efforts to streamline the portfolio, which is part of a broader strategy to strengthen the business for the long term [2] - LTC Properties originated a $26.1 million mortgage loan for the construction of a seniors housing community in Illinois during the third quarter [2] Dividend and Financial Stability - LTC Properties maintained monthly dividend payments throughout the pandemic, achieving a record of 235 consecutive monthly payments, which sets the company apart from many healthcare REITs that cut dividends [2] - The current dividend yield is nearly 6%, providing a strong return for investors, particularly retirees on fixed incomes [2] Industry Trends - The seniors housing industry has experienced a resurgence in recent years, with occupancy rates improving consistently, marking the third quarter of 2024 as the 13th consecutive quarter of increases [2]

Core Insights - Manulife Financial Corporation has entered into a $5.4 billion reinsurance agreement with Reinsurance Group of America, which includes $2.4 billion of long-term care reserves, marking a significant milestone in optimizing its portfolio [1][2][4] - The transaction is expected to release $0.8 billion of capital, which will be returned to shareholders through share buybacks [2][9][10] - The cumulative reduction of LTC reserves will be 18% and morbidity sensitivity by 17% upon closing, demonstrating the company's ability to manage its LTC portfolio effectively [2][3][8] Transaction Details - The reinsurance agreement involves a full risk transfer of $2.4 billion of LTC reserves and includes a legacy block of U.S. structured settlements with $3.0 billion of reserves [2][4] - The transaction is priced at close to 1.0 times book value, with a modest negative ceding commission of 4% on the LTC block [4][10] - The deal is expected to be accretive to core return on equity (ROE) and have a neutral impact on core earnings per share (EPS) [2][10] Shareholder Value - The capital release of $0.8 billion will allow the company to repurchase up to 90 million common shares under its current normal course issuer bid (NCIB) program [9][10] - The transaction is anticipated to result in an annual reduction to core earnings and net income attributed to shareholders of $70 million and $50 million, respectively [10] - Manulife aims to dispose of $1.5 billion of alternative long-duration assets as part of this transaction [5][9] Management Commentary - The President and CEO of Manulife emphasized that this transaction unlocks significant shareholder value and accelerates the company's transformation towards higher returns and lower risk [2][3] - The Global Head of Strategy and Inforce Management noted the importance of this transaction in improving the return profile of the in-force business [3][4]

Financial Data and Key Metrics Changes - Net income available to common shareholders increased by $7.1 million, primarily due to one-time income from former operators related to portfolio transitions in prior years, a decline in interest expense from deleveraging activities, and increases in rent and income from unconsolidated joint ventures [8] - Fully diluted FFO per share was $0.78 compared to $0.65 last year, while excluding non-recurring items, FFO per share was $0.68 versus $0.65 [9] - Total liquidity was approximately $286 million, up 51% from the prior quarter, with $5.4 million in cash on hand and $279 million available on the line of credit [13][14] Business Line Data and Key Metrics Changes - The company recorded a $3.6 million gain on the sale of an assisted living community in Texas and received $441,000 in contractual rent through the remainder of the lease term [10] - The lease-up portfolio, which includes 17 properties across seven operators, is expected to generate approximately $3.6 million in revenue for 2024 [23] Market Data and Key Metrics Changes - The pro forma debt to annualized adjusted EBITDA for real estate decreased to 4.2 times from 5.3 times in the second quarter, while the pro forma annualized adjusted fixed charge coverage ratio increased to 4.8 from 3.7 times [14] Company Strategy and Development Direction - The company is actively evaluating RIDEA structures and analyzing the infrastructure needed for successful execution, with an initial gross investment range of $150 million to $200 million expected to be converted by the second quarter of next year [5][24] - The management believes that the RIDEA structure will act as a catalyst for growth in 2025, indicating a shift towards more cooperative investment strategies [24] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the year and 2025, highlighting the positive financial results and the ability to capitalize on new investment opportunities due to a deleveraged balance sheet [4][26] - The management acknowledged the challenges posed by recent hurricanes but noted that there was no material damage to their buildings, emphasizing the resilience of their operators [18] Other Important Information - The company received $4.1 million in previously unrecorded revenue from former operators related to portfolio transitions in prior years and net proceeds of nearly $63 million from equity sales under the ATM program [4][11] - The fourth quarter guidance for FFO, excluding known non-recurring items, is between $0.65 and $0.66 per share, reflecting a decrease due to mortgage loan payoffs [15][16] Q&A Session Summary Question: Can you share additional detail around the upfront platform investments necessary for RIDEA? - The company is analyzing the resources needed for effective management and will provide more information in the next quarterly call [28][30] Question: What conversations have you had regarding external growth opportunities around RIDEA? - The company is seeing opportunities and believes there is significant potential for growth in this space [32] Question: Can you elaborate on why tenants are interested in conversions to RIDEA today? - Tenants without long-term triple net leases are particularly interested in these conversions [37] Question: What is the outlook around external growth given your improved leverage and liquidity? - The company is actively looking at opportunities and hopes to provide more details in the next call [64]