LTC Properties(LTC) - 2024 Q4 - Annual Report

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].