[Q1 2025 Operating Results Overview](index=1&type=section&id=Q1%202025%20Operating%20Results%20Overview) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) LTC Properties reported decreased Q1 2025 revenues and net income, but diluted Core FFO and FAD per share improved, driven by strategic portfolio transitions Q1 2025 Financial Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $49,031 | $51,366 | | Net Income to Common Stockholders | $20,517 | $24,065 | | Diluted EPS | $0.45 | $0.56 | | NAREIT Diluted FFO per Share | $0.65 | $0.69 | | Diluted Core FFO per Share | $0.65 | $0.64 | | Diluted FAD per Share | $0.76 | $0.73 | | Diluted Core FAD per Share | $0.70 | $0.67 | - Management emphasized a strong start to 2025, with **$176 million** in gross assets converted or soon to be converted into a new SHOP (seniors housing operating portfolio) The company is focused on growth, supported by a new CIO, access to capital, and a **$300 million** investment pipeline[5](index=5&type=chunk) [First Quarter 2025 Financial Results Analysis](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results%20Analysis) Q1 2025 financial results show decreased revenues and net income, primarily due to prior year one-time income and increased expenses - Total revenues decreased due to one-time revenue received in 2024, lower revenue from property sales, and mortgage loan payoffs This was partially offset by rent increases and higher income from financing receivables[9](index=9&type=chunk) - Expenses rose mainly because of a higher provision for credit losses from a note write-off during the transition of **12 properties** to the RIDEA structure, and increased incentive compensation[9](index=9&type=chunk) - Income from unconsolidated joint ventures increased significantly due to receiving a **$3.0 million** payment representing a **13%** exit IRR from a preferred equity redemption[9](index=9&type=chunk) - Net income available to common shareholders fell by **$3.5 million**, driven by a lower gain on sale and the revenue and expense changes noted above[9](index=9&type=chunk) [Portfolio and Balance Sheet](index=2&type=section&id=Portfolio%20and%20Balance%20Sheet) [Q1 2025 Portfolio and Capital Activities](index=2&type=section&id=Q1%202025%20Portfolio%20and%20Capital%20Activities) LTC executed strategic Q1 2025 portfolio and capital activities, transitioning properties to SHOP, redeeming preferred equity, and managing debt - Transitioned **12 properties** from a triple-net lease into a new SHOP (seniors housing operating portfolio) under the RIDEA structure, with a combined gross book value of **$176.1 million**[9](index=9&type=chunk) - Redeemed a preferred equity investment for **$16.0 million**, which included a **13%** exit IRR of **$3.0 million** The company also sold **two** non-revenue producing assisted living communities for a total of **$1.67 million**[9](index=9&type=chunk) - During Q1, LTC repaid **$18.9 million** on its line of credit and raised **$1.1 million** from stock sales Subsequent to quarter-end, the company borrowed **$4.5 million**, made **$7.0 million** in scheduled debt paydowns, and raised an additional **$8.5 million** from stock sales[8](index=8&type=chunk)[9](index=9&type=chunk) [Balance Sheet and Liquidity](index=2&type=section&id=Balance%20Sheet%20and%20Liquidity) As of March 31, 2025, LTC maintained a strong liquidity position of **$681.2 million**, comprising cash, credit line availability, and equity issuance capacity - LTC's total liquidity was **$681.2 million** as of March 31, 2025, comprising: - **$23.3 million** of cash on hand - **$276.2 million** available under the unsecured revolving line of credit - **$381.7 million** capacity to issue common stock under equity distribution agreements[9](index=9&type=chunk) [Full Year 2025 Guidance](index=4&type=section&id=Full%20Year%202025%20Guidance) [2025 Guidance Details](index=4&type=section&id=2025%20Guidance%20Details) LTC introduced full-year 2025 guidance, projecting Diluted Core FFO per share between **$2.65** and **$2.69**, and Diluted Core FAD per share between **$2.78** and **$2.82** Full Year 2025 Guidance Per Share | Metric | Low | High | | :--- | :--- | :--- | | GAAP Net Income Attributable to LTC | $3.38 | $3.42 | | Diluted Core FFO | $2.65 | $2.69 | | Diluted Core FAD | $2.78 | $2.82 | - Key guidance assumptions include: - SHOP NOI for the remaining eight months of 2025 between **$9.4 million** and **$10.3 million** - Full-year 2025 G&A expenses between **$28.6 million** and **$29.5 million**[13](index=13&type=chunk)[31](index=31&type=chunk) - Guidance excludes several one-time, non-recurring items, such as a **$6.5 million** lease termination fee, **$1.1 million** to **$1.5 million** in RIDEA ramp-up costs, and approximately **$1.1 million** for an employee's retirement[13](index=13&type=chunk)[31](index=31&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2025, LTC reported total revenues of **$49.0 million**, down from **$51.4 million**, with net income decreasing to **$20.5 million** from **$24.1 million** Consolidated Statements of Income (in thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | **Total revenues** | **$49,031** | **$51,366** | | Total expenses | 30,646 | 30,304 | | Operating income | 18,556 | 24,313 | | **Net income available to common stockholders** | **$20,517** | **$24,065** | | Diluted earnings per common share | $0.45 | $0.56 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, LTC's total assets were **$1.776 billion**, with total liabilities at **$726.2 million** and equity at **$1.049 billion** Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total assets** | **$1,775,509** | **$1,786,142** | | Total liabilities | 726,207 | 733,137 | | **Total equity** | **1,049,302** | **1,053,005** | | **Total liabilities and equity** | **$1,775,509** | **$1,786,142** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities increased to **$29.6 million**, with a **$13.9 million** net increase in cash and cash equivalents Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | Net cash provided by operating activities | $29,571 | $21,066 | | Net cash provided by investing activities | $11,629 | $21,209 | | Net cash used in financing activities | ($27,319) | ($53,551) | | **Increase (decrease) in cash and cash equivalents** | **$13,881** | **($11,276)** | [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Supplemental Reporting Measures (FFO & FAD)](index=9&type=section&id=Supplemental%20Reporting%20Measures%20(FFO%20%26%20FAD)) LTC uses non-GAAP metrics FFO and FAD to supplement GAAP results, adjusting net income for real estate depreciation and non-cash items - FFO and FAD are used as supplemental measures of operating performance, as they exclude the effect of historical cost depreciation, which may not be relevant in evaluating current performance[23](index=23&type=chunk) - FFO is defined by NAREIT as net income excluding gains/losses on real estate sales and impairment write-downs, plus depreciation and amortization[24](index=24&type=chunk) - FAD is defined as FFO adjusted for non-cash items such as straight-line rent, amortization of lease inducement, and non-cash compensation It is used as an indicator of common dividend potential[25](index=25&type=chunk) [Reconciliation of FFO and FAD](index=10&type=section&id=Reconciliation%20of%20FFO%20and%20FAD) For Q1 2025, LTC reconciled GAAP net income of **$20.5 million** to NAREIT FFO of **$29.5 million** and FAD of **$34.7 million** Q1 2025 Reconciliation of Net Income to FFO and FAD (in thousands) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **GAAP net income available to common stockholders** | **$20,517** | **$24,065** | | Depreciation and amortization | 9,162 | 9,095 | | Gain on sale of real estate, net | (171) | (3,251) | | **NAREIT FFO attributable to common stockholders** | **$29,508** | **$29,909** | | Non-recurring items | 405 | (2,377) | | **Core FFO** | **$29,913** | **$27,532** | | **FAD** | **$34,680** | **$31,274** | | Non-recurring income | (2,659) | (2,377) | | **Core FAD** | **$32,021** | **$28,897** | - Non-recurring adjustments to NAREIT FFO in Q1 2025 included a **$3.1 million** write-off of a working capital note for the RIDEA transition and a **$3.0 million** income gain from a JV redemption[28](index=28&type=chunk) [Reconciliation of FFO and FAD Guidance](index=13&type=section&id=Reconciliation%20of%20FFO%20and%20FAD%20Guidance) The company provided full-year 2025 guidance reconciliation, bridging GAAP net income per share to Diluted Core FFO and FAD per share Full Year 2025 Guidance Reconciliation (Per Share) | | Low | High | | :--- | :--- | :--- | | **GAAP net income attributable to LTC** | **$3.38** | **$3.42** | | Adjustments (Depreciation, Gain on Sale, etc.) | (0.92) | (0.92) | | **Diluted NAREIT FFO** | 2.46 | 2.50 | | Non-recurring one-time items | 0.19 | 0.19 | | **Diluted Core FFO** | **$2.65** | **$2.69** | | **Diluted FAD** | 2.67 | 2.71 | | Non-recurring one-time items | 0.11 | 0.11 | | **Diluted Core FAD** | **$2.78** | **$2.82** |