LTC Properties, Inc.

Before management begins its presentation, please know that today's comments, including the question and answer session, may include forward-looking statements, subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTC Properties' filings with the Securities and Exchange Commission from time to time, including the company's most recent 10-K, dated December 31, 2020. LTC undertakes no obligation to revise or update these forward-looking statements, to reflect events or circumstances after the date of this presentation. Please note this event is being recorded. I would now like to turn the conference over to Wendy Simpson.

Thank you, Operator. Welcome everyone to LTC's 2021 Third Quarter Conference Call. Joining me today are Pam Kessler, Co-President and Chief Financial Officer, and Clint Malen, Co-President and Chief Investment Officer. I am so pleased to be able to open our comments by saying we have successfully eliminated several ongoing operator challenges, executed on 46 million in new investments, and have an active and healthy pipeline. At the same time, the industry is recuperating from the incredible strain created by the pandemic. I have said before that our industry handled the unimaginable with grace and poise. and is proving that seniors housing is a safe and necessary component of our national network of healthcare in the United States. While there are still some challenges to overcome, I continue to believe that the industry's strength and perseverance will help us navigate the new normal. In LTC's portfolio, occupancy gains are continuing, vaccination rates among patients and residents remain high, And the potential of the vaccine mandates among staff holds the promise of continuing to reduce the impact of COVID in our buildings. It seems the recovery has begun and should continue into the new year. Before I get into our LTC specific discussion, I'd like to spend a moment discussing industry staffing. The problem is very real. but our operators are working constantly and creatively to find viable solutions. I have not spoken to an operator yet that has not had trouble finding and retaining qualified employees. Operators are turning away residents and patients due to the labor shortage and the resulting staffing challenges. We have heard from several operators that if not for the current labor constraints, they could increase occupancy. So they are increasing wages and providing sign-up and retention bonuses to help meet this demand. Additionally, in-person school is now open, freeing parents to be able to reenter the workforce. And COVID-19 related add-ons to unemployment insurance have expired, requiring a return to work for some to make up for that income shortfall. However, the child tax credit that most families are receiving and is proposed to be part of the Build Back Better legislation will likely continue to provide public support sufficient enough to keep some people from returning to work. On the plus side, it has been reported recently that Texas, where we own 34 properties, passed a bill to support long-term care in the state. The bill proposes $200 million in grants for skilled nursing and $178.3 million in grants for assisted living communities and other care-based providers to help fund staffing, recruitment, and retention. We would love to see other states follow this example. Government support for our industry is continuing. There is about $17 billion available for distribution to healthcare providers through Phase IV of the Provider Relief Fund and another $8.5 billion available for distribution to rural providers through the American Rescue Plan. The portal for requesting aid closed a few days ago on the October 26th deadline, so we anticipate receipt of funds by operators later this year at the earliest. In a recent interview with Provider Magazine, Mark Parkinson, who has been a past guest on our earnings calls, said, and I quote, The Delta variant has caused a pause in the financial recovery of the sector. Combined with increasing staff costs that we are already experiencing, we are going to need continued help from both the federal and state governments. He believes that there is a bipartisan support stemming from the efforts made by providers throughout the pandemic, but that passing legislation in a divided Congress will make real change difficult. highlighting the need for actions that don't require congressional approval. However, short of a new highly contagious variant, or COVID surge, I truly believe that our industry is on more solid footing today than it has been since the pandemic began, and I remain hopeful that some of the remaining pressures will continue to abate over the coming months. Now moving to our third quarter. Rent and mortgage interest income collections excluding senior care and senior lifestyle, were 94%. We have received no new substantial requests for rent deferrals and abatements. With occupancy increasing and pent-up demand for needs-based care, we don't expect to see a big change in rent deferrals and abatements in the fourth quarter. For the last several quarters, the requests we've received have been from the same small subset of operators, and that has not changed. We do expect to continue providing some amount of relief until the occupancy gains become more permanent. The senior lifestyle portfolio transition is complete with the exception of one building in New Jersey that is awaiting licensure, which we are expecting at any time. We have fully transitioned the senior care portfolio as well. With these challenges successfully addressed, we are excited to be working with new operators and solidifying relationships with current operators who have the resources and desire to stabilize operations and further grow occupancy. As I mentioned earlier, we recently completed $46 million in investments and have built a healthy pipeline. We remain focused on shorter-term cash flow strategic deals that have what we believe to be reduced risk profiles and look forward to announcing additional investments over the next several months. We have ample access to liquidity to act on these opportunities to provide accretive returns for LTC and our shareholders. We maintained our $0.19 per share monthly dividend by paying out $22.4 million in common dividends during the quarter to our shareholders. The payout ratio on our dividend excluding non-recurring items was approximately 100% for the third quarter. If we used pro forma performance, including recently completed investments, the third quarter FAD payout ratio excluding non-recurring items would be approximately 96%. Although this remains well above our preferred payout ratio of approximately 80% of FAD, we expect our 2022 FAD to improve with the additional from the releasing of the senior care and senior lifestyle portfolios, which will help bring the payout ratio more in line with historical levels. With respect to guidance, for the fourth quarter, we expect FFO to increase approximately two cents to three cents per share, excluding non-recurring items from third quarter results. Please note this guidance does not include the recovery of any deferred rent or additional investments. Now I'll turn things over to Pam.

Thank you, Wendy. Total revenue decreased $701,000 compared with the third quarter of last year, resulting principally from unpaid rent from senior care and senior lifestyle, abated and deferred rent, and the sale of a property in Washington. The decrease was partially offset by the write-off of straight-line rent receivable balances in the prior year quarter. rent received from releasing 18 properties in the senior lifestyle portfolio, completed development projects, an increase in property tax revenue, annual rent escalation, capital improvement funding, and higher payments from ANTA. Interest income was comparable year over year. Interest expense decreased $751,000, mostly due to scheduled principal paydowns on our senior unsecured notes and lower interest rates on our line of credits. partially offset by a higher outstanding balance on our line of credit. Transaction costs increased $4 million related mostly to our settlement with senior care and related fees. During the 2021 third quarter, we recognized a gain on sale of real estate of $2.7 million related to the sale of a skilled nursing center in Washington. In last year's third quarter, we recorded a $900,000 impairment charge related to a closed assisted living property in Florida which was sold in the first quarter of 2021 and received $373,000 in insurance proceeds for damage related to a property sold in the first quarter of 2020. Net income available to common shareholders decreased by $1.2 million, primarily due to the previously discussed revenue decline and settlement and related fees for senior care. The decrease was partially offset by a prior year impairment charge and a current year gain on sale. Nary FFO per diluted share was 45 cents this quarter, compared with 58 cents in last year's third quarter. Excluding non-recurring items, FFO per share was 55 cents this quarter, compared with 71 cents in the third quarter of 2020. The decrease, excluding non-recurring items, was due to receiving zero rent from senior care and senior lifestyle, abated and deferred rent, and higher G&A expense. These decreases were partially offset by higher revenues resulting from releasing 18 properties in the senior lifestyle portfolio, completed development projects, mezzanine loan funding, and lower interest expense. During the 2021 third quarter, we funded a $4.4 million mezzanine loan and a $1.8 million mortgage loan. Additionally, we funded $2.8 million in capital improvement projects on properties we own. Subsequent to the end of the quarter, we funded two mortgage loans for a total of $39.5 million. Clint will discuss our investment activities in a moment. During the third quarter, we borrowed $68.5 million under our unsecured revolving line of credit and paid $25.2 million in scheduled principal pay downs on our senior unsecured notes. Currently, we have $5.9 million of cash on hand, $465.6 million available on our line of credit, with $134.4 million outstanding and $200 million available under our ATM. This leaves us with ample liquidity of $671.5 million. We have no significant long-term debt maturities over the next five years. At the end of the 2021 third quarter, our credit metrics remain strong with a debt to annualized adjusted EBITDA for real estate of 5.8 times, an annualized adjusted fixed charge coverage ratio of 4.3 times, and a debt-to-enterprise value of 35.3%. Performa for recently completed investments, annualized adjusted EBITDA for real estate was 5.7 times, the annualized adjusted fixed charge coverage ratio was 4.3 times, and debt-to-enterprise value was 32.9%. I'll finish my discussion with rent deferrals and abatements. As Wendy mentioned, excluding senior care and senior lifestyle, we collected 94% of third quarter rent and mortgage interest income. During the quarter, we provided $1.3 million in rent deferrals and $970,000 in rent abatements. As Wendy noted, these deferrals and abatements relate to the same small subset of operators that have been receiving ongoing relief from us. As a reminder, senior lifestyle did not pay us rent in 2021. With the exception of the one property Wendy discussed, the portfolio is transitioned and we are receiving contractual rent from the operators who now lease these properties. Although Senior Care did not pay us rent in the third quarter, we do expect to receive rent from HMG as performance improves. Clint will provide more detail. In October, we provided rent deferrals totaling $438,000 and rent abatements totaling $240,000. We have agreed to provide rent deferrals of up to $441,000 and abatements of up to $240,000 for each of November and December 2021. Now, I'll turn the call over to Clay.