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Equity
 3 Months Ended
Mar. 31, 2013
Equity  
Equity

6.                                    Equity

 

Equity is allocated between controlling and non-controlling interests as follows (in thousands):

 

 

 

LTC
Properties, Inc.
Stockholders’
Equity

 

Non-controlling
Interest

 

Total
Equity

 

Balance at December 31, 2012

 

$463,101

 

$7

 

$463,108

 

Net income

 

12,976

 

—

 

12,976

 

Issue common stock

 

4,293

 

—

 

4,293

 

Vested restricted common stock

 

985

 

—

 

985

 

Stock option exercise

 

523

 

—

 

523

 

Reclassification adjustment

 

(9)

 

—

 

(9

)

Non-controlling interest preferred return

 

—

 

(7)

 

(7

)

Preferred stock dividends

 

(818)

 

—

 

(818

)

Common stock dividends

 

(14,217)

 

—

 

(14,217

)

Other

 

(23)

 

 

 

(23

)

Balance at March 31, 2013

 

$466,811

 

$—

 

$466,811

 

 

Preferred Stock.  At March 31, 2013, we had 2,000,000 shares of our 8.5% Series C Cumulative Convertible Preferred Stock (or Series C preferred stock) outstanding.  Our Series C preferred stock is convertible into 2,000,000 shares of our common stock at $19.25 per share.  Total shares reserved for issuance of common stock related to the conversion of Series C preferred stock were 2,000,000 shares at March 31, 2013.

 

Common Stock.  During the three months ended March 31, 2013, we acquired 600 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations. We have an equity distribution agreement which allows us to issue and sell, from time to time, up to $85,686,000 in aggregate offering price of our common shares.  Sales of common shares are made by means of ordinary brokers’ transactions at market prices, in block transactions, or as otherwise agreed between us and our sales agents.  During the three months ended March 31, 2012, we did not sell shares of our common stock under our equity distribution agreement. During the three months ended March 31, 2013, we sold 126,742 shares of common stock for $4,895,000 in net proceeds under our equity distribution agreement. In conjunction with the sale of common stock, we reclassified $602,000 of accumulated costs associated with the equity distribution agreement to additional paid in capital. At March 31, 2013, we had $59,578,000 available under this amended equity distribution agreement. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our unsecured line of credit.

 

Available Shelf Registrations.  Our shelf registration statement provides us with the capacity to offer up to $400,000,000 in common stock, preferred stock, warrants, debt, depositary shares, or units.  We may from time to time raise capital under our current shelf registration in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. At March 31, 2013, we had availability of $167,614,000 under our effective shelf registration.

 

Non-controlling Interests. We currently have no limited partners. During 2012, we had one limited partnership. The limited partnership agreement allowed the limited partners to convert, on a one-for-one basis, their limited partnership units into shares of common stock or the cash equivalent, at our option. Since we exercised control, we consolidated the limited partnership and we carried the non-controlling interests at cost.

 

During 2012, two of our limited partners exercised their conversion rights to exchange all of their 112,588 partnership units. At our discretion, we converted 23,294 partnership units into an equal number of our common shares.  The partnership conversion price was $17.00 per partnership unit.  At our discretion, we elected to satisfy the conversion of 89,294 limited partnership units with cash.  We paid the limited partners $2,764,000, which represents the closing price of our common stock on the redemption date plus $0.05 per share multiplied by the number of limited partnership units redeemed.  The amount we paid upon redemption exceeded the book value of the limited partnership interest redeemed by $1,246,000. Accordingly, the $1,246,000 excess book value of the limited partners’ interest in the partnership was reclassified to stockholders’ equity. We accounted for these conversions as an equity transaction because there was no change in control requiring consolidation or deconsolidation and remeasurement. Subsequent to these partnership conversions, the assets held by the limited partnership were transferred to other subsidiaries of the Company and the limited partnership was terminated.

 

The following table represents the change from net income attributable to us and transfers from non-controlling interest (in thousands):

 

 

 

Three months ended
 March 31,

 

 

 

2013

 

2012

 

Net income attributable to LTC Properties, Inc.

 

$12,976

 

$12,921

 

Transfers from the non-controlling interest

 

 

 

 

 

Decrease in paid-in capital for limited partners conversion

 

—

 

(1,246)

 

Change from net income attributable to LTC Properties, Inc. and transfers from non-controlling interest

 

$12,976

 

$11,675

 

 

Distributions. We declared and paid the following cash dividends (in thousands):

 

 

 

Three months ended March 31, 2013

 

Three months ended March 31, 2012

 

 

 

Declared

 

Paid

 

Declared

 

Paid

 

Preferred Stock

 

 

 

 

 

 

 

 

 

Series C

 

$     818

 

$     818

 

$     818

 

$     818

 

Total Preferred

 

818

 

818

 

818

 

818

 

 

 

 

 

 

 

 

 

 

 

Common Stock (1)

 

14,217

 

14,217

 

13,226

 

13,226

 

 

 

 

 

 

 

 

 

 

 

Total

 

$15,035

 

$15,035

 

$14,044

 

$14,044

 

 

(1)          Represents $0.155 per share per month and $0.145 per share per month for the three months ended March 31, 2013 and 2012, respectively.

 

In April 2013, we declared a monthly cash dividend of $0.155 per share on our common stock for the months of April, May and June 2013, payable on April 30, May 31 and June 28, 2013, respectively, to stockholders of record on April 22, May 23 and June 20, 2013, respectively.

 

Other Equity.  At March 31, 2013 and December 31, 2012, other equity consisted of accumulated comprehensive income of $143,000 and $152,000, respectively.  This balance represents the net unrealized holding gains on available-for-sale REMIC Certificates recorded in 2005 when we repurchased the loans in the underlying loan pool.  This amount is being amortized to increase interest income over the remaining life of the loans that we repurchased from the REMIC Pool.

 

Stock-Based Compensation.  During the three months ended March 31, 2013, a total of 22,000 stock options were exercised at a total option value of $523,000 and a total market value on the date of exercise of $865,000. During the three months ended March 31, 2012, a total of 10,000 stock options were exercised at a total option value of $151,000 and a total market value on the date of exercise of $305,000. No stock options were issued during the three months ended March 31, 2013 and 2012. At March 31, 2013, we had 73,334 stock options outstanding and all stock options are exercisable.  Compensation expense related to the vesting of stock options for the three months ended March 31, 2012 was $4,000.

 

During the three months ended March, 31, 2013, we granted 20,000 shares of restricted common stock at $36.26 per share. These shares all vest on June 1, 2016. Also during the three months ended March 31, 2013, we accelerated the vesting of 18,180 shares of restricted common stock due to the retirement of our Senior Vice President, Marketing and Strategic Planning. Accordingly, we recorded $457,000 of compensation expense related to the accelerated vesting. During the three months ended March, 31, 2012, we granted 56,200 shares of restricted common stock at $31.77 per share. The vesting of these shares are as follows: 14,000 shares vest ratably over a five-year period from the grant date, 30,000 shares all vest on June 15, 2015, and 12,200 shares all vest on January 10, 2016. During the three months ended March 31, 2013 and 2012, we recognized $985,000 and $448,000, respectively, of compensation expense related to the vesting of restricted common stock.