LTC Properties, Inc. (LTC) Cash Flow Statement

The 2026Q1 payout ratio of roughly 0.82 of AFFO leaves a thin retained buffer, and the 2026Q2 dividend total appears to include special or catch-up distributions that AFFO did not fund. Investors should monitor whether recurring AFFO can cover the regular dividend without relying on the anticipated Prestige loan payoff and asset sale proceeds. The coverage picture is clearly less stable than the headline monthly dividend would suggest.

The scale of the 2026Q3 deficit against a modest OCF base indicates that the SHOP investment program is being financed externally rather than from retained cash generation. The expanded $1 billion credit facility and the projected $730M Prestige payoff suggest management has identified the funding path, but the deficit warrants further investigation into the timing and certainty of those inflows. Any slippage in these transactions would likely pressure the pace of deployment.

Such a wide divergence between FFO and OCF suggests the FFO figure is heavily influenced by discrete gains and non-cash items, which may not repeat in subsequent quarters. Over the 2024 to 2025 periods, FFO and OCF tracked more closely, which makes the recent divergence more notable. Investors should treat the elevated FFO with caution until recurring cash conversion is demonstrated.

The magnitude of the net income spike relative to operating cash flow suggests depreciation and gain-on-sale effects are materially distorting GAAP earnings. The FFO-to-net-income ratio of 0.12 in 2026Q3 versus 1.30 in 2026Q1 underscores how unstable the earnings base has become. Analysts should rely on AFFO and cash-based measures to judge the underlying earnings power.