What changed in this filing

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Item 1. Financial Statements

2025-08-04 compared with 2025-05-05 · 408 added, 195 removed, 574 unchanged (51% of the section changed)

3 unchanged sentences

(amounts in thousands, except per share)

March 31, 2025

June 30, 2025

December 31, 2024

23 unchanged sentences

Senior unsecured notes, net of debt issue costs:

2025—$ 1,017 ;

Accrued interest

23 unchanged sentences

Three Months Ended

Six Months Ended

Rental income

Resident fees and services

Interest income from financing receivables

4 unchanged sentences

Depreciation and amortization

Seniors housing operating expenses

Provision for credit losses

3 unchanged sentences

Total expenses

Other operating income:

Gain on sale of real estate, net

Operating income

Income before unconsolidated joint ventures, real estate dispositions and other items

Gain (loss) on sale of real estate, net

Income from unconsolidated joint ventures

Income tax benefit

Income allocated to non-controlling interests

9 unchanged sentences

(amounts in thousands, unaudited)

Three Months Ended March 31,

Unrealized (loss) gain on cash flow hedges before reclassification

Three Months Ended

Six Months Ended

Unrealized gain (loss) on cash flow hedges before reclassification

Gains reclassified from accumulated other comprehensive income to interest expense

19 unchanged sentences

( 1,775,928 )

Issuance of common stock

Issuance of restricted stock

Common Stock cash distributions ($ 0.57 per share)

Stock-based compensation expense

Fair market valuation adjustment for interest rate swap

Cash paid for taxes in lieu of common shares

Non-controlling interest contributions

Non-controlling interest distributions

Balance—June 30, 2024

( 1,800,715 )

Balance—December 31, 2024

11 unchanged sentences

( 1,879,101 )

Issuance of common stock

Issuance of restricted stock

Common Stock cash distributions ($ 0.57 per share)

Stock-based compensation expense

Vesting of performance-based stock units

Fair market valuation adjustment for interest rate swap

Cash paid for taxes in lieu of common shares

Non-controlling interest distributions

Balance—June 30, 2025

( 1,905,398 )

LTC PROPERTIES, INC.

1 unchanged sentence

(amounts in thousands, unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES:

3 unchanged sentences

Gain on sale of real estate, net

Income tax benefit

Income from unconsolidated joint ventures

20 unchanged sentences

Principal payments received on mortgage loans receivable

Investments in unconsolidated joint ventures

Proceeds from liquidation of investments in unconsolidated joint ventures

Advances and originations under notes receivable

Principal payments received on notes receivable

Net cash provided by investing activities

Net cash used in investing activities

FINANCING ACTIVITIES:

5 unchanged sentences

Distributions paid to stockholders

Acquisitions of and distributions paid to non-controlling interests

Acquisition of and distributions paid to non-controlling interests

Financing costs paid

1 unchanged sentence

Net cash used in financing activities

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

3 unchanged sentences

Non-cash investing and financing transactions:

Contribution from non-controlling interest

Investment in financing receivables

Exchange of mortgage loans for controlling interests in joint ventures accounted for as financing receivables

Accretion of interest reserve recorded as mortgage loan receivable

Write-off of notes receivable

Decrease (increase) in fair value of interest rate swap agreements

Decrease in fair value of interest rate swap agreements

Distributions paid to non-controlling interests

6 unchanged sentences

We invest primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending.

Subsequent to March 31, 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008.

We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes.

Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators.

Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof.

During the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008.

Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), independent living communities (“ILF”), assisted living communities (“ALF”), memory care communities (“MC”) and combinations thereof.

We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals.

To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

To meet these objectives, we attempt to invest in properties that provide an opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Basic of Presentation and Accounting Policies

Basic of Presentation

We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

1 unchanged sentence

generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries.

All significant intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results for a full year.

No provision has been made for federal or state income taxes.

Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended.

As such, we generally are not taxed on income that is distributed to our stockholders.

Under RIDEA, a REIT may lease a "qualified healthcare property" on an arm's-length basis to a taxable REIT subsidiary ("TRS") and generally the rent received from the TRS will be treated as “rents from real property.” A "qualified healthcare property" includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients.

Resident level rents and related operating expenses for these facilities will be reported in our consolidated financial statements and will be subject to federal and state income taxes as the operations of such facilities are included in TRS entities.

The results of operations for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the results for a full year.

As explained above, we began utilizing the RIDEA structure in the second quarter of 2025, and established a seniors housing operating portfolio (“SHOP”) segment.

Accordingly, effective in the second quarter of 2025, we conduct and manage our business as two operating segments, for reporting and decision-making purposes:

real estate investments and SHOP.

See Note 16 to our consolidated financial statements for more information.

Our real estate investments segment consists of owned properties that are leased pursuant to non-cancelable triple-net operating (“NNN” or “Triple-Net”) leases, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures.

During the second quarter of 2025, we terminated our Anthem Memory Care, LLC (“Anthem”) and New Perspective Senior Living, LLC.

(“New Perspective”) Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment.

Accordingly, as of June 30, 2025, our SHOP segment is comprised of the operations of 12 memory care and one independent and assisted living communities that are managed on behalf of LTC by two independent operators pursuant to the terms of separate management agreements.

Revenue Recognition-SHOP

Resident fees and services represent all amounts earned from residents within our SHOP segment, as outlined in individual resident agreements.

Fees are billed monthly based on contracted rates in the resident agreements, or where applicable, reimbursement rates established by Medicaid and Medicare.

Resident fees and services revenue is derived from amounts paid by residents and/or third-party payors.

Resident agreements typically vary in duration.

Revenue is primarily service-based and is recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”) when performance obligations are satisfied.

LTC PROPERTIES, INC.

1 unchanged sentence

Real Estate Investments

Assisted living communities, independent living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively “ALF”).

Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the seniors housing communities classification (“SH”).

Any reference to the number of properties or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Owned Properties

Our owned properties are leased pursuant to non-cancelable operating leases.

Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities.

Many of the leases contain renewal options.

The majority of our leases contain provisions for specified annual increases over the rents of the prior year.

The following table summarizes our investments in owned properties at March 31, 2025 (dollar amounts in thousands) :

Our owned property investments include 108 properties leased to 20 different operators under Triple-Net leases, and 13 properties operated on our behalf by two independent operators pursuant to separate management agreements.

The following tables summarize our investments in owned properties at June 30, 2025 (dollar amounts in thousands) :

Type of Property

Properties (1)

Assisted Living

Seniors Housing-NNN

Seniors Housing-SHOP

Seniors Housing

Skilled Nursing

(1) We own properties in 23 states that are leased to 22 different operators.

(1) We own properties in 23 states.

(2) Includes three parcels of land held-for-use, and one behavioral health care hospital.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater or less than that currently being paid.

During the three months ended March 31, 2025, a master lease covering two skilled nursing centers in Tennessee that was scheduled to mature on December 31, 2025, was amended extending the maturity to December 31, 2026.

Additionally, the master lease purchase option window, which expired on December 31, 2024, was extended for another year to December 31, 2025.

Additionally, during the three months ended March 31, 2025, we terminated two existing leases with the same operator, and combined them into a single master lease.

Type of Property

Seniors Housing

Skilled Nursing

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

During the six months ended June 30, 2025 and 2024, we invested in the following capital improvement projects in our owned properties ( dollar amounts in thousands ):

Six Months Ended June 30,

Type of Property

Seniors Housing Communities

Skilled Nursing Centers

Owned Properties- Triple-Net

Our Triple-Net leases require the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities.

Many of the leases contain renewal options.

The majority of our leases contain provisions for specified annual increases over the rents of the prior year.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater than that currently being paid.

The following table outlines information related to our Triple-Net lease extensions during the six months ended June 30, 2025:

Type of Property

April 30, 2026

April 30, 2031

December 31, 2025

December 31, 2026

February 28, 2025

February 28, 2026

February 28, 2031

December 31, 2025

December 31, 2026

(1) Subsequent to June 30, 2025, Genesis Healthcare, Inc.

(“Genesis”) filed for Chapter 11 bankruptcy.

Genesis has paid their contractual rent through August 2025.

(2) The purchase option window provided in the master lease, which expired on December 31, 2024, was extended for another year to December 31, 2025.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Additionally, during the six months ended June 30, 2025, we terminated two existing leases with the same operator and combined them into a single master lease.

The new master lease has a five-year term with one 1-year extension option and four 5-year extension options.

1 unchanged sentence

In connection with the termination of these leases, we wrote-off straight-line rent receivable and lease incentive balances of $ 243,000 and $ 249,000 , respectively.

Subsequent to March 31, 2025, we terminated our Anthem Memory Care, LLC (“Anthem”) triple-net master leases and transitioned the 12 memory care communities covered under the master leases into our new seniors housing operating portfolio (“SHOP”) under the RIDEA structure.

In anticipation of this event, we wrote-off Anthem’s working capital note of $ 2,693,000 and the related interest receivable of $ 371,000 during the three months ended March 31, 2025.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Also, during the six months ended June 30, 2025, we terminated our Anthem Triple-Net master leases and converted the communities covered under the master leases into our SHOP segment.

In conjunction with the conversion, we wrote-off Anthem’s working capital note of $ 2,693,000 and the related interest receivable of $ 371,000 during the six months ended June 30, 2025.

In addition, we terminated our New Perspective Triple-Net lease and converted the community covered under the lease into our SHOP segment.

In connection with the conversion, we paid New Perspective a $ 5,971,000 lease termination fee.

For more information regarding these communities, see Owned Properties-SHOP below.

We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis.

1 unchanged sentence

Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a “straight-line” basis for those customer receivable balances deemed uncollectible.

During the three months ended March 31, 2025, we wrote-off straight-line rent receivable and lease incentive balances of $ 243,000 and $ 249,000 , respectively, in connection with the termination of two existing leases with the same operator, and combining them into a master lease as discussed above.

During the three months ended March 31, 2024, we wrote-off lease incentive balance of $ 191,000 , as a result of property sales.

We continue to take into account the current financial condition of our operators in our estimation of uncollectible accounts at March 31, 2025.

During the six months ended June 30, 2025, we wrote-off straight-line rent receivable and lease incentive balances of $ 243,000 and $ 249,000 , respectively, in connection with the termination of two existing leases with the same operator, and combining them into a master lease as discussed above.

During the six months ended June 30, 2024, we wrote-off a straight-line rent receivable balance of $ 321,000 as a result of converting a lease to fair-market rent resets and a lease incentive balance of $ 190,000 as a result of property sales.

We continue to take into account the current financial condition of our operators in our estimation of uncollectible accounts at June 30, 2025.

We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.

The following table summarizes components of our rental income for the three months ended March 31, 2025 and 2024 (in thousands):

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

The following table summarizes components of our rental income for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended

Six Months Ended

Rental Income

1 unchanged sentence

Variable cash rental income (3)

Straight-line rent

Straight-line rent adjustment

Adjustment of lease incentives and rental income

Amortization of lease incentives

(1) Decreased primarily due to a one-time revenue received in 2024 related to the repayment of $ 2,377 in rent credit and lower rent due to property sales, partially offset by rent increases from fair-market rent resets, annual escalations and amendments.

(1) Decreased primarily due to the conversion of 13 communities from Triple-Net to our new SHOP segment, partially offset by rent increases from fair-market rent resets.

(2) Decreased primarily due to turnaround impact of one-time revenue received in 2024 related to the repayment of $ 2,377 in rent credit, lower rent from property sales, and (1) above, partially offset by higher rent from escalations.

(3) The variable rental income includes reimbursement of real estate taxes by our lessees.

(3) In connection with the termination of two existing leases with the same operator, and combing them into a single master lease, we wrote-off a straight-line rent receivable of $ 243 and a lease incentive balance of $ 249 .

Decrease primarily due to conversion of 13 communities from Triple-Net to our new SHOP segment and property sales.

(4) Straight-line rental income decreased primarily due to scheduled annual escalations.

(5) In connection with the termination of two existing leases with the same operator, and combining them into a single master lease, we wrote-off a straight-line rent receivable of $ 243 and a lease incentive balance of $ 249 .

(6) Represents a lease incentive balance write-off as a result of converting a lease to fair-market rent resets.

LTC PROPERTIES, INC.

25 unchanged sentences

Commitments and Contingencies .

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Properties Held -for-Sale.

The following summarizes our held-for-sale properties as of March 31, 2025 and December 31, 2024 ( dollar amounts in thousands ):

At March 31, 2025

The following summarizes our held-for-sale properties as of June 30, 2025 and December 31, 2024 ( dollar amounts in thousands ):

At June 30, 2025

At December 31, 2024

(1) During the three months ended March 31, 2025, we engaged a broker to sell seven SNFs under a master lease, following the operator’s election not to exercise the renewal option available under the master lease.

(1) During 2025, we engaged a broker to sell seven SNFs under a master lease, following the operator’s election not to exercise the renewal option available under the master lease.

The master lease covers SNFs in California ( 1 ), Florida ( 2 ) and Virginia ( 4 ) and matures in January 2026.

At March 31, 2025, these centers met the criteria under GAAP as held-for-sale.

The operator is obligated to pay rent on the portfolio through maturity and is current on rent obligations through May 2025.

At June 30, 2025, these centers met the criteria under GAAP as held-for-sale.

The operator is obligated to pay rent on the portfolio through maturity and is current on rent obligations through July 2025.

(2) This community was sold during the first quarter of 2025.

Upon sale, the community was removed from a master lease covering five ALFs in Oklahoma and rent under the master lease was not reduced as a result of the sale.

Upon sale, the community was removed from a master lease covering five SHs in Oklahoma and rent under the master lease was not reduced as a result of the sale.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Acquisitions.

The following table summarizes our acquisitions for the six months ended June 30, 2025 and 2024 (dollar amounts in thousands):

Type of Property

(1) During the six months ended June 30, 2024, we acquired a parcel of land in Kansas adjacent to an existing community operated by Brookdale.

Rent was increased by 8.0 % of our total cost of the investment.

Intangible Assets.

4 unchanged sentences

Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases.

The following is a summary of the carrying amount of intangible assets as of March 31, 2025 and December 31, 2024 (in thousands) :

March 31, 2025

The following is a summary of the carrying amount of intangible assets as of June 30, 2025 and December 31, 2024 (in thousands) :

June 30, 2025

December 31, 2024

4 unchanged sentences

(3) Included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

Improvements.

During the three months ended March 31, 2025 and 2024, we invested in t he following capital improvement projects (in thousands) :

Three Months Ended March 31,

Type of Property

Assisted Living Communities

Skilled Nursing Centers

LTC PROPERTIES, INC.

1 unchanged sentence

Properties Sold .

During the three months ended March 31, 2025 and 2024 we recorded a net gain on sale of real estate of $ 171,000 and $ 3,251,000 , respectively.

The following table summarizes property sales during the three months ended March 31, 2025 and 2024 (dollar amounts in thousands):

During the six months ended June 30, 2025 and 2024 we recorded a net gain on sale of real estate of $ 503,000 and $ 3,219,000 , respectively.

The following table summarizes property sales during the six months ended June 30, 2025 and 2024 (dollar amounts in thousands):

(Loss) Gain (1)

(1) Calculation of net gain includes cost of sales and write-off of straight-line receivable and lease incentives, when applicable.

(2) We sold a parcel of land adjacent to a memory care community within our portfolio.

(3) Represents the price to sell our portion of interest in a JV, net of the JV partner’s $ 2,305 contributions in the joint venture.

(4) We recognized additional loss due to additional incurred costs related to properties sold during 2023.

Owned Properties-SHOP

As discussed above, during the second quarter of 2025, we terminated our Anthem and New Perspective Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment.

At June 30, 2025, our SHOP included operations of 13 communities managed on our behalf by two independent operators pursuant to separate management agreements.

The following table provides information regarding our SHOP (dollar amounts in thousands):

Type of Property

CA, CO, KS, IL, OH

(1) Resident fees and services include all amounts earned from residents, based on individual resident agreements, at our SHOP communities.

The individual resident agreements typically vary in duration.

Resident fees and services are primarily service-based and are recognized in accordance with ASC 606 once performance obligations are satisfied.

(2) These communities were converted from NNN to SHOP during the second quarter of 2025.

Accordingly, revenues and expenses do not reflect a full quarter of operations.

Subsequent to June 30, 2025, we acquired a 67 -unit assisted living and memory care community in California within our SHOP segment for $ 35,200,000 .

In connection with the acquisition, we entered into a management agreement with an operator new to us.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Financing Receivables

7 unchanged sentences

Therefore, we consolidated the joint ventures as Financing Receivables on our Consolidated Balance Sheets and recorded the rental revenue from these joint ventures as Interest income from financing receivables on our Consolidated Statements of Income .

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

The following tables provide information regarding our investments in financing receivables ( dollar amounts in thousands ):

12 unchanged sentences

Mortgage Loans

The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at March 31, 2025 (dollar amounts in thousands) :

The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at June 30, 2025 (dollar amounts in thousands) :

Interest Rate

2 unchanged sentences

(2) Some loans contain certain guarantees and provide for certain facility fees.

(3) Our mortgage loans are secured by properties located in four states with six borrowers.

(3) Our mortgage loans are secured by properties located in four states with seven borrowers.

Additionally, during 2024, we committed to fund a $ 26,120 mortgage loan for the construction of a 116 -unit ILF, ALF and MC located in Illinois.

3 unchanged sentences

(4) Minimum interest payable is based on an annual current pay interest rate of 8.5 % on the outstanding loan balance.

The difference between the contractual interest rate and the current pay interest rate of 8.5 % on the outstanding loan balance remains an obligation of the borrower and is payable through the application of security deposits held by LTC on behalf of the borrower or payable upon maturity.

During the 2025 first quarter, we received full contractual cash interest of $ 4,991 , through $ 3,826 of cash receipts and application of $ 1,165 of security deposits.

The difference between the contractual interest rate and the current pay interest rate on the outstanding loan balance remains an obligation of the borrower and is payable through the application of security deposits held by LTC on behalf of Prestige Healthcare (“Prestige”), the borrower, or payable upon maturity.

Prestige paid full contractual interest through July 2025 and none of Prestige’s security was used to pay the difference between the contractual interest rate and the current pay interest rate.

As of June 30, 2025, we hold $ 6,077 in security on behalf of Prestige.

The loan provides for 2.25 % annual interest rate increases.

During July 2025, we amended the mortgage loan to eliminate the current pay rate and revert monthly interest payments to the full contractual interest rate of 11.14 % , effective July 1, 2025.

Additionally, the amendment provides Prestige an option to prepay their mortgage loan at par and without penalty within a 12-month window beginning in July 2026.

Prestige will have to provide us with a 90-day notice of its intention to exercise the option, and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing.

As of June 30, 2025, we have $ 41,455 of accrued effective interest related to this loan, which is expected to be recovered through payments collected through the contractual maturity of the loan.

If Prestige exercises its contingent prepayment option, we will no longer be able to collect our remaining accrued effective interest as of such date.

(5) Mortgage loans provide for 2.25 % annual increases in the interest rate.

The following table summarizes our mortgage loan activity for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

The following table summarizes our mortgage loan activity for the six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 30,

Originations and funding under mortgage loans receivable

Exchange of mortgage loans for controlling interests in joint ventures accounted for as financing receivables

Pay-offs received

Application of interest reserve

1 unchanged sentence

Mortgage loan premium amortization

Provision for loan loss reserve

Net increase in mortgage loans receivable

(1) Funding relates to a $ 19,500 mortgage loan commitment for the construction of an 85 -unit ALF and MC in Michigan.

(Provision) recovery for loan loss reserve

Net increase (decrease) in mortgage loans receivable

(1) Includes the following:

(a) $ 38,495 under our $ 42,300 mortgage loan commitment secured by a 250 -unit ILF, ALF and MC in Florida.

The loan term is five years at a fixed rate of 8.5 % ;

(b) $ 3,040 under our $ 19,500 mortgage loan commitment for the construction of an 85 -unit ALF and MC in Michigan.

The borrower contributed $ 12,100 of equity upon origination in July 2023, which was used to initially fund the construction.

1 unchanged sentence

The interest-only loan term is approximately three years at a rate of 8.75 % , and includes two one-year extensions, each of which is contingent on certain coverage thresholds.

(2) We funded the following:

(2) Includes the following:

(a) $ 6,878 under our $ 19,500 mortgage loan commitment.

For an explanation of the terms and other relevant information related to this mortgage loan, see (1) above;

(b) $ 188 of additional funding under other mortgage loan receivables .

For an explanation of the terms and other relevant information related to this mortgage loan see (1) (a) above;

(b) $ 5,546 of additional funding under a mortgage loan receivable agreement with an ALG affiliate secured by 13 ALFs and MCs in North Carolina ( 12 ) and South Carolina ( 1 ).

During the three months ended June 30, 2024, we exchanged this $ 64,450 mortgage loan receivable for a controlling interest in a JV investment with an ALG affiliate.

See Financing Receivables above for more information;

(c) $ 2,766 of additional funding under a mortgage loan receivable agreement with an ALG affiliate secured by four ALFs in North Carolina.

During the three months ended June 30, 2024, we exchanged this $ 37,985 mortgage loan receivable for a controlling interest in a JV investment with an ALG affiliate.

See Financing Receivables above for more information;

(d) $ 767 of additional funding.

(3) Includes the following:

(a) $ 64,450 mortgage loan receivable due from an ALG affiliate was exchanged for a controlling interest in a JV.

See (2)(b) above for more information;

(b) $ 37,985 mortgage loan receivable due from an ALG affiliate was exchanged for a controlling interest in a JV.

See (2)(c) above for more information;

LTC PROPERTIES, INC.

1 unchanged sentence

Investment in Unconsolidated Joint Ventures

We have preferred equity investments in one joint venture and an acquisition, development and construction (“ADC”) loan .

We have a preferred equity investments in one joint venture and an acquisition, development and construction (“ADC”) loan.

We determined that each of these JVs meet the accounting criteria to be considered a variable interest entity (“VIE”).

3 unchanged sentences

Therefore, we have accounted for the JVs using the equity method of accounting.

During the three months ended March 31, 2025, we received $ 15,962,000 , including a 13 % exit IRR of $ 2,962,000 , from the redemption of our preferred equity investment in a joint venture that owns a 267 -unit independent and assisted living community in Washington.

The following table provides information regarding our unconsolidated joint venture investments at March 31, 2025 (dollar amounts in thousands):

During 2025, we received $ 15,962,000 , including a 13 % exit IRR of $ 2,962,000 , from the redemption of our preferred equity investment in a joint venture that owns a 267 -unit independent and assisted living community in Washington.

The following table provides information regarding our unconsolidated joint venture investments at June 30, 2025 (dollar amounts in thousands):

Preferred Equity

6 unchanged sentences

We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036.

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the three months ended March 31, 2025 and 2024 (in thousands):

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the six months ended June 30, 2025 and 2024 (in thousands):

Income Accrued

(1) During the three months ended March 31, 2025, our preferred equity investment in a JV that owns a 267 -unit ILF and ALF in Washington was redeemed for $ 15,962 , which included a 13 % exit IRR of $ 2,962 .

(1) During 2025, our preferred equity investment in a JV that owns a 267 -unit ILF and ALF in Washington was redeemed for $ 15,962 , which included a 13 % exit IRR of $ 2,962 .

LTC PROPERTIES, INC.

2 unchanged sentences

Notes receivable consist of mezzanine loans and working capital loans.

The following table summarizes our investments in notes receivable at March 31, 2025 ( dollar amounts in thousands ):

Working capital

The following table summarizes our investments in notes receivable at June 30, 2025 ( dollar amounts in thousands ):

Working capital

1 unchanged sentence

(1) Excludes the impact of credit loss reserve.

The following table is a summary of our notes receivable components as of March 31, 2025 and December 31, 2024 (in thousands):

At March 31, 2025

The following table is a summary of our notes receivable components as of June 30, 2025 and December 31, 2024 (in thousands):

At June 30, 2025

At December 31, 2024

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Notes receivable credit loss reserve

The following table summarizes our notes receivable activity for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Total notes receivable, net of credit loss reserve

The following table summarizes our notes receivable activity for the six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 30,

Advances under notes receivable

Principal payments received under notes receivable

2 unchanged sentences

Net decrease in notes receivable

(1) Represents the write-off of Anthem Memory Care LLC (“Anthem”) working capital note in connection with the transition of triple-net leases covering 12 properties to RIDEA.

(1) Represents the write-off of Anthem Memory Care LLC (“Anthem”) working capital note in connection with the conversion of Anthem’s Triple-Net leases to SHOP.

LTC PROPERTIES, INC.

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Lease Incentives

Our non-contingent lease incentive balances at March 31, 2025 and December 31, 2024 were $ 3,074,000 and $ 3,522,000 , respectively.

The following table summarizes our lease incentives activity for the three months ended March 31, 2025 and 2024 (in thousands) :

Three Months Ended March 31,

Our non-contingent lease incentive balances at June 30, 2025 and December 31, 2024 were $ 2,893,000 and $ 3,522,000 , respectively.

The following table summarizes our lease incentives activity for the six months ended June 30, 2025 and 2024 (in thousands) :

Six Months Ended June 30,

Lease incentives funded

2 unchanged sentences

Other adjustments

Net increase in non-contingent lease incentives

(1) Represents uncollectible lease incentive balances written-off due to the termination of two existing leases with the same operator, and combing them into a single master lease.

Net (decrease) increase in non-contingent lease incentives

(1) Represents uncollectible lease incentive balances written-off due to the termination of two existing leases with the same operator, and combining them into a single master lease.

(2) Represents lease incentive balances written-off due to property sales.

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Credit Loss Reserve

We apply Accounting Standards Codification Topic 326, Financial Instruments-Credit Losses (“ASC 326”), which requires a forward-looking “expected loss” model, to estimate our loan losses.

We apply ASC Topic 326, Financial Instruments-Credit Losses (“ASC 326”), which requires a forward-looking “expected loss” model, to estimate our loan losses.

We determined our Financing receivables , Mortgage loans receivable and Notes receivable line items on our Consolidated Balance Sheets are within the scope of ASC 326.

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Real Estate Investments above.

At March 31, 2025, we had investments in four JVs accounted for as financing receivables that owned 31 properties in three states.

At June 30, 2025, we had investments in four JVs accounted for as financing receivables that owned 31 properties in three states.

In addition to owning the properties through our controlling interests in the JVs, generally, these leases provide one or more of the following:

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As part of our strategy of making investments in properties used in the provision of long-term health care services, we provided mortgage loan financing on such properties.

At March 31, 2025, we had nine mortgage loans secured by 27 properties in four states with six borrowers.

At June 30, 2025, we had ten mortgage loans secured by 28 properties in four states with seven borrowers.

In addition to a lien on the mortgaged properties, the loans are generally secured by non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits.

7 unchanged sentences

Year of origination (1)

At March 31, 2025

At June 30, 2025

Investment Type:

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Therefore, we elected the policy to write off accrued interest receivable by recognizing credit loss expense.

As of March 31, 2025, the total balance of accrued interest receivable of $ 61,754,000 was not included in the measurement of expected credit loss.

During the three months ended March 31, 2025, we wrote-off Anthem’s interest receivable of $ 371,000 in connection with the transition to RIDEA as explained in Note 2.

As of June 30, 2025, the total balance of accrued interest receivable of $ 64,454,000 was not included in the measurement of expected credit loss.

During the six months ended June 30, 2025, we wrote-off Anthem’s interest receivable of $ 371,000 in connection with the conversion of Anthem’s Triple-Net leases to SHOP as explained in Note 3.

Real Estate Investments .

During the three months ended March 31, 2024, we did no t recognize any write-off related to accrued interest receivable.

During the six months ended June 30, 2024, we did no t recognize any write-off related to accrued interest receivable.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Prepaid Expenses and Other Assets

The following is a summary of our prepaid expenses and other assets ( dollar amounts in thousands ):

June 30, 2025

December 31, 2024

Intangible assets

SHOP prepaid expenses and other assets

Real estate investments, prepaid expenses and other assets

Right of use asset, net

Interest rate swap asset

SHOP Accounts receivable, net of credit loss reserve:

Deferred income tax asset

Debt Obligations

3 unchanged sentences

The Revolving Line of Credit had a maturity date of November 19, 2025 and provided a one-year extension option at our discretion, subject to customary conditions.

During the first quarter of 2024, we entered into an amendment to the Original Credit Agreement (the “Credit Agreement”) to accelerate our one-year extension option notice to January 4, 2024.

Concurrently, we exercised our option to extend the maturity date to November 19, 2026.

During the first quarter of 2024, we entered into an amendment to the Original Credit Agreement (the “Credit Agreement”) to accelerate our one-year extension option notice and exercised our option to extend the maturity date to November 19, 2026.

Other material terms of the Original Credit Agreement remained unchanged.

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Accordingly, the aggregate commitment of the lenders under the Credit Agreement increased to $ 525,000,000 , with $ 475,000,000 remaining available under the Accordion.

The exercise of the Accordion did not materially change any other term or condition of the Credit Agreement, including its maturity date or covenant requirements.

Based on our leverage at March 31, 2025, the facility provides for interest annually at Adjusted SOFR plus 110 basis points and a facility fee of 15 basis points and the Term Loans provide for interest annually at Adjusted SOFR plus 125 basis points.

The exercise of the Accordion did not change any other term or condition of the Credit Agreement, including its maturity date or covenant requirements.

Based on our leverage at June 30, 2025, the facility provides for interest annually at Adjusted SOFR plus 110 basis points and a facility fee of 15 basis points and the Term Loans provide for interest annually at Adjusted SOFR plus 125 basis points.

Subsequent to June 30, 2025, we entered into a new four-year unsecured credit agreement (“New Credit Agreement”) maturing in July 2029, to replace our previous Credit Agreement.

The New Credit Agreement increased the aggregate commitment on our revolving line of credit from $ 425,000,000 to $ 600,000,000 and provides for the opportunity to increase the total commitment to an aggregate $ 1,200,000,000 .

The New Credit Agreement provides for a one-year extension option, subject to customary conditions.

Material terms of the New Credit Agreement remain unchanged.

In connection with the New Credit Agreement, the Term Loans were rolled into the new revolving line of credit, keeping the interest rate swap agreements intact at an average 2.3 % rate, based on current margins.

Interest Rate Swap Agreements.

In connection with entering into the Term Loans described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans.

In connection with entering into the Term Loans described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans.

The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value in Prepaid expenses and other assets , with cumulative changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets .

During the three months ended March 31, 2025 and 2024 we recorded a decrease of $ 910,000 and an increase of $ 378,000 in fair value of Interest Rate Swaps, respectively.

During the six months ended June 30, 2025 and 2024, we recorded a decrease of $ 1,627,000 and $ 145,000 in fair value of Interest Rate Swaps, respectively.

As discussed above, subsequent to June 30, 2025, the Term Loans were paid off using proceeds from our new revolving line of credit under our New Credit Agreement, keeping the interest rate swap agreements intact through November 2025 at 2.3 % and November 2026 at 2.4 % , based on current margins.

Information regarding our interest rate swaps measured at fair value, which are classified as Level 2 of the fair value hierarchy is presented below ( dollar amounts in thousands ):

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Maturity Date

March 31, 2025

June 30, 2025

December 31, 2024

6 unchanged sentences

The senior unsecured notes mature between 2026 and 2033.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

The senior unsecured notes and the Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, that require us to maintain, among other things:

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● a ratio of EBITDA, as calculated in the debt obligation, to fixed charges not less than 1.50 to 1.0.

At March 31, 2025, we were in compliance with all applicable financial covenants.

At June 30, 2025, we were in compliance with all applicable financial covenants.

These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The following table sets forth information regarding debt obligations by component as of March 31, 2025 and December 31, 2024 ( dollar amounts in thousands):

At March 31, 2025

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

The following table sets forth information regarding debt obligations by component as of June 30, 2025 and December 31, 2024 ( dollar amounts in thousands):

At June 30, 2025

At December 31, 2024

3 unchanged sentences

Senior unsecured notes, net of debt issue costs (3)

(1) Represents weighted average of interest rate as of March 31, 2025.

(2) Subsequent to March 31, 2025, we repaid $ 18,900 under our unsecured revolving line of credit.

(1) Represents weighted average of interest rate as of June 30, 2025.

(2) Subsequent to June 30, 2025, as noted above, we entered into our New Credit Agreement increasing commitments from $ 425,000 to $ 600,000 and repaid our Term Loans using proceeds from our revolving line of credit under our New Credit Agreement.

Additionally, we borrowed $ 41,850 under our new revolving line of credit under our New Credit Agreement.

Accordingly, we have $ 310,400 outstanding and $ 289,600 available for borrowing under our unsecured revolving line of credit.

During the three months ended March 31, 2025 and 2024, our debt borrowings and repayments were as follows ( in thousands ):

Three Months Ended March 31,

(3) Subsequent to June 30, 2025, we repaid $ 7,000 in scheduled principal paydown on our senior unsecured notes.

During the six months ended June 30, 2025 and 2024, our debt borrowings and repayments were as follows ( in thousands ):

Six Months Ended June 30,

Debt Obligations

1 unchanged sentence

Senior unsecured notes

(1) Subsequent to March 31, 2025, we repaid $ 18,900 under our unsecured revolving line of credit.

(1) Subsequent to June 30, 2025, as noted above, we entered into our New Credit Agreement increasing commitments from $ 425,000 to $ 600,000 and repaid our Term Loans using proceeds from our revolving line of credit under our New Credit Agreement.

Additionally, we borrowed $ 41,850 under our new revolving line of credit under our New Credit Agreement.

Accordingly, we have $ 310,400 outstanding and $ 289,600 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to June 30, 2025, we repaid $ 7,000 in scheduled principal paydown on our senior unsecured notes.

Accrued Expenses and Other Liabilities

The following is a summary of our accrued expenses and other liabilities ( dollar amounts in thousands ):

June 30, 2025

December 31, 2024

Security deposits

Property tax liability

Maintenance and repair reserves

Accounts payable and other accrued liabilities

SHOP liabilities

Deferred commitments

Lease liabilities

SHOP deferred revenue

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Non-controlling Interests.

3 unchanged sentences

Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

As of March 31, 2025, we have the following consolidated VIEs (in thousands):

As of June 30, 2025, we have the following consolidated VIEs (in thousands):

Non-Controlling

5 unchanged sentences

(1) Includes the total real estate investments and excludes intangible assets.

In 2018, we entered into a JV to develop, purchase and own seniors housing properties.

The JV purchased land located in Oregon for the development of a 97 -unit assisted living and memory care.

Additionally, in a sale-leaseback transaction, the JV purchased an existing operational 89 -unit independent living community adjacent to the 97 -unit assisted living and memory care community.

During the three months ended March 31, 2025, we acquired our JV partner’s non-controlling interest for $ 1,150,000 resulting in us controlling full ownership of these communities.

During the six months ended June 30, 2025, we acquired our JV partner’s non-controlling interest in a JV that owns two seniors housing communities in Oregon with a total of 186 units for $ 1,150,000 resulting in us controlling full ownership of these communities.

As a result, these VIEs are not listed in the table above.

Common Stock.

Through part of the fourth quarter of 2024, we had separate equity distribution agreements (collectively, the “Original Equity Distribution Agreements”) to offer and sell, from time to time, up to $ 200,000,000 in aggregate offering price of shares of our common stock.

We had separate equity distribution agreements (collectively, the “Original Equity Distribution Agreements”) to offer and sell, from time to time, up to $ 200,000,000 in aggregate offering price of shares of our common stock.

During the fourth quarter of 2024, we terminated our Original Equity Distribution Agreements and entered into a new equity distribution agreement (the “Equity Distribution Agreement”) to offer and sell, from time to time, up to $ 400,000,000 in aggregate offering price of shares of our common stock.

The Equity Distribution Agreement provides for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings.

During the three months ended March 31, 2024, we sold 139,100 shares of common stock for $ 4,453,000 in net proceeds under our Original Equity Distribution Agreements.

During the six months ended June 30, 2024, we sold 343,800 shares of common stock for $ 10,974,000 in net proceeds under our Original Equity Distribution Agreements.

In conjunction with the sale of common stock, we incurred $ 116,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received.

During the three months ended March 31, 2025, we sold 238,100 shares of common stock for $ 8,485,000 in net proceeds under our Equity Distribution Agreement.

During the six months ended June 30, 2025, we sold 387,600 shares of common stock for $ 13,785,000 in net proceeds under our Equity Distribution Agreement.

In conjunction with the sale of common stock, we incurred $ 205,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received.

At March 31, 2025, we had $ 381,745,000 available under the Equity Distribution Agreement.

Subsequent to March 31, 2025, we sold 30,400 shares of common stock for $ 1,072,000 in net proceeds under our Equity Distribution Agreement.

Accordingly, subsequent to March 31, 2025, we had $ 380,659,000 available under the Equity Distribution Agreement.

During the three months ended March 31, 2025 and 2024, we acquired 138,010 shares and 49,540 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Available Shelf Registration.

We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us

At June 30, 2025, we had $ 376,378,000 available under the Equity Distribution Agreement.

During the six months ended June 30, 2025 and 2024, we acquired 151,018 shares and 49,540 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units.

Available Shelf Registration.

We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units.

We may from time to time raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered.

3 unchanged sentences

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

Three Months Ended March 31,

Six Months Ended June 30,

Common Stock (1)

(1) Represents $ 0.19 per share per month for the three months ended March 31, 2025 and 2024.

(1) Represents $ 0.19 per share per month for the six months ended June 30, 2025 and 2024.

(2) Includes $ 1,312 of distribution related to vesting of the performance-based stock units.

In April 2025, we declared a monthly cash dividend of $ 0.19 per share on our common stock for the months of April, May and June 2025, payable on April 30, May 30, and June 30, 2025, respectively, to stockholders of record on April 22, May 22, and June 20, 2024, respectively.

In July 2025, we declared a monthly cash dividend of $ 0.19 per share on our common stock for the months of July, A ugust and September 2025, payable on July 31, August 29, and September 30, 2025, respectively, to stockholders of record on July 23, August 21, and September 22, 2025, respectively.

Stock-Based Compensation .

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Beginning in the first quarter of 2024, we entered into Performance Stock Unit Award Agreements, based upon absolute and relative total shareholder return, under the 2021 Plan.

During the three months ended March 31, 2025 and 2024, no stock options were granted or exercised.

During the three months ended March 31, 2024, 5,000 stock options expired and were cancelled.

At March 31, 2025, we had no stock options outstanding and exercisable .

During the six months ended June 30, 2025 and 2024, no stock options were granted or exercised.

During the six months ended June 30, 2024, 5,000 stock options expired and were cancelled.

At June 30, 2025 and 2024, we had no stock options outstanding and exercisable .

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

The following table summarizes our restricted stock activity for the three months ended March 31, 2025 and 2024 :

Three Months Ended March 31,

The following table summarizes our restricted stock activity for the six months ended June 30, 2025 and 2024 :

Six Months Ended June 30,

Weighted Average Price

Outstanding, January 1

Outstanding, March 31

(1) Subsequent to March 31, 2025, 13,362 shares of restricted stock vested in connection with an employee retirement.

Additionally, subsequent to March 31, 2025, 5,626 shares of restricted stock were granted and will vest in three years .

During the three months ended March 31, 2025, 163,221 units of performance-based stock units vested.

No performance-based stock units vested during the three months ended March 31, 2024.

Subsequent to March 31, 2025, 19,694 performance-based stock units vested in connection with an employee retirement.

During the three months ended March 31, 2025 and 2024, we granted restricted stock and performance-based stock units under the 2021 Plan as follows:

Outstanding, June 30

(1) Includes the accelerated vesting of 13, 362 shares of restricted common stock in connection with an employee’s retirement.

During the six months ended June 30, 2025, 182,915 units of performance-based stock units vested, which includes the accelerated vesting of 19,694 performance-based stock units in connection with an employee’s retirement.

No performance-based stock units vested during the six months ended June 30, 2024.

During the six months ended June 30, 2025 and 2024, we granted restricted stock and performance-based stock units under the 2021 Plan as follows:

Vesting Period

1 unchanged sentence

ratably over 3 years

Restricted stock

April 30, 2028

Restricted stock

Performance-based stock units

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TSR targets (3)

Restricted stock

(1) Vesting date is the earlier of the one-year anniversary of the award date and the date of the next annual meeting of the stockholders of LTC following the award date.

(2) Vesting is based on achieving certain total shareholder return (“TSR”) targets in three years .

(3) Vesting is based on achieving certain TSR targets relative to the TSR of a predefined peer group in three years .

(3) Subsequent to March 31, 2025, 5,626 shares of restricted stock were granted and will vest in three years .

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the three months ended March 31, 2025 and 2024 were $ 2,253,000 and $ 2,202,000 , respectively.

Subsequent to March 31, 2025, we recognized $ 700,000 of compensation expense in connection with the accelerated vesting of restricted common stock and performance-based stock units in connection with an employee retirement.

Additionally, subsequent to March 31, 2025, we granted 5,626 shares of restricted stock, which vests in three years .

Accordingly, the remaining compensation expense, excluding the compensation expense related to the accelerated vesting, to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands):

April-December 2025

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the six months ended June 30, 2024 was $ 4,522,000 .

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the six months ended June 30, 2025, was $ 5,048,000 , which includes $ 700,000 of compensation expense related to accelerated vesting of restricted common stock and performance-based stock units in connection with an employee’s retirement.

Accordingly, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands):

July-December 2025

Commitments and Contingencies

At March 31, 2025, we had commitments as follows (in thousands):

Real estate properties (N ote 2.

At June 30, 2025, we had commitments as follows (in thousands):

Triple-Net properties

SHOP properties

owned real estate properties (Note 3.

Real Estate Investments )

14 unchanged sentences

Real Estate Investments .

(3) Represents $ 45,620 related to construction loans and $ 18,000 of commitments which are contingent upon the borrower achieving certain coverage ratios.

(4) Represents expenditure reserve of $ 1,438 related to a mortgage loan secured by a SNF and ALF in Texas.

(3) Represents $ 45,620 related to two construction loan, $ 19,950 of contingent commitments available upon the borrower achieving certain coverage ratios, and $ 2,000 of other commitments.

(4) Represents expenditure reserve of $ 1,438 related to a mortgage loan secured by a SNF in Texas.

The loan is accounted for as an unconsolidated JV in accordance with GAAP.

4 unchanged sentences

Real Estate Investments for a table summarizing information about our purchase options.

We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition.

These types of claims and

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder.

the aggregate material to our results of operations or financial condition.

These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder.

We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages.

1 unchanged sentence

Major Operators

We have two operators that represent 10% or more of our combined rental revenue and interest income from mortgage loans.

The following table sets forth information regarding our major operators as of March 31, 2025:

Within our real estate investment segment, two operators each account for 10% or more of our Total revenues .

Our SHOP segment is not subject to operator concentration, as the communities are operated on our behalf by independent operators under management agreements.

In addition, resident agreements are entered into with individual residents.

Accordingly, we are not exposed to operator credit risk to the same extent as within our real estate investment segment.

The following table presents information regarding our major operators as of June 30, 2025:

Percentage of

1 unchanged sentence

ALG Senior Living (4)

(1) Includes total revenues for the three months ended March 31, 2025.

(1) Includes total revenues for the six months ended June 30, 2025.

(2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets.

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The following table sets forth the computation of basic and diluted net income per share ( in thousands, except per share amounts ):

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Less income allocated to non-controlling interests

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Diluted net income per share

(1) For the three months ended March 31, 2025 and 2024, the participating securities were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(1) For the three and six months ended June 30, 2025 and 2024, the participating securities were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

Fair Value Measurements

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We do not invest our cash in auction rate securities.

The carrying value and estimated fair value of our financial instruments as of March 31, 2025 and December 31, 2024 were as follows ( in thousands ):

At March 31, 2025

The carrying value and estimated fair value of our financial instruments as of June 30, 2025 and December 31, 2024 were as follows ( in thousands ):

At June 30, 2025

At December 31, 2024

7 unchanged sentences

The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows.

The discount rate used to value our future cash inflows of the financing receivables at both March 31, 2025 and December 31, 2024 was 7.7 % .

The discount rate used to value our future cash inflows of the financing receivables at both June 30, 2025 and December 31, 2024 was 7.6 % and 7.7 % , respectively.

(2) Our investment in mortgage loans receivable is classified as Level 3.

1 unchanged sentence

The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments.

The discount rate used to value our future cash inflows of the mortgage loans receivable at March 31, 2025 and December 31, 2024 was 8.9 % and 10.0 % , respectively.

The discount rate used to value our future cash inflows of the mortgage loans receivable at June 30, 2025 and December 31, 2024 was 9.5 % and 10.0 % , respectively.

(3) Our investments in notes receivable are classified as Level 3.

The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments.

The discount rate used to value our future cash flows of the notes receivable at March 31, 2025 and December 31, 2024 was 8.0 % and 7.6 % , respectively.

The discount rate used to value our future cash flows of the notes receivable at June 30, 2025 and December 31, 2024 was 8.1 % and 7.6 % , respectively.

(4) Our revolving line of credit and term loans bear interest at a variable interest rate.

The estimated fair value of our revolving line of credit and term loans approximated their carrying values at March 31, 2025 and December 31, 2024 upon prevailing market interest rates for similar debt arrangements.

The estimated fair value of our revolving line of credit and term loans approximated their carrying values at June 30, 2025 and December 31, 2024 upon prevailing market interest rates for similar debt arrangements.

(5) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows.

The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities.

At March 31, 2025 and December 31, 2024, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.25 % for those maturing before year 2030 and 6.5 % for those maturing at or beyond year 2030.

At June 30, 2025, the discount rate used to value our future cash outflow of our senior unsecured notes was 5.8 % for those maturing before 2030 and 6.0 % for those maturing at or beyond 2030.

At December 31, 2024, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.25 % for those maturing before year 2030 and 6.5 % for those maturing at or beyond year 2030.

Segment Information

6 unchanged sentences

determine whether there are multiple operating segments requiring presentation as separate reportable segments.

During the years ended March 31, 2025 and 2024, the CODM has been collectively identified as our Executive Chairman and Co-Presidents, who share the responsibility for allocating resources and assessing segment performance.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Our CODM evaluates the performance of our investments based on Net income attributable to LTC Properties, Inc .

During the three months ended March 31, 2025 and 2024, we operated under one reportable segment.

For more information see Segment Information within Note 2.

Real Estate Investments above.

The table below provides certain information on our segment information (unaudited, dollar amounts in thousands):

Three Months Ended March 31,

During the six months ended June 30, 2025 and 2024, the CODM has been collectively identified as our Executive Chairman and Co-Presidents, who share the responsibility for allocating resources and assessing segment performance.

During the second quarter of 2025, we began utilizing the RIDEA structure and established our SHOP segment.

Accordingly, as of June 30, 2025, we conduct and manage our business as two operating segments:

real estate investments and SHOP and our CODM evaluated the performance of our investments based on net operating income (“NOI”).

For more information and reconciliation of NOI see Item 2.

Non-GAAP Financial Measures .

Summary information by reportable segment for the three and six months ended June 30, 2025 is as follows (unaudited, in thousands):

Three Months Ended June 30, 2025

investment portfolio

Rental income

Resident fees and services

Interest income from financing receivables

2 unchanged sentences

Total revenues

Income from unconsolidated joint ventures

Property level expenses

Interest expense

2 unchanged sentences

Transaction costs

General and administrative expenses

Gain on sale of real estate, net

Income tax benefit

Six Months Ended June 30, 2025

investment portfolio

Rental income

Resident fees and services

Interest income from financing receivables

Interest income from mortgage loans

Interest and other income

Total revenues

Income from unconsolidated joint ventures

Property level expenses

Interest expense

Depreciation and amortization

Provision for credit losses

Transaction costs

General and administrative expenses

Gain on sale of real estate, net

Income tax benefit

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

During the six months ended June 30, 2024, we operated under one reportable segment and our CODM evaluated the performance of our investments based on net income.

Summary information by reportable segment for the three and six months ended June 30, 2024 is as follows ( unaudited, in thousands ):

Three Months Ended

Six Months Ended

Three and Six Months Ended June 30, 2024

June 30, 2024

Rental income

Interest income from financing receivables

Interest income from mortgage loans

Interest and other income

Total revenues

Interest expense

Depreciation and amortization

Provision for credit losses

Transaction costs

Property tax expense

1 unchanged sentence

Total expenses

Other operating income:

Gain on sale of real estate, net

Operating income

Income before unconsolidated joint ventures, real estate dispositions and other items

(Loss) gain on sale of real estate, net

Income from unconsolidated joint ventures

Income allocated to non-controlling interests

Net income attributable to LTC Properties, Inc.

Our Company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended.

As such, we generally are not taxed on income that is distributed to our stockholders.

Under RIDEA, a REIT may lease a "qualified healthcare property" on an arm's-length basis to a taxable REIT subsidiary ("TRS") if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent operator”.

Generally, the rent received from the TRS will meet the related party exception and will be treated as “rents from real property”.

A "qualified healthcare property" includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients.

Resident fees and services revenue and related operating expenses for these facilities are reported on our Consolidated Statements of Income and are subject to federal, state and local income taxes.

Accordingly, we recorded a provision for income taxes for the three months ended June 30, 2025, which included a benefit of $ 81,000 and a deferred tax asset of $ 165,000 in Prepaid expenses and other assets on our Consolidated Balance Sheets.

Subsequent Events

Subsequent to March 31, 2025, the following events occurred:

We transitioned a triple-net portfolio of 12 memory care communities operated by Anthem to our new RIDEA structure.

We repaid $ 18,900,000 under our unsecured revolving line of credit.

Accordingly, we have $ 129,950,000 outstanding and $ 295,050,000 available for borrowing under our unsecured revolving line of credit.

We sold 30,400 shares of common stock for $ 1,072,000 in net proceeds under our Equity Distribution Agreements.

Accordingly, we have $ 380,659,000 available under our Equity Distribution Agreements.

We declared a monthly cash dividend of $ 0.19 per share on our common stock for the months of April, May and June 2025 , payable on April 30 , May 30 , and June 30, 2025 , respectively to stockholders of record on April 22 , May 22 , and June 20, 2024 , respectively.

Subsequent to June 30, 2025, the following events occurred:

We acquired a 67 -unit assisted living and memory care community in California within our SHOP segment for $ 35,200,000 .

In conjunction with the acquisition, we entered into a management agreement with an operator new to us.

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

We amended our $ 180,421,000 mortgage loan with Prestige secured by 14 skilled nursing centers in Michigan to eliminate the 8.5 % current pay rate and revert monthly interest payments to the full contractual interest rate of 11.14 %, effective July 1, 2025.

Additionally, the amendment provides Prestige an option to prepay this mortgage loan at par and without penalty within a 12-month window beginning in July 2026.

Prestige will have to provide us with a 90 -days notice of its intention to exercise the option, and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing.

As of June 30, 2025, we have $ 41,455,000 accrued effective interest related to this loan, which is expected to be recovered through payments collected through the contractual maturity of the loan.

If Prestige exercises its contingent prepayment option, we will no longer be able to collect our remaining accrued effective interest as of such date.

We repaid $ 7,000,000 in scheduled principal paydowns on our senior unsecured notes.

Additionally, we entered into our New Credit Agreement maturing in July 2029, to replace our existing unsecured credit agreement.

The new unsecured credit agreement provides for a one-year extension option, subject to customary conditions.

Material terms of the New Credit Agreement remain unchanged.

In connection with the New Credit Agreement, the two $ 50,000,000 term loans that were maturing over the next 16 months were rolled into the new revolving line of credit, keeping the interest rate swap agreements intact through November 2025 at 2.3 % and November 2026 at 2.4 %, based on current margins.

Further, we borrowed $ 41,850,000 under our revolving line of credit under our new unsecured credit agreement.

Accordingly, we have $ 310,400,000 outstanding and $ 289,600,000 available for borrowing under our revolving line of credit.

We declared a monthly cash dividend of $ 0.19 per share on our common stock for the months of July, A ugust and September 2025 , payable on July 31 , August 29 , and September 30, 2025 , respectively to stockholders of record on July 23 , August 21 , and September 22, 2025 , respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements