What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-04 compared with 2025-05-05 · 341 added, 166 removed, 336 unchanged (60% of the section changed)

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A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to, our dependence on our operators for revenue and cash flow;

operational and legal risks and liabilities under our new segment of RIDEA structure properties;

government regulation of the health care industry;

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We 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.

The following graph summarizes our gross investments as of March 31, 2025:

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.

The following graph summarizes our gross investments as of June 30, 2025:

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.

We conduct and manage our business as one operating segment for internal reporting and internal decision-making purposes.

For purposes of this quarterly report and other presentations, we generally include ALF, ILF, MC, and combinations thereof in the ALF classification.

As of March 31, 2025, seniors housing and health care properties comprised approximately 99.4% of our gross investment portfolio.

We conduct and manage our business as two operating segments for internal reporting and internal decision-making purposes:

real estate investments and seniors housing operating portfolio (“SHOP”).

For purposes of this quarterly report and other presentations, we generally include ILF, ALF, MC, and combinations thereof in the seniors housing communities classification (“SH”).

As of June 30, 2025, seniors housing and health care properties comprised approximately 99.4% of our gross investment portfolio.

We have been operating since August 1992.

Substantially all of our revenues and sources of cash flows from operations are derived from rents from operating leases, interest earned on financing receivables, interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures.

Substantially all of our revenues and sources of cash flows from operations are derived from rents from operating leases, resident fees and services, interest earned on financing receivables, interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures.

Income from our investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of the operators on their lease and loan obligations and the rates earned thereon.

To the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

To mitigate this risk, we monitor our investments through a variety of methods

determined by investment type, property type and operator.

liquidity and/or financial condition.

To mitigate this risk, we monitor our investments through a variety of methods determined by investment type, property type and operator.

Our monitoring process includes periodic review of financial statements for each facility, periodic review of operator credit, scheduled property inspections and review of covenant compliance.

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In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other loans, operating leases or agreements between us and the operator and its affiliates.

During the second quarter of 2025, we began utilizing the structures provided for in 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 and established a seniors housing operating portfolio (“SHOP”).

Under a typical RIDEA structure, we have certain oversight approval rights and the right to review operational and financial reporting information, but our independent third party operators will ultimately control the day-to-day operations of the property, pursuant to the terms of our management agreements.

Offering RIDEA structures represent a further aspect of our traditional strategy of investing through vehicles such as non-cancelable triple-net operating (“NNN” or “Triple-Net”) leases, mortgage loans, and structured finance.

We believe that RIDEA structures provide us with additional investment opportunities.

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 12 memory care and one independent and assisted living communities covered under the master leases to our new SHOP segment.

To develop and implement RIDEA structures, we may need to continue to commit financial and operational resources.

While we anticipate that adding RIDEA transactions will be positive for our business model, our ability to succeed in this new segment will be determined by numerous factors, including our ability to identify suitable investments and our relationship with operators of RIDEA structures.

Depending upon the availability and cost of external capital, we anticipate making additional investments in health care related properties.

New investments are generally funded from cash on hand, proceeds from periodic asset sales, temporary borrowings under our unsecured revolving line of credit and internally generated cash flows.

Our investments generate internal cash from rent, interest from financing receivables and interest receipts and principal payments on loan receivables and income from unconsolidated joint ventures.

Our investments generate internal cash from rent, resident fees and services, interest from financing receivables and interest receipts and principal payments on loan receivables and income from unconsolidated joint ventures.

Permanent financing for future investments, which replaces funds drawn under our unsecured revolving line of credit, may be provided through a combination of public and private offerings of debt and equity securities and secured and unsecured debt financing.

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Changes in the capital markets’ environment may impact the availability of cost-effective capital.

We have evaluated and begun to enter into structures provided in 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.

Under a typical RIDEA structure, we have certain oversight approval rights and the right to review operational and financial reporting information, but our third party managers will ultimately control the day-to-day operations of the property.

Offering RIDEA structures represent a further aspect of our traditional strategy of investing through vehicles such as triple-net leases, mortgage loans, and structured finance.

We believe that RIDEA structures provide us with additional investment opportunities.

Subsequent to March 31, 2025, we transitioned a triple-net portfolio of 12 memory care communities operated by Anthem Memory Care, LLC to our new seniors housing operating portfolio (“SHOP”) under the RIDEA structure.

An additional property with New Perspective Senior Living, LLC (“New Perspective”) is expected to transition later during the second quarter of 2025.

To develop and implement RIDEA structures, we may need to continue to commit financial and operational resources.

While we anticipate that adding RIDEA transactions will be positive for our business model, our ability to succeed in this new focus will be determined by numerous factors, including our ability to identify suitable investments and our relationship with operators of RIDEA structures.

We believe our business model has enabled and will continue to enable us to maintain the integrity of our property investments, including in response to financial difficulties that may be experienced by operators.

Traditionally, we have taken a conservative approach to managing our business, choosing to maintain liquidity and exercise patience until favorable investment opportunities arise.

Real Estate Portfolio Overview

The following tables summarize our real estate investment portfolio as of March 31, 2025 ( dollar amounts in thousands ):

Three Months Ended

March 31, 2025

The following tables summarize our real estate investment portfolio as of June 30, 2025 ( dollar amounts in thousands ):

Six Months Ended

June 30, 2025

Rental Income

Owned Properties

Properties (1)

Assisted Living

Fees and Services

Owned-Triple-Net:

Seniors Housing

Skilled Nursing

Seniors Housing

Total Owned Properties

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Properties (1)

Assisted Living

Seniors Housing

Skilled Nursing

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Properties (1)

Assisted Living

Seniors Housing

Skilled Nursing

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Properties (1)

Assisted Living

Seniors Housing

Skilled Nursing

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Joint Ventures

Assisted Living

Seniors Housing

Skilled Nursing

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Properties (1)

Assisted Living

Seniors Housing

Skilled Nursing

Total Portfolio

(1) We have investments in owned properties, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures in 25 states to 28 operators.

(1) We have investments in owned properties, including Triple-Net and SHOP, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures in 25 states to 29 operators.

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

(3) Excludes $3,090 variable rental income from lessee reimbursement of our real estate taxes and $492 write-off of straight-line rent and lease incentive write-offs.

(3) Excludes $5,866 variable rental income from lessee reimbursement of our real estate taxes, $974 rental income related to termination of master leases and converting the communities into our new SHOP and $243 write-off of straight-line rent.

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

(5) Included in the Interest and other income line item of our Consolidated Statements of Income .

(6) Excludes income from the redemption of our preferred equity investment in a joint venture.

As of March 31, 2025, we had $1.7 billion in net carrying value of investments, consisting of $916.7 million or 55.5% invested in owned and leased properties, $357.8 million or 21.7% invested in financing receivables, $314.4 million or 19.0% invested in mortgage loans secured by first mortgages, $44.3 million or 2.7% in notes receivable and $17.6 million or 1.1% in unconsolidated joint ventures.

Rental income, income from financing receivables and interest income from mortgage loans represented 64.1%, 14.3% and 18.7%, respectively, of Total revenues on the Consolidated Statements of Income for the three months ended March 31, 2025.

In most instances, our lease structure contains fixed annual rental escalations and/or annual rental escalations that are contingent upon changes in the Consumer Price Index.

Certain leases have annual rental escalations that are contingent upon changes in the gross operating revenues of the property.

This revenue is not recognized until the appropriate contingencies have been resolved.

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, we terminated two existing leases with the same operator, and combined them into a single master lease.

As of June 30, 2025, we had $1.7 billion in net carrying value of investments as follows ( dollar amounts in thousands ):

Owned-Triple-Net

Financing Receivables

Mortgage Loans

Notes Receivable

Unconsolidated Joint Ventures

The following table provides details on the components of revenues and related net operating income (“NOI”) across our portfolio ( in thousands ):

Three Months Ended

Six Months Ended

June 30, 2025

Real Estate Investment segment:

Owned-Triple-Net

Contractual cash rental income

Variable cash rental income

Straight-line rent adjustment (1)

Adjustment of lease incentives and rental income

Amortization of lease incentives

Rental income

Financing Receivables:

Cash Interest income from financing receivables

Effective interest income (2)

Interest income from financing receivables

Mortgage loans receivable:

Cash interest received

Effective interest income (3)

Interest income from mortgage loans

Other notes receivable:

Interest income-other notes

Effective interest income (4)

Interest income from notes receivable

Total revenue-Real Estate Investments segment

Property level expenses-real estate investments

NOI-real estate investment segment (5)

SHOP segment:

Resident Fees and Services:

Property level expenses-SHOP

NOI-SHOP segment (5)

(1) At June 30, 2025, the straight-line rent receivable balance on our Consolidated Balance Sheets was $20,187.

(2) At June 30, 2025, the financing receivables effective interest receivable balance which is included in the Interest receivable line item on our Consolidated Balance Sheets was $6,138.

(3) At June 30, 2025, the mortgage loans receivable effective interest receivable balance which is included in the interest receivable line item on our Consolidated Balance Sheets was $54,787.

(4) At June 30, 2025, the other notes receivable effective interest receivable balance which is included in the interest receivable line item on our Consolidated Balance Sheets was $1,563.

(5) See Non-GAAP Financial Measures below for additional information and reconciliation.

The following table outlines information related to our Triple-Net lease extensions during the six months ended June 30, 2025 ( dollar amounts in thousands ):

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.

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.

Annual cash rent is $2.5 million for the first lease year escalating by 2.0% annually thereafter.

The terms and economics of the new master lease is similar to those of the two leases that were terminated.

Subsequent to March 31, 2025, we terminated our Anthem triple-net master leases and transitioned the 12 memory care communities covered under the master leases into our new SHOP portfolio under the RIDEA structure.

In anticipation of this event, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million during the three months ended March 31, 2025.

For the three months ended March 31, 2025, we recorded $0.6 million in straight-line rental adjustment reflecting higher cash rent received than recorded as rental income, and amortization of lease incentive cost of $0.2 million.

During the first quarter of 2025, we wrote-off a straight-line rent receivable of $0.2 million and a lease incentive balance of $0.2 million in connection with the termination of two existing leases with the same operator, and combining them into a single master as discussed above.

During the three months ended March 31, 2025, we received $32.7 million of cash rental income, which includes $3.1 million of operator reimbursements for real estate taxes.

At March 31, 2025, the straight-line rent receivable balance on the consolidated balance sheet was $20.7 million.

For the three months ended March 31, 2025, we recorded $7.0 million in Interest income from financing receivables which includes $6.7 million of interest received in cash and $0.3 million in financing receivables effective interest.

At March 31, 2025, the financing receivables effective interest receivable which is included in the Interest receivable line item on our Consolidated Balance Sheets was $5.8 million.

For the three months ended March 31, 2025, we recorded $9.2 million in Interest income from mortgage loans which includes $8.2 million of interest received in cash and $1.0 million in mortgage loans effective interest.

At March, 31, 2025, the mortgage loans effective interest receivable which is included in the Interest receivable line item on our Consolidated Balance Sheets was $53.8 million.

The terms and economics of the new master lease are similar to those of the two leases that were terminated.

In connection with the termination of these leases, we wrote-off straight-line rent receivable and lease incentive balances totaling $0.5 million.

Also, as previously discussed, 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 new SHOP segment.

In conjunction with the conversion, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million.

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 $6.0 million lease termination fee.

Update on Certain Operators

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The joint ventures lease these communities to affiliates of ALG under three 10-year master leases and has provided the lessee with the option to purchase these communities.

In accordance with GAAP, the communities are recorded as Financing Receivables on our Consolidated Balance Sheets.

In accordance with generally accepted accounting principles (“GAAP”), the communities are recorded as Financing Receivables on our Consolidated Balance Sheets.

Additionally, ALG operates a 45-unit assisted living and memory care community in North Carolina under a mortgage loan, which was scheduled to mature in January 2025.

During the three months ended March 31, 2025, the mortgage loan maturity was extended to September 2025.

ALG has paid their contractual rent and interest obligations through May 2025.

ALG has paid their contractual rent and interest obligations through July 2025.

Anthem Memory Care

Anthem operated 12 memory care communities located in California, Colorado, Kansas, Illinois and Ohio under Triple-Net master leases.

During the second quarter of 2025, we terminated our Anthem Triple-Net master leases and converted the 12 memory care communities covered under the master leases into our new SHOP segment.

In conjunction with the conversion, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million during the six months ended June 30, 2025.

Genesis Healthcare, Inc.

Subsequent to June 30, 2025, Genesis filed for Chapter 11 bankruptcy.

Affiliates of Genesis lease six skilled nursing centers in New Mexico (five) and Alabama (one) with a total of 782 beds under a master lease with LTC.

The master lease matures on April 30, 2026 and provides three 5-year renewal options.

During the three months ended June 30, 2025, we received Genesis’ written notice of its exercise of a 5-year extension option, which would extend the term of the lease to April 30, 2031.

Genesis has paid their contractual rent through August 2025.

Prestige Healthcare

Prestige Healthcare (“Prestige”) operates 21 skilled nursing centers located in Michigan secured under four mortgage loans and two skilled nursing centers located in South Carolina under a master lease.

Prestige is our largest operator based upon revenues and assets representing 16.5% of our total revenues and 14.7% of our total assets as of March 31, 2025.

Under one of the mortgage loans with Prestige secured by 14 properties, the minimum mortgage interest payment due to us is based on an annual current pay 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 Prestige and is payable through the application of security deposits we hold on behalf of Prestige or is payable at maturity

Prestige is our largest operator based upon revenues and assets representing 14.8% of our total revenues and 14.5% of our total assets as of June 30, 2025.

Under one of the mortgage loans with Prestige secured by 14 properties, the minimum mortgage interest payment due to us was based on an annual current pay rate of 8.5% on the outstanding loan balance.

The difference between the contractual interest rate and the current pay interest rate on the outstanding loan balance remains an obligation of Prestige and is payable through the application of security deposits we hold on behalf of Prestige or is payable at maturity

During the first quarter of 2025, we received full contractual cash interest of $5.0 million from Prestige through $3.8 million of cash receipts and application of $1.2 million of Prestige’s security.

At March 31, 2025, Prestige’s security totaled $3.8 million and subsequently, we received $2.3 million in retroactive Medicaid payments from Prestige, which was added to the security deposits we hold.

Beginning in 2025, 50% of Prestige’s excess cash flow will be added to our security, and used to pay contractual interest beyond the current pay amount.

Our projections continue to indicate we will receive all contractual interest due in 2025.

Anthem Memory Care

Anthem operates 12 memory care communities located in California, Colorado, Kansas, Illinois and Ohio under a triple-net master lease.

In anticipation of this event, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million during the three months ended March 31, 2025.

At March 31, 2025, Prestige’s security totaled $3.8 million.

During the second quarter of 2025, we received full contractual cash interest of $5.0 million from Prestige.

None of Prestige’s security was used to pay the difference between the contractual interest rate and the 8.5% current pay interest rate.

At June 30, 2025, Prestige’s security totaled $6.1 million.

Subsequent to June 30, 2025, the Prestige mortgage loan was amended to provide Prestige an option to prepay the 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.

In consideration of granting the prepayment option, the amendment eliminates the 8.5% current pay rate and reverts monthly interest payments to the full contractual interest rate of 11.14%, effective July 1, 2025, and escalated annually.

As of June 30, 2025, we have $41.5 million of accrued effective interest related to the Prestige 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.

Prestige is current on their contractual loan obligations through July 2025.

Other Operators

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The communities were leased under two separate leases with the same operator, who was the non-controlling member of the JV.

During the three months ended March 31, 2025, we acquired the operator’s $4.0 million non-controlling interest in the JV for $1.2 million and terminated the two existing leases.

In conjunction with the termination of these leases, we wrote-off $0.2 million straight-line rent receivable

and $0.2 million lease incentive.

During the six months ended June 30, 2025, we acquired the operator’s $4.0 million non-controlling interest in the JV for $1.2 million and terminated the two existing leases.

In conjunction with the termination of these leases, we wrote-off $0.2 million straight-line rent receivable and $0.3 million lease incentive.

Concurrently, we entered into a new combined master lease with the same operator.

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Additionally, the master lease provides the operator with an earn-out of up to $4.0 million, contingent on achieving certain performance thresholds.

Additionally, during the three months ended March 31, 2025, we engaged a broker to sell seven skilled nursing centers under a master lease, following the operator’s election not to exercise the renewal option available under the master lease.

The master lease covers skilled nursing centers 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.

Accordingly, these centers have been classified as held-for-sale at March 31, 2025.

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

Additionally, during the first quarter of 2025, we engaged a broker to sell seven skilled nursing centers under a master lease, following the operator’s election not to exercise the renewal option available under the master lease.

The master lease covers seven skilled nursing centers in California (1), Florida (2) and Virginia (4) with a gross book value of $71.7 million and matures in January 2026.

Accordingly, these centers met the criteria under GAAP as held-for-sale and have been classified 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.

All of the properties covered under this master lease are under contract, and we expect to complete all of the sales in the fourth quarter of 2025, generating net proceeds of approximately by $120.0 million.

We anticipate recording a gain on sale of approximately $80.0 million.

2025 Activities Overview

The following tables summarize our transactions during the three months ended March 31, 2025 (dollar amounts in thousands):

The following tables summarize our transactions during the six months ended June 30, 2025 (dollar amounts in thousands):

Investment in Improvement projects

Assisted Living Communities

Type of Property

Seniors Housing Communities

Skilled Nursing Centers

Properties Held -for-Sale

(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.

Accordingly, 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.

All the properties are under contract, and we expect to complete all of the sales in the fourth quarter of 2025.

Properties Sold

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

RIDEA Structure

Subsequent to March 31, 2025, we transitioned a triple-net portfolio of 12 memory care communities operated by Anthem to our new SHOP portfolio under the RIDEA structure.

An additional property with New Perspective is expected to transition later during the second quarter of 2025.

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

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 segment ( 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 Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , 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.

(3) See Non-GAAP Financial Measures below for additional information and reconciliation.

Subsequent to June 30, 2025, we acquired a 67-unit assisted living and memory care community in California within our SHOP segment for $35.2 million.

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

Investment in Mortgage Loans Receivable

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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.

(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.

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Preferred Equity Investment in Unconsolidated Joint Ventures

During the three months ended March 31, 2025, we received $16.0 million, including a 13% exit IRR of $3.0 million, from the redemption of our preferred equity investment in a joint venture that owns a 267-unit independent and assisted living community in Washington.

During the six months ended June 30, 2025, we received $16.0 million, including a 13% exit IRR of $3.0 million, from the redemption of our preferred equity investment in a joint venture that owns a 267-unit independent and assisted living community in Washington.

Investment in Notes Receivable

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Net decrease in notes receivable

(1) Represents the write-off of 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 working capital note in connection with the conversion of its Triple-Net leases to SHOP.

Health Care Regulatory

The Centers for Medicare & Medicaid Services (“CMS”) annually updates Medicare SNF prospective payment system rates and other policies.

On July 31, 2024, CMS issued a final rule to update SNF rates and policies for the fiscal year 2025.

CMS estimated that the updated payment rates would result in a net increase of 4.2%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in fiscal year 2025.

CMS stated that its impact figures do not incorporate the SNF Value-Based Purchasing (“VBP”) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP, which are estimated to total $196.5 million in fiscal year 2025.

The final rule also changes CMS’s enforcement policies as they relate to imposing civil monetary penalties (“CMPs”) for health and safety violations in nursing homes.

In the final rule, CMS expanded the type of CMPs that can be imposed to allow for more per instance and per day CMPs to be imposed, and to permit both types of penalties to be imposed concurrently.

In addition, the final rule finalized updates to the SNF Quality Reporting Program (“QRP”) to better account for adverse social conditions that negatively impact individuals’ health or health care.

Finally, for the SNF VBP program, CMS finalized several operational and administrative proposals.

On April 11, 2025, CMS issued a proposed rule for updates to Medicare payment policies and rates for SNFs under the SNF Prospective Payment System (“PPS”) for fiscal year 2026.

For fiscal year 2026, CMS proposed updating SNF PPS rates by 2.8% based on the proposed SNF market basket of 3.0%, plus a 0.6% market basket forecast error adjustment, and a negative 0.8% productivity adjustment.

These impact figures do not incorporate the SNF VBP reductions for certain SNFs subject to the net reduction in payments under the SNF VBP.

Those adjustments are estimated to total $196.5 million in FY 2025.

CMS also proposed a series of operational and administrative proposals for the SNF VBP program.

In addition, for the SNF Quality Reporting Program (“QRP”), CMS proposed to remove four standardized patient assessment data elements beginning October 1, 2025.

On July 31, 2025, CMS issued a final rule to update Medicare payment policies and rates for SNFs under the SNF prospective payment system (“SNF PPS”) for fiscal year (“FY”) 2026.

CMS announced that for FY 2026, it was updating SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment, which amounts to an increase in SNF PPS payments of $1.16 billion compared to payments in FY 2025.

CMS announced that it was finalizing several changes to the PDPM ICD-10-CM code mappings to allow providers to provide more accurate, consistent, and appropriate primary diagnoses that meet the criteria for skilled intervention during a Part A SNF stay.

CMS finalized 34 changes to the PDPM ICD-10-CM code mappings to maintain consistency with the latest ICD-10-CM coding guidance.

CMS also announced that for the SNF VBP Program, it was finalizing a series of operational and administrative proposals as part of the final rule.

In addition, CMS announced that for the SNF Quality Reporting Program (“QRP”), it was finalizing its proposal to remove four standardized patient assessment data elements from the Minimum Data Set (“MDS”), the SNF resident assessment form, beginning with residents admitted on or after October 1, 2025.

CMS also announced it was finalizing its proposal to amend the reconsideration request policy and process.

On April 22, 2024, CMS issued the Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting final rule.

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The final rule was challenged in federal courts in Texas and Iowa.

In the litigation proceeding in Texas, on April 7, 2025, the United States District Court for the Northern District of Texas granted the plaintiffs’ motion for summary judgment and vacated the 24/7 requirement and the HPRD requirements at 42 C.F.R.

Section 483.35(b)(1) and 483.35(c).

It is uncertain whether the judgement will be appealed.

There can be no assurance that these rules or future regulations modifying Medicare SNF payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.

An April 2025 decision from the U.S.

District Court for the Northern District of Texas and a June 2025 decision from the U.S.

District Court for the Northern District of Iowa blocked the rule from taking effect.

The Texas federal court vacated the rule in full, finding that CMS had exceeded its authority in promulgating it.

Meanwhile, the Iowa federal court only vacated the 24/7 RN requirement and the minimum staffing hours requirement, while leaving the rest of the rule in place.

Department of Justice has appealed the Texas federal court’s decision striking down the entire rule to the U.S.

Court of Appeals for the Fifth Circuit.

To date, no appeal of the Iowa federal court’s decision has been noticed.

Regardless, however, the One Big Beautiful Bill Act (“OBBBA”), signed by President Trump on July 4, 2025, imposes a 10-year moratorium on the implementation and enforcement of the entire rule.

On June 18, 2025, CMS issued a Quality, Safety and Oversight memorandum, QSO-25-NH, which outlines updates to how nursing home ratings are calculated and reported on the Nursing Home Care Compare website.

According to the QSO memo, as of July 30, 2025, CMS will publish average Five Star ratings and other performance-based information for chains or affiliated entities on the Nursing Home Care Compare website.

CMS will also be removing COVID-19 vaccination information from the main profile page of each nursing home effective as of the same date.

CMS will also be revising the

methodology used to calculate Five Star Ratings.

In addition, CMS also recently announced a third extension for SNFs to submit required Medicare revalidations.

Facilities now have until January 1, 2026 to submit these filings.

Failure by an operator to comply with regulatory requirements can, among other things, jeopardize a facility’s compliance with the conditions of participation under relevant federal and state healthcare programs.

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The following table reflects our recent historical trends of concentration risk (gross investment, in thousands) :

Real property

Owned properties-Triple-Net

Owned properties-SHOP

Financing receivables

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Real estate investment mix:

Assisted living communities

Senior housing communities

Skilled nursing centers

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Remaining operators (2)

SHOP operators (2)

Geographic mix:

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(1) Includes three parcels of land located adjacent to properties securing the Prestige Healthcare mortgage loan and are managed by Prestige.

(2) 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 SHOP segment.

Accordingly, the communities managed by Anthem and New Perspective on our behalf are classified as “SHOP operators” during the three months ended June 30, 2025.

Our SHOP segment is not subject to operator concentration risk.

Credit Strength.

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Our coverage ratios include interest coverage ratio and fixed charge coverage ratio.

coverage ratios indicate our ability to service interest and fixed charges (interest).

The coverage ratios indicate our ability to service interest and fixed charges (interest).

The coverage ratios are based on earnings before interest, taxes, depreciation and amortization for real estate (“EBITDA re ”) as defined by NAREIT.

EBITDA re is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures.

Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies.

See Non-GAAP Financial Measures below for information and reconciliation.

The following table reflects the recent historical trends for our credit strength measures:

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Fixed charge coverage ratio (9)

(1) Increased due to increase in outstanding debt and decrease in market capitalization from lower stock price.

(2) Decreased due to increase in market capitalization due to increase in stock price.

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(8) Increase due to decrease in interest expense and increase in rental and other income.

(8) Decreased due to increase in gross asset value.

(9) Increased primarily due to increase in rental income from acquisitions, contractual rent increases and annual escalations.

(10) In calculating our interest coverage and fixed charge coverage ratios above, we use EBITDA re , which is a financial measure not derived in accordance with GAAP (non-GAAP financial measure).

EBITDA re is not an alternative to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP.

You should not rely on EBITDA re as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows.

Net income is the most directly comparable GAAP measure to EBITDA re.

Quarter Ended

(Gain) loss on sale

Impairment loss

Interest expense

Depreciation and amortization

Non-recurring one-time items

Adjusted EBITDA re

Interest expense

Interest coverage ratio

Interest expense

Total fixed charges

Fixed charge coverage ratio

(1) Includes $2,693 write-off of a working capital note, $371 of related interest receivable, and $303 of one-time transaction costs, all in connection with the transition to RIDEA, partially offset by the 13% exit IRR of $2,962 received in connection with the redemption of our preferred equity investment in a JV.

(2) Includes a one-time additional straight-line income of $3,158 related to restoring accrual basis accounting for two master leases, recovery of credit losses of $511 related to a mortgage loan receivable write-off, partially offset by $290 provision for credit losses related to the write-off of an uncollectible loan receivable.

(3) Includes an aggregate one-time income of $4,493 received from three former operators, the recovery of provisions for credit losses of $293 related to a mortgage loan receivable payoff, partially offset by the uncollectible effective interest write-off of $613 related to the partial paydown of a mortgage loan receivable.

(4) Includes $321 write-off of an uncollectible straight-line rent receivable, $1,635 provision for credit losses related to acquisitions totaling $163,460 accounted for as financing receivables, partially offset by $934 recovery of provision for credit losses related to the payoffs of mortgage loan receivables.

(5) Represents the repayment of an operator rent credit received from the buyer/lessee in connection with the sale of a 110-unit ALF in Wisconsin.

(9) In calculating our interest coverage and fixed charge coverage ratios above, we use EBITDA re.

See Non-GAAP Financial Measures below for information and reconciliation.

We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results.

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Rental income

Resident fees and services

Interest income from financing receivables

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Depreciation and amortization

Seniors housing operating expenses

Provision for credit losses

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Total expenses

Other operating income:

Gain (loss) on sale of real estate, net

Income from unconsolidated joint ventures

Income tax benefit

Income allocated to non-controlling interests

Net income attributable to LTC Properties, Inc.

Income allocated to participating securities

Net income available to common stockholders

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

Increased due to the conversion of 13 communities discussed above.

(3) Increased primarily due to the exchange of two mortgage loan receivables near the end of the second quarter of 2024 for controlling interests in two newly formed JVs that are accounted for as financing receivables.

(4) Decreased primarily due to explanation (3) above and payoffs partially offset by additional mortgage loan funding.

(5) Decreased primarily due to receipt of insurance proceeds in 2024.

(6) Decreased due to lower outstanding balance on our revolving line of credit, scheduled principal paydowns on our senior unsecured notes and lower interest rates.

(7) Represents operating expenses related to our new SHOP segment.

(8) Increased due to $5,971 lease termination fee paid to New Perspective upon conversion of the community covered under the Triple-Net lease into our SHOP segment and additional costs associated with the startup of new RIDEA platform.

(9) Increased primarily due to one-time expenses related to an employee’s retirement and increase in incentive compensation expenses.

Six Months Ended

Rental income

Resident fees and services

Interest income from financing receivables

Interest income from mortgage loans

Interest and other income

Total revenues

Interest expense

Depreciation and amortization

Seniors housing operating expenses

Provision for credit losses

Transaction costs

Property tax expense

General and administrative expenses

Total expenses

Gain on sale of real estate, net

Operating income

Income from unconsolidated joint ventures

Income tax benefit

Income allocated to non-controlling interests

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Net income available to common stockholders

(1) Decreased primarily due to a one-time revenue received in 2024 related to the repayment of $2,377 in rent credits, lower rent due to property sales and the write-off of a straight-line rent receivable and lease incentive balance in connection with the termination of two existing leases with the same operator, and combining them into a single master lease.

These increases were partially offset by rent increases from fair-market rent resets, annual escalations and amendments.

(2) Increased primarily due to the exchange of two mortgage loan receivables during the second quarter of 2024 for controlling interests in two newly formed JVs that are accounted for as financing receivables.

(1) Decreased primarily due to a one-time revenue received in 2024 related to the repayment of $2,377 in rent credits, conversion of 13 communities from Triple-Net to our new SHOP segment lower rent due to property sales and the write-off of a straight-line rent receivable and lease incentive balance in connection with the termination of two existing leases with the same operator, and combining them into a single master lease.

These decreases were partially offset by rent increases from fair-market rent resets, annual escalations and amendments.

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

Increased due to the conversion of 13 communities discussed above.

(4) Decreased primarily due to explanation (3) above and payoffs partially offset by additional mortgage loan funding.

(5) Decreased primarily due to receipt of insurance proceeds in 2024.

(6) Decreased due to lower outstanding balance on our revolving line of credit, scheduled principal paydowns on our senior unsecured notes and lower interest rates.

(7) Represents operating expenses related to our new SHOP segment.

(8) Increased due to the write-off of a working capital note and the related interest receivable in connection with the transition of Triple-Net leases covering 12 properties to RIDEA.

(6) Represents the gain on sale of sale of a 39-unit ALF in Ohio partially offset by the loss on sale of a 29-unit ALFs located in Oklahoma.

(7) Represents the gain on sale of a 110-unit community in Wisconsin partially offset by the aggregate loss on sale of 6 ALFs located in Texas (five) and Florida (one).

(9) Increased due to $5,971 lease termination fee paid to New Perspective upon conversion of the community covered under the Triple-Net lease into our SHOP segment and additional costs associated with the startup of new RIDEA platform.

(10) Increased primarily due to one-time expenses related to an employee’s retirement and increase in incentive compensation expenses.

(11) Represents the net gain on sale related to one SH and a parcel of land adjacent to a MC within our portfolio located in Ohio, partially offset by loss on sale related to one SH in Oklahoma.

(12) Represents the gain on sale of a 110-unit community in Wisconsin and two closed properties located in Texas, partially offset by the aggregate loss on sale of 6 SHs located in Texas (five) and Florida (one).

(13) Increased due to the 13% exit IRR of $2,962 received in connection with the redemption of our preferred equity investment in a JV.

Non-GAAP Financial Measures

A non-GAAP financial measure is defined as a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP.

We consider Funds from Operations (“FFO”), NOI and EBITDA re to be useful supplemental measures of our financial or operating performance.

Funds From Operations Available to Common Stockholders

Funds from Operations (“FFO”) attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP.

FFO attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP.

Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time.

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Three Months Ended

Six Months Ended

GAAP net income available to common stockholders

Depreciation and amortization

Gain on sale of real estate, net

(Gain)/Loss on sale of real estate, net

NAREIT FFO attributable to common stockholders

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Shares for diluted FFO per share

Net Operating Income

Net operating income or NOI is a non-GAAP financial measure that is calculated as net income (loss) (computed in accordance with GAAP) before (i) general and administrative expenses, (ii) transaction costs, (iii) provision for credit losses, (iv) impairment loss, (v) depreciation and amortization, (vi) interest expense, (vii) gain or loss on sale of real estate and (viii) income tax benefit or expense.

We use NOI to reflect the operating performance of our portfolio because NOI excludes certain items that are not associated with the operations of our properties.

NOI is not equivalent to our net income (loss) as determined under GAAP.

Additionally, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.

Therefore, caution should be exercised when comparing our NOI to that of other REITs.

The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to NOI for the periods presented below (in thousands):

Three Months Ended

Six Months Ended

Income tax benefit

(Gain) loss on sale of real estate, net

General and administrative expense

Transaction costs

Provision for credit losses

Depreciation and amortization

Interest expense

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate

Earnings before interest, taxes, depreciation and amortization for real estate or EBITDA re is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures.

EBITDA re is not an alternative to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP.

Net income is the most directly comparable GAAP measure to EBITDA re.

The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to EBITDA re for the periods presented below (in thousands):

Three Months Ended

(Gain) loss on sale

Impairment loss

Interest expense

Depreciation and amortization

Non-recurring one-time items

Adjusted EBITDA re

Interest expense

Interest coverage ratio

Interest expense

Total fixed charges

Fixed charge coverage ratio

(1) See (2) and (3) below for explanation.

(2) Includes $5,971termination fee paid to New Perspective, $1,136 one-time costs associated with an employee’s retirement, $520 of one-time RIDEA transaction costs and $384 provision for credit losses related to a mortgage loan origination.

(3) Includes $2,693 write-off of a working capital note, $371 of related interest receivable, and $303 of one-time transaction costs, all in connection with the transition to RIDEA, partially offset by the 13% exit IRR of $2,962 received in connection with the redemption of our preferred equity investment in a JV.

(4) Includes a one-time additional straight-line income of $3,158 related to restoring accrual basis accounting for two master leases, recovery of credit losses of $511 related to a mortgage loan receivable write-off, partially offset by $290 provision for credit losses related to the write-off of an uncollectible loan receivable.

(5) Includes an aggregate one-time income of $4,493 received from three former operators, the recovery of provisions for credit losses of $293 related to a mortgage loan receivable payoff, partially offset by the uncollectible effective interest write-off of $613 related to the partial paydown of a mortgage loan receivable.

(6) Includes $321 write-off of an uncollectible straight-line rent receivable, $1,635 provision for credit losses related to acquisitions totaling $163,460 accounted for as financing receivables, partially offset by $934 recovery of provision for credit losses related to the payoffs of mortgage loan receivables.

Liquidity and Capital Resources

Sources and Uses of Cash

As of March 31, 2025, we had $681.2 million in liquidity as follows (amounts in thousands, except per share amounts) :

At March 31, 2025

As of June 30, 2025, we had $640.4 million in liquidity as follows (amounts in thousands, except per share amounts) :

At June 30, 2025

Cash and cash equivalents

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Total Liquidity

(1) Subsequent to June 30, 2025, 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.

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 had $673,587 in liquidity.

See (1) above.

We believe that our current cash balance, cash flow from operations available for distribution or reinvestment, our borrowing capacity and our potential ability to access the capital markets are sufficient to provide for payment of our current operating costs, meet debt obligations and pay common dividends at least sufficient to maintain our REIT status and repay borrowings at, or prior to, their maturity.

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Depending on our borrowing capacity, compliance with financial covenants, ability to access the capital markets, and the payment of dividends may be negatively impacted.

We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2025.

We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2025 and 2026.

Our investments, principally our investments in owned properties, financing receivables and mortgage loans, are subject to the possibility of loss of their carrying values as a result of changes in market prices, interest rates and inflationary expectations.

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Inasmuch as we may initially fund some of our investments with variable interest rate debt, we would be at risk of net interest margin deterioration if medium and long-term rates were to increase.

Our primary sources of cash include rent and interest receipts, borrowings under our unsecured credit facility, public and private issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable.

Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments

(including acquisitions, capital expenditures and construction advances), loan advances and general and administrative expenses.

Our primary sources of cash include rent, resident fees and services, interest receipts, borrowings under our unsecured credit facility, public and private issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable.

Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures and construction advances), loan advances and general and administrative expenses.

These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below ( in thousands ):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash provided by (used in):

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Financing activities

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

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Unsecured Credit Facility.

We have an unsecured credit agreement (the Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $525.0 million comprised of a $425.0 million revolving credit facility (the “Revolving Line of Credit”) and two $50.0 million term loans (the “Term Loans”).

We had an unsecured credit agreement (the “Credit Agreement”) that provided for an aggregate commitment of the lenders of up to $525.0 million comprised of a $425.0 million revolving credit facility (the “Revolving Line of Credit”) and two $50.0 million term loans (the “Term Loans”).

The Term Loans mature on November 19, 2025 and November 19, 2026.

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The Credit Agreement permitted us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1.0 billion.

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.

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 $425.0 million to $600.0 million and provides for the opportunity to increase the total commitment to an aggregate of $1.2 billion.

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.

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The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with 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, we recorded a decrease of $0.9 million in fair value of Interest Rate Swaps.

As of March 31, 2025, the terms of the Interest Rate Swaps are as follows ( dollar amounts in thousands ):

During the six months ended June 30, 2025, we recorded a decrease of $1.6 million in fair value of Interest Rate Swaps.

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.

As of June 30, 2025, the terms of the Interest Rate Swaps are as follows ( dollar amounts in thousands ):

Fair Value at

Maturity Date

March 31, 2025

June 30, 2025

November 2021

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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 debt obligations by component as of March 31, 2025 are as follows (dollar amounts in thousands):

The debt obligations by component as of June 30, 2025 are as follows (dollar amounts in thousands):

Debt Obligations

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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.

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, our debt borrowings and repayments were as follows (in thousands):

(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, our debt borrowings and repayments were as follows (in thousands):

Debt Obligations

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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 commitment 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.

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

At March 31, 2025, we had 45,887,855 shares of common stock outstanding, total equity on our balance sheet $1.0 billion and our equity securities had a market value of $1.6 billion.

During the three months ended March 31, 2025, we declared and paid $27.3 million of cash dividends.

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

Subsequent to March 31, 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, 2025, respectively.

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

At June 30, 2025, we had 46,065,292 shares of common stock outstanding, total equity on our balance sheet $1.0 billion and our equity securities had a market value of $1.6 billion.

During the six months ended June 30, 2025, we declared and paid $53.6 million of cash dividends.

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

Subsequent to June 30, 2025, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of July, August 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.

At-The-Market Program.

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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, 2025, we sold 238,100 shares of common stock for $8.5 million 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 $13.8 million 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 $381.7 million available under the Equity Distribution Agreement.

Subsequent to March 31, 2025, we sold 30,400 shares of common stock for $1.1 million in net proceeds under our Equity Distribution Agreement.

Accordingly, subsequent to March 31, 2025, we had $380.7 million available under the Equity Distribution Agreement.

At June 30, 2025, we had $376.4 million available under the Equity Distribution Agreement.

Available Shelf Registrations.

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During the second quarter of 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”).

Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption.

In addition, any shares that

are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan.

Under the 2021 Plan, 1,900,000 shares of common stock have been

authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption.

In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan.

Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants.

The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion.

During the three months ended March 31, 2025, 136,292 shares of restricted stock and 163,221 performance-based stock units vested.

Subsequent to March 31, 2025, 13,362 shares of restricted stock and 19,694 performance-based stock units vested in connection with an employee retirement.

During the three months ended March 31, 2025, we awarded restricted stock and performance-based stock units as follows:

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 six months ended June 30, 2025, 165,549 shares of restricted stock and 182,915 performance-based stock units vested.

During the six months ended June 30, 2025, we awarded restricted stock and performance-based stock units as follows:

Vesting Period

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ratably over 3 years

Restricted stock

April 30, 2028

Restricted stock

Performance-based stock units

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TSR targets (3)

(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 3 years.

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

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

Critical Accounting Policies

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in our market risk during the three months ended March 31, 2025.

There were no material changes in our market risk during the six months ended June 30, 2025.

For additional information, refer to Item 7A as presented in our Annual Report on Form 10-K for the year ended December 31, 2024.

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 2. Management’s Discussion and Analysis