LTC PROPERTIES INC 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ Cautionary Statement Regarding Forward-Looking Statements This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. You can identify some of the forward-looking statements by their use of forward-looking words, such as “believes,” “expects,” “may,” “will,” “could,” “would,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or the negative of those words or similar words. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. 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; changes in federal, state, or local laws limiting real estate investment trust (“REIT”) investments in the health care sector; federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid; required regulatory approvals for operation of health care facilities; a failure to comply with federal, state, or local regulations for the operation of health care facilities; the adequacy of insurance coverage maintained by our operators; our reliance on a few major operators; our ability to renew leases or enter into favorable terms of renewals or new leases; the impact of inflation, operator financial or legal difficulties; the sufficiency of collateral securing mortgage loans; an impairment of our real estate investments; the relative illiquidity of our real estate investments; our ability to develop and complete construction projects; our ability to invest cash proceeds for health care properties; a failure to qualify as a REIT; our ability to grow if access to capital is limited; and a failure to maintain or increase our dividend. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in our publicly available filings with the Securities and Exchange Commission. We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements, whether as a result of new information, future events or otherwise. Although our management believes that the assumptions and expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The actual results may differ materially from any forward-looking statements due to the risks and uncertainties of such statements. Executive Overview Business and Investment Strategy We are a REIT that invests in seniors housing and health care properties through sale-leasebacks, financing receivables, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. 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. 37 Table of Contents 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 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, 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, 38 Table of Contents 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. In addition to our monitoring and research efforts, we also structure our investments to help mitigate payment risk. Some operating leases and loans are credit enhanced by guaranties and/or letters of credit. 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, 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. The timing, source and amount of cash flows provided by financing activities and used in investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. Changes in the capital markets’ environment may impact the availability of cost-effective capital. 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 and the variability of cash flow from our SHOP segment. Traditionally, we have taken a conservative approach to managing our business, choosing to maintain liquidity and exercise patience until favorable investment opportunities arise. 39 Table of Contents Real Estate Portfolio Overview The following tables summarize our real estate investment portfolio as of June 30, 2025 ( dollar amounts in thousands ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Percentage ​ ​ Rental Income ​ ​ Percentage ​ ​ ​ ​ Number of ​ SNF ​ SH ​ Gross ​ of ​ ​ and Resident ​ ​ of Total ​ ​ Owned Properties ​ Properties (1) ​ Beds ​ Units ​ Investments ​ Investments ​ ​ Fees and Services ​ ​ Revenues ​ ​ Owned-Triple-Net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Seniors Housing ​ 57 ​ — ​ 3,404 ​ $ 544,031 ​ 25.8 % ​ $ 23,284 ​ ​ 22.5 % ​ Skilled Nursing ​ 50 ​ 6,113 ​ 236 ​ ​ 598,800 ​ 28.4 % ​ ​ 31,443 ​ ​ 30.4 % ​ Other (2) ​ 1 ​ 118 ​ — ​ ​ 12,005 ​ 0.6 % ​ ​ 297 ​ ​ 0.3 % ​ Subtotal: Triple-Net ​ 108 ​ 6,231 ​ 3,640 ​ ​ 1,154,836 ​ 54.8 % ​ ​ 55,024 (3) ​ ​ 53.2 % ​ Owned-SHOP: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Seniors Housing ​ 13 ​ — ​ 832 ​ ​ 174,847 ​ 8.3 % ​ ​ 11,950 (4) ​ ​ 11.6 % ​ Total Owned Properties ​ 121 ​ 6,231 ​ 4,472 ​ ​ 1,329,683 ​ 63.1 % ​ ​ 66,974 ​ ​ 64.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Percentage ​ ​ Interest Income ​ ​ Percentage ​ ​ ​ ​ Number of ​ SNF ​ SH ​ ​ Gross ​ of ​ ​ from Financing ​ ​ of Total ​ ​ Financing Receivables ​ Properties (1) ​ Beds ​ Units ​ ​ Investments ​ Investments ​ ​ Receivable ​ ​ Revenues ​ ​ Seniors Housing ​ 28 ​ — ​ 1,263 ​ ​ 284,879 ​ 13.5 % ​ ​ 11,199 ​ ​ 10.8 % ​ Skilled Nursing ​ 3 ​ 299 ​ — ​ ​ 76,559 ​ 3.6 % ​ ​ 2,887 ​ ​ 2.8 % ​ Total Financing Receivables ​ 31 ​ 299 ​ 1,263 ​ ​ 361,438 ​ 17.1 % ​ ​ 14,086 ​ ​ 13.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Percentage ​ ​ Interest Income ​ ​ Percentage ​ ​ ​ ​ Number of ​ SNF ​ SH ​ ​ Gross ​ of ​ ​ from Mortgage ​ ​ of Total ​ ​ Mortgage Loans ​ Properties (1) ​ Beds ​ Units ​ ​ Investments ​ Investments ​ ​ Loans ​ ​ Revenues ​ ​ Seniors Housing ​ 6 ​ — ​ 584 ​ ​ 85,745 ​ 4.1 % ​ ​ 2,479 ​ ​ 2.4 % ​ Skilled Nursing ​ 22 ​ 2,726 ​ — ​ ​ 271,070 ​ 12.8 % ​ ​ 16,380 ​ ​ 15.9 % ​ Total Mortgage Loans ​ 28 ​ 2,726 ​ 584 ​ ​ 356,815 ​ 16.9 % ​ ​ 18,859 ​ ​ 18.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Percentage ​ ​ Interest ​ ​ Percentage ​ ​ ​ ​ Number of ​ SNF ​ SH ​ ​ Gross ​ of ​ ​ and other ​ ​ of Total ​ ​ Notes Receivable ​ Properties (1) ​ Beds ​ Units ​ ​ Investments ​ Investments ​ ​ Income ​ ​ Revenues ​ ​ Seniors Housing ​ 6 ​ — ​ 765 ​ ​ 42,957 ​ 2.0 % ​ ​ 2,451 ​ ​ 2.4 % ​ Skilled Nursing ​ — ​ — ​ — ​ ​ 1,178 ​ 0.1 % ​ ​ — ​ ​ 0.0 % ​ Total Notes Receivable ​ 6 ​ — ​ 765 ​ ​ 44,135 ​ 2.1 % ​ ​ 2,451 (5) ​ ​ 2.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Percentage ​ ​ Income from ​ ​ Percentage ​ ​ ​ ​ Number of ​ SNF ​ SH ​ ​ Gross of ​ ​ Unconsolidated ​ ​ of Total ​ ​ Unconsolidated Joint Ventures ​ Properties (1) ​ Beds ​ Units ​ ​ Investments Investments ​ ​ Joint Ventures ​ ​ Revenues ​ ​ Seniors Housing ​ 1 ​ — ​ 109 ​ ​ 6,340 ​ 0.3 % ​ ​ 289 ​ ​ 0.3 % ​ Skilled Nursing ​ 1 ​ 104 ​ — ​ ​ 11,453 ​ 0.5 % ​ ​ 589 ​ ​ 0.6 % ​ Total Unconsolidated Joint Ventures ​ 2 ​ 104 ​ 109 ​ ​ 17,793 ​ 0.8 % ​ ​ 878 (6) ​ ​ 0.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Portfolio ​ 188 ​ 9,360 ​ 7,193 ​ $ 2,109,864 ​ 100.0 % ​ $ 103,248 ​ ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Number of ​ ​ ​ ​ Percentage ​ ​ ​ ​ of ​ SNF ​ SH ​ Gross ​ of ​ ​ Summary of Properties by Type ​ Properties (1) ​ Beds ​ Units ​ Investments ​ Investments ​ ​ Seniors Housing ​ 111 ​ — ​ 6,957 ​ $ 1,138,799 ​ 54.0 % ​ Skilled Nursing ​ 76 ​ 9,242 ​ 236 ​ ​ 959,060 ​ 45.4 % ​ Other (2) ​ 1 ​ 118 ​ — ​ ​ 12,005 ​ 0.6 % ​ Total Portfolio ​ 188 ​ 9,360 ​ 7,193 ​ $ 2,109,864 ​ 100.0 % ​ (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 $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. ​ ​ 40 Table of Contents As of June 30, 2025, we had $1.7 billion in net carrying value of investments as follows ( dollar amounts in thousands ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ Carrying ​ of ​ ​ Value ​ Investments Owned-Triple-Net ​ $ 778,295 ​ 46.3 % Owned-SHOP ​ ​ 129,588 ​ 7.7 % Financing Receivables ​ ​ 357,824 ​ 21.3 % Mortgage Loans ​ ​ 353,253 ​ 21.0 % Notes Receivable ​ ​ 43,694 ​ 2.6 % Unconsolidated Joint Ventures ​ ​ 17,793 ​ 1.1 % ​ ​ $ 1,680,447 ​ 100.0 % ​ 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 ​ $ 28,079 ​ $ 57,702 Variable cash rental income ​ ​ 2,777 ​ ​ 5,866 Straight-line rent adjustment (1) ​ ​ (497) ​ ​ (1,075) Adjustment of lease incentives and rental income ​ ​ — ​ ​ (492) Amortization of lease incentives ​ ​ (182) ​ ​ (380) Rental income ​ ​ 30,177 ​ ​ 61,621 Financing Receivables: ​ ​ ​ ​ ​ ​ Cash Interest income from financing receivables ​ ​ 6,727 ​ ​ 13,430 Effective interest income (2) ​ ​ 357 ​ ​ 656 Interest income from financing receivables ​ ​ 7,084 ​ ​ 14,086 Mortgage loans receivable: ​ ​ ​ ​ ​ ​ Cash interest received ​ ​ 8,667 ​ ​ 16,903 Effective interest income (3) ​ ​ 1,013 ​ ​ 1,956 Interest income from mortgage loans ​ ​ 9,680 ​ ​ 18,859 Other notes receivable: ​ ​ ​ ​ ​ ​ Interest income-other notes ​ ​ 1,065 ​ ​ 2,133 Effective interest income (4) ​ ​ 159 ​ ​ 318 Interest income from notes receivable ​ ​ 1,224 ​ ​ 2,451 ​ ​ ​ ​ ​ ​ ​ Total revenue-Real Estate Investments segment ​ ​ 48,165 ​ ​ 97,017 ​ ​ ​ ​ ​ ​ ​ Property level expenses-real estate investments ​ ​ (2,795) ​ ​ (5,902) NOI-real estate investment segment (5) ​ $ 45,370 ​ $ 91,115 ​ ​ ​ ​ ​ ​ ​ SHOP segment: ​ ​ ​ ​ ​ ​ Resident Fees and Services: ​ $ 11,950 ​ $ 11,950 Property level expenses-SHOP ​ ​ (9,419) ​ ​ (9,419) NOI-SHOP segment (5) ​ $ 2,531 ​ $ 2,531 (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. 41 Table of Contents ​ The following table outlines information related to our Triple-Net lease extensions during the six months ended June 30, 2025 ( dollar amounts in thousands ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Number ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ of ​ of ​ ​ ​ Original ​ Extended Type of Property ​ ​ Investment ​ Properties ​ Beds/Units ​ State ​ Maturity ​ Maturity SH ​ $ 68,353 ​ 7 ​ 461 ​ IL, MI, OH ​ May 31, 2025 ​ May 31, 2026 SNF ​ ​ 53,339 ​ 6 ​ 782 ​ AL, NM ​ April 30, 2026 (1) ​ April 30, 2031 SH ​ ​ 32,361 ​ 2 ​ 159 ​ GA, SC ​ December 31, 2025 ​ December 31, 2026 SH ​ ​ 25,704 ​ 2 ​ 88 ​ TX ​ February 28, 2025 ​ February 28, 2026 SNF ​ ​ 13,054 ​ 2 ​ 211 ​ SC ​ February 28, 2026 ​ February 28, 2031 SNF ​ ​ 5,275 ​ 2 ​ 141 ​ TN ​ December 31, 2025 (2) ​ December 31, 2026 ​ ​ $ 198,086 ​ 21 ​ 1,842 ​ ​ ​ ​ ​ ​ (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 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. ​ 42 Table of Contents Update on Certain Operators ALG Senior Living We hold controlling interest in three joint ventures with ALG Senior Living (“ALG”). The joint ventures own 28 assisted living and memory care communities in North Carolina (27) and South Carolina (1) with a total of 1,263 units. 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 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 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 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. 43 Table of Contents 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 We had a JV that owned two assisted living communities with a total of 186 units in Oregon. The communities were leased under two separate leases with the same operator, who was the non-controlling member of the JV. 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. 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% annually thereafter. 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 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. ​ 44 Table of Contents 2025 Activities Overview The following tables summarize our transactions during the six months ended June 30, 2025 (dollar amounts in thousands): Investment in Improvement projects ​ ​ ​ ​ ​ ​ ​ Type of Property ​ NNN ​ SHOP Seniors Housing Communities ​ $ 1,668 ​ $ 91 Skilled Nursing Centers ​ ​ 736 ​ ​ — Total ​ $ 2,404 ​ $ 91 Properties Held -for-Sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Type ​ Number ​ Number ​ ​ ​ ​ ​ ​ ​ ​ of ​ of ​ of ​ ​ Gross ​ ​ Accumulated State ​ Property ​ Properties ​ Beds/units ​ ​ Investment ​ ​ Depreciation CA/FL/VA ​ SNF (1) ​ 7 ​ 896 ​ $ 71,742 ​ $ (29,284) (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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Type ​ Number ​ Number ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of ​ of ​ of ​ ​ Sales ​ ​ Carrying ​ ​ Net ​ State ​ Properties ​ Properties ​ Beds/Units ​ ​ Price ​ ​ Value ​ ​ (Loss) Gain (1) ​ Ohio ​ SH ​ 1 ​ 39 ​ $ 1,000 ​ $ 670 ​ $ 259 ​ Ohio (2) ​ n/a ​ — ​ — ​ ​ 1,800 ​ ​ 1,342 ​ ​ 340 ​ Oklahoma ​ SH ​ 1 ​ 29 ​ ​ 670 ​ ​ 670 ​ ​ (96) ​ Total ​ ​ ​ 2 ​ 68 ​ $ 3,470 ​ $ 2,682 ​ $ 503 ​ (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. 45 Table of Contents SHOP Segment 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 ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Seniors ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Resident ​ Housing ​ Investment ​ Number ​ Number ​ ​ ​ ​ ​ Gross ​ Fees and ​ Operating ​ per ​ of ​ of ​ ​ Type of Property ​ Investment ​ Services (1) ​ Expenses ​ Unit ​ Properties ​ Beds/Units ​ State SH ​ $ 152,462 ​ $ 11,755 (2) ​ $ 9,302 (2) ​ $ 208.28 ​ 12 ​ 732 ​ CA, CO, KS, IL, OH SH ​ ​ 22,385 ​ ​ 195 (2) ​ ​ 117 (2) ​ $ 223.85 ​ 1 ​ 100 ​ WI Total ​ $ 174,847 ​ $ 11,950 ​ $ 9,419 ​ $ 210.15 ​ 13 ​ 832 ​ ​ (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 ​ ​ ​ ​ ​ ​ ​ Amount ​ Originations and funding under mortgage loans receivable ​ $ 41,535 (1) ​ Scheduled principal payments received ​ ​ (451) ​ Mortgage loan premium amortization ​ ​ (3) ​ Provision for loan loss reserve ​ ​ (411) ​ Net increase in mortgage loans receivable ​ $ 40,670 ​ (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%; and ​ (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. Our remaining commitment is $3,706. 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. ​ 46 Table of Contents Preferred Equity Investment in Unconsolidated Joint Ventures 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 ​ ​ ​ ​ ​ ​ ​ ​ Amount ​ ​ Principal payments received under notes receivable ​ $ (888) ​ ​ Write-off of notes receivable ​ ​ (2,693) (1) ​ ​ Recovery of credit losses ​ ​ 36 ​ ​ Net decrease in notes receivable ​ $ (3,545) ​ ​ (1) Represents the write-off of Anthem working capital note in connection with the conversion of its Triple-Net leases to SHOP. ​ 47 Table of Contents Health Care Regulatory The Centers for Medicare & Medicaid Services (“CMS”) annually updates Medicare SNF prospective payment system rates and other policies. 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 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 $208.36 million in FY 2026. 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. The final rule set forth new comprehensive minimum staffing requirements. It finalized a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 hours per resident day of direct registered nurse care and 2.45 hours per resident day of direct nurse aide care. It permitted facilities to use any combination of nurse staff (registered nurse, licensed practical nurse and licensed vocational nurse, or nurse aide) to account for the additional 0.48 hours per resident day needed to comply with the total nurse staffing standard. CMS also finalized enhanced facility assessment requirements and a requirement to have a registered nurse onsite 24 hours a day, seven days a week (“24/7”), to provide skilled nursing care. The final rule also provided a staggered implementation timeframe of the minimum nurse staffing standards and 24/7 registered nurse requirement based on geographic location as well as possible exemptions for qualifying facilities for some parts of these requirements based on workforce unavailability and other factors. The final rule was challenged in federal courts in Texas and Iowa. 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. The U.S. 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 48 Table of Contents 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. 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 and our overall financial condition. 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. Further the ability of our operators to comply with applicable regulations, including minimum staffing requirements, can be adversely impacted by changes in the labor market and increases in inflation. Key Performance Indicators, Trends and Uncertainties We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to concentration risk and credit strength. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results in making operating decisions and for budget planning purposes. Concentration Risk. We evaluate by gross investment our concentration risk in terms of asset mix, real estate investment mix, operator mix and geographic mix. Concentration risk is valuable to understand what portion of our real estate investments could be at risk if certain sectors were to experience downturns. Asset mix measures the portion of our investments that are real property or mortgage loans. The National Association of Real Estate Investment Trusts (“NAREIT”), an organization representing U.S. REITs and publicly traded real estate companies, classifies a company with 50% or more of assets directly or indirectly in the equity ownership of real estate as an equity REIT. Investment mix measures the portion of our investments that relate to our various property classifications. Operator mix measures the portion of our investments that relate to our top five operators. Geographic mix measures the portion of our real estate investment that relate to our top five states. 49 Table of Contents The following table reflects our recent historical trends of concentration risk (gross investment, in thousands) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/30/25 ​ 3/31/25 ​ 12/31/24 ​ 9/30/24 ​ 6/30/24 Asset mix: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned properties-Triple-Net ​ $ 1,154,836 ​ $ 1,329,856 ​ $ 1,333,078 ​ $ 1,342,188 ​ $ 1,342,069 ​ Owned properties-SHOP ​ ​ 174,847 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Financing receivables ​ ​ 361,438 ​ ​ 361,460 ​ ​ 361,482 ​ ​ 361,504 ​ ​ 361,525 ​ Mortgage loan receivables ​ ​ 356,815 ​ ​ 317,527 ​ ​ 315,734 ​ ​ 364,414 ​ ​ 393,375 ​ Notes receivable ​ ​ 44,135 ​ ​ 44,786 ​ ​ 47,717 ​ ​ 48,173 ​ ​ 58,995 ​ Unconsolidated joint ventures ​ ​ 17,793 ​ ​ 17,602 ​ ​ 30,602 ​ ​ 30,602 ​ ​ 30,504 ​ Real estate investment mix: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior housing communities ​ $ 1,138,799 ​ $ 1,100,232 ​ $ 1,117,588 ​ $ 1,165,395 ​ $ 1,166,053 ​ Skilled nursing centers ​ ​ 959,060 ​ ​ 958,994 ​ ​ 959,020 ​ ​ 959,482 ​ ​ 1,001,532 ​ Other (1) ​ ​ 12,005 ​ ​ 12,005 ​ ​ 12,005 ​ ​ 12,005 ​ ​ 12,005 ​ Under development ​ — ​ ​ — ​ ​ — ​ ​ 9,999 ​ ​ 6,878 ​ Operator mix: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ALG Senior Living ​ $ 295,628 ​ $ 295,629 ​ $ 295,629 ​ $ 307,308 ​ $ 307,308 ​ Prestige Healthcare (1) ​ ​ 268,567 ​ ​ 268,896 ​ ​ 269,022 ​ ​ 269,345 ​ ​ 272,081 ​ Encore Senior Living ​ ​ 196,735 ​ ​ 195,355 ​ ​ 195,276 ​ ​ 191,988 ​ ​ 187,645 ​ HMG Healthcare, LLC ​ ​ 167,202 ​ ​ 166,976 ​ ​ 166,716 ​ ​ 166,833 ​ ​ 176,877 ​ Anthem Memory Care, LLC (2) ​ ​ — ​ ​ 153,714 ​ ​ 156,407 ​ ​ 156,407 ​ ​ 156,407 ​ Ignite ​ ​ 117,008 ​ ​ 116,816 ​ ​ 116,954 ​ ​ 116,954 ​ ​ 116,856 ​ Remaining operators (2) ​ ​ 889,877 ​ ​ 873,845 ​ ​ 888,609 ​ ​ 938,046 ​ ​ 969,294 ​ SHOP operators (2) ​ ​ 174,847 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Geographic mix: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Texas ​ $ 319,423 ​ $ 318,584 ​ $ 318,133 ​ $ 323,737 ​ $ 328,428 ​ North Carolina ​ ​ 301,727 ​ ​ 301,650 ​ ​ 301,468 ​ ​ 301,142 ​ ​ 300,893 ​ Michigan ​ ​ 293,189 ​ ​ 292,396 ​ ​ 290,450 ​ ​ 287,795 ​ ​ 287,389 ​ Florida ​ ​ 168,626 ​ ​ 130,152 ​ ​ 130,174 ​ ​ 130,196 ​ ​ 130,218 ​ Ohio ​ ​ 140,813 ​ ​ 142,089 ​ ​ 144,353 ​ ​ 144,229 ​ ​ 143,115 ​ Remaining states ​ ​ 886,086 ​ ​ 886,360 ​ ​ 904,035 ​ ​ 959,782 ​ ​ 996,425 ​ (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. We measure our credit strength both in terms of leverage ratios and coverage ratios. Our leverage ratios include debt to gross asset value and debt to market capitalization. The leverage ratios indicate how much of our Consolidated Balance Sheets capitalization is related to long-term obligations. Our coverage ratios include interest coverage ratio and fixed charge coverage ratio. 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. See Non-GAAP Financial Measures below for information and reconciliation. ​ 50 Table of Contents The following table reflects the recent historical trends for our credit strength measures: Balance Sheet Metrics ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year to Date ​ Quarter Ended ​ ​ ​ 6/30/25 ​ 6/30/25 ​ ​ 3/31/25 ​ ​ 12/31/24 ​ ​ 9/30/24 ​ ​ 6/30/24 ​ Debt to gross asset value ​ 31.3 % 31.3 % ​ 31.1 % ​ 31.1 % (4) ​ 34.5 % (4) ​ 37.6 % Debt to market capitalization ratio ​ 30.4 % 30.4 % (1) ​ 29.5 % (2) ​ 30.3 % (5) ​ 32.3 % (7) ​ 36.5 % Interest coverage ratio (9) ​ 5.1 x 5.1 x ​ 5.0 x (3) ​ 4.7 x (6) ​ 4.2 x (8) ​ 3.7 x Fixed charge coverage ratio (9) ​ 5.1 x 5.1 x ​ 5.0 x (3) ​ 4.7 x (6) ​ 4.2 x (8) ​ 3.7 x (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. ​ (3) Increased due to decrease in interest expense. ​ (4) Decreased due to decrease in outstanding debt, partially offset by decrease in gross asset value. ​ (5) Decreased due to decrease in outstanding debt, partially offset by decrease in market capitalization from lower stock price. ​ (6) Increased due to decrease in interest expense and increase in rental income, partially offset by decrease in other income. ​ (7) Decreased due to decrease in outstanding debt and increase in market capitalization resulting from the sale of common stock under our Original Equity Distribution Agreements, as well as increase in stock price. ​ (8) Increase due to decrease in interest expense and increase in rental and other income. ​ (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. Our expected results may not be achieved, and actual results may differ materially from our expectations. This may be a result of various factors, including, but not limited to ​ ● the status of the economy; ● the status of capital markets, including prevailing interest rates; ● compliance with and changes to regulations and payment policies within the health care industry; ● changes in financing terms; ● competition within the health care and seniors housing industries; ● changes in federal, state and local legislation; and ● the duration, spread and severity of a public health crises such as a pandemic. Management regularly monitors the economic and other factors listed above. We develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends. ​ 51 Table of Contents Operating Results (unaudited, in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ ​ ​ 2025 ​ 2024 ​ Difference ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental income ​ $ 30,177 ​ $ 31,657 ​ $ (1,480) (1) ​ Resident fees and services ​ ​ 11,950 ​ ​ — ​ ​ 11,950 (2) ​ Interest income from financing receivables ​ ​ 7,084 ​ ​ 3,830 ​ ​ 3,254 (3) ​ Interest income from mortgage loans ​ ​ 9,680 ​ ​ 12,661 ​ ​ (2,981) (4) ​ Interest and other income ​ ​ 1,349 ​ ​ 1,968 ​ ​ (619) (5) ​ Total revenues ​ ​ 60,240 ​ ​ 50,116 ​ ​ 10,124 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ 8,014 ​ ​ 10,903 ​ ​ 2,889 (6) ​ Depreciation and amortization ​ ​ 8,776 ​ ​ 9,024 ​ ​ 248 ​ Seniors housing operating expenses ​ ​ 9,419 ​ ​ — ​ ​ (9,419) (7) ​ Provision for credit losses ​ ​ 387 ​ ​ 703 ​ ​ 316 ​ Transaction costs ​ ​ 6,706 ​ ​ 380 ​ ​ (6,326) (8) ​ Property tax expense ​ ​ 2,795 ​ ​ 3,247 ​ ​ 452 ​ General and administrative expenses ​ ​ 8,447 ​ ​ 6,760 ​ ​ (1,687) (9) ​ Total expenses ​ ​ 44,544 ​ ​ 31,017 ​ ​ (13,527) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (loss) on sale of real estate, net ​ ​ 332 ​ ​ (32) ​ ​ 364 ​ Income from unconsolidated joint ventures ​ ​ 439 ​ ​ 671 ​ ​ (232) ​ Income tax benefit ​ ​ 81 ​ ​ — ​ ​ 81 ​ Net income ​ ​ 16,548 ​ ​ 19,738 ​ ​ (3,190) ​ Income allocated to non-controlling interests ​ ​ (1,456) ​ ​ (377) ​ ​ (1,079) (3) ​ Net income attributable to LTC Properties, Inc. ​ ​ 15,092 ​ ​ 19,361 ​ ​ (4,269) ​ Income allocated to participating securities ​ ​ (154) ​ ​ (173) ​ ​ 19 ​ Net income available to common stockholders ​ $ 14,938 ​ $ 19,188 ​ $ (4,250) ​ (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. ​ ​ ​ ​ 52 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ ​ ​ 2025 ​ 2024 ​ Difference ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental income ​ $ 61,621 ​ $ 65,206 ​ $ (3,585) (1) ​ Resident fees and services ​ ​ 11,950 ​ ​ — ​ ​ 11,950 (2) ​ Interest income from financing receivables ​ ​ 14,086 ​ ​ 7,660 ​ ​ 6,426 (3) ​ Interest income from mortgage loans ​ ​ 18,859 ​ ​ 25,109 ​ ​ (6,250) (4) ​ Interest and other income ​ ​ 2,755 ​ ​ 3,507 ​ ​ (752) (5) ​ Total revenues ​ ​ 109,271 ​ ​ 101,482 ​ ​ 7,789 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ 15,927 ​ ​ 21,948 ​ ​ 6,021 (6) ​ Depreciation and amortization ​ ​ 17,938 ​ ​ 18,119 ​ ​ 181 ​ Seniors housing operating expenses ​ ​ 9,419 ​ ​ — ​ ​ (9,419) (7) ​ Provision for credit losses ​ ​ 3,439 ​ ​ 727 ​ ​ (2,712) (8) ​ Transaction costs ​ ​ 7,147 ​ ​ 646 ​ ​ (6,501) (9) ​ Property tax expense ​ ​ 5,902 ​ ​ 6,630 ​ ​ 728 ​ General and administrative expenses ​ ​ 15,418 ​ ​ 13,251 ​ ​ (2,167) (10) ​ Total expenses ​ ​ 75,190 ​ ​ 61,321 ​ ​ (13,869) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sale of real estate, net ​ ​ 503 (11) ​ ​ 3,219 (12) ​ ​ (2,716) ​ Income from unconsolidated joint ventures ​ ​ 4,104 ​ ​ 1,047 ​ ​ 3,057 (13) ​ Income tax benefit ​ ​ 81 ​ ​ — ​ ​ 81 ​ Net income ​ ​ 38,769 ​ ​ 44,427 ​ ​ (5,658) ​ Income allocated to non-controlling interests ​ ​ (2,997) ​ ​ (836) ​ ​ (2,161) (3) ​ Net income attributable to LTC Properties, Inc. ​ ​ 35,772 ​ ​ 43,591 ​ ​ (7,819) ​ Income allocated to participating securities ​ ​ (317) ​ ​ (338) ​ ​ 21 ​ Net income available to common stockholders ​ $ 35,455 ​ $ 43,253 ​ $ (7,798) ​ (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. ​ (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 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. ​ (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. 53 Table of Contents 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 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. We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO facilitates comparisons of operating performance between periods. We use FFO as a supplemental performance measurement of our cash flow generated by operations. FFO does not represent cash generated from operating activities in accordance with GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders. We calculate and report FFO in accordance with the definition and interpretive guidelines issued by NAREIT. FFO, as defined by NAREIT, means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from us; therefore, caution should be exercised when comparing our FFO to that of other REITs. 54 Table of Contents The following table reconciles GAAP net income available to common stockholders to NAREIT FFO available to common stockholders (unaudited, amounts in thousands, except per share amounts) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 GAAP net income available to common stockholders ​ $ 14,938 ​ $ 19,188 ​ $ 35,455 ​ $ 43,253 Add: Depreciation and amortization ​ ​ 8,776 ​ ​ 9,024 ​ ​ 17,938 ​ ​ 18,119 (Less)/Add: (Gain)/Loss on sale of real estate, net ​ ​ (332) ​ ​ 32 ​ ​ (503) ​ ​ (3,219) NAREIT FFO attributable to common stockholders ​ $ 23,382 ​ $ 28,244 ​ $ 52,890 ​ $ 58,153 NAREIT FFO attributable to common stockholders per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of dilutive securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Add: Participating securities ​ ​ — ​ ​ 173 ​ ​ — ​ ​ 338 Diluted NAREIT FFO attributable to common stockholders ​ $ 23,382 ​ $ 28,417 ​ $ 52,890 ​ $ 58,491 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares used to calculate NAREIT FFO per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares for basic net income per share ​ ​ 45,714 ​ ​ 43,171 ​ ​ 45,524 ​ ​ 43,030 Effect of dilutive securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance-based stock units ​ ​ 314 ​ ​ 292 ​ ​ 314 ​ ​ 292 Participating securities ​ ​ — ​ ​ 304 ​ ​ — ​ ​ 291 Total effect of dilutive securities ​ ​ 314 ​ ​ 596 ​ ​ 314 ​ ​ 583 Shares for diluted FFO per share ​ ​ 46,028 ​ ​ 43,767 ​ ​ 45,838 ​ ​ 43,613 ​ 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 ​ ​ June 30, ​ June 30, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 Net income ​ $ 16,548 ​ $ 19,738 ​ $ 38,769 ​ $ 44,427 Less: Income tax benefit ​ ​ (81) ​ ​ — ​ ​ (81) ​ ​ — Less/Add: (Gain) loss on sale of real estate, net ​ ​ (332) ​ ​ 32 ​ ​ (503) ​ ​ (3,219) Add: General and administrative expense ​ ​ 8,447 ​ ​ 6,760 ​ ​ 15,418 ​ ​ 13,251 Add: Transaction costs ​ ​ 6,706 ​ ​ 380 ​ ​ 7,147 ​ ​ 646 Add: Provision for credit losses ​ ​ 387 ​ ​ 703 ​ ​ 3,439 ​ ​ 727 Add: Depreciation and amortization ​ ​ 8,776 ​ ​ 9,024 ​ ​ 17,938 ​ ​ 18,119 Add: Interest expense ​ ​ 8,014 ​ ​ 10,903 ​ ​ 15,927 ​ ​ 21,948 NOI ​ $ 48,465 ​ $ 47,540 ​ $ 98,054 ​ $ 95,899 ​ ​ 55 Table of Contents 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. 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. 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year to Date ​ Three Months Ended ​ ​ ​ 6/30/25 ​ 6/30/25 ​ ​ 3/31/25 ​ 12/31/24 ​ 9/30/24 ​ 6/30/24 ​ Net income ​ $ 38,769 ​ $ 16,548 ​ $ 22,221 ​ $ 19,590 ​ $ 30,862 ​ $ 19,738 ​ Less/Add: (Gain) loss on sale ​ ​ (503) ​ ​ (332) ​ ​ (171) ​ ​ (1,097) ​ ​ (3,663) ​ ​ 32 ​ Add: Impairment loss ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,953 ​ ​ — ​ ​ — ​ Add: Interest expense ​ ​ 15,927 ​ ​ 8,014 ​ ​ 7,913 ​ ​ 8,365 ​ ​ 10,023 ​ ​ 10,903 ​ Add: Depreciation and amortization ​ ​ 17,938 ​ ​ 8,776 ​ ​ 9,162 ​ ​ 9,194 ​ ​ 9,054 ​ ​ 9,024 ​ EBITDA re ​ ​ 72,131 ​ ​ 33,006 ​ ​ 39,125 ​ ​ 43,005 ​ ​ 46,276 ​ ​ 39,697 ​ Add/(Less) : Non-recurring one-time items ​ ​ 8,416 (1) ​ ​ 8,011 (2) ​ ​ 405 (3) ​ ​ (3,379) (4) ​ ​ (4,173) (5) ​ ​ 1,022 (6) ​ Adjusted EBITDA re ​ $ 80,547 ​ $ 41,017 ​ $ 39,530 ​ $ 39,626 ​ $ 42,103 ​ $ 40,719 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ $ 15,927 ​ $ 8,014 ​ $ 7,913 ​ $ 8,365 ​ $ 10,023 ​ $ 10,903 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest coverage ratio ​ ​ 5.1 x ​ 5.1 ​ ​ 5.0 x ​ 4.7 x ​ 4.2 x ​ 3.7 x ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ $ 15,927 ​ $ 8,014 ​ $ 7,913 ​ $ 8,365 ​ $ 10,023 ​ $ 10,903 ​ Total fixed charges ​ $ 15,927 ​ $ 8,014 ​ $ 7,913 ​ $ 8,365 ​ $ 10,023 ​ $ 10,903 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed charge coverage ratio ​ ​ 5.1 x ​ 5.1 x ​ 5.0 x ​ 4.7 x ​ 4.2 x ​ 3.7 x (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. ​ 56 Table of Contents Liquidity and Capital Resources Sources and Uses of Cash 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 $ 7,609 ​ Available under unsecured revolving line of credit ​ 256,450 (1) ​ Available under Equity Distribution Agreement ​ 376,378 ​ Total Liquidity $ 640,437 (2) ​ (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. The timing, source and amount of cash flows used in financing and investing activities are sensitive to the capital markets environment, especially to changes in interest rates. In addition inflation may adversely affect our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position. The operating results of the facilities will be impacted by various factors over which the operators/owners may have no control. Those factors include, without limitation, the health of the economy, inflation pressures, employee availability and cost, changes in supply of or demand for competing seniors housing and health care facilities, ability to hire and maintain qualified staff, ability to control other rising operating costs, and the potential for significant reforms in the health care industry and related occupancy challenges in the governmental regulations and financing of the health care industry or the impact of any other infectious disease and epidemic outbreaks. We cannot presently predict what impact these potential events may have, if any. We believe that adequate provision has been made for the possibility of loans proving uncollectible but we will continually evaluate the financial condition of the operations of our seniors housing and health care properties. In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and will make future revisions to the provision, if considered necessary. 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 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. The effects on interest rates may affect our costs of financing our operations and the fair-market value of our financial assets. Generally, our leases have agreed upon annual increases and our loans have predetermined increases in interest rates. 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. 57 Table of Contents 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 ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ Change ​ Net cash provided by (used in): ​ 2025 ​ 2024 ​ ​ $ ​ Operating activities ​ $ 59,598 ​ $ 58,026 ​ $ 1,572 ​ Investing activities ​ ​ (26,697) ​ ​ (1,009) ​ ​ (25,688) ​ Financing activities ​ ​ (34,706) ​ ​ (71,129) ​ ​ 36,423 ​ Decrease in cash and cash equivalents ​ ​ (1,805) ​ ​ (14,112) ​ ​ 12,307 ​ Cash and cash equivalents, beginning of period ​ ​ 9,414 ​ ​ 20,286 ​ ​ (10,872) ​ Cash and cash equivalents, end of period ​ $ 7,609 ​ $ 6,174 ​ $ 1,435 ​ Debt Obligations Unsecured Credit Facility. 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. The Revolving Line of Credit has a maturity date of November 19, 2026. 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 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. In connection with entering into the Term Loans as 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. 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 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. 58 Table of Contents As of June 30, 2025, the terms of the Interest Rate Swaps are as follows ( dollar amounts in thousands ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ Fair Value at ​ Date Entered ​ Maturity Date ​ Swap Rate ​ ​ Rate Index ​ Amount ​ June 30, 2025 ​ November 2021 ​ November 19, 2025 ​ 2.52 % ​ 1-month SOFR ​ $ 50,000 ​ $ 592 ​ November 2021 ​ November 19, 2026 ​ 2.66 % ​ 1-month SOFR ​ ​ 50,000 ​ ​ 1,596 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 100,000 ​ $ 2,188 ​ Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 4.50%. The senior unsecured notes mature between 2026 and 2033. 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: ● a ratio of total indebtedness to total asset value not greater than 0.6 to 1.0; ● a ratio of secured debt to total asset value not greater than 0.35 to 1.0; ● a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and ● a ratio of EBITDA, as calculated in the debt obligation, to fixed charges not less than 1.50 to 1.0. 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 June 30, 2025 are as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Applicable ​ ​ ​ ​ Available ​ ​ Interest ​ Outstanding ​ for Debt Obligations ​ Rate (1) ​ Balance ​ Borrowing Revolving line of credit (2) ​ 5.50% ​ $ 168,550 ​ $ 256,450 Term loans, net of debt issue costs (2) ​ 2.59% ​ ​ 99,883 ​ ​ — Senior unsecured notes, net of debt issue costs (3) ​ 4.15% ​ ​ 428,024 ​ ​ — Total ​ 4.25% ​ $ 696,457 ​ $ 256,450 (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. ​ (3) Subsequent to June 30, 2025, we repaid $7,000 in scheduled principal paydown on our senior unsecured notes. 59 Table of Contents During the six months ended June 30, 2025, our debt borrowings and repayments were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Debt Obligations ​ ​ Borrowings ​ ​ Repayments ​ Revolving line of credit ​ $ 53,600 (1) ​ $ (29,400) ​ Senior unsecured notes ​ ​ — ​ ​ (12,500) (2) ​ Total ​ $ 53,600 ​ $ (41,900) ​ (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. ​ (2) Subsequent to June 30, 2025, we repaid $7,000 in scheduled principal paydown on our senior unsecured notes. Equity 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. We have an equity distribution agreement (the “Equity Distribution Agreement”) to offer and sell, from time to time, up to $400.0 million 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 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 June 30, 2025, we had $376.4 million available under the Equity Distribution Agreement. Available Shelf Registrations. 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 registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires in November 2027. Stock-Based Compensation. 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 60 Table of Contents 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. 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: ​ ​ ​ ​ ​ ​ ​ ​ No. of ​ Price per ​ ​ ​ ​ Shares ​ Share ​ Award Type ​ Vesting Period 113,790 ​ $ 34.88 ​ Restricted stock ​ ratably over 3 years 5,626 ​ $ 35.55 ​ Restricted stock ​ April 30, 2028 15,625 ​ $ 35.20 ​ Restricted stock ​ (1) ​ 52,666 ​ $ 34.88 ​ Performance-based stock units ​ TSR targets (2) 48,535 ​ $ 34.88 ​ Performance-based stock units ​ TSR targets (3) 236,242 ​ ​ ​ ​ ​ ​ ​ (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. Critical Accounting Policies Our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q are prepared in conformity with U.S. generally accepted accounting principles for interim financial information set forth in the Accounting Standards Codification as published by the Financial Accounting Standards Board, which require us to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and accompanying footnotes. We base these estimates on our experience and assumptions regarding future events we believe to be reasonable under the circumstances. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements. We have described our most critical accounting policies in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our critical accounting policies or estimates since December 31, 2024. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 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.