LTC Reports 2025 Second Quarter Results

-- Raises 2025 Guidance to Include $400 Million of Completed and Anticipated Near-Term Investments --

-- Investments Expected to More than Double Size of SHOP Portfolio --

-- Backfilling Pipeline with Additional SHOP Transactions --

LTC Properties, Inc. (NYSE:LTC) ("LTC" or the "Company"), a real estate investment trust that primarily invests in seniors housing and health care properties, today announced operating results for the second quarter ended June 30, 2025.

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More detailed financial information is available in the tables at the end of this press release, the Company's Supplemental Operating and Financial Data presentation for the 2025 second quarter, and its Form 10-Q, as filed with the Securities and Exchange Commission, which can be found in the Investor Relations section of www.ltcreit.com.

"Growth is front and center for LTC. With $400 million of investments now included in our guidance, our SHOP portfolio will more than double in size. Even with this level of increased investment activity, we are continuing to backfill our pipeline with an additional accretive SHOP transactions as we transform our company from a small cap, triple-net REIT to a larger, more diversified seniors housing focused REIT," said LTC's co-CEOs Pam Kessler and Clint Malin. "We have established a strong platform for meaningful growth, and with ample access to capital, we are excited about the opportunities ahead to drive shareholder value well into the future."

Second Quarter 2025 Financial Results:

• Total revenues increased $10.1 million, primarily due to the conversion of Anthem's and New Perspective's triple-net portfolios into the Company's seniors housing operating portfolio ("SHOP") authorized by the Real Estate Investment Trust ("REIT") Investment Diversification and Empowerment Act of 2007 ("RIDEA").
• Expenses increased $13.5 million, due to recognition of SHOP operating expenses, higher transaction costs related to RIDEA platform costs and SHOP conversions, and higher general and administrative expenses due to an employee's retirement, offset by lower interest expense and provision for credit losses, as well as reduced property tax expense.
• Income allocated to non-controlling interests increased by $1.1 million, due to new consolidated joint ventures formed in 2024 related to an increase in the Company's sale lease-back financing receivable.
• Net income available to common shareholders decreased by $4.3 million, primarily due to an increase in transaction costs and general and administrative expense, offset by lower interest expense and a net increase due to SHOP conversions.

2025 Second Quarter Update:

RIDEA Conversions and Loan Origination

• As previously announced, converted 13 properties with a total of 832 units and a combined gross book value of $174.8 million under Anthem's and New Perspective's triple-net leases into SHOP. In connection with the New Perspective conversion, LTC paid a $6.0 million lease termination fee and received a $500,000 working capital note payoff from New Perspective. During the second quarter of 2025, LTC received $2.5 million of net operating income from these conversions, which is approximately $780,000 more than under the triple-net leases for the same period last year; and
• Originated a $42.3 million mortgage loan, with initial funding of $38.4 million. The loan term is five years with a fixed yield of 8.5%, and is secured by a 250-unit independent living, assisted living and memory care community in Florida.

Debt and Equity

• Borrowed $19.7 million under the Company's unsecured revolving line of credit;
• Repaid $5.5 million in scheduled principal paydowns on the Company's senior unsecured notes; and
• Sold 149,500 shares of common stock, generating $5.3 million of net proceeds under an equity distribution agreement.

Activities subsequent to June 30, 2025:

• Acquired a 67-unit seniors housing community offering assisted living and memory care services in California, within LTC's SHOP segment for $35.2 million, with an estimated year-one yield of 7%. In connection with the acquisition, the Company entered into a management agreement with an affiliate of Discovery Senior Living, an operator new to LTC;
• Amended the Prestige Healthcare ("Prestige") mortgage loan secured by 14 skilled nursing centers in Michigan. The Company has provided Prestige an option to prepay the loan without penalty during a 12-month window starting in July 2026, subject to customary conditions and contingent on Prestige's ability to obtain replacement financing. In consideration for granting the prepayment option, the amendment eliminated the 8.5% current pay rate and reverted monthly interest payments to the full contractual interest rate of 11.14%, effective July 1, 2025, and escalates annually. Prestige paid full contractual interest in the second quarter 2025 and in July 2025, and none of Prestige's security was used to pay the difference between the contractual interest rate and prior current pay interest rate. As of June 30, 2025, LTC held $6.1 million in security on behalf of Prestige;
• Entered into a new four-year unsecured credit agreement maturing in July 2029 to replace LTC's previous unsecured credit agreement. The new credit agreement increased the aggregate commitment on the revolver from $425.0 million to $600.0 million, and provides the opportunity to increase the commitment size to a total of $1.2 billion. Additionally, the unsecured credit agreement provides for a one-year extension option, subject to customary conditions. Material terms of the unsecured credit agreement remain unchanged. In connection with the new credit agreement, the two $50.0 million term loans that were maturing over the next 16 months were rolled into the revolving credit line, keeping the interest rate swap agreements intact through November 2025 at 2.3% and November 2026 at 2.4%;
• Borrowed $41.9 million under the Company's unsecured revolving line of credit;
• Repaid $7.0 million in scheduled principal paydowns on the Company's senior unsecured notes; and
• Disclosed that Genesis Healthcare, Inc. (Genesis) filed for Chapter 11 bankruptcy on July 9, 2025, exercised their five-year lease renewal option, and is current on its contractual rent obligations through August 2025. LTC holds $4.7 million of security in a letter of credit from Genesis as required by the master lease.

Investment Pipeline

The Company expects to close investments totaling approximately $320.0 million over the next 60 days. Of this amount, $320.0 million, approximately $60.0 million represents an 8.25% five-year mortgage loan. The remaining $260.0 million represents SHOP investments at an anticipated average year-one yield of 7%. Upon closing these transactions, the Company's SHOP segment will represent nearly 20% of its total portfolio.

Balance Sheet and Liquidity as of June 30, 2025:

LTC's total liquidity was $640.4 million, including:

• $7.6 million of cash on hand;
• $256.4 million available under its unsecured revolving line of credit; and
• Capacity to issue up to $376.4 million of common stock under LTC's equity distribution agreements.

Proforma Balance Sheet and Liquidity as of June 30, 2025:

LTC's total liquidity was $673.6 million, including:

• $7.6 million of cash on hand;
• $289.6 million available under its unsecured revolving line of credit; and
• Capacity to issue up to $376.4 million of common stock under LTC's equity distribution agreements.

Guidance

The Company raised 2025 full-year guidance, as the result of $400.0 million of completed and anticipated near-term investments, as follows:

• GAAP net income attributable to LTC increased from $3.38 and $3.42 per share, to $3.45 and $3.48 per share;
• Diluted Core FFO increased to $2.67 and $2.71 per share, from $2.65 and $2.69 per share; and
• Diluted Core FAD increased to between $2.80 and $2.83 per share, from $2.78 and $2.82 per share.

LTC's updated 2025 full-year guidance excludes potential asset sales other than planned sales previously announced, financings, or equity issuances, and includes only those transactions closed to date or expected to close within the next 60 days, as well as the following revised assumptions:

• Increased SHOP net operating income ("NOI") between $10.4 million and $15.6 million for 2025, or $17.3 million and $35.7 million annualized;
• Increased SHOP FAD capital expenditures to the range of $660,000 to $920,000, or approximately $1,200 to $1,400 annualized per unit; and
• Increased general and administrative expenses to between $29.0 million and $29.8 million.

Information and a reconciliation of funds from operations attributable to common stockholders, excluding non-recurring items, ("Core FFO") and funds available for distribution, excluding non-recurring items, ("Core FAD") can be found in the tables at the end of this press release.

Conference Call Information

LTC will conduct a conference call on Tuesday, August 5, 2025, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to provide commentary on its performance and operating results for the quarter ended June 30, 2025. The conference call is accessible by telephone and the internet. Interested parties may access the live conference call via the following:

Additionally, an audio replay of the call will be available three hours after the live call through August 19, 2025 via the following:

About LTC

LTC is a real estate investment trust (REIT) focused on seniors housing and health care properties, investing through RIDEA, triple-net leases, joint ventures, and structured finance solutions. The Company's portfolio includes nearly 200 properties across approximately 25 states, operated by more than 25 partners. Based on gross real estate investments, assets are evenly balanced between seniors housing and skilled nursing centers. Learn more at www.LTCreit.com.

Forward-Looking Statements

This press release 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. Examples of forward-looking statements include the Company's 2025 full-year guidance and statements regarding the Company's investment pipeline, expected SHOP portfolio size, anticipated growth, and future strategy. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect the Company's 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, the Company's dependence on its operators for revenue and cash flow; operational and legal risks and liabilities under the Company's new segment of RIDEA structure properties, government regulation of the health care industry; changes in federal, state, or local laws limiting 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 the Company's operators; the Company's reliance on a few major operators; the Company's 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 the Company's real estate investments; the relative illiquidity of the Company's real estate investments; the Company's ability to develop and complete construction projects; the Company's ability to invest cash proceeds for health care properties; a failure to qualify as a REIT; the Company's ability to grow if access to capital is limited; and a failure to maintain or increase the Company's 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 the Company's Annual Report on Form 10‑K for the fiscal year ended December 31, 2024, the Company's subsequent Quarterly Report on Form 10‑Q, and the Company's publicly available filings with the Securities and Exchange Commission. The Company does 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 the Company's 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 achieved by the Company may differ materially from any forward-looking statements due to the risks and uncertainties of such statements.

See LTC's most recent Quarterly Report on Form 10‑Q for Supplemental Cash Flow Information

Supplemental Reporting Measures

FFO and FAD are supplemental measures of a real estate investment trust's ("REIT") financial performance that are not defined by U.S. generally accepted accounting principles ("GAAP"). Investors, analysts and the Company use FFO and FAD as supplemental measures of operating performance. The Company believes FFO and FAD are helpful in evaluating the operating performance of a REIT. 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. LTC believes that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO and FAD facilitate like comparisons of operating performance between periods. Occasionally, the Company may exclude non-recurring items from FFO and FAD in order to allow investors, analysts and management to compare the Company's operating performance on a consistent basis without having to account for differences caused by unanticipated items.

FFO, as defined by the National Association of Real Estate Investment Trusts ("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. The Company's computation 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 have a different interpretation of the current NAREIT definition from that of the Company; therefore, caution should be exercised when comparing the Company's FFO to that of other REITs.

The Company defines FAD as FFO excluding the effects of straight-line rent, amortization of lease inducement, effective interest income, deferred income from unconsolidated joint ventures, non-cash compensation charges, capitalized interest and non-cash interest charges. GAAP requires rental revenues related to non-contingent leases that contain specified rental increases over the life of the lease to be recognized evenly over the life of the lease. This method results in rental income in the early years of a lease that is higher than actual cash received, creating a straight-line rent receivable asset included in the consolidated balance sheet. At some point during the lease, depending on its terms, cash rent payments exceed the straight-line rent which results in the straight-line rent receivable asset decreasing to zero over the remainder of the lease term. Effective interest method, as required by GAAP, is a technique for calculating the actual interest rate for the term of a loan based on the initial origination value. Similar to the accounting methodology of straight-line rent, the actual interest rate is higher than the stated interest rate in the early years of a loan thus creating an effective interest receivable asset included in the interest receivable line item in the consolidated balance sheet and reduces down to zero when, at some point during the loan term, the stated interest rate is higher than the actual interest rate. FAD is useful in analyzing the portion of cash flow that is available for distribution to stockholders. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential. The FAD payout ratio, which represents annual distributions to common shareholders expressed as a percentage of FAD, facilitates the comparison of dividend coverage between REITs.

While the Company uses FFO and FAD as supplemental performance measures of the cash flow generated by operations and cash available for distribution to stockholders, such measures are not representative of cash generated from operating activities in accordance with GAAP, and are not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.

Reconciliation of FFO and FAD

The following table reconciles GAAP net income available to common stockholders to each of NAREIT FFO attributable to common stockholders and FAD (unaudited, amounts in thousands):

Reconciliation of FFO and FAD (continued)

The following table continues the reconciliation between GAAP net income available to common stockholders and each of NAREIT FFO attributable to common stockholders and FAD by reconciling the non-recurring items (unaudited, amounts in thousands):

Reconciliation of FFO and FAD (continued)

The following table continues the reconciliation between GAAP net income available to common stockholders and each of NAREIT FFO attributable to common stockholders and FAD (unaudited, amounts in thousands, except per share amounts):

Reconciliation of FFO and FAD (continued)

Guidance

The Company raised guidance for the 2025 full year. The following guidance ranges reflect management's view of current and future market conditions. There can be no assurance that the Company's actual results will not differ materially from the estimates set forth below. Except as otherwise required by law, the Company assumes no, and hereby disclaims any, obligation to update any of the foregoing guidance ranges as a result of new information or new or future developments. The 2025 full year guidance is as follows (unaudited, amounts in thousands, except per share amounts):

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Mandi Hogan

(805) 981‑8655