Investment In Preferred Stock, At Cost

6 Months Ended

Jun. 30, 2011

Investment In Preferred Stock, At Cost

Investment In Preferred Stock, At Cost

NOTE 4.  INVESTMENT IN PREFERRED STOCK, AT COST

    In September 1998, we purchased 2,000,000 shares of the cumulative preferred stock of LTC Properties, Inc. ("LTC"), a publicly-held REIT.  The nonvoting preferred stock is convertible into 2,000,000 shares of LTC common stock.  The closing price of LTC's common stock at June 30, 2011 was $27.82 per share.  The preferred stock has an annual cumulative coupon rate of 8.5% payable quarterly and a liquidation preference of $19.25 per share.  The preferred stock is not redeemable by us or LTC.  The preferred stock, which is not listed on a stock exchange, is considered a non-marketable security and is recorded at cost in our Condensed Consolidated Balance Sheets.  Dividends to be received from the 8.5% coupon rate are recorded as investment income when the dividend is declared.  The carrying value of the preferred stock at June 30, 2011 and December 31, 2010 equals its original cost of $38,132,000.