8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20459

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report:  February 26, 2015

(Date of earliest event reported)

LTC PROPERTIES, INC.

(Exact name of Registrant as specified in its charter)

Maryland	1-11314	71-0720518
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. Employer Identification No)

2829 Townsgate Road, Suite 350

Westlake Village, CA  91361

(Address of principal executive offices)

(805) 981-8655

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. — Results of Operations and Financial Condition

On February 26, 2015, LTC Properties, Inc. announced the operating results for the three and twelve months ended December 31, 2014. The text of the press release and the supplemental information package are furnished herewith as Exhibits 99.1 and 99.2, respectively, and are specifically incorporated by reference herein.

The information in this Form 8-K and the related information in the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of LTC under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01. — Financial Statements and Exhibits

99.1	Press Release issued February 26, 2015.
99.2	LTC Properties, Inc. Supplemental Information Package for the period ending December 31, 2014.

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	LTC PROPERTIES, INC.
Dated: February 26, 2015	By:	/s/ WENDY L. SIMPSON
		Wendy L. Simpson
		Chairman, CEO & President

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

For more information contact:
Wendy L. Simpson
Pam Kessler
(805) 981-8655

LTC REPORTS 2014 FOURTH QUARTER RESULTS;

ANNOUNCES NEW INVESTMENTS, DEVELOPMENT

COMMITMENTS

— $74 Million of Investments and New Development Commitments

Signal Continued Diversification and Focus on Growth —

WESTLAKE VILLAGE, CALIFORNIA, February 26, 2015 — LTC Properties, Inc. (NYSE: LTC) announced today operating results for its fourth quarter ended December 31, 2014.

Funds from Operations (“FFO”) increased 14.3% to $22.8 million for the fourth quarter of 2014, from $20.0 million for the comparable 2013 period. FFO per diluted common share was $0.64 and $0.57 for the quarters ended December 31, 2014 and 2013, respectively. The increase in FFO was primarily due to higher revenues from mortgage loan originations, acquisitions and completed development projects.  Additionally, the 2013 period included a one-time non-cash provision for loan loss reserve related to a mortgage loan origination and write-off of straight-line rent, partially offset by higher interest expense related to the sale of senior unsecured notes.

Normalized FFO increased by 4.0% to $22.8 million for the fourth quarter of 2014, from $21.9 million for the fourth quarter of 2013. Normalized FFO per diluted common share was $0.64 and $0.62 for the quarters ended December 31, 2014 and 2013, respectively. The increase in normalized FFO was due to higher revenues from mortgage loan originations, acquisitions and completed development projects, partially offset by higher interest expense related to the sale of senior unsecured notes.

Net income available to common stockholders increased to $20.0 million, or $0.57 per diluted share, for the fourth quarter of 2014, from $13.7 million, or $0.40 per diluted share, for the same period in 2013. The increase in net income available to common stockholders was primarily due to a gain on sale of 16 assisted living properties, as previously announced, an increase in revenues from mortgage loan originations, acquisitions and completed development projects. Additionally, the 2013 period, included the one-time non-cash provision as detailed above.

“2014 reflected continued growth and excellent progress on a number of fronts, and this progress continued into 2015,” said Wendy Simpson, LTC’s Chairman and Chief Executive Officer.  “Recently, we completed a number of transactions and further expanded relationships with key partners.  Our strategic development objectives for 2015 and beyond call for attracting select new operators and working closely with our existing partners, who are familiar with our lease structure and appreciate our eagerness to help them grow, while continuing to diversify our portfolio. LTC has a long history of making accretive investments, and we expect to use our considerable financial flexibility to support our ongoing growth objectives.”

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Subsequent to December 31, 2014, the Company completed the following transactions:

·Committed $12.2 million to purchase and complete the development of a 56-unit memory care property currently under construction in Texas. In conjunction with this commitment, LTC purchased the land and existing improvements for $7.2 million, and entered into a master lease for an initial term of 15 years with an affiliate of Thrive Senior Living (“Thrive”) which includes an 8.75% initial cash yield escalating at approximately 2.25% annually thereafter. The master lease provides for the payment of a lease inducement fee of up to $1.6 million to be amortized as a yield adjustment over the lease term. The master lease also provides LTC a right to provide similar financing for certain future development opportunities, the right of which the Company has already exercised, adding to the master lease a parcel of land purchased in South Carolina for $2.5 million, coupled with the Company’s commitment to provide Thrive with up to $16.5 million, including the land purchase, for the development of an 89-unit combination assisted living and memory care property.  In conjunction with this new development, LTC provided Thrive an additional lease inducement fee of up to $2.4 million to be amortized as a yield adjustment over the lease term.

·Purchased and equipped a 106-bed skilled nursing property in Wisconsin for a total of $13.9 million by exercising its right under a $10.6 million mortgage loan.  The property was leased to an affiliate of Fundamental as part of a master lease for an initial term of 10 years at a 10.3% initial cash yield escalating 2.5% annually thereafter.  Additionally, the Company provided a lease inducement in the amount of $1.1 million, which will be amortized as a yield adjustment over the lease term, to Fundamental.

·Amended a mortgage loan with an affiliate of Prestige Healthcare securing 15 skilled nursing properties located in Michigan to provide $20.0 million in loan proceeds for the redevelopment of two of the properties securing the loan, and agreed to convey to the borrower two parcels of land held-for-use adjacent to these properties to facilitate the projects. As consideration for the commitment and associated conveyance, the borrower forfeited its option to prepay up to 50% of the then outstanding loan balance. As a result of the forfeiture of the prepayment option, the Company expects to record $1.3 million of effective interest income related to this loan during 2015.

·Originated an $11.0 million mortgage loan with an affiliate of Prestige Healthcare, initially funding $9.5 million with a commitment to fund the balance for approved capital improvement projects. The loan which embodies many elements of a triple-net lease is secured by a 157-bed skilled nursing property in Michigan and bears interest at 9.41% for five years, escalating annually thereafter by 2.5%. The term is 30 years with interest-only payments, and affords LTC the option to purchase the property under certain circumstances, including a change in regulatory environment.

Conference Call Information

LTC will conduct a conference call on Friday, February 27, 2015, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to provide commentary on the Company’s performance and operating results for the quarter ended December 31, 2014. The conference call is accessible by telephone and the internet. Telephone access will be available by dialing 877-510-2862 (domestically) or 412-902-4134 (internationally). To participate in the webcast, log on to the Company’s website at www.LTCreit.com 15 minutes before the call to download the necessary software.

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An audio replay of the conference call will be available from February 27 through March 13, 2015 and may be accessed by dialing 877-344-7529 (domestically) or 412-317-0088 (internationally) and entering conference number 10059704. Additionally, an audio archive will be available on the Company’s website on the “Presentations” page of the “Investor Information” section, which is under the “Investors” tab. The Company’s earnings release and supplemental information package for the current period will be available on the Company’s website on the “Press Releases” and “Presentations” pages, respectively, of the “Investor Information” section which is under the “Investors” tab.

About LTC

The Company is a self-administered real estate investment trust that primarily invests in senior housing and long-term care facilities through facility lease transactions, mortgage loans and other investments. At December 31, 2014, LTC had 205 investments located in 29 states comprising 97 skilled nursing properties, 92 assisted living properties, eight range of care properties, one school, two parcels of land under development and five parcels of land held-for-use. Assisted living properties, independent living properties, memory care properties and combinations thereof are included in the assisted living property type. Range of care properties consist of properties providing skilled nursing and any combination of assisted living, independent living and/or memory care services. For more information on LTC Properties, Inc., visit the Company’s website at www.LTCreit.com.

Forward Looking Statements

This press release includes statements that are not purely historical and are “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, including statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future. All statements other than historical facts contained in this press release are forward looking statements. These forward looking statements involve a number of risks and uncertainties.  Please see our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q, and our other publicly available filings with the Securities and Exchange Commission for a discussion of these and other risks and uncertainties. All forward looking statements included in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such forward looking statements. 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.

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LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share amounts)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
	(unaudited)						(audited)
Revenues:
Rental income	$	26,474		$	25,259		$	101,849		$	98,166
Interest income from mortgage loans	4,108			3,103			16,553			6,298
Interest and other income	173			231			559			510
Total revenues	30,755			28,593			118,961			104,974
Expenses:
Interest expense	3,683			2,852			13,128			11,364
Depreciation and amortization	6,594			6,237			25,529			24,389
(Recovery) provisions for doubtful accounts	(46		)	2,139			32			2,180
General and administrative expenses	3,343			2,715			11,832			11,636
Total expenses	13,574			13,943			50,521			49,569
Operating income	17,181			14,650			68,440			55,405
Gain on sale of real estate, net	3,819			—			4,959			—
Income from continuing operations	21,000			14,650			73,399			55,405
Discontinued operations:
Income from discontinued operations	—			—			—			805
Gain on sale of real estate, net	—			—			—			1,605
Net income from discontinued operations	—			—			—			2,410
Net income	21,000			14,650			73,399			57,815
Income allocated to participating securities	(138		)	(99		)	(481		)	(383		)
Income allocated to preferred stockholders	(819		)	(819		)	(3,273		)	(3,273		)
Net income available to common stockholders	$	20,043		$	13,732		$	69,645		$	54,159
Basic earnings per common share:
Continuing operations	$	0.58		$	0.40		$	2.01		$	1.56
Discontinued operations	$	0.00		$	0.00		$	0.00		$	0.07
Net income available to common stockholders	$	0.58		$	0.40		$	2.01		$	1.64
Diluted earnings per common share:
Continuing operations	$	0.57		$	0.40		$	1.99		$	1.56
Discontinued operations	$	0.00		$	0.00		$	0.00		$	0.07
Net income available to common stockholders	$	0.57		$	0.40		$	1.99		$	1.63
Weighted average shares used to calculate earnings per common share:
Basic	34,678			34,555			34,617			33,111
Diluted	36,698			34,582			36,640			33,142

NOTE: Computations of per share amounts from continuing operations, discontinued operations and net income are made independently.  Therefore, the sum of per share amounts from continuing operations and discontinued operations may not agree with the per share amounts from net income available to common stockholders.

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Supplemental Reporting Measures

FFO, adjusted FFO (“AFFO”), and Funds Available for Distribution (“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, AFFO and FAD as supplemental measures of operating performance. The Company believes FFO, AFFO 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 U.S. 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, AFFO and FAD facilitate like comparisons of operating performance between periods. Additionally the Company believes that normalized FFO, normalized AFFO and normalized FAD provide useful information because they allow investors, analysts and our 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 U.S. 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. Normalized FFO represents FFO adjusted for certain items detailed in the reconciliations. 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 our Company’s FFO to that of other REITs.

We define AFFO as FFO excluding the effects of straight-line rent and amortization of lease inducement. U.S. 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 our 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. By excluding the non-cash portion of straight-line rental revenue and amortization of lease inducement, investors, analysts and our management can compare AFFO between periods. Normalized AFFO represents AFFO adjusted for certain items detailed in the reconciliations.

We define FAD as AFFO excluding the effects of non-cash compensation charges, capitalized interest and non-cash interest charges. 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. Normalized FAD represents FAD adjusted for certain items detailed in the reconciliations.

While the Company uses FFO, normalized FFO, normalized AFFO and normalized FAD as supplemental performance measures of our 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 U.S. 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.

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Reconciliation of FFO, Normalized FFO, Normalized AFFO and Normalized FAD

The following table reconciles each of net income, FFO and normalized FFO available to common stockholders, as well as normalized AFFO and normalized FAD (unaudited, amounts in thousands, except per share amounts):

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
Net income available to common stockholders	$	20,043		$	13,732		$	69,645		$	54,159
Add: Depreciation and amortization (continuing and discontinued operations)	6,594			6,237			25,529			24,706
Less: Gain on sale of real estate, net	(3,819		)	—			(4,959		)	(1,605		)
FFO available to common stockholders	22,818			19,969			90,215			77,260
Add: Non-recurring one-time items	—			1,980		(1)	—			2,687		(2)
Normalized FFO available to common stockholders	22,818			21,949			90,215			79,947
Less: Non-cash rental income	(792		)	(790		)	(2,161		)	(3,295		)
Normalized adjusted FFO (AFFO)	22,026			21,159			88,054			76,652
Add: Non-cash compensation charges	927			541			3,253			2,134
Add: Non-cash interest related to earn-out liabilities	18			—			18			256
Less: Capitalized interest	(290		)	(214		)	(1,506		)	(932		)
Normalized funds available for distribution (FAD)	$	22,681		$	21,486		$	89,819		$	78,110

(1)	Comprised of a $1,244 provision for loan loss reserve on a $124,387 mortgage loan origination and an $869 non-cash write-off of straight-line rent offset by revenue from the Sunwest bankruptcy settlement distribution of $133.
(2)	Represents a one-time severance and accelerated restricted stock vesting charge of $707 related to the retirement of the Company’s former Senior Vice President, Marketing and Strategic Planning and (1) above.

Basic FFO available to common stockholders per share	$	0.66	$	0.58	$	2.61	$	2.33
Diluted FFO available to common stockholders per share	$	0.64	$	0.57	$	2.55	$	2.29
Diluted FFO available to common stockholders	$	23,775	$	20,887	$	93,969	$	80,916
Weighted average shares used to calculate diluted FFO per share available to common stockholders	36,940		36,778		36,866		35,342
Basic normalized FFO available to common stockholders per share	$	0.66	$	0.64	$	2.61	$	2.41
Diluted normalized FFO available to common stockholders per share	$	0.64	$	0.62	$	2.55	$	2.37
Diluted normalized FFO available to common stockholders	$	23,775	$	22,867	$	93,969	$	83,603
Weighted average shares used to calculate diluted normalized FFO per share available to common stockholders	36,940		36,778		36,866		35,342
Basic normalized AFFO per share	$	0.64	$	0.61	$	2.54	$	2.32
Diluted normalized AFFO per share	$	0.62	$	0.60	$	2.49	$	2.27
Diluted normalized AFFO	$	22,983	$	22,077	$	91,808	$	80,308
Weighted average shares used to calculate diluted normalized AFFO per share	36,940		36,778		36,866		35,342
Basic normalized FAD per share	$	0.65	$	0.62	$	2.59	$	2.36
Diluted normalized FAD per share	$	0.64	$	0.61	$	2.54	$	2.31
Diluted normalized FAD	$	23,638	$	22,404	$	93,573	$	81,766
Weighted average shares used to calculate diluted normalized FAD per share	36,940		36,778		36,866		35,342

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LTC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(audited, amounts in thousands)

	December 31, 2014			December 31, 2013
ASSETS
Real estate investments:
Land	$	80,024		$	80,993
Buildings and improvements	869,814			856,624
Accumulated depreciation and amortization	(223,315		)	(218,700		)
Net real estate properties	726,523			718,917
Mortgage loans receivable, net of loan loss reserves: 2014 — $1,673; 2013 — $1,671	165,656			165,444
Real estate investments, net	892,179			884,361
Other assets:
Cash and cash equivalents	25,237			6,778
Debt issue costs, net	3,782			2,458
Interest receivable	597			702
Straight-line rent receivable, net of allowance for doubtful accounts: 2014 — $731; 2013 — $1,541	32,651			29,760
Prepaid expenses and other assets	9,931			6,756
Notes receivable	1,442			595
Total assets	$	965,819		$	931,410
LIABILITIES
Bank borrowings	$	—		$	21,000
Senior unsecured notes	281,633			255,800
Bonds payable	—			2,035
Accrued interest	3,556			3,424
Earn-out liabilities	3,258			—
Accrued expenses and other liabilities	17,251			16,713
Total liabilities	305,698			298,972
EQUITY
Stockholders’ equity:
Preferred stock $0.01 par value; 15,000 shares authorized; shares issued and outstanding: 2014 — 2,000; 2013 — 2,000	38,500			38,500
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2014 — 35,480; 2013 — 34,746	355			347
Capital in excess of par value	717,396			688,654
Cumulative net income	855,247			781,848
Accumulated other comprehensive income	82			117
Cumulative distributions	(951,459		)	(877,028		)
Total equity	660,121			632,438
Total liabilities and equity	$	965,819		$	931,410

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EX-99.2

Exhibit 99.2

Supplemental Operating and Financial Data December 31, 2014 (Unaudited) Assisted Living Property – Upper Arlington, OH Operated by Sunrise Senior Living

Table of Contents 2 CORPORATE Company Information 3 Additional Information 4 Forward-Looking Statements & Non-GAAP Information 5 Real Estate Activities 6-9 Real Estate Portfolio Summary 10 Real Estate Portfolio Metrics 11 Real Estate Portfolio Diversification 12-14 Proforma Top Ten Operators 15 Proforma Real Estate Portfolio Maturity 16 Enterprise Value 17 Debt Maturity 18 Financial Data Summary 19-20 Consolidated Statements of Income 21 Consolidated Balance Sheets . 22 Funds from Operations . 23-24 Glossary . 25-27

3 Company Information CORPORATE Wendy Simpson Boyd Hendrickson Edmund King Chairman Lead Director James Pieczynski Devra Shapiro Timothy Triche, MD Wendy Simpson Pam Kessler Clint Malin Chairman, Chief Executive Officer and President Executive Vice President, CFO, and Secretary Executive Vice President and Chief Investment Officer Brent Chappell Cece Chikhale Mark Hemingway Senior VP, Investment and Portfolio Management Vice President, Controller and Treasurer Vice President of Marketing Peter Lyew Vice President and Director of Taxes Corporate Office Investor Relations www.LTCreit.com 2829 Townsgate Road, Suite 350 Investor.Relations@LTCreit.com (805) 981-8655 phone Westlake Village, CA 91361 (805) 981-8655 (805) 981-8663 fax Board of Directors Management Contact Information Company Founded in 1992, LTC Properties, Inc. ("LTC") is a self-administered real estate investment trust that primarily invests in senior housing and long-term care properties through facility lease transactions, mortgage loans, and other investments. Our primary objectives are to sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in long-term care and other health care related properties leased to qualified, experienced operators. 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, and form of investment. For more information on LTC, visit the Company’s website at www.LTCreit.com .

4 CORPORATE Additional Information Crowell, Weedon, & Co. J.J. B. Hilliard, W.L. Lyons, Inc. JMP Securities, LLC Doug Christopher, CFA John Roberts Peter Martin KeyBanc Capital Markets, Inc. Mizuho Securities USA Inc. MLV & Co LLC Jordan Sadler Rich Anderson Paul Morgan RBC Capital Markets Corporation Stifel, Nicolaus & Company, Inc. Wells Fargo Securities, LLC Mike Carroll Dan Bernstein Todd Stender Any opinions, estimates, or forecasts regarding LTC's performance made by the analysts listed above do not represent the opinions, estimates, or forecasts of LTC or its management. Analyst Coverage

5 Forward-Looking Statements This supplemental information 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,’’ ‘‘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, the status of the economy, the status of capital markets (including prevailing interest rates), and our access to capital; the income and returns available from investments in health care related real estate, the ability of our borrowers and lessees to meet their obligations to us, our reliance on a few major operators; competition faced by our borrowers and lessees within the health care industry, regulation of the health care industry by federal, state and local governments, (including as a result of the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010), changes in Medicare and Medicaid reimbursement amounts (including due to federal and state budget constraints), compliance with and changes to regulations and payment policies within the health care industry, debt that we may incur and changes in financing terms, our ability to continue to qualify as a real estate investment trust, the relative illiquidity of our real estate investments, potential limitations on our remedies when mortgage loans default, and risks and liabilities in connection with properties owned through limited liability companies and partnerships. 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’’ and other information contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 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. Non-GAAP Information This supplemental information contains certain non-GAAP information including EBITDA, normalized EBITDA, FFO, normalized FFO, normalized interest coverage ratio, and normalized fixed charges coverage ratio. A reconciliation of this non-GAAP information is provided on pages 20, 23, and 24 of this supplemental information, and additional information is available under the “Non-GAAP Financial Measures” subsection under the “Selected Financial Data” section of our website at www.LTCreit.com. CORPORATE

6 Real Estate Activities REAL ESTATE PORTFOLIO (dollar amounts in thousands) ACQUISITIONS See page 7 for Development activities. Simultaneous with the purchase, we made a development commitment totaling $12.2 million, including the land purchase, and added the property into a master lease. The property was included in a master lease at an incremental initial cash yield of 6.5% and we provided the lessee with contingent earn-out payments totaling up to $4,000 as a lease inducement. Subsequent to December 31, 2014, we purchased a parcel of land and existing improvements to complete construction of a memory care property and entered into a master lease which provides for our payment of a lease inducement of up to $1,589. Subsequent to December 31, 2014, we purchased and equipped the property for a total of $13,946 by exercising our right under a $10,600 mortgage loan. The property was added to an existing master lease at a lease rate of 10.3%, which was the interest rate in effect on the loan, and provided the lessee a lease inducement in an amount of $1,054. See page 7 for Lease-up activities. Subsequent to December 31, 2014, we purchased a parcel of land to develop a combination assisted living and memory care property. We added the land to the master lease discussed in (4) above and provided an additional lease inducement payment of up to $2,363. LOAN ORIGINATIONS Represents year-to-date mortgage interest income. We expect mortgage interest income, assuming no loan modifications, to be $228 for 2015. Date # of Properties # Beds/Units Location Operator Date of Construction Purchase Price 10/22/2014 1 UDP (1)(2) 66 units Burr Ridge, IL Under Development Property 2014-2016 1,400 $ 12/5/2014 1 MC (3) 48 units Castle Rock, CO Senior Lifestyle 2012 9,800 2 114 units 11,200 $ 2/6/2015 1 UDP (1)(4) 56 units Corpus Christi, TX Under Development Property 2015 7,195 $ 2/19/2015 1 SNF (5) 106 beds Slinger, WI Fundamental 2014 13,946 2/20/2015 1 UDP (1)(6) 89 units Murrells Inlet, SC Under Development Property 2015-2016 2,490 3 145 units/106 beds 23,631 $ Property Type Date # of Properties Property Type # Beds/Units Location Borrower Operator Origination 7/31/14 1 ALF 100 units Phoenix, AZ GrayHC-PVRE Gray Health Care 3,027 $ N/A N/A 96 $ (1) 7.0% 1/30/15 1 SNF 157 beds Grand Blanc, MI Affiliates of Madison Healthcare Prestige Healthcare 11,000 $ - $ 9,500 $ - $ 9.4% Interest Rate 2014 Annual Revenue Development Funding Funded to Date

7 Real Estate Activities REAL ESTATE PORTFOLIO (dollar amounts in thousands) Includes purchase of land and existing improvements, if applicable, and development commitment. Commitment is part of the total loan commitment secured by 15 properties in Michigan operated by Prestige Healthcare. Subsequent to December 31, 2014, we amended the loan to provide an additional $20.0 million loan proceeds for the redevelopment projects at two of the properties securing the loan. Subsequent to December 31, 2014, we purchased a parcel of land and existing improvements to complete construction of a memory care property. Subsequent to December 31, 2014, we purchased a parcel of land to develop a combination assisted living and memory care property. DEVELOPMENT LEASE-UP Subsequent to December 31, 2014, we purchased and equipped the property securing the mortgage loan for a total of $13,946 by exercising our right under this loan. Project Type # of Projects Property Type # Beds/ Units 4Q14 2012 Expansion/Renovation Fort Collins, CO 2 ALF/MC 8.30% - 8,000 $ 453 $ 5,095 $ 2,905 $ 4Q14 2013 Renovation St. Petersburg, FL 1 SNF 8.75% - 500 354 500 - 4Q14 2013 Renovation Hillview/Lauderdale, TN 2 SNF 7.00% - 2,200 183 2,161 39 5 - 10,700 $ 990 $ 7,756 $ 2,944 $ 1Q15 2013 Development Westminster, CO 1 MC 9.25% 60 units 10,703 $ 2,517 $ 9,181 $ 1,522 $ - (2) 2013 Renovation Various cities in MI 15 SNF 9.41% - 12,000 (2) 1,824 3,337 8,663 - (2) 2015 Redevelopment Richmond, MI 1 SNF 9.41% - 10,000 (2) - - 10,000 - (2) 2015 Redevelopment Rochester Hills, MI 1 SNF 9.41% - 10,000 (2) - - 10,000 4Q15 2015 Development Corpus Christi, TX 1 MC 8.75% 56 units 12,179 - 7,195 (3) 4,984 19 116 units 54,882 $ 4,341 $ 19,713 $ 35,169 $ 2Q16 2014 Development Burr Ridge, IL 1 MC 9.30% 66 units 12,248 $ 2,057 $ 2,057 $ 10,191 $ 2Q16 2015 Development Murrells Inlet, SC 1 ALF/MC 8.75% 89 units 16,535 - 2,490 (4) 14,045 2 155 units 28,783 $ 2,057 $ 4,547 $ 24,236 $ Total 26 WA 9.02% 271 units 94,365 $ 7,388 $ 32,016 $ 62,349 $ x Estimated Rent Inception Date Commitment Year Location Approximate Cash Lease Yield Investment Commitment (1) 4Q14 Funding Total Funded to Date Remaining Commitment Date Opened Occupancy at Dec 31, 2014 Commitment Year Project Type Location # of Projects Property Type Approximate Cash Lease/Loan Yield # Beds/Units Feb-14 56% 2012 Redevelopment Slinger, WI 1 SNF (1) 10.08% 106 beds 10,600 $ - $ - $ Aug-14 50% 2013 Development Littleton, CO 1 MC 9.25% 60 units 9,931 159 9,689 Nov-14 21% 2012 Development Cold Spring, KY 1 SNF 8.50% 143 beds 23,500 4,971 20,904 Dec-14 44% 2012 Development Frisco, TX 1 ALF/MC 9.25% 80 units 5,800 352 5,691 Dec-14 17% 2013 Development Aurora, CO 1 MC 9.25% 48 units 9,622 1,860 8,744 5 188 units/249 beds 59,453 $ 7,342 $ 45,028 $ Total Commitment 4Q14 Funding Total Funded to Date

8 REAL ESTATE PORTFOLIO Rendering Real Estate Activities Lease-Up in Slinger, WI The Pavilion at Glacier Valley 106-bed skilled nursing property Certificate of Occupancy – February 14, 2014 Operated by Fundamental

9 REAL ESTATE PORTFOLIO Real Estate Activities Rendering Development in Westminster, CO Green Ridge Place 60-unit memory care property To be operated by Anthem Memory Care

10 Real Estate Portfolio Summary REAL ESTATE PORTFOLIO (dollar amounts in thousands) Real Estate Snapshot – Owned and Loan Portfolio Includes rental income and interest income from mortgage loans and excludes rental income from properties sold and interest income from loans that paid off during the year ended December 31, 2014. Includes two MC developments with a total of 126 units. Includes one school property and five parcels of land held-for-use. Type of Property Gross Investments Investment Type Skilled Nursing 97 $ 633,052 56.7% $ 52,259 $ 14,595 59.4% Real Property 949,838 $ 85.0% Assisted Living 92 415,520 37.2% 37,847 985 34.5% Loans Receivable 167,329 15.0% Range of Care 8 46,217 4.1% 5,332 282 5.0% Total 1,117,167 $ 100.0% Under Development (2) - 11,495 1.0% - - - Other (3) 1 10,883 1.0% 1,294 - 1.1% Total 198 $ 1,117,167 100.0% $ 96,732 $15,862 100.0% # of Properties Gross Investment % of Revenues % For the Year Ended December 31, 2014 % of Investments Rental Income (1) Interest Income (1)

11 Same Property Portfolio Statistics (1) Real Estate Portfolio Metrics REAL ESTATE PORTFOLIO Stabilized Property Portfolio Quality Mix Owned Properties Payor Source (1) Private Pay Medicare Medicaid (1) Quality mix for our skilled nursing portfolio, for the twelve months presented, is 25.6% Private Pay, 27.9% Medicare, and 46.5% Medicaid. For the Twelve Months Ended September 30, 2014 55.4% 16.5% 28.1%

LTC owns or holds mortgages on 198 properties, two parcels of land under development, and five parcels of land held-for-use in 29 states. 12 Real Estate Portfolio Diversification REAL ESTATE PORTFOLIO WA ME 1 5 NV WY MI IL AR LA KY WV ND NY 33 2 1 2 3 5 1 2 3 2 2 2 2 1 6 21 3 5 4 8 11 4 5 2 6 1 4 2 12 7 3 1 1 1 1 1 1 1 2 1 1 OR CA AZ NM TX UT ID MT SD NE KS OK MS MN WI FL AL GA SC TN MO IA IN OH PA NJ NC VA CO Skilled Nursing Properties (Total: 97) Assisted Living Properties (Total: 92) Schools (Total: 1) Range of Care Properties (Total: 8) Under Development Properties (Total: 2) 1 15 Land Held-For-Use (Total: 5) 5 1 1

13 Real Estate Portfolio Diversification REAL ESTATE PORTFOLIO State Diversification By Property Type - Owned and Loan Portfolio The MSA rank by population as of July 1, 2013, as estimated by the United States Census Bureau. Due to master leases with properties in multiple states, revenue by state is not available. (dollar amounts in thousands) State (2) # of Props SNF % ALF % ROC % UDP % OTH % Gross Investment % Texas 55 193,087 $ 30.5% 43,458 $ 10.5% 2,994 $ 6.5% - $ - - $ - 239,539 $ 21.5% Michigan 15 127,725 20.2% - - - - - - 1,613 14.8% 129,338 11.6% Colorado 15 6,038 1.0% 92,394 22.2% 2,007 4.3% 9,420 81.9% - - 109,859 9.8% Ohio 13 54,000 8.5% 44,647 10.7% - - - - - - 98,647 8.8% Florida 13 35,361 5.6% 35,650 8.6% - - - - - - 71,011 6.4% New Jersey 5 - - 61,397 14.8% - - - - 9,270 85.2% 70,667 6.3% California 5 20,649 3.2% 28,070 6.8% 2,311 5.0% - - - - 51,030 4.6% New Mexico 7 50,622 8.0% - - - - - - - - 50,622 4.5% Arizona 6 36,091 5.7% 3,016 0.7% - - - - - - 39,107 3.5% Kansas 8 14,111 2.2% 17,145 4.1% - - - - - - 31,256 2.8% All Others 56 95,368 15.1% 89,743 21.6% 38,905 84.2% 2,075 18.1% - - 226,091 20.2% Total 198 633,052 $ 100.0% 415,520 $ 100.0% 46,217 $ 100.0% 11,495 $ 100.0% 10,883 $ 100.0% 1,117,167 $ 100.0%

14 Proforma Real Estate Portfolio Diversification REAL ESTATE PORTFOLIO Operator Diversification – Owned and Loan Portfolio We have investments in 29 states leased or mortgaged to 36 different operators. Includes annualized GAAP rent for leased properties and twelve months interest income from properties secured by mortgage loans. Proforma includes rents from re-leased properties formerly operated by Enlivant as of January 1, 2015. Effective January 1, 2015, Senior Lifestyle Management began operating 13 properties formerly operated by Enlivant. (dollar amounts in thousands) Operators (1) Annual Income (2) % Gross Investment % Brookdale Senior Living 37 15,606 $ 13.1% 123,984 $ 11.1% Prestige Healthcare 17 13,172 11.1% 141,527 12.7% Senior Care Centers 9 12,336 10.4% 115,039 10.3% Preferred Care 29 10,635 8.9% 83,402 7.5% Senior Lifestyle Management (3) 17 8,458 7.1% 57,349 5.1% Carespring Health Care Management 3 7,778 6.5% 75,716 6.8% Juniper Communities 6 7,030 5.9% 87,088 7.8% Traditions Senior Management 5 6,810 5.7% 63,402 5.7% Fundamental 5 4,970 4.2% 45,221 4.0% Sunrise Senior Living 6 4,614 3.9% 37,659 3.4% All Others 64 27,455 23.2% 286,780 25.6% 198 118,864 $ 100.0% 1,117,167 $ 100.0% # of Properties

15 Proforma Top Ten Operators REAL ESTATE PORTFOLIO Brookdale Senior Living (NYSE: BKD) operates more than 1,150 independent living, assisted living, and memory care communities and continuing care retirement centers, with the ability to serve approximately 110,000 residents. As of December 31, 2014 , the LTC portfolio consisted of 37 assisted living properties in nine states with a gross investment balance of $12 4.0 million. Prestige Healthcare (privately held) provides skilled nursing, assisted living, and independent living services, and other rehabilitative and hea lthcare services at 35 facilities in seven s tates. As of December 31, 2014 , the LTC portfolio consisted of 15 skilled nursing properties and five parcels of land held - for - use in Michigan and two range of care properties in South Carolina with a gross investment balance of $ 141.5 million. Senior Car e Centers (privately held) provides skilled nursing care, memory care, assisted living, and i ndependent living services in 80 facilities exclusively in Texas. As of December 31, 2014 , the LTC portfolio consisted of nine skilled nursing properties in Texas with a gross investment balance of $ 115.0 million. Preferred Care (privately held) operates 108 facilities comprised of skilled nursing, assisted living, and independent living facilities, as well as five specialty care f acilities, in 12 states. As of De cember 31, 2014 , the LTC portfolio consisted of 27 skilled nursing and two range of care properties in six states with a g ross investment balance of $83.4 million. They also operate one skilled nursing facility under a sub - lease with another lessee in our portfolio which is not included in the Preferred Care annual income . Senior Lifestyle (privately held) manages 167 communities consisting of independent living, assisted living, memory care, skilled nursing and rehab ilitative , affordable senior apartments, and short term stays i n 27 states. As of proforma December 31, 2014, the LTC portfolio consisted of 17 assisted living properties in seven states, with a gross inv estment balance of $57.3 million. Carespring Health Care Man agement (privately held) provides skilled nursing, assisted living, and independent living services, and other rehabilitative and hea lthcare services at 11 facilities in two states. As of December 31, 2014 , the LTC portfolio consisted of three skilled nur sing properties in two states wi th a gross investment balance of $7 5.7 million. Juniper Communities (privately held) operates 20 facilities comprised of skilled nursing, assisted living, memory care, and independent living fa cilities in four states. As of December 31, 2014 , the LTC portfolio consisted of six assisted living and memory care properties in three states with a gross investment balan ce of $87.1 million. Traditions Senior Management (privately held) operate 2 8 facil ities consisting of independent living, assisted living, and skilled nursing facilities in eight states. As of December 31, 2014 , the LTC portfolio consisted of four skilled nursing properties and one range of care property in three states with a gross investment balance of $6 3. 4 million. They also operate two skilled nursing properties under a sub - lease with Preferred Care, Inc. which is not included in the Traditions Senior Management annual income . Fundamental (privately held) includes skilled nursing facilities, assisted living facilities, long term acute care hospitals, hospices, outpatient c linics, behavioral health services and other healthcare services at 77 locations in 9 states. As of Decembe r 31, 2014 , the LTC portfolio consisted of five skilled nursing properties in three states, with a gross investment balance of $45.2 million. Sunrise Senior Living ( privately held), through its subsidiaries, operates 302 communities in the United States, C anada, and the United Kingdom. Sunrise offers a full range of senior living services, including independent living, assisted living, memory care, as well as nursing and rehabilitative services. As of December 31, 2014 , the LTC portfolio consisted of six assisted living properties in t wo states, with a gross investment balance of $ 37.7 million.

16 Proforma Real Estate Portfolio Maturity (dollar amounts in thousands) Includes annualized GAAP rent for leased properties and twelve months interest income from properties secured by mortgage loans. Proforma includes rents from re-leased properties formerly operated by Enlivant as of January 1, 2015. (As a % of Total Annual Income(1)) REAL ESTATE PORTFOLIO % of Total % of Total Annual Income (1) % of Total 2015 - $ - 282 $ 1.8% 282 0.2% 2016 3,097 3.0% 426 2.7% 3,523 3.0% 2017 1,653 1.6% 965 6.1% 2,618 2.2% 2018 10,666 10.4% 973 6.1% 11,639 9.8% 2019 1,596 1.5% 233 1.5% 1,829 1.5% 2020 13,631 13.2% - - 13,631 11.5% 2021 18,365 17.8% - - 18,365 15.5% 53,994 52.5% 12,983 81.8% 66,977 56.3% Total 103,002 $ 100.0% 15,862 $ 100.0% 118,864 $ 100.0% Year Rental Income (1) Interest Income (1) Thereafter

17 Enterprise Value FINANCIAL We amended our Unsecured Credit Agreement increasing the commitment to $400,000 with the opportunity to increase the credit line up to $600,000. The maturity of the facility was also extended to October 14, 2018. Includes amortization of debt issue cost. Non-traded shares. Two million shares outstanding with a face rate of 8.5% and a liquidation value of $19.25 per share, convertible into common stock on a one-for-one basis. Our Series C preferred stock is not redeemable by us. Traded on NYSE. Closing price of our common stock as reported by the NYSE on December 31, 2014, the last trading day of fourth quarter 2014. Normalized EBITDA for the twelve months ended December 31, 2014. See page 20 for reconciliation of normalized EBITDA. (amounts in thousands, except per share amounts and number of shares) Capitalization Bank borrowings (1) - $ Senior unsecured notes -weighted average rate 4.8% (2) 281,633 Total debt 281,633 15% 12/31/14 No. of shares Preferred stock - Series C (3) 38,500 2% Common stock (4) 35,480,261 43.17 $ (5) 1,531,683 83% Total equity 1,570,183 85% 1,851,816 $ 100% Less: Cash and cash equivalents (25,237) 1,826,579 $ Debt to Enterprise Value 15.4% Debt & Preferred to Enterprise Value 17.5% Debt to Normalized EBITDA (6) 2.6x Enterprise Value At December 31, 2014 Debt Equity Closing Price Total Market Value

18 Debt Maturity FINANCIAL (dollar amounts in thousands) During 2014, we amended our Unsecured Credit Agreement increasing the commitment to $400,000 with the opportunity to increase the credit line up to $600,000. The maturity of the facility was also extended to October 14, 2018. Reflects scheduled principal payments. $ - $ 29,166 $ 29,166 - 26,667 26,667 - 26,167 26,167 - 28,167 28,167 - 25,666 25,666 - 32,160 32,160 - 32,160 32,160 - 81,480 81,480 $ - $ 281,633 $ 281,633 Year Unsecured Line of Credit (1) Senior Unsecured Notes (2) Total 2020 2017 2016 2015 2019 2018 Total Thereafter 2021

19 Financial Data Summary FINANCIAL (dollar amounts in thousands) Balance Sheet, Leverage Ratios and Coverage Ratios 12/31/14 12/31/13 12/31/12 12/31/11 Balance Sheet: Gross real estate assets $1,117,167 $1,104,732 $940,176 $779,033 Net real estate assets 892,179 884,361 740,846 599,916 Gross asset value 1,190,807 1,151,781 988,922 826,214 Total debt 281,633 278,835 303,935 159,200 Total liabilities 305,698 298,972 326,484 178,387 Preferred stock 38,500 38,500 38,500 38,500 Total equity 660,121 632,438 463,108 468,710 Leverage Ratios: Debt to gross asset value 23.7% 24.2% 30.7% 19.3% Debt & preferred stock to gross asset value 26.9% 27.6% 34.6% 23.9% Debt to total enterprise value 15.4% 18.1% 21.6% 14.1% Debt & preferred stock to total enterprise value 17.5% 20.6% 24.3% 17.5% Coverage Ratios: Debt to normalized EBITDA 2.6x 2.9x 3.7x 2.1x Normalized EBITDA / interest incurred 7.3x 7.7x 8.3x 11.7x Normalized EBITDA / fixed charges 6.0x 6.1x 6.2x 6.3x For the Year Ended

20 Financial Data Summary FINANCIAL FINANCIAL (dollar amounts in thousands) Non-Cash Rental Revenue Components For leases in place at December 31, 2014, including the re-leasing of the 20 properties formerly operated by Enlivant and assuming no modification or replacement of existing leases, no lease renewals, and no new leased investments are added to our portfolio. Reconciliation of Normalized EBITDA and Fixed Charges Represents the one-time severance and accelerated restricted stock vesting charge of $707 related to the retirement of the Company’s former Senior Vice President, Marketing and Strategic Planning, a $1,244 provision for loan loss reserve on a $124,387 mortgage loan origination, and an $869 non-cash write-off of straight-line rent offset by revenue from the Sunwest bankruptcy settlement distribution of $133. Represents revenue from the Sunwest bankruptcy settlement distribution. Net income 73,399 $ 57,815 $ 51,327 $ 49,443 $ Less: Gain on sale of real estate, net (4,959) (1,605) (16) - Add: Interest expense 13,128 11,364 9,932 6,434 Add: Depreciation and amortization (includes discontinued operations) 25,529 24,706 22,153 19,623 Adjusted EBITDA 107,097 92,280 83,396 75,500 Add back/(deduct): Non-recurring one-time items - 2,687 (1) (347) (2) - Normalized EBITDA 107,097 $ 94,967 $ 83,049 $ 75,500 $ Interest expense: 13,128 $ 11,364 $ 9,932 $ 6,434 $ Add: Capitalized interest 1,506 932 129 45 Interest incurred 14,634 12,296 10,061 6,479 Interest incurred 14,634 12,296 10,061 6,479 Preferred stock dividend 3,273 3,273 3,273 5,512 Fixed Charges 17,907 $ 15,569 $ 13,334 $ 11,991 $ For the Year Ended 12/31/14 12/31/13 12/31/12 12/31/11

Consolidated Statements of Income 21 FINANCIAL FINANCIAL (amounts in thousands, except per share amounts) 2014 2013 2014 2013 Revenues Rental income 26,474 $ 25,259 $ 101,849 $ 98,166 $ Interest income from mortgage loans 4,108 3,103 16,553 6,298 Interest and other income 173 231 559 510 Total revenues 30,755 28,593 118,961 104,974 Expenses Interest expense 3,683 2,852 13,128 11,364 Depreciation and amortization 6,594 6,237 25,529 24,389 (Recovery) provisions for doubtful accounts (46) 2,139 32 2,180 General and administrative expenses 3,343 2,715 11,832 11,636 Total expenses 13,574 13,943 50,521 49,569 Operating Income 17,181 14,650 68,440 55,405 Gain on sale of real estate, net 3,819 - 4,959 - Income from continuing operations 21,000 14,650 73,399 55,405 Discontinued operations: Income from discontinued operations - - - 805 Gain on sale of real estate, net - - - 1,605 Net income from discontinued operations - - - 2,410 Net Income 21,000 14,650 73,399 57,815 Income allocated to participating securities (138) (99) (481) (383) Income allocated to preferred stockholders (819) (819) (3,273) (3,273) Net income available to common stockholders 20,043 $ 13,732 $ 69,645 $ 54,159 $ Basic earnings per common share: $0.58 $0.40 $2.01 $1.64 Diluted earnings per common share: $0.57 $0.40 $1.99 $1.63 Weighted average shares used to calculate earnings per common share: Basic 34,678 34,555 34,617 33,111 Diluted 36,698 34,582 36,640 33,142 (unaudited) (audited) Three Months Ended Twelve Months Ended December 31, December 31,

Consolidated Balance Sheets 22 FINANCIAL FINANCIAL (audited, amounts in thousands) December 31, 2013 December 31, 2013 ASSETS LIABILITIES Real estate investments: Bank borrowings - $ 21,000 $ Land 80,024 $ 80,993 $ Senior unsecured notes 281,633 255,800 Buildings and improvements 869,814 856,624 Bonds payable - 2,035 Accumulated depreciation and amortization (223,315) (218,700) Accrued interest 3,556 3,424 Net real estate property 726,523 718,917 Earn-out liabilities 3,258 - Mortgage loans receivable, net of loan loss Accrued expenses and other liabilities 17,251 16,713 reserves: 2014 - $1,673; 2013 - $1,671 165,656 165,444 Total liabilities 305,698 298,972 Real estate investments, net 892,179 884,361 EQUITY Other assets: Stockholders' equity: Cash and cash equivalents 25,237 6,778 Preferred stock (1) 38,500 38,500 Debt issue costs, net 3,782 2,458 Common stock (2) 355 347 Interest receivable 597 702 Capital in excess of par value 717,396 688,654 Straight-line rent receivable, net of allowance for Cumulative net income 855,247 781,848 doubtful accounts: 2014 - $731; 2013 - $1,541 32,651 29,760 Other comprehensive income 82 117 Prepaid expenses and other assets 9,931 6,756 Cumulative distributions (951,459) (877,028) Notes receivable 1,442 595 Total equity 660,121 632,438 Total assets 965,819 $ 931,410 $ Total liabilities and equity 965,819 $ 931,410 $ (1) Preferred stock $0.01 par value; 15,000 shares authorized; shares issued and outstanding: 2014 - 2,000; 2013 - 2,000 (2) Common stock $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2014 - 35,480; 2013 - 34,746 December 31, 2014 December 31, 2014

Funds from Operations 23 FINANCIAL FINANCIAL (unaudited, amounts in thousands, except per share amounts) Reconciliation of Normalized FFO, Normalized AFFO, and Normalized FAD Comprised of a $1,244 provision for loan loss reserve on a $124,387 mortgage loan origination and an $869 non-cash write-off of straight-line rent offset by revenue from the Sunwest bankruptcy settlement distribution of $133. Represents the one-time severance and accelerated restricted stock vesting charge of $707 related to the retirement of the Company’s former Senior Vice President, Marketing and Strategic Planning and (1) above. 2014 2013 2014 2013 Net income available to common stockholders 20,043 $ 13,732 $ 69,645 $ 54,159 $ Add: Depreciation and amortization (includes discontinued operations) 6,594 6,237 25,529 24,706 Less: Gain on sale of real estate, net (3,819) - (4,959) (1,605) FFO available to common stockholders 22,818 19,969 90,215 77,260 Add: Non-recurring one-time items - 1,980 (1) - 2,687 (2) Normalized FFO available to common stockholders 22,818 21,949 90,215 79,947 Less: Non-cash rental income (792) (790) (2,161) (3,295) Normalized adjusted FFO (AFFO) 22,026 21,159 88,054 76,652 Add: Non-cash compensation charges 927 541 3,253 2,134 Add: Non-cash interest related to earn-out liabilities 18 - 18 256 Less: Capitalized interest (290) (214) (1,506) (932) Normalized funds available for distribution (FAD) 22,681 $ 21,486 $ 89,819 $ 78,110 $ $0.64 $0.57 $2.55 $2.29 $0.64 $0.62 $2.55 $2.37 $0.62 $0.60 $2.49 $2.27 $0.64 $0.61 $2.54 $2.31 Diluted FFO available to common stockholders per share Diluted normalized FFO available to common stockholders per share Diluted normalized AFFO per share Diluted normalized FAD per share Twelve Months Ended December 31, December 31, Three Months Ended

Funds from Operations 24 FINANCIAL FINANCIAL Reconciliation of Normalized FFO Per Share (unaudited, amounts in thousands, except per share amounts) 2013 2013 Normalized FFO available to common stockholders $ 22,818 $ 21,949 $ 90,215 $ 79,947 Effect of dilutive securities: Participating securities 138 99 481 383 Convertible preferred securities 819 819 3,273 3,273 Diluted normalized FFO available to common stockholders $ 23,775 $ 22,867 $ 93,969 $ 83,603 34,678 34,555 34,617 33,111 Effect of dilutive securities: Stock options 20 27 23 31 Participating securities 242 196 226 200 Convertible preferred securities 2,000 2,000 2,000 2,000 Shares for diluted FFO per share 36,940 36,778 36,866 35,342 $0.66 $0.64 $2.61 $2.41 $0.64 $0.62 $2.55 $2.37 Diluted normalized FFO per share Shares for basic FFO per share Basic normalized FFO per share 2014 2014 Three Months Ended December 31, Twelve Months Ended December 31,

25 GLOSSARY Glossary Adjusted Funds From Operations (“AFFO”): FFO excluding the effects of straight - line rent and amortization of lease inducement . Assisted Living Properties (“ALF”) : The ALF portfolio consists of assisted living, independent living, and/or memory care properties. (See Independent Living and Memory Care) Assisted living properties are s enior housing properties serving elderly persons who require assistance with activities of daily living, but do not require the co nstant supervision skilled nursing properties provide. Services are usually available 24 hours a day and include personal supervision and assistance with eating , bathing, grooming and administering medication. The facilities provide a combination of hous ing, supportive services, personalized assistance and health care designed to respond to individual needs . Contractual Lease Rent: Rental revenue as defined by the lease agreement between us and the operator for the lease year . EBITDA: Earnings before interest, taxes, depreciation and amortization . Funds Available for Distribution (“FAD”): A FFO excluding the effects of n on - cash compensation charges , capitalized interest and non - cash interest charges. Funds From Operations (“FFO”): A s defined by the National Association of Real Estate Investment Trusts (“NAREIT”), net income available to common stockholder s (compute d in accordance with U.S. 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 ventu res. GAAP Lease Yield: GAAP rent divided by the sum of the p urchase p rice and transaction costs. GAAP Rent: Total rent we will receive as a fixed amount over the life of the lease and recognize d evenly over that life. GAAP rent recorded in the early years of a lease is higher than the cash rent received and during the later years of the lease , the cash rent received is higher than GAAP rent recognized . GAAP rent is commonly referred to as strai ght - line rental income. Gross Asset Value: Represents total assets plus accumu lated depreciation and loan loss reserves . Gross Investment: Original price paid for an asset plus capital improvements funded by LTC , without any deprec i ation deductions. Gross Investment is commonly referred to as undepreciated book value. Independent Living Properties (“ILF”) : Senior housing properties offer ing a sense of community and numerous levels of service, such as laundry, housekeeping, dining options/meal plan s, exercise and wellness programs, transportation , social , cultural and recreational activities , on - site security and emergency response programs. Many offer on - site conveniences like beauty/barber shops, fitness facilities, game rooms, libraries and acti vity centers. ILFs are also known as retirement communities or senior apartments . Interest Income: Represents interest income from mortgage loans. Licensed Beds/Units: The number of beds and/or units tha t an operator is authorized to operate at senior housing and long - term care propert ies . Licensed b eds and/or u nits may differ from the number of beds and/or units in service at any given time.

26 GLOSSARY Glossary Memory Care Properties (“MC”) : Senior housing properties offering specialized options for seniors with Alzheimer’s disease and other forms of dementia. The se facilities offer dedicated care and specialized programming for various conditions relating to memory loss in a secured envir o nment that is typically smaller in scale and more residential in nature than traditional assisted living facilities. These facilities have staff available 24 hours a day to respond to the unique needs of their residents. Metropolitan Statistical Areas ( “ MSA ” ) : Based on the U.S. Census Bureau, MSA is a geographic entity defined by the Office of Management and Budget (OMB) for use by Federal statistical agencies in collecting, tabulating, and publishing Federal statistics. A metro area contains a core urban area of 50,00 0 or more population. Micropolitan Statistical Areas ( “ Micro - SA ” ) : Based on the U.S. Census Bureau, Micro - SA is a geographic entity defined by the Office of Manageme nt and Budget (OMB) for use by Federal statistical agencies in collecting, tabulating, and publishing Federal statistics. A micro area contains an urban core of at least 10,000 (but less than 50,000) population. Net Rea l Estate Assets: G ross real estate investment less accumulated depreciation. Net Real Estate Asset is commonly referred to as Net Book Value (“NBV”) . Non - cash Rental I ncome: Straight - line rental income and amortization of lease inducement. Non - cash C ompens ation C harges: Vesting expense relating to stock option s and restricted stock. Normalized AFFO: A FFO adjusted for non - recurring, infrequent or unusual items . Normalized EBITDAR Coverage: The trailing twelve month’s earnings from the operator financial statements adjusted for non - recurring, infrequent, or unusual items and before interest, taxes, depreciation, amortization, and rent divided by the operator’s contractual lease rent. Manag ement fees are imputed at 5% of revenues. Normalized EBITDARM Coverage: The trailing twelve month’s earnings from the operator financial statements adjusted for non - recurring, infrequent, or unusual items and before interest, taxes, depreciation, amortiz ation, rent, and management fees divided by the operator’s contractual lease rent. Normalized FAD: FAD adjusted for non - recurring, infrequent or unusual items . Normalized FFO: FF O adjusted for non - recurring, infrequent or unusual items. Occupancy: The weighted average percentage of all beds and/or units that are occupied at a given time. The calculation uses the trailing twelve months and is based on licensed beds and/or units which may differ from the number of beds and/or units in service at any given time. Operator Financial Statements: Property level operator financial statements which are unaudited and have not been independently verified by us. Private Pay: Private pay includes private insurance, HMO, VA, and other payors .

27 GLOSSARY Glossary Glossary Purchase Price: Represents the fair value price of an as set that is exchanged in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities t hat are usual and customary for transactions involving such assets; it is not a forced transaction (for example, a forced liquidation or di stress sale). Quality Mix: LTC revenue by operator underlying payor source for the quarter presented. LTC is not a Medicaid or a Medicare recipient. Statistics represent LTC's rental revenues times operators' underlying payor source revenue percentage. Underlying payor source revenue percentage is calculated from prope rty level operator financial statements which are unaudited and have not been independently verified by us. Range of Care ( “ ROC ” ): Range of care properties consist of properties providing skilled nursing and any combination of assisted living, independent living and/or memory care services. Rental Income: Represents GAAP rent net of amortized lease inducement cost . Same Property Portfolio (“SPP”) : S ame property statistics allow for the comparative evaluation of performance across a consistent population of LTC’s leased property portfolio . Our SPP is comprised of s tabilized properties owned and operated throughout the duration of the quarter - over - quarter comparison periods presented (excluding assets sold and assets held - for - sale) . Accordingly, a leased property must be owned and stabilized for a mi nimum of 1 5 months to be included in our SSP. School : An institution for educatin g students which include s a charter school . Charter schools provide an alternative to the traditional public school and are generally autonomous entities authorized by the state or locality to conduct operations independent from the surrounding public school district. Laws vary by state, but generally charters are granted by state boards of education either directly or in conjunction with local school districts or public universities. Operators are granted charters to establish and operate schools based on the goals and objectives set forth in the charter. Upon receipt of a char ter, schools receive an annuity from the state for each student enrolled. Skilled Nursing Properties (“SNF”) : Senior housing properties providing restorative, rehabilitative and nursing care for people not requiring the more extensive and sophisticated treatment available at acute care hospitals. Many SNF s provide ancillary services that include occupational, speech, physical, respiratory and IV t herapies, as well as sub - acute care services which are paid either by the patient, the patient’s family, private health insurance, or through the fede ral Medicare or state Medicaid programs. Stabilized: Properties are generally considered sta bilized upon the earlier of achieving certain occupancy thresholds ( e.g. 80% for SNF s and 90% for ALF s ) and, as applicable, 12 months from the date of acquisition or, in the event of a de novo development, redevelopment , major renovations or addition, 24 months from the date the property is first placed in or returned to service. Under Development Properties (“UDP”): Development project s to construct senior housing propert ies .