Executive Summary

LTC delivered mixed Q2 2025: total revenues rose to $60.24M (+20% YoY) on SHOP conversions, while diluted GAAP EPS fell to $0.32 vs $0.44 last year due to higher transaction and G&A costs; Core FFO/share ticked up to $0.68 and Core FAD/share to $0.71 .
Guidance raised: FY2025 GAAP NI/share to $3.45–$3.48, Core FFO/share to $2.67–$2.71, and Core FAD/share to $2.80–$2.83, reflecting ~$400M of completed/near‑term investments and a ramping SHOP portfolio .
Strategic catalysts: new $600M unsecured revolver (up from $425M), pipeline of ~$320M expected to close within 60 days (SHOP to ~20% of portfolio), and acquisition of a 67‑unit SHOP asset at a 7% initial yield; management emphasized transformation toward a seniors housing‑focused REIT with ample capital access .
Risk watch: Genesis (a tenant) filed Chapter 11 in July; LTC holds $4.7M LOC security and reports Genesis as current on rent through August and exercising a 5‑year lease renewal to April 2031, helping mitigate near‑term exposure .

What Went Well and What Went Wrong

What Went Well
- SHOP conversions accretive: Q2 SHOP NOI was $2.53M, ~$780K higher than triple‑net for the same period last year; average SHOP occupancy ~81% .
- Balance sheet/liquidity strengthened: new four‑year unsecured revolver lifted commitments to $600M (expandable to $1.2B) and pro forma liquidity to $673.6M; debt/annualized adjusted EBITDAre 4.2x; fixed charge coverage 5.1x .
- Raised FY2025 guidance on ~$400M investments; management: “Growth is front and center…our SHOP portfolio will more than double in size” .
What Went Wrong
- GAAP diluted EPS declined to $0.32 (vs $0.44 YoY) on higher SHOP operating costs, RIDEA platform startup costs, lease termination fee, and G&A (retirement‑related) despite lower interest expense .
- Revenue contribution from mortgage loans fell YoY (Q2 mortgage interest $9.68M vs $12.66M in Q2’24) given payoffs/principal paydowns, partially offset by financing receivables interest .
- Tenant risk: Genesis Chapter 11 increases headline risk; though LTC reports current rent and $4.7M security, investors will monitor case progression and lease performance .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($USD)	$52.582M	$49.031M	$60.240M
Diluted EPS ($USD)	$0.39	$0.45	$0.32
NAREIT Diluted FFO/share ($USD)	$0.72	$0.65	$0.51
Diluted Core FFO/share ($USD)	$0.65	$0.65	$0.68
Diluted FAD/share ($USD)	$0.66	$0.76	$0.56
Diluted Core FAD/share ($USD)	$0.66	$0.70	$0.71

Revenue Composition ($USD)	Q2 2024	Q1 2025	Q2 2025
Rental Income	$31.657M	$31.444M	$30.177M
Resident Fees & Services (SHOP)	—	—	$11.950M
Interest from Financing Receivables	$3.830M	$7.002M	$7.084M
Interest from Mortgage Loans	$12.661M	$9.179M	$9.680M
Interest & Other Income	$1.968M	$1.406M	$1.349M
Total Revenues	$50.116M	$49.031M	$60.240M

Estimate Comparison (S&P Global)	Q1 2025	Q2 2025
Primary EPS Consensus Mean vs Actual ($USD)	0.4567* vs 0.4639*	0.8195* vs 0.4630*
Revenue Consensus Mean vs Actual ($USD)	$48.887M* vs $51.290M*	$53.086M* vs $56.368M*
EPS # of Estimates	4*	5*
Revenue # of Estimates	2*	3*
Target Price Consensus Mean	$38.00*	$38.00*

Values marked with * retrieved from S&P Global. Note: S&P “Primary EPS” and revenue definitions may differ from LTC’s GAAP diluted EPS and reported total revenues [S&P Global].

KPIs and Segment Notes:

SHOP NOI: $2.531M in Q2 (two months from Anthem portfolio + partial month from New Perspective); average SHOP occupancy ~81% .
Liquidity (as of 6/30/25): $640.4M; pro forma $673.6M post new revolver .
Leverage: Debt to annualized adjusted EBITDAre 4.2x; fixed charge coverage 5.1x .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
GAAP Net Income per Share	FY 2025	$3.38–$3.42	$3.45–$3.48	Raised
Diluted Core FFO per Share	FY 2025	$2.65–$2.69	$2.67–$2.71	Raised
Diluted Core FAD per Share	FY 2025	$2.78–$2.82	$2.80–$2.83	Raised
SHOP NOI (FY 2025)	FY 2025	$9.4–$10.3M (8 months)	$10.4–$15.6M (full year)	Raised
SHOP FAD Capex (FY 2025)	FY 2025	$0.6–$0.8M (8 months)	$0.66–$0.92M (full year)	Revised scope
G&A Expense (FY 2025)	FY 2025	$28.6–$29.5M	$29.0–$29.8M	Raised slightly
Dividend	Q3 2025	$0.19/month (prior practice)	$0.19/month (Jul/Aug/Sep)	Maintained

Assumptions include ~$400M of completed/near‑term investments, SHOP conversions (13 properties, 832 units), and excludes additional investments beyond 60 days, asset sales (except planned), financings, or equity issuances .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 & Q1 2025)	Current Period (Q2 2025)	Trend
Transformation to SHOP/RIDEA	RIDEA groundwork; pipeline expanding; SHOP conversions planned	SHOP accretive; pipeline ~$320M; SHOP to ~20% of portfolio; 7% yields, >10% unlevered IRR target	Accelerating external growth
Capital & Liquidity	Liquidity ~$680M; leverage ~4.3x; ATM usage	New $600M revolver; liquidity pro forma ~$674M; leverage 4.2x; target low‑4x over time	Improved flexibility
Tenant/Operator Risk (Genesis)	Genesis monitored; paid May rent	Genesis Ch.11; exercised renewal to 2031; current on rent through Aug; $4.7M LOC security	Managed, still a watch item
Prestige Loan & SNF Recycling	Structure designed to support recovery; security growing	Prestige option to prepay in 12‑month window from Jul’26; reverted to 11.14% contractual rate; planned sale of 7 SNFs with ~$120M proceeds and ~$80M gain	Portfolio rotation progressing
Guidance Drivers	Introduced FY’25 guidance with SHOP assumptions	Raised guidance on $400M investments; SHOP NOI uplift; cautious on expense normalization	Positive revision
Funding Strategy	Blend debt/equity; leverage neutral or over‑equitize	Similar approach; use sales proceeds; blend higher‑yield loans with SHOP	Consistent

Management Commentary

“Growth is front and center for LTC…our SHOP portfolio will more than double in size…we are excited about the opportunities ahead to drive shareholder value” — Co‑CEOs Pam Kessler & Clint Malin .
“Core FFO improved to $0.68…Core FAD to $0.71…we increased our full year 2025 core FFO guidance range…low end includes investments made to date; high end includes $320M expected to close in the next sixty days” — CFO Cece Chikhale .
“We expect to record a gain on sale of approximately $80 million…strategically recycling capital out of older skilled nursing assets and into newer seniors housing communities” — EVP Asset Management Gibson Satterwhite .
“Our SHOP investment sites are on accretion…targeted unlevered IRR…north of 10%…these investments will drive our SHOP gross book value to approximately $475 million” — CIO David Boitano .

Q&A Highlights

Funding plan: Blend debt/equity, aim leverage‑neutral or over‑equitize; ~$120M SNF sale proceeds to help fund; cost of capital offset by higher‑yield loans .
Pipeline sustainability: Focused on single‑asset/small stabilized portfolios, newer vintage; competitive market but LTC’s size enables accretive smaller deals; additional LOIs in process .
SHOP NOI drivers: Q2 SHOP NOI ~$400K above internal expectations; occupancy catching up; cautious on expenses potentially mean‑reverting; guidance uplift driven by new deals .
Prestige & ALG: Prestige prepay option in Jul’26 contingent on financing (likely HUD); ALG purchase options timing more likely 2027 depending on rates and performance .
Leverage targets: Management prefers low‑4x net debt/EBITDA; current 4.2x provides optionality to fund near‑term investments .
Management agreements: Structured with incentives tied to top/bottom‑line, short/long‑term goals; operators retained for continuity on external SHOP deals .

Estimates Context

EPS: Q2 2025 S&P Primary EPS consensus was $0.8195* vs S&P “actual” $0.4630* — a miss. Note LTC GAAP diluted EPS reported at $0.32, which differs from S&P’s Primary EPS definition .
Revenue: Q2 2025 S&P revenue consensus was $53.086M* vs S&P “actual” $56.368M* — a beat, while LTC reported total revenues of $60.240M (definition differences likely) .
Target price: Consensus $38.00* with 7 estimates; recommendation text not available in the S&P dataset retrieved.
Values marked with * retrieved from S&P Global.

Where estimates may adjust:

Upward revisions to revenue could reflect SHOP accretion pace and pipeline closings; EPS consensus likely to incorporate higher transaction/G&A and SHOP OpEx as platform scales .

Key Takeaways for Investors

Near‑term growth catalyst: ~$320M of investments closing within 60 days (SHOP ~ $260M at 7% initial yields; loan ~$60M at 8.25%), potentially taking SHOP to ~20% of portfolio with >10% targeted unlevered IRRs .
Balance sheet optionality: New $600M revolver and pro forma liquidity ~$674M provide funding flexibility; expect a blend of debt/equity and recycling of ~$120M SNF sale proceeds .
Earnings quality: Core FFO/Core FAD per share improved; watch GAAP EPS headwinds from platform ramp costs and SHOP OpEx normalization vs accretive SHOP NOI .
Risk monitoring: Genesis bankruptcy is contained near‑term (renewal, current rent, $4.7M security), but remains a headline risk; monitor court developments and rent coverage trends .
Portfolio rotation: Strategic recycling out of older SNFs to stabilized seniors housing strengthens mix and supports guidance trajectory; potential Prestige prepayment in 2026 could further redeploy capital .
Dividend stability: Monthly $0.19/share for Q3 maintained; coverage supported by Core FAD trajectory though SHOP ramp costs warrant monitoring .
Trading lens: Raised guidance and visible pipeline should be supportive; any execution delays or expense normalization in SHOP could be short‑term headwinds, while successful closings and NOI ramp are upside catalysts .

LTC PROPERTIES INC (LTC)·Q2 2025 Earnings Summary