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<SEC-DOCUMENT>0000950148-04-000915.txt : 20040507
<SEC-HEADER>0000950148-04-000915.hdr.sgml : 20040507
<ACCEPTANCE-DATETIME>20040507172503
ACCESSION NUMBER:		0000950148-04-000915
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20040331
FILED AS OF DATE:		20040507

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LTC PROPERTIES INC
		CENTRAL INDEX KEY:			0000887905
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				710720518
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11314
		FILM NUMBER:		04790263

	BUSINESS ADDRESS:	
		STREET 1:		22917 PACIFIC COAST HWY
		STREET 2:		SUITE 350
		CITY:			MALIBU
		STATE:			CA
		ZIP:			90265
		BUSINESS PHONE:		3104556010

	MAIL ADDRESS:	
		STREET 1:		22917 PACIFIC COAST HWY
		STREET 2:		SUITE 350
		CITY:			MALIBU
		STATE:			CA
		ZIP:			90265
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>v98528e10vq.htm
<DESCRIPTION>LTC PROPERTIES, INC. - MARCH 31, 2004
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vq</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<HR size="4" noshade color="#000000" style="margin-top: -5px">
<HR size="1" noshade color="#000000" style="margin-top: -10px">








<P align="center" style="font-size: 14pt">UNITED STATES<BR>
<B>SECURITIES AND EXCHANGE COMMISSION</B>



<DIV align="center" style="font-size: 12pt">Washington, D.C. 20459</DIV>


<P align="center" style="font-size: 10pt"><HR align="center" size="1" noshade width="15%">



<P align="center" style="font-size: 18pt">FORM 10-Q

<p>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 10pt">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Mark One)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT face="Wingdings">&#120;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">For the quarterly period ended March&nbsp;31, 2004



<P align="center" style="font-size: 10pt">OR


<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="94%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT face="Wingdings">&#111;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">For the Transition period from <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>



<P align="center" style="font-size: 10pt">Commission file number 1-11314



<P align="center" style="font-size: 24pt"><B>LTC PROPERTIES, INC.</B>



<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Maryland
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">71-0720518</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">22917 Pacific Coast Highway, Suite&nbsp;350<BR>
Malibu, California 90265<BR>
(Address of principal executive offices)



<P align="center" style="font-size: 10pt">(310)&nbsp;455-6010<BR>
(Registrant&#146;s telephone number, including area code)



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether Registrant (1)&nbsp;has filed all reports to be
filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12&nbsp;months (or for such shorter period that Registrant was required to
file such reports), and (2)&nbsp;has been subject to such filing requirements for
the past 90&nbsp;days. Yes <FONT face="Wingdings">&#120;</FONT> No <FONT face="Wingdings">&#111;</FONT>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule&nbsp;12b-2 of the Exchange Act). Yes <FONT face="Wingdings">&#120;</FONT> No <FONT face="Wingdings">&#111;</FONT>


<P align="center" style="font-size: 10pt">Shares of Registrant&#146;s common stock, $.01 par value, outstanding April&nbsp;30, 2004 &#150; 19,664,614



<P>
<HR size="1" noshade color="#000000" style="margin-top: -2px">
<HR size="4" noshade color="#000000" style="margin-top: -10px">






<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.</B>



<P align="center" style="font-size: 10pt"><B>FORM 10-Q</B>



<P align="center" style="font-size: 10pt"><B>March&nbsp;31, 2004</B>



<P align="center" style="font-size: 10pt"><B>INDEX</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="94%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>PART I &#151; Financial Information</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Item&nbsp;1. Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px"><A href="#101">Consolidated Balance Sheets</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px"><A href="#102">Consolidated Statements of Income</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px"><A href="#103">Consolidated Statements of Cash Flows</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px"><A href="#104">Notes to Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#105">Item&nbsp;2. Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#106">Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#107">Item&nbsp;4. Controls and Procedures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#108"><B>PART II &#151; Other Information</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#109">Item&nbsp;2. Changes in Securities and Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#110">Item&nbsp;6. Exhibits and Reports on Form&nbsp;8-K</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v98528exv3w1.txt">Exhibit 3.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v98528exv3w2.txt">Exhibit 3.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v98528exv10w1.txt">Exhibit 10.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v98528exv10w2.txt">Exhibit 10.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v98528exv31w1.htm">Exhibit 31.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v98528exv31w2.htm">Exhibit 31.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v98528exv32.htm">Exhibit 32</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>


<P align="center" style="font-size: 10pt">2
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.</B>


<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>CONSOLIDATED BALANCE SHEETS</B></DIV>



<DIV align="center" style="font-size: 10pt">(Amounts in thousands, except per share amounts)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="74%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>March 31, 2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>December 31, 2003</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">ASSETS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Real Estate Investments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Buildings and improvements, net of accumulated depreciation and
amortization: 2004 - $76,390; 2003 - $73,299</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">357,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">356,830</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,308</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Properties held for sale, net of accumulated depreciation and
amortization: 2004 - $0; 2003 - $77</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Mortgage loans receivable, net of allowance for doubtful
accounts: 2004 and 2003 - $1,280</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,465</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">REMIC Certificates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61,662</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Real estate investments, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">520,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">515,752</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other Assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,919</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Debt issue costs, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,496</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,809</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,855</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,495</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Notes receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Marketable debt securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,281</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">553,436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">574,924</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">LIABILITIES AND STOCKHOLDERS&#146; EQUITY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Bank borrowings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Mortgage loans payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116,998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123,314</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Bonds payable and capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,686</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Senior mortgage participation payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,250</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accrued interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">952</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accrued expenses and other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,514</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Liability for Series&nbsp;A 9.5% Preferred Stock redemption</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,642</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distributions payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,991</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,383</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">166,483</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">192,741</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Minority interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,831</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,401</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Stockholders&#146; equity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred stock $0.01 par value: 15,000 shares authorized;
shares issued and outstanding: 2004 - 8,200; 2003 - 8,026</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">189,163</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Common stock: $0.01 par value; 35,000 shares authorized;
shares issued and outstanding: 2004 - 18,018; 2003 - 17,807</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Capital in excess of par value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">255,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,055</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cumulative net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">284,849</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">274,948</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(638</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cumulative distributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(358,402</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(344,924</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total Stockholders&#146; Equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">376,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368,782</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total Liabilities and Stockholders&#146; Equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">553,436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">574,924</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><I>See accompanying notes.</I>



<P align="center" style="font-size: 10pt">3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.</B>


<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF INCOME</B></DIV>



<DIV align="center" style="font-size: 10pt">(Amounts in thousands, except per share amounts)<BR>
(Unaudited)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Revenues:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Rental income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest income from mortgage loans and notes receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,507</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest income from REMIC Certificates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest and other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">781</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,860</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Expenses:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,063</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Impairment charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Legal expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">364</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Operating and other expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,824</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,626</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income before minority interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,234</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Minority interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(283</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(321</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,913</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Discontinued operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income (loss)&nbsp;from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(29</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Gain on sale of assets, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income (loss)&nbsp;from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(29</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,884</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred stock redemption charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,029</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred stock dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,946</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,761</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income available to common stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net Income per Common Share from Continuing Operations net of Preferred Stock
Dividends:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net Income per Common Share from Discontinued Operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net Income per Common Share Available to Common Stockholders:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income available to common stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Reclassification adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,303</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,426</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><I>See accompanying notes.</I>



<P align="center" style="font-size: 10pt">4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.</B>


<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B></DIV>



<DIV align="center" style="font-size: 10pt">(Amounts in thousands)<BR>
(Unaudited)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">OPERATING ACTIVITIES:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,884</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Adjustments to reconcile net income to net cash provided by operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,232</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Impairment charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Straight-line rental income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(281</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Other non-cash charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">977</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Gain on sale of real estate investments, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(975</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Decrease in accrued interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(71</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(176</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Net change in other assets and liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,753</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,424</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">INVESTING ACTIVITIES:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Investment in real estate mortgages</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,661</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Investment in REMIC Certificates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,898</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Investment in real estate properties and capital improvements, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,461</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(86</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proceeds from sale of real estate investments and other assets, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">220</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Principal payments on mortgage loans receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">347</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Redemption of investment in senior secured notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(344</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Net cash provided by investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">549</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">FINANCING ACTIVITIES:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Borrowings under the line of credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Repayments of bank borrowings under the line of credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(21,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net proceeds from issuance of preferred stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,578</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Mortgage principal payments on the senior mortgage participation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(204</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(212</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Principal payments on mortgage loans payable and capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,498</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,018</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Redemption of preferred stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(126,305</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Repurchase of common and preferred stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,093</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Distributions paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,841</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,759</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">996</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Net cash used in financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(29,989</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,086</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">(Decrease) increase in cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(14,171</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">887</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash and cash equivalents, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,919</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,001</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash and cash equivalents, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,888</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SUPPLEMENTAL CASH FLOW INFORMATION:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,676</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non-cash investing and financing transactions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Conversion of limited partnership units into common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><I>See accompanying notes.</I>



<P align="center" style="font-size: 10pt">5
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.</B>


<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></DIV>



<DIV align="center" style="font-size: 10pt"><B>(Unaudited)</B></DIV>



<P align="left" style="font-size: 10pt"><B>1. General</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">LTC Properties, Inc., a Maryland corporation, is a real estate investment trust
(or REIT) that invests primarily in long term care properties through mortgage
loans, property lease transactions and other investments.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In accordance with &#147;plain English&#148; guidelines provided by the Securities and
Exchange Commission, whenever we refer to &#147;our company&#148; or to &#147;us,&#148; or use the
terms &#147;we&#148; or &#147;our,&#148; we are referring to LTC Properties, Inc. and/or its
subsidiaries.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We have prepared consolidated financial statements included herein without
audit (except for the balance sheet at December&nbsp;31, 2003 which is audited) and
in the opinion of management have included all adjustments necessary for a fair
presentation of the results of operations for the three months ended March&nbsp;31,
2004 and 2003 pursuant to the rules and regulations of the Securities and
Exchange Commission. The accompanying consolidated financial statements
include the accounts of our company, its wholly-owned subsidiaries and
controlled partnerships. All significant intercompany accounts and
transactions have been eliminated in consolidation. Control over those
partnerships is based on the provisions of the partnership agreements that
provide us with a controlling financial interest in the partnerships. Under
the terms of the partnership agreements, our company, as general partner, is
responsible for the management of the partnerships&#146; assets, business and
affairs. Our rights and duties in management of the partnerships include
making all operating decisions, setting the capital budgets, executing all
contracts, making all employment decisions, and the purchase and disposition of
assets, among others. The general partner is responsible for the ongoing,
major, and central operations of the partnership and makes all management
decisions. In addition, the general partner assumes the risk for all operating
losses, capital losses, and is entitled to substantially all capital gains
(appreciation).


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The limited partners have virtually no rights and are precluded from taking
part in the operation, management or control of the partnership. The limited
partners are also precluded from transferring their partnership interests
without the express permission of the general partner. However, we can
transfer our interest without consultation or permission of the limited
partners.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Certain information and note disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to such rules and
regulations; however, we believe that the disclosures in the accompanying
financial statements are adequate to make the information presented not
misleading.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Certain reclassifications have been made to the prior period financial
statements to conform to the current year presentation and as required by
Statement of Financial Accounting Standards (or SFAS) No.&nbsp;144 &#147;<I>Accounting for
the Impairment or Disposal of Long-Lived Assets</I>.&#148; The results of operations
for the three months ended March&nbsp;31, 2004 are not necessarily indicative of the
results for a full year.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">No provision has been made for federal or state income taxes. Our company
qualifies as a REIT under Sections&nbsp;856 through 860 of the Internal Revenue Code
of 1986, as amended. As such, we are not taxed on our income that is
distributed to our stockholders.


<P align="left" style="font-size: 10pt"><B>2. Real Estate Investments</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><I>Owned Properties</I>. At March&nbsp;31, 2004, we owned 53 skilled nursing properties
with a total of 6,095 beds, 88 assisted living properties with 4,182 units and
one school located in 23 states.


<P align="center" style="font-size: 10pt">6
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued<BR>
(Unaudited)</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004 we sold one skilled nursing
property in Georgia for $1,500,000 resulting in a gain on sale of $975,000 and
generated net proceeds of $208,000 after a $1,250,000 pay down of a mortgage
loan secured by the property. Also during the first quarter of 2004, we
purchased a 120 bed skilled nursing property in Texas for a total of $3,371,000
in cash. The property is leased to a third party operator under a 20&nbsp;year
lease beginning at an annual lease payment of $363,000 and increasing 2%
annually.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Subsequent to March&nbsp;31, 2004, we sold two closed skilled nursing properties for
a total of $262,000 resulting in a total loss on the sales of $256,000. We
received $5,000 in combined net proceeds from the sales after the $236,000
payoff of a mortgage loan securing one of the properties sold. Also subsequent
to March&nbsp;31, 2004, we acquired for $2,134,000 from a REMIC pool
we originated a 165 bed skilled nursing property in Texas which had
been foreclosed on by the REMIC. The property is leased to a third party operator under a two year
lease with a two year option to extend. The annual lease payment is $180,000
during the initial two year term and $240,000 during the extended two year
term. In April&nbsp;2004 we converted one mortgage loan on a 194 bed skilled
nursing property in Arizona to an owned property through a deed in lieu
foreclosure transaction plus $50,000. This property was added to a master
lease with a third party operator, increasing the annual rent due under the
master lease by $372,000.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In accordance with SFAS No.&nbsp;144 <I>&#147;Accounting for the Impairment or Disposal of
Long-Lived Assets&#148; </I>properties held for sale on the balance sheet includes only
those properties available for immediate sale in their present condition and
for which management believes that it is probable that a sale of the property
will be completed within one year. Properties held for sale are carried at the
lower of cost or fair value less estimated selling costs. No depreciation
expense is recognized on properties held for sale once they have been
classified as such. In addition, the operating results of real estate assets
designated as held for sale and all gains and losses from real estate sold are
included in discontinued operations in the consolidated statement of
operations.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Set forth in the table below are the components of the net income (loss)&nbsp;from
discontinued operations for the three months ended March&nbsp;31, 2004 and 2003
<I>(unaudited, in thousands)</I>:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="79%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Rental income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">179</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest and other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(77</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Depreciation amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(169</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Legal expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Operating and other expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income (loss)&nbsp;from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(29</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><I>Mortgage Loans</I>. At March&nbsp;31, 2004 we had 38 mortgage loans secured by first
mortgages on 31 skilled nursing properties with a total of 3,875 beds and eight
assisted living properties with a total of 369 units located in 19 states. At
March&nbsp;31, 2004, the mortgage loans had interest rates ranging from 9.5% to
12.7% and maturities ranging from 2004 to 2018. In addition, the loans contain
certain guarantees, provide for certain facility fees and generally have
25-year amortization schedules. The majority of the mortgage loans provide for
annual increases in the interest rate based upon a specified increase of 10 to
25 basis points.


<P align="center" style="font-size: 10pt">7
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued<BR>
(Unaudited)</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the first quarter 2004, we acquired a mortgage loan from a REMIC pool we
originated for $3,661,000, which represented the outstanding loan balance. In
April&nbsp;2004, this loan was converted into an owned property through a deed in
lieu foreclosure transaction plus $50,000. In April&nbsp;2004, we funded a new loan
on a 156 bed skilled nursing property in Georgia in the amount of $1,868,000.
Also subsequent to March&nbsp;31, 2004, we acquired a mortgage loan from a REMIC
pool we originated for $694,000 in cash which represented the outstanding loan
balance owed to the REMIC pool under the mortgage.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><I>REMIC
Certificates. </I>As of March&nbsp;31, 2004 we had $63,084,000 of
REMIC Certificates at net book value, which includes the $3,873,000 of
REMIC certificates we acquired during the first quarter. Of the
$63,084,000, $56,401,000 of our net book value represents face value certificated
interests in the principal balances of the underlying mortgage pools
which at March&nbsp;31, 2004 had total unpaid principal balance of
$201,265,000. Additionally, there are also $137,671,000 senior
certificates outstanding that have priority over the $56,401,000 of
face value certificates we retained.

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Our
investment in the $56,401,000 of face value certificates is backed by
the difference between the $201,265,000 in mortgage pool principal
and the $137,671,000 of senior certificates outstanding, or
$63,594,000, resulting in a collateral cushion over our net book
value of $7,193,000.

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The
remaining $6,683,000 of our REMIC certificates are I/O certificates
that represent the present value of the expected cash flows resulting
from the mortgage pools that result from the spread in interest that
arises between what the underlying mortgage loans are paying in
interest versus the interest being paid on the principal based
certificates. These cash flows have been discounted at a rate of 35%
to arrive at the estimated fair market value of the I/O certificates.

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Interest only certificates and certificates with an investment rating of &#147;BB&#148;
or higher are classified as available-for-sale and unrated certificates and
certificates with an investment rating of &#147;B&#148; or lower are classified as
held-to-maturity. As of March&nbsp;31, 2004, available-for-sale certificates were
recorded at their fair value of approximately $12,778,000.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">At March&nbsp;31, 2004, held-to-maturity certificates had a book value of
$50,307,000 and an estimated fair value of $39,406,000. As of March&nbsp;31, 2004,
the effective yield on the available-for-sale certificates and the
held-to-maturity certificates, based on expected future cash flows discounted
to give effect to potential risks associated with prepayments and unanticipated
credit losses, was 34.80% and 11.92%, respectively.


<P align="left" style="font-size: 10pt"><B>3. Notes Receivable</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">At March&nbsp;31, 2004, we held a Secured Term Note (or Secured Note) issued by
Centers for Long Term Care (or CLC), a wholly owned subsidiary of Center
Healthcare, a private company that purchased CLC according to an Agreement and
Plan of Merger dated October&nbsp;6, 2003 as discussed in <I>Note 8. </I>of our Annual
Report filed on Form 10-K for the year ended December&nbsp;31, 2003. The face value
of the Secured Note is $8,867,000 which represents the balance due on a
previous secured line of credit including unpaid interest and rents due and
unpaid through April&nbsp;30, 2003. The Secured Note is due October&nbsp;1, 2008 and
provides for interest of 8.0% compounded monthly and accruing to the principal
balance from October&nbsp;1, 2003 through September&nbsp;30, 2004 and 8.0% compounded
monthly payable in cash quarterly in arrears beginning October&nbsp;2004. The book
value of the note was $4,046,000 at March&nbsp;31, 2004. During 2004 and 2003 we
did not record any interest on this note.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">At March&nbsp;31, 2004, we held a Promissory Note (or Note) issued by Healthcare
Holdings, Inc. (or HHI), a wholly owned subsidiary of CLC. The face value of
the Note is $9,150,000. The original Note was received in December&nbsp;2001 in
exchange for our right to receive 1,238,076 shares of Assisted Living Concepts,
Inc. (or ALC) common stock distributed concurrently with ALC&#146;s emergence from
bankruptcy on December&nbsp;31, 2001. The Note is for a term of five years and
bears interest at 5.0%, compounded


<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued<BR>
(Unaudited)</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">annually and accruing to the principal balance plus interest at 2.0% on the
principal payable in cash annually. The Note is a full recourse obligation of
HHI and is secured by all of the assets owned now or in the future by HHI and
contains a provision for acceleration should there be a change of control of
HHI or CLC. We agreed to waive this provision to allow CLC to enter into the
Agreement and Plan of Merger. At March&nbsp;31, 2004, HHI owned 1,452,794 shares of
ALC common stock with a fair market value based on the closing price of ALC
stock at March&nbsp;31, 2004 of $11,986,000. At March&nbsp;31, 2004, the book value of
the $9,150,000 Note was $5,245,000 which represented the fair market value of
the 1,238,076 shares acquired by HHI on December&nbsp;31, 2001 including a
$2,150,000 increase in the Note during 2003. In accordance with the terms of
the Note, we received $196,000 from HHI in March&nbsp;2004 representing the 2.0%
interest on the outstanding principal balance at December&nbsp;31, 2003 which is
payable in cash in arrears. This amount was recognized as interest income in
the first quarter of 2004. In the first quarter of 2003, we received $140,000
from HHI representing the 2.0% interest which was applied to the line
of credit CLC had outstanding with us at that time.


<P align="left" style="font-size: 10pt"><B>4. Debt Obligations</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">At March&nbsp;31, 2004, $12,000,000 was outstanding under our Unsecured Revolving
Credit. During the three months ended March&nbsp;31, 2004, pricing under the
Unsecured Revolving Credit ranged between LIBOR plus 2.75% and LIBOR plus
3.25%. At March&nbsp;31, 2004, the interest rate applicable to borrowings under the
Unsecured Revolving Credit would have been approximately 4.0%.


<P align="left" style="font-size: 10pt"><B>5. Senior Mortgage Participation Payable</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In 2002, we completed a loan participation transaction whereby we issued a
$30,000,000 senior participating interest in 22 of our first mortgage loans
that had a total unpaid principal balance of $58,627,000 (the &#147;Participation
Loan Pool&#148;) to a private bank. The Participation Loan Pool had a weighted
average interest rate of 11.6% and a weighted average scheduled term to
maturity of 77&nbsp;months. The senior participation balance is secured by the
entire Participation Loan Pool.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The senior participation receives interest at a rate of 9.25% per annum,
payable monthly in arrears, on the then outstanding principal balance of the
senior participation. In addition, the senior participation receives all
mortgage principal collected on the Participation Loan Pool until the senior
participation balance has been reduced to zero. We retain interest received on
the Participation Loan Pool in excess of the 9.25% paid to the senior
participation. The ultimate extinguishments of the senior participation are
tied to the underlying maturities of loans in the Participation Loan Pool,
which range from 12 to 173&nbsp;months. We have accounted for the participation
transaction as a secured borrowing under SFAS No.&nbsp;140 &#147;<I>Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities</I>.&#148;


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004 and 2003, the senior participation
received principal payments of $204,000 and $212,000, respectively. At March
31, 2004, $18,046,000 was outstanding under the senior mortgage participation.


<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued<BR>
(Unaudited)</B>



<P align="left" style="font-size: 10pt"><B>6. Stockholders&#146; Equity</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the first quarter of 2004 we redeemed all 1,838,520 outstanding shares
of Series&nbsp;A preferred stock and all 1,988,000 outstanding shares of Series&nbsp;B
preferred stock. Accordingly we recognized the $4,029,000 of original issue
costs related to the Series&nbsp;A and Series&nbsp;B preferred stock as a preferred stock
redemption charge in the three months ended March&nbsp;31, 2004. In February&nbsp;2004,
we issued 4,000,000 shares of Series&nbsp;F Cumulative Redeemable Preferred Stock
(or Series&nbsp;F preferred stock) in a registered direct placement generating net
cash proceeds of approximately $98,578,000. The cash proceeds and cash on hand
were used to redeem all of the outstanding shares of our Series&nbsp;A preferred
stock and Series&nbsp;B preferred stock. The Series&nbsp;F preferred stock has a
dividend rate of 8.0% and a liquidation value of $25.00 per share. Dividends
are cumulative from the date of original issue and are payable quarterly to
stockholders of record on the first day of each quarter. The liquidation
preference of the Series&nbsp;F preferred stock is <I>pari passu </I>with our other series
of preferred stock. The Series&nbsp;F preferred stock has no voting rights, no
stated maturity, nor is it subject to any sinking fund or mandatory redemption.
On or after February&nbsp;23, 2009, we may, at our option, redeem Series&nbsp;F
preferred stock, in whole or from time to time in part, for $25.00 per share in
cash plus any accrued and unpaid dividends to the date of redemption.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004, we declared and paid the
following cash dividends <I>(unaudited, in thousands)</I>:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="70%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Declared</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Paid</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Series&nbsp;A</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,860</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Series&nbsp;B</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,491</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Series&nbsp;C</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">818</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Series&nbsp;E</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,169</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Series&nbsp;F</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">822</TD>
    <TD nowrap>(1)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:20px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,946</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,338</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Common Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,503</TD>
    <TD nowrap>(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,503</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:20px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">9,449</TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">9,841</TD>
    <TD nowrap>(3)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:20px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents 22&nbsp;days of accrued dividends.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents $0.25 per share</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The difference between declared and paid is the
change in distributions payable on the balance sheet at
March&nbsp;31, 2004 and December&nbsp;31, 2003.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Subsequent to March&nbsp;31, 2004, we declared a cash dividend of $0.275 per share
on our common stock payable on June&nbsp;30, 2004, to stockholders of record on June
18, 2004.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004, a total of 35,871 stock options
were exercised at a total option value of approximately $194,000 and a total
market value as of the dates of exercise of approximately $557,000. Subsequent
to March&nbsp;31, 2004, a total of 60,800 stock options were exercised at a total
option value of approximately $337,000 and a total market value as of the dates
of exercise of approximately $976,000.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In January&nbsp;2004, two of our limited partners exercised their conversion rights
and exchanged their interest in five of our limited partnerships. In
accordance with the partnership agreements, at our option, we issued 175,392
shares of our common stock. Since the market value of the common stock issued
was greater than


<P align="center" style="font-size: 10pt">10
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued<BR>
(Unaudited)</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">the book value of the partnership interests received, we recognized a $295,000
increase in the basis of the properties underlying the limited partnership
interests acquired.


<P align="left" style="font-size: 10pt">Other equity consists of the following <I>(in thousands)</I>:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>March 31, 2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>December 31, 2003</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Notes receivable from stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(1,674</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2,792</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accumulated comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,154</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total Other Equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(638</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004, three notes receivable from
stockholders with a combined balance of $940,000 were paid in full. Two of
these notes were from current members of our board of directors.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">On March&nbsp;23, 2004, we filed a Form S-3 &#147;shelf&#148; registration which became
effective April&nbsp;5, 2004 and provides us with the capacity to offer up to
$200,000,000 in our debt and/or equity securities.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In our Proxy Statement for our annual meeting to be held on May&nbsp;18, 2004, we
have requested that our stockholders approve the following equity related
proposals:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an increase in the number of authorized common stock
from 35,000,000 to 45,000,000 shares;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an increase in the number of authorized preferred
stock from 15,000,000 to 25,000,000 shares;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>approval of The 2004 Stock Option Plan which would
provide for the granting of options on 500,000 shares of
common stock; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>approval of The 2004 Restricted Stock Plan which would
provide for the granting of up to 100,000 shares of
restricted common stock.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">There can be no assurances given that all or any of these proposals will be
approved by our stockholders.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In April&nbsp;2004, we received conversion notification on 795,000 shares of our
$25.00 liquidation value, 8.5% Series&nbsp;E Convertible Preferred Stock. These
shares converted into shares of common stock at a conversion price of $12.50
per common share. Accordingly we issued 1,590,000 shares of common stock.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Prior to January&nbsp;1, 2003, we accounted for stock option grants in accordance
with APB Opinion No.&nbsp;25, &#147;<I>Accounting for Stock Issued to Employees</I>&#148; (or APB 25)
and related Interpretations. Historically, we granted stock options for a
fixed number of shares to employees with an exercise price equal to the fair
value of the shares at the date of grant. Under APB 25, because the exercise
price of our employee stock options equaled the market price of the underlying
stock on the date of grant, no compensation expense was recognized. Effective
January&nbsp;1, 2003, we adopted SFAS No.&nbsp;148, &#147;<I>Accounting for Stock-Based
Compensation &#150; Transition and Disclosure</I>,&#148; on a prospective basis for all
employee awards granted, modified or settled on or after January&nbsp;1, 2003. We
did not grant any options during the three months ended March&nbsp;31, 2004.


<P align="center" style="font-size: 10pt">11
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued<BR>
(Unaudited)</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The following table illustrates the effect on net income and earnings per share
as if the fair value method had been applied to all outstanding and unvested
awards in each period <I>(unaudited, in thousands)</I>:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income available to common stockholders, as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Add: Stock-based compensation expense in the period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Deduct: Total stock-based compensation expense determined
under fair value method for all awards</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(34</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Pro forma net income available to common stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">89</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income per common share available to common stockholders:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic &#150; as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic &#150; pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted &#150; as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted &#150; pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>7. Major Operators</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">There are two companies that lease properties directly from us that each
represent between 10% and 20% of our total assets. One of these companies is
publicly traded and thus files quarterly financial information with the
Securities and Exchange Commission and the other is privately owned and thus no
financial information is available. The following table summarizes our
publicly traded major lessee&#146;s assets, stockholders&#146; equity, annual revenue and
net loss from continuing operations as of or for the twelve months ended
December&nbsp;31, 2003 per the lessee&#146;s public filings:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="79%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Assisted Living</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Concepts, Inc.</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3"><B>(in thousands)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,327</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non-current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">188,887</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,056</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non-current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,129</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,029</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gross revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">168,012</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Loss from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(337</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">157</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash provided by operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,090</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash provided by investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,318</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash used in financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(23,630</TD>
    <TD nowrap>)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Assisted Living Concepts, Inc. (or ALC) leases 37 assisted living properties
with a total of 1,434 units we own representing approximately 13.0%, or
$71,937,000, of our total assets at March&nbsp;31, 2004.


<P align="center" style="font-size: 10pt">12
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>LTC PROPERTIES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued<BR>
(Unaudited)</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In January&nbsp;2004, we received $12,374,000 in cash from ALC as full redemption of
ALC Senior and Junior Notes we held. The notes were redeemed at face value
plus accrued and unpaid interest as of the redemption date. See <I>Note 3. Notes
Receivable </I>for a discussion of a note we have with HHI which is secured by
1,452,794 shares of ALC&#146;s common stock owned by HHI.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Alterra Healthcare Corporation (or Alterra) leases 35 assisted living
properties with a total of 1,416 units we own representing approximately 12.8%,
or $70,752,000, of our total assets at March&nbsp;31, 2004. Alterra announced on
January&nbsp;22, 2003, that it had filed a voluntary petition with the U.S.
Bankruptcy Court for the District of Delaware to reorganize under Chapter&nbsp;11 of
the U.S. Bankruptcy Code. Alterra emerged from bankruptcy in December&nbsp;2003 as
a non-publicly traded company. All of our leases with Alterra were assumed,
without change, by the reorganized Alterra.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">ALC is a publicly traded company, and as such is subject to the filing
requirements of the Securities and Exchange Commission. Our financial position
and our ability to make distributions may be adversely affected by financial
difficulties experienced by ALC and Alterra or any of our other lessees and
borrowers, including additional bankruptcies, inability to emerge from
bankruptcy, insolvency or general downturn in business of any such operator, or
in the event any such operator does not renew and/or extend its relationship
with us or our borrowers when it expires.


<P align="left" style="font-size: 10pt"><B>8. Earnings per Share</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The following table sets forth the computation of basic and diluted net income
per share
<I>(unaudited, in thousands, except per share amounts)</I>:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,884</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred stock redemption charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,029</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred stock dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,946</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,761</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income for basic net income per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Effect of dilutive securities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Other dilutive securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income for diluted net income per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Shares for basic net income per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,965</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Effect of dilutive securities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Shares for diluted net income per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,038</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
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    <TD><DIV style="margin-left:10px; text-indent:-10px">Basic net income per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
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    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px">Diluted net income per share</DIV></TD>
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    <TD align="right">$</TD>
    <TD align="right">0.05</TD>
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    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
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<P align="left" style="font-size: 10pt"><B>Item&nbsp;2. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>



<P align="left" style="font-size: 10pt"><B>Operating Results</B>



<P align="left" style="font-size: 10pt"><B><I>Three months ended March&nbsp;31, 2004 compared to three months ended March&nbsp;31, 2003</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Revenues for the three months ended March&nbsp;31, 2004 increased to $17.0&nbsp;million
from $15.9&nbsp;million for the same period in 2003. Rental income for the three
months ended March&nbsp;31, 2004 increased $1.8&nbsp;million primarily as a result of the
effect of receiving rent for the entire quarter of 2004 on properties formerly
leased to Sun Healthcare Group, Inc. (or Sun) as compared to receiving one
month of rent from Sun in the first quarter of 2003 ($0.2&nbsp;million), receiving
rent in 2004 on properties formerly leased to Centers for Long Term Care (or
CLC) which were on non-accrual in the first quarter of 2003 ($1.0&nbsp;million), the
receipt of rent from properties acquired in 2003 and 2004 ($0.1&nbsp;million), an
increase due to straight-line rental income ($0.3&nbsp;million) and new leases and
rental increases provided for in existing lease agreements ($0.2&nbsp;million).
Same store rental income, properties owned for the three months ended March&nbsp;31,
2004 and the three months ended March&nbsp;31, 2003 and excluding straight-line
rental income, increased $1.4&nbsp;million due to the effect of receiving rent for
the entire quarter of 2004 on properties formerly leased to Sun and CLC as
noted above and rental increases provided for in existing lease agreements.
Interest income from mortgage loans and notes receivable decreased $0.4&nbsp;million
from prior year due to the pay off of two loans partially offset by the receipt
of interest from one new loan. Interest income from REMIC Certificates for the
three months ended March&nbsp;31, 2004 decreased $0.4&nbsp;million compared to the same
period of 2003 due to the amortization of the related asset and the early
payoff of certain mortgage loans underlying our investment in REMIC
Certificates. Interest and other income for the three months ended March&nbsp;31,
2004 was comparable to prior year.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Interest expense decreased by $1.8&nbsp;million to $3.3&nbsp;million for the three months
ended March&nbsp;31, 2004 from $5.1&nbsp;million during the same period in 2003, due to a
decrease in average borrowings outstanding during the period and a decrease in
interest rates on our Unsecured Revolving Credit compared to the Secured
Revolving Credit we had in the first quarter of 2003.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Depreciation and amortization expense for the first quarter of 2004 increased
$0.1&nbsp;million from the first quarter of 2003 due to acquisitions.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We recorded a $1.3&nbsp;million impairment charge during the first quarter of 2003.
No impairment charge was taken in the first quarter of 2004.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Legal expenses were $0.3&nbsp;million lower in the first quarter of 2004 due to
lower legal costs for general litigation defense. Operating and other expenses
decreased $0.6&nbsp;million due to lower property tax and other payments made in
2003 on behalf of certain operators and for closed and unsold properties.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004, net income from discontinued
operations was $1.0&nbsp;million. During the first quarter of 2004, we sold one
skilled nursing property in Georgia resulting in a gain on sale of $1.0
million. During the first quarter of 2003, we reported a loss on discontinued
operations of $0.03&nbsp;million related to properties that were subsequently sold.
This reclassification was made in accordance with SFAS No.&nbsp;144 &#147;<I>Accounting for
the Impairment or Disposal of Long-Lived Assets</I>&#148; which requires that the
financial results of properties meeting certain criteria be reported on a
separate line item called &#147;Discontinued Operations&#148;.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the first quarter of 2004, we redeemed all of our outstanding Series&nbsp;A
and Series&nbsp;B preferred stock. Accordingly, we recognized a $4.0&nbsp;million
preferred stock redemption charge related to the original issue costs of the
stock redeemed. In addition, preferred stock dividends were $1.2&nbsp;million
higher in the first quarter of 2004 as compared to the prior year due to the
issuance of Series&nbsp;E and Series&nbsp;F preferred stock and the timing of the Series
A and Series&nbsp;B preferred stock redemption.


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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Net income available to common stockholders increased to $0.9&nbsp;million for the
three months ended March&nbsp;31, 2004 from $0.1&nbsp;million for the same period in 2003
primarily due to the increases in revenue, the impairment charge in 2003, lower
interest expense in 2004 and gain on sale of assets in 2004 partially offset by
a $4.0&nbsp;million preferred stock redemption charge and a $1.2&nbsp;million increase in
preferred stock dividends as discussed above.


<P align="left" style="font-size: 10pt"><B>Liquidity and Capital Resources</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">At March&nbsp;31, 2004 our real estate investment portfolio (before accumulated
depreciation and amortization) consisted of $459.2&nbsp;million invested primarily
in owned long-term care properties, mortgage loans of approximately $74.8
million (net of a $1.3&nbsp;million reserve) and subordinated REMIC Certificates of
approximately $63.1&nbsp;million with a weighted average effective yield of 14.3%.
At March&nbsp;31, 2004 the outstanding certificate principal balance and the
weighted average pass-through rate for the senior REMIC Certificates (all held
by outside third parties) was $137.7&nbsp;million and 6.9%. Our portfolio consists
of direct investments (properties that we either own or on which we hold
promissory notes secured by first mortgages) in 84 skilled nursing properties,
96 assisted living properties and one school in 30 states.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">For the three months ended March&nbsp;31, 2004, we had net cash provided by
operating activities of $12.5&nbsp;million. During the first quarter of 2004 we
acquired a mortgage loan from a REMIC pool we originated for $3.7&nbsp;million,
which represented the outstanding loan balance and purchased $4.0&nbsp;million face
value REMIC Certificates in a pool we originated from a third party for $3.9
million in cash including accrued interest. In March&nbsp;2004 we acquired 120 bed
skilled nursing property in Texas for a total of $3.4&nbsp;million in cash. The
property is leased to a third party operator under a 20&nbsp;year lease beginning at
an annual lease payment of $0.4&nbsp;million and increasing 2% annually.
Additionally, we invested $0.1&nbsp;million in building improvements. During the
quarter we sold one skilled nursing property in Georgia for $1.5&nbsp;million
resulting in a gain on sale of $1.0&nbsp;million and net proceeds of $0.2&nbsp;million
after a $1.3&nbsp;million pay down of a mortgage loan secured by the property. We
also received $2.2&nbsp;million in principal payments on mortgage loans receivable
and $12.3&nbsp;million from Assisted Living Concepts, Inc. (or ALC) as full
redemption of the ALC Senior and Junior Notes we held as investments. The
notes were redeemed at face value plus accrued and unpaid interest as of the
redemption date and the proceeds were used to reduce amounts outstanding under
our Unsecured Revolving Credit.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004, we borrowed $33.0&nbsp;million and
repaid $21.0&nbsp;million under our Unsecured Revolving Credit. In January&nbsp;2004, we
issued 4.0&nbsp;million shares of 8.0% Series&nbsp;F Cumulative Redeemable Preferred
Stock (see <I>Note 6. Stockholders&#146; Equity) </I>which generated net cash proceeds of
approximately $98.6&nbsp;million. The cash proceeds plus cash on hand and
borrowings under our Unsecured Revolving Credit were used to redeem all of the
outstanding shares of our Series&nbsp;A and Series&nbsp;B preferred stock for $126.3
million which represented the $25.00 liquidation price per share plus all
accrued and unpaid dividends through the redemption date.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004, $0.2&nbsp;million in principal was
received by the non-recourse senior mortgage participation holder and we paid
$5.5&nbsp;million in principal payments on mortgage loans and capital lease
obligations including $4.5&nbsp;million of mortgage debt repaid prior to maturity.
The mortgage repaid was held in a REMIC pool we originated.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the three months ended March&nbsp;31, 2004, we declared and paid cash
dividends on our Series&nbsp;A, Series&nbsp;B, Series&nbsp;C and Series&nbsp;E preferred stock
totaling $1.9&nbsp;million ($0.8&nbsp;million of which was accrued at year end), $1.5
million ($0.4&nbsp;million of which was accrued at year end), $0.8&nbsp;million and $1.2
million respectively. During the three months ended March&nbsp;31, 2004, we
declared a cash dividend totaling $0.8&nbsp;million which represented 22&nbsp;days of
accrued dividends on our new Series&nbsp;F preferred stock. Additionally, we
declared and paid cash dividends on our common stock totaling $4.5&nbsp;million.
Subsequent to March&nbsp;31, 2004 we declared a $0.275 dividend per share on our
common stock payable on June&nbsp;30, 2004.


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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the first quarter of 2004, two of our limited partners exercised their
conversion rights and exchanged their interest in five of our limited
partnerships. In accordance with the partnership agreements, at our option, we
issued 175,392 shares of our common stock. Since the market value of the
common stock issued was greater than the book value of the partnership
interests received, we recognized a $0.3&nbsp;million increase in the basis of the
properties underlying the limited partnership interests acquired.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Subsequent to March&nbsp;31, 2004, we sold two closed skilled nursing properties for
a total of $0.3&nbsp;million resulting in a total loss on the sales of $0.3&nbsp;million.
Proceeds from the sale were used to payoff a $0.2&nbsp;million mortgage loan
securing one of the properties sold. We also acquired for
$2.1&nbsp;million from a REMIC pool we originated a 165 bed skilled
nursing property in Texas which had been foreclosed on by the REMIC. The property is leased to a third
party operator under a two year lease with a two year option to extend. The
annual lease payment is $0.2&nbsp;million during the initial two year term. In
April&nbsp;2004 we converted one mortgage loan on a 194 bed skilled nursing property
in Arizona to an owned property through a deed in lieu foreclosure transaction
plus $0.1&nbsp;million. This property was added to a master lease with a third
party operator, increasing the annual rent due under the master lease by $0.4
million. In April&nbsp;2004, we funded a new loan on a 156 bed skilled nursing
property in Georgia in the amount of $1.9&nbsp;million. Also subsequent to March
31, 2004, we acquired a mortgage loan from a REMIC pool we originated for $0.7
million in cash which represented the outstanding loan balance owed to the
REMIC pool under the mortgage.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In April&nbsp;2004, we received conversion notification on 795,000 shares of Series
E preferred stock. Accordingly we issued 1,590,000 shares of common stock.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">On March&nbsp;23, 2004, we filed a Form S-3 &#147;shelf&#148; registration statement which
became effective April&nbsp;5, 2004 and provides us with the capacity to offer up to
$200.0&nbsp;million in our debt and/or equity securities. Our decision to offer any
or all securities covered under this registration is contingent on many factors
including but not limited to the market for such securities, the general
economic and financial market conditions and our performance, financial
position and prospects for the use of any funds raised.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We expect our future income and ability to make distributions from cash flows
from operations to depend on the collectibility of our mortgage loans
receivable, REMIC Certificates and rents. The collection of these loans,
certificates and rents will be dependent, in large part, upon the successful
operation by the operators of the skilled nursing properties and assisted
living properties we own or are pledged to us and the school we own. The
operating results of the facilities will be impacted by various factors over
which the operators/owners may have no control. Those factors include, without
limitation, the status of the economy, changes in supply of or demand for
competing long-term care facilities, ability to control rising operating costs,
and the potential for significant reforms in the long-term care industry. In
addition, our future growth in net income and cash flow may be adversely
impacted by various proposals for changes in the governmental regulations and
financing of the long-term care industry. We cannot presently predict what
impact these proposals may have, if any. We believe that an adequate provision
has been made for the possibility of loans proving uncollectible but we will
continually evaluate the status of the operations of the skilled nursing
facilities, assisted living facilities and the school. In addition, we will
monitor our borrowers and the underlying collateral for mortgage loans and will
make future revisions to the provision, if considered necessary.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Our investments, principally our investments in mortgage loans, REMIC
Certificates, and owned properties, are subject to the possibility of loss of
their carrying values as a result of changes in market prices, interest rates
and inflationary expectations. The effects on interest rates may affect our
costs of financing our operations and the fair market value of our financial
assets. We generally made loans that have predetermined increases in interest
rates and leases that have agreed upon annual increases. Inasmuch as we may
initially fund some of our investments with variable interest rate debt, we are
at risk of net interest margin deterioration if medium and long-term rates were
to increase.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">All but $4.0&nbsp;million face value of the REMIC Certificates we hold are
subordinate in rank and right of payment to the certificates sold to
third-party investors and as such would, in most cases, bear the first risk of
loss in the event of impairment to any of the underlying mortgages. The
returns on our investment in REMIC Certificates are


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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">subject to certain uncertainties and contingencies including, without
limitation, the level of prepayments, estimated future credit losses,
prevailing interest rates, and the timing and magnitude of credit losses on the
underlying mortgages collateralizing the securities that are a result of the
general condition of the real estate market or long-term care industry. As
these uncertainties and contingencies are difficult to predict and are subject
to future events that may alter management&#146;s estimations and assumptions, no
assurance can be given that current yields will not vary significantly in
future periods. To minimize the impact of prepayments, the mortgage loans
underlying the REMIC Certificates generally prohibit prepayment unless the
property is sold to an unaffiliated third party (with respect to the borrower).


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We believe that our current cash flow from operations available for
distribution or reinvestment, our current borrowing capacity and (based on
market conditions) our ability to issue debt and equity securities are
sufficient to provide for payment of our operating costs, meet debt
obligations, provide funds for distribution to the holders of our preferred
stock and pay common dividends at least sufficient to maintain our REIT status
and repay borrowings at, or prior to, their maturity.


<P align="left" style="font-size: 10pt"><B>Critical Accounting Policies</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Effective January&nbsp;1, 2003, we adopted Statement of Financial Accounting
Standard (or SFAS) No.&nbsp;148 &#147;<I>Accounting for Stock-Based Compensation &#150;
Transition and Disclosure</I>.&#148; SFAS No.&nbsp;148 amends SFAS No.&nbsp;123 &#147;<I>Accounting for
Stock-Based Compensation</I>&#148; to provide alternative methods of transition to SFAS
No.&nbsp;123&#146;s fair value method of accounting for stock-based employee
compensation. SFAS No.&nbsp;148 also amends the disclosure provisions of SFAS No.
123 and APB Opinion No.&nbsp;28 &#147;<I>Interim Financial Reporting</I>&#148; to require disclosure
in the summary of significant accounting policies of the effects of an entity&#146;s
accounting policy for stock-based employee compensation on reported net income
and earnings per share in annual and interim financial statements. SFAS No.
148 provides three transition methods for entities that adopt the fair value
recognition provisions of SFAS No.&nbsp;123 for stock-based employee compensation.
In addition to the prospective method originally provided under SFAS No.&nbsp;123,
SFAS No.&nbsp;148 provides for a modified prospective method and a retroactive
restatement method. We have adopted the prospective method and therefore will
recognize compensation expense related to all employee stock-based awards
granted, modified or settled after January&nbsp;1, 2003.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We use the Black-Scholes model for calculating stock option expense. This
model requires management to make certain estimates including stock volatility,
discount rate and the termination discount factor. If management incorrectly
estimates these variables, the results from operations could be affected.
Prior to January&nbsp;1, 2003, we accounted for stock option grants in accordance
with APB Opinion No.&nbsp;25, &#147;<I>Accounting for Stock Issued to Employees</I>&#148; (APB 25)
and related Interpretations. Historically, we granted stock options for a
fixed number of shares to employees with an exercise price equal to the fair
value of the shares at the date of grant. Under APB 25, because the exercise
price of our employee stock options equaled the market price of the underlying
stock on the date of the grant, no compensation expense was recognized.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">As of March&nbsp;31, 2004, there were 250,000 options outstanding subject to the
disclosure requirements of SFAS No.&nbsp;148. The fair value of these options was
estimated utilizing the Black-Scholes valuation model and assumptions as of
each respective grant date. In determining the estimated fair values for the
options granted in prior years, the weighted average expected life assumption
was five years, the weighted average volatility was 0.49 and the weighted
average risk free interest rate was 3.80%. At March&nbsp;31, 2004, the weighted
average fair value of the options outstanding was estimated to be $0.84 per
share, the weighted average exercise price of the options was $5.67 per share
and the weighted average remaining vesting life was 1.4&nbsp;years. See <I>Note 6.
Stockholders&#146; Equity </I>for further discussion.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">For further discussion of our critical accounting policies, see our Annual
Report filed on Form 10-K for the year ended December&nbsp;31, 2003.


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<P align="left" style="font-size: 10pt"><B>Statement Regarding Forward Looking Disclosure</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Certain information contained in this report includes forward looking
statements, which can be identified by the use of forward looking terminology
such as &#147;may,&#148; &#147;will,&#148; &#147;expect,&#148; &#147;should&#148; or comparable terms or negatives
thereof. These statements involve risks and uncertainties that could cause
actual results to differ materially from those described in the statements.
These risks and uncertainties include (without limitation) the following: the
effect of economic and market conditions and changes in interest rates,
government policy changes relating to the health care industry including
changes in reimbursement levels under the Medicare and Medicaid programs,
changes in reimbursement by other third party payors, the financial strength of
the operators of our properties as it affects the continuing ability of such
operators to meet their obligations to us under the terms of our agreements
with our borrowers and operators, the amount and the timing of additional
investments, access to capital markets and changes in tax laws and regulations.
Other important factors are identified in our Annual Report on Form 10-K for
the year ended December&nbsp;31, 2003, including factors identified under the
headings &#147;Business&#148; and &#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations.&#148; Finally, we assume no obligation to
update or revise any forward-looking statements or to update the reasons why
actual results could differ from those projected in any forward-looking
statements.

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<P align="left" style="font-size: 10pt"><B>Item&nbsp;3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Readers are cautioned that statements contained in this section &#147;Quantitative
and Qualitative Disclosures About Market Risk&#148; are forward looking and should
be read in conjunction with the disclosure under the heading &#147;Statement
Regarding Forward Looking Disclosure&#148; set forth above.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We are exposed to market risks associated with changes in interest rates as
they relate to our mortgage loans receivable, investments in REMIC Certificates
and debt. Interest rate risk is sensitive to many factors, including
governmental monetary and tax policies, domestic and international economic and
political considerations and other factors that are beyond our control.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We do not utilize interest rate swaps, forward or option contracts or foreign
currencies or commodities, or other types of derivative financial instruments.
The purpose of the following disclosure is to provide a framework to understand
our sensitivity to hypothetical changes in interest rates as of March&nbsp;31, 2004.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Our future earnings, cash flows and estimated fair values relating to financial
instruments are dependent upon prevalent market rates of interest, such as
LIBOR or term rates of U.S. Treasury Notes. Changes in interest rates
generally impact the fair value, but not future earnings or cash flows, of
mortgage loans receivable, our investments in REMIC Certificates and fixed rate
debt. For variable rate debt, such as our Unsecured Revolving Credit, changes
in interest rates generally do not impact the fair value, but do affect future
earnings and cash flows.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">At March&nbsp;31, 2004, based on the prevailing interest rates for comparable loans
and estimates made by management, the fair value of our mortgage loans
receivable was approximately $75.8&nbsp;million. A 1% increase in such rates would
decrease the estimated fair value of our mortgage loans by approximately $2.8
million while a 1% decrease in such rates would increase their estimated fair
value by approximately $3.0&nbsp;million. A 1% increase or decrease in applicable
interest rates would not have a material impact on the fair value of our
investment in REMIC Certificates or fixed rate debt.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The estimated impact of changes in interest rates discussed above are
determined by considering the impact of the hypothetical interest rates on our
borrowing costs, lending rates and current U.S. Treasury rates from which our
financial instruments may be priced. We do not believe that future market rate
risks related to our financial instruments will be material to our financial
position or results of operations. These analyses do not consider the effects
of industry specific events, changes in the real estate markets, or other
overall economic activities that could increase or decrease the fair value of
our financial instruments. If such events or changes were to occur, we would
consider taking actions to mitigate and/or reduce any negative exposure to such
changes. However, due to


<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">the uncertainty of the specific actions that would be taken and their possible
effects, the sensitivity analysis assumes no changes in our capital structure.

<DIV align="left">
<A name="107"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;4. CONTROLS AND PROCEDURES</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Our principal executive officer and principal financial officer have carried
out an evaluation of the effectiveness of our disclosure controls and
procedures as of March&nbsp;31, 2004 (as defined in the Securities Exchange Act of
1934 Rules&nbsp;13a-15(e) and 15d-15(e)). Based on that evaluation, these officers
have concluded that as of March&nbsp;31, 2004, our disclosure controls and
procedures were effective to ensure that information required to be disclosed
in reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission&#146;s rules and forms.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">During the period covered by this report, there have been no changes in our
internal controls over financial reporting that have materially affected or are
reasonably likely to materially affect our internal controls over financial
reporting.


<P align="center" style="font-size: 10pt">19
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="108"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART II</B>



<P align="center" style="font-size: 10pt"><B>OTHER INFORMATION</B>


<DIV align="left">
<A name="109"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;2. Changes in Securities and Use of Proceeds.</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">(c)&nbsp;&nbsp;In January&nbsp;2004, two of our limited partners exercised their conversion
rights and exchanged their interest in five of our limited partnerships. In
accordance with the partnership agreements, at our option, we issued 175,392
shares of our common stock. The shares were issued in reliance on Section&nbsp;4(2)
of the Securities Act.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">(e)&nbsp;&nbsp;The following table provides the information with respect to repurchases of
shares of our 9.5% Series&nbsp;A Cumulative Preferred Stock and 9.0% Series&nbsp;B
Cumulative Preferred Stock during each month in the first quarter of 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum Number</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares Purchased as</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Shares that May</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total Number</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Part of Publicly</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Yet Be Purchased</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Average Price</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Announced Plans or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Under the Plans or</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Period</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Purchased</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Paid per Share</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Programs</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Programs</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">January 1 through January&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">9.5% Series&nbsp;A Cumulative
Preferred Stock (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,225,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,225,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">February 1 through February&nbsp;29, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">March 1 through March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">9.5% Series&nbsp;A Cumulative
Preferred Stock (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,838,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,838,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">9.0% Series&nbsp;B Cumulative
Preferred Stock (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,988,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,988,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:20px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,052,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,052,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:20px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">On December&nbsp;31, 2003, we announced the redemption of 1,225,680 shares of
our 9.5% Series&nbsp;A Cumulative Preferred Stock representing 40% of the
outstanding shares of the Series&nbsp;A Cumulative Preferred Stock. The
redemption date was January&nbsp;30, 2004 and the redemption price was $25.00
per share plus accrued and unpaid dividends. Because the redemption was
announced in 2003, all charges relating to the redemption were recorded in
2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">On February&nbsp;23, 2004, we announced the redemption of 1,838,520 shares of
our 9.5% Series&nbsp;A Cumulative Preferred Stock representing all of the
outstanding shares of the Series&nbsp;A Cumulative Preferred Stock. The
redemption date was March&nbsp;25, 2004 and the redemption price was $25.00 per
share plus accrued and unpaid dividends.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">On March&nbsp;1, 2004, we announced the redemption of 1,988,000 shares of our
9.0% Series&nbsp;B Cumulative Preferred Stock representing all of the
outstanding shares of the Series&nbsp;B Cumulative Preferred Stock. The
redemption date was March&nbsp;31, 2004 and the redemption price was $25.00 per
share plus accrued and unpaid dividends.</TD>
</TR>

</TABLE>


<DIV align="left">
<A name="110"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;6. Exhibits and Reports on Form&nbsp;8-K</B>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><B>(a)</B></TD>
    <TD width="3%">&nbsp;</TD>
    <TD><B>Exhibits</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The following exhibits are filed as exhibits to this report:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">3.1</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>Articles Supplementary Reclassifying 3,080,000
Shares of 9.5% Series&nbsp;A Cumulative Preferred Stock and
2,000,000 Shares of 9% Series&nbsp;B Cumulative Preferred Stock into
unclassified shares of Preferred Stock filed April&nbsp;1, 2004.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">3.2</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Articles Supplementary Reclassifying 40,000 Shares
of Series&nbsp;D Junior Participating Preferred Stock into
unclassified shares of Preferred Stock filed April&nbsp;1, 2004.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">10.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amended and Restated Employment Agreement of Wendy
Simpson dated March&nbsp;9, 2004.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">20
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">10.2</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>Amended and Restated Employment Agreement of Alex
Chavez dated March&nbsp;9, 2004.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">31.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certification by Chief Executive Officer pursuant
to Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">31.2</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certification by Chief Financial Officer pursuant
to Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">32</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certifications by Chief Executive Officer and Chief
Financial Officer pursuant to Section&nbsp;906 of the Sarbanes-Oxley
Act of 2002*</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In accordance with Item&nbsp;601(b)(4)(iii) of Regulation&nbsp;S-K, certain
instruments pertaining to Registrant&#146;s long-term debt have not been
filed; copies thereof will be furnished to the Securities and
Exchange Commission upon request.</TD>
</TR>

</TABLE>



<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="98%">Certification will not be deemed &#147;filed&#148; for purposes of Section
18 of the Securities and Exchange Act of 1934</TD>
</TR>

</TABLE>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><B>(b)</B></TD>
    <TD width="3%">&nbsp;</TD>
    <TD><B>Reports on Form&nbsp;8-K</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On January&nbsp;26, 2004 we filed a Current Report on Form 8-K dated
January&nbsp;26, 2004 reporting that we signed a Credit Agreement dated
as of December&nbsp;26, 2003 with Bank of Montreal, as Administrative
Agent and Harris Nesbitt Corp. as Co-Lead Arranger and Book Manager
and Keybank Corporate Capital, Inc. as Co-Lead Arranger and
Syndication Agent. The Credit Agreement provides for $45&nbsp;million of
total commitments and is a revolving line with no scheduled
maturities other than the three year term of the Credit Agreement.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On February&nbsp;6, 2004 we filed a Current Report on Form 8-K dated
February&nbsp;6, 2004 reporting our press release announcing the
postponement of our Series&nbsp;F Preferred Stock offering.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On February&nbsp;12, 2004, we filed a Current Report on Form 8-K dated
February&nbsp;12, 2004 reporting our press release announcing the
operating results for the three and twelve months ended December&nbsp;31,
2003.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On February&nbsp;19, 2004, we filed a Current Report on Form 8-K dated
February&nbsp;18, 2004 announcing the issuance and sale of up to four
million (4,000,000) shares of the 8% Series&nbsp;F Cumulative Preferred
Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On February&nbsp;23, 2004, we filed a Current Report on Form 8-K dated
February&nbsp;23, 2004 reporting our press release announcing the
redemption of 1,838,520 shares of our 9.5% Series&nbsp;A Cumulative
Preferred Stock representing all of the outstanding shares of the
Series&nbsp;A Cumulative Preferred Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On February&nbsp;27, 2004, we filed a Current Report on Form 8-K dated
February&nbsp;27, 2004 reporting our press release announcing the closing
of the sale of 1&nbsp;million shares of 8% Series&nbsp;F cumulative redeemable
preferred stock in a registered direct placement.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On March&nbsp;1, 2004, we filed a Current Report on Form 8-K dated March
1, 2004 reporting our press release announcing the redemption of
1,988,000 shares of our 9.0% Series&nbsp;B Cumulative Preferred Stock
representing all of the outstanding shares of the Series&nbsp;B
Cumulative Preferred Stock.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">21
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>On March&nbsp;19, 2004, we filed a Current Report on Form 8-K dated March
19, 2004 reporting our press release announcing the approval of an
amendment to our Stockholder Rights Plan to change its expiration
date from May&nbsp;24, 2010 to April&nbsp;1, 2004.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">22
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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<DIV align="left">
<A name="111"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="3">LTC PROPERTIES, INC.<BR>
Registrant</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: May&nbsp;7, 2004
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ WENDY L. SIMPSON</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR align="left" size="1" noshade width="85%"></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wendy L. Simpson</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice Chairman and Chief Financial Officer</TD>
</TR>

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</DIV>



<P align="center" style="font-size: 10pt">23
</DIV>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>v98528exv3w1.txt
<DESCRIPTION>EXHIBIT 3.1
<TEXT>
<PAGE>
                                                                     EXHIBIT 3.1
                              LTC PROPERTIES, INC.

                             ARTICLES SUPPLEMENTARY

                  LTC PROPERTIES, INC., a Maryland corporation (the "Company")
hereby certifies to the State Department of Assessments and Taxation of Maryland
(the "Department") that:

                  FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Company by Article SEVENTH of the Company's Articles of
Amendment and Restatement filed with the Department on August 3, 1992, as
amended and supplemented (the "Charter"), and Section 2-105 of the Maryland
General Corporation Law (the "MGCL"), the Board of Directors of the Company has,
by unanimous written consent in lieu of a meeting dated as of April 1, 2004,
adopted resolutions reclassifying and designating 3,080,000 authorized but
unissued shares of 9.5% Series A Cumulative ("Series A Preferred Stock"),
constituting all of the shares classified and designated as Series A Preferred
Stock, and 2,000,000 authorized but unissued shares of 9% Series B Cumulative
Preferred Stock ("Series B Preferred Stock"), constituting all of the shares
classified and designated as Series B Preferred Stock, as authorized but
unissued and unclassified shares of Preferred Stock (as defined in the Charter)
of the Company

                  SECOND: After giving effect to the reclassification and
designation of such authorized but unissued shares of Series A Preferred Stock
and Series B Preferred Stock described in Article FIRST, the number of
authorized but unissued shares of Series A Preferred Stock and Series B
Preferred Stock is zero, and of the Fifteen Million (15,000,000) shares of
Preferred Stock which the Company has authority to issue under its Charter, Two
Million (2,000,000) shares have been classified and designated as 8.5% Series C
Cumulative Convertible Preferred Stock ("Series C Preferred Stock"), Forty
Thousand (40,000) shares have been classified and designated as Series D Junior
Participating Preferred Stock ("Series D Preferred Stock"), Two Million Two
Hundred Thousand (2,200,000) shares have been classified and designated as 8.5%
Series E Cumulative Convertible Preferred Stock, Four Million (4,000,000) shares
have been classified and designated as 8% Series F Cumulative Preferred Stock
and Six Million Seven Hundred Sixty Thousand (6,760,000) shares have not been
classified and designated as a separate series. The total number of shares of
stock of all classes which the Company has authority to issue, consisting of
Fifty Million (50,000,000) shares, par value $.01 per share, remains unchanged.

                  THIRD: The shares of stock described herein have been
classified or reclassified by the Board of Directors under the authority
contained in the Charter of the Company.

                  FOURTH: These Articles Supplementary have been approved by the
Board of Directors of the Company in the manner and by the vote required by law.

                  FIFTH: The undersigned Vice Chairman of the Company
acknowledges these Articles Supplementary to be the corporate act of the Company
and, as to all matters or facts

                                STATE OF MARYLAND

I hereby certify that there is a true and complete copy of the 3 page document
on file in this office. DATED: April 1, 2004.

                  STATE DEPARTMENT OF ASSESSMENTS AND TAXATION

BY: [ILLEGIBLE], Custodian
This stamp replaces our previous certification system. Effective: 6/95

<PAGE>

required to be verified under oath, the undersigned Vice Chairman of the Company
acknowledges that to the best of her knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties of perjury.

                  IN WITNESS WHEREOF, the Company has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
Vice Chairman and attested to by its Secretary on this 1st day of April, 2004.

ATTEST:                                    LTC PROPERTIES, INC.

/s/ Alex Chavez                        By: /s/ Wendy L. Simpson          (SEAL)
- ------------------------                   -----------------------------
Name:  Alex Chavez                         Name:  Wendy L. Simpson
Title: Secretary                           Title: Vice Chairman

                                                                   [SEAL]
                                                            LTC PROPERTIES, INC.
                                                               CORPORATE SEAL
                                                                  LTC 1992
                                                                  MARYLAND

                                       2


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>v98528exv3w2.txt
<DESCRIPTION>EXHIBIT 3.2
<TEXT>
<PAGE>
                                                                     EXHIBIT 3.2
                              LTC PROPERTIES, INC.

                             ARTICLES SUPPLEMENTARY

                  LTC PROPERTIES, INC., a Maryland corporation (the "Company")
hereby certifies to the State Department of Assessments and Taxation of Maryland
(the "Department") that:

                  FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Company by Article SEVENTH of the Company's Articles of
Amendment and Restatement filed with the Department on August 3, 1992, as
amended and supplemented (the "Charter"), and Section 2-105 of the Maryland
General Corporation Law (the "MGCL"), the Board of Directors of the Company has,
by unanimous written consent in lieu of a meeting dated as of March 18, 2004,
adopted resolutions reclassifying and designating Forty Thousand (40,000)
authorized but unissued shares of Series D Participating Preferred Stock of the
Company ("Series D Preferred Stock"), constituting all of the shares classified
and designated as Series D Preferred Stock, as authorized but unissued and
unclassified shares of Preferred Stock (as defined in the Charter) of the
Company

                  SECOND: After giving effect to the reclassification and
designation of such authorized but unissued shares of Series D Preferred Stock
described in Article FIRST, the number of authorized but unissued shares of
Series D Preferred Stock is zero, and of the Fifteen Million (15,000,000) shares
of Preferred Stock which the Company has authority to issue under its Charter,
Two Million (2,000,000) shares have been classified and designated as 8.5%
Series C Cumulative Convertible Preferred Stock ("Series C Preferred Stock"),
Two Million Two Hundred Thousand (2,200,000) shares have been classified and
designated as 8.5% Series E Cumulative Convertible Preferred Stock, Four Million
(4,000,000) shares have been classified and designated as 8% Series F Cumulative
Preferred Stock and Six Million Eight Hundred Thousand (6,800,000) shares have
not been classified and designated as a separate series. The total number of
shares of stock of all classes which the Company has authority to issue,
consisting of Fifty Million (50,000,000) shares, par value $.01 per share,
remains unchanged.

                  THIRD: The shares of stock described herein have been
classified or reclassified by the Board of Directors under the authority
contained in the Charter of the Company.

                  FOURTH: These Articles Supplementary have been approved by the
Board of Directors of the Company in the manner and by the vote required by law.

                  FIFTH: The undersigned Vice Chairman of the Company
acknowledges these Articles Supplementary to be the corporate act of the Company
and, as to all matters or facts required to be verified under oath, the
undersigned Vice Chairman of the Company acknowledges that to the best of her
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties of
perjury.

                                STATE OF MARYLAND

I hereby certify that this is a true and complete copy of the 3 page document
on file in this office. DATED: April 1, 2004.

                  STATE DEPARTMENT OF ASSESSMENTS AND TAXATION

BY: [ILLEGIBLE], Custodian
This stamp replaces our previous certification system. Effective: 6/95

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
Vice Chairman and attested to by its Secretary on this 1st day of April, 2004.

ATTEST:                                 LTC PROPERTIES, INC.

/s/ Alex Chavez                         By: /s/ Wendy L. Simpson          (SEAL)
- -------------------------                   -------------------------------
Name:  Alex Chavez                          Name:  Wendy L. Simpson
Title: Secretary                            Title: Vice Chairman

                                                                   [SEAL]
                                                            LTC PROPERTIES, INC.
                                                               CORPORATE SEAL
                                                                  LTC 1992
                                                                  MARYLAND

                                       2


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>v98528exv10w1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement"), effective as of March 9,
2004, is by and between LTC PROPERTIES, INC., a corporation organized under the
laws of the State of Maryland ("LTC" or the "Company"), and WENDY SIMPSON
("EXECUTIVE").

         NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

         1.       Appointment, Title and Duties. LTC hereby employs Executive to
serve as its Vice Chairperson and Chief Financial Officer. In such capacity,
Executive shall report to the Chief Executive Officer of the Company, and shall
have such duties, powers and responsibilities as are customarily assigned to a
Vice Chairperson and Chief Financial Officer of a publicly held corporation, but
shall also be responsible to the Board of Directors and to any committee
thereof. In addition, Executive shall have such other duties and
responsibilities as the Chief Executive Officer may assign her, with her
consent, including serving with the consent or at the request of the Chief
Executive Officer as an officer or on the board of directors of affiliated
corporations.

         2.       Term of Agreement. The term of this Agreement shall commence
as of the date hereof and shall extend such that at each and every moment of
time hereafter the remaining term shall be two years.

         3.       Acceptance of Position. Executive accepts the position of Vice
Chairperson of LTC and Chief Financial Officer, and agrees that during the term
of this Agreement she will faithfully perform her duties and, except as
expressly approved by the Board of Directors of LTC, will devote substantially
all of her business time to the business and affairs of LTC, and will not
engage, for her own account or for the account of any other person or entity, in
a business which competes with LTC. It is acknowledged and agreed that Executive
may serve as an officer and/or director of companies in which LTC owns voting or
non-voting stock. In addition, it is acknowledged and agreed that Executive may,
from time to time, serve as a member of the board of directors of other
companies, in which event the Board of Directors of LTC must expressly approve
such service pursuant to a Board resolution maintained in the Company's minute
books. Any compensation or remuneration which Executive receives in
consideration of her service on the board of directors of other companies shall
be the sole and exclusive property of Executive, and LTC shall have no right or
entitlement at any time to any such compensation or remuneration.

         4.       Salary and Benefits. During the term of this Agreement:

                  (a)      LTC shall pay to Executive a base salary at an annual
rate of not less than Three Hundred Thousand Dollars ($300,000) per annum ("Base
Salary"), paid in approximately equal installments at intervals based on any
reasonable Company policy. LTC agrees from time to time to consider increases in
such base salary in the discretion of the Board of Directors. Any increase, once
granted, shall automatically amend this Agreement to provide that thereafter
Executive's base salary shall not be less than the annual amount to which such
base salary has been increased.

                                       1

<PAGE>

                  (b)      Executive shall participate in all health,
retirement, Company-paid insurance, sick leave, disability, expense
reimbursement and other benefit programs which LTC makes available to any of its
senior executives, and shall be eligible for bonuses in the discretion of the
Board of Directors.

                  (c)      Executive shall be entitled to reasonable vacation
time, not less than four (4) weeks per year, provided that not more than two (2)
weeks of such vacation time may be taken consecutively without prior notice to
and non-objection by the Compensation Committee of the Board of Directors or, if
there is no Compensation Committee, the Board of Directors.

         5.       Certain Terms Defined. For purposes of this Agreement:

                  (a)      Executive shall be deemed to be "disabled" if a
physical or mental condition shall occur and persist which, in the written
opinion of a licensed physician selected by the Board of Directors in good
faith, has rendered Executive unable to perform the duties set forth in Section
1 hereof for a period of sixty (60) days or more and, in the written opinion of
such physician, the condition will continue for an indefinite period of time,
rendering Executive unable to return to her duties;

                  (b)      A termination of Executive's employment by LTC shall
be deemed for "Cause" if, and only if, it is based upon (i) conviction of a
felony; (ii) material disloyalty to the Company such as embezzlement,
misappropriation of corporate assets or, except as permitted pursuant to Section
3 of this Agreement, breach of Executive's agreement not to engage in business
for another enterprise of the type engaged in by the Company; or (iii) the
engaging in unethical or illegal behavior which is of a public nature, brings
LTC into disrepute, and result in material damage to the Company. The Company
shall have the right to suspend Executive with pay, for a reasonable period to
investigate allegations of conduct which, if proven, would establish a right to
terminate this Agreement for Cause, or to permit a felony charge to be tried.
Immediately upon the conclusion of such temporary period, unless Cause to
terminate this Agreement has been established, Executive shall be restored to
all duties and responsibilities as if such suspension had never occurred;

                  (c)      A resignation by Executive shall not be deemed to be
voluntary and shall be deemed to be a resignation with "Good Reason" if it is
based upon (i) a diminution in Executive's title, duties, or salary; (ii) a
reduction in benefits which is not part of an across-the-board reduction in
benefits of all senior executive personnel; (iii) a direction by the Board of
Directors that Executive report to any person or group other than the Chief
Executive Officer or the Board of Directors, or (iv) a geographic relocation of
Executive's place of work a distance for more than seventy-five (75) miles from
LTC's offices located at 22917 Pacific Coast Hwy, Suite 350, Malibu, California
90265;

                  (d)      "Affiliate" means with respect to any Person, a
Person who, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control, with the Person
specified;

                  (e)      "Base Salary" means, as of any date of termination of
employment, the highest base salary of Executive in the then current fiscal year
or in any of the last four fiscal years immediately preceding such date of
termination of employment;

                                       2

<PAGE>

                  (f)      "Beneficial Owner" shall have the meaning given to
such term in Rule 13d-3 under the Exchange Act;

                  (g)      A "Change in Control" occurs if:

                           (i)      Any Person or related group of Persons
(other than Executive and her Related Persons, the Company or a Person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 30% or more of the combined voting
power of the Company's then outstanding securities; or

                           (ii)     The stockholders of the Company approve a
merger or consolidation of the Company with any other corporation (or other
entity), other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 66-2/3% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided, however,
that a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires 30% or more of the
combined voting power of the Company's then outstanding securities shall not
constitute a Change in Control; or

                           (iii)    The Stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
or

                           (iv)     A majority of the members of the Board of
Directors of the Company cease to be Continuing Directors;

                  (h)      "Code" means the Internal Revenue Code of 1986, as
amended.

                  (i)      "Continuing Directors" means, as of any date of
determination, any member of the Board of Directors who (i) was a member of such
Board of Directors on the date of the Agreement or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board of Directors at the
time of such nomination or election.

                  (j)      "Exchange Act" means the Exchange Act of 1934, as
amended.

                  (k)      "Person" means any individual, corporation,
partnership, limited liability company, trust, association or other entity.

                  (l)      "Related Person" means any immediate family member
(spouse, partner, parent, sibling or child whether by birth or adoption) of the
Executive and any trust, estate or foundation, the beneficiary of which is the
Executive and/or an immediate family member of the Executive.

                                       3

<PAGE>

         6.       Certain Benefits Upon Termination. Executive's employment
shall be terminated upon the earlier of (i) the voluntary resignation of
Executive with or without Good Reason; (ii) Executive's death or permanent
disability; or (iii) upon the termination of Executive's employment by LTC for
any reason at any time. In the event of such termination, the below provisions
of this Section 6 shall apply, and in the event of a Change of Control, whether
or not Executive's employment is terminated thereby, Section 6(b) shall apply,
and in the event of a Change in Control, whether or not Executive's employment
is terminated thereby, Section 6(b) shall apply.

                  (a)      If Executive's employment by LTC terminates for any
reason other than as a result of (i) a termination for Cause, or (ii) a
voluntary resignation by Executive without a Good Reason, or (iii) a Change in
Control of the Company, then LTC shall pay Executive a lump sum severance
payment equal to two times her Base Salary; provided that if employment
terminates by reason of Executive's death or disability, then such salary shall
be paid only to the extent the Company has available "key man" life, disability
or similar insurance relating to the death or disability of Executive;

                  (b)      Upon a Change in Control of the Company whether or
not Executive's employment is terminated thereby, in lieu of the severance
payment described in Section 6(a) above, LTC shall pay Executive a lump sum
severance payment in cash equal to $1.0 million, and all stock options and/or
restricted stock shall automatically vest concurrently upon a Change in Control,
notwithstanding any prior existing vesting schedule;

                  (c)      If Executive's employment by LTC terminates for any
reason, except for LTC's termination of Executive's employment for Cause or a
voluntary resignation by Executive without a Good Reason, LTC shall offer to
Executive the opportunity to participate in all Company-provided medical and
dental plans to the extent Executive elects and remains eligible for coverage
under COBRA and for a maximum period of eighteen (18) months at Company expense;
provided, however, in the event Executive's employment by LTC terminated upon a
Change in Control of the Company, then Executive shall not be given the
opportunity to participate in any of such medical and dental plans, except to
the extent required by law;

                  (d)      In the event that Executive's employment terminates
by reason of her death, all benefits provided in this Section 6 shall be paid to
her estate or as her executor shall direct, but payment may be deferred until
Executive's executor or personal representative has been appointed and qualified
pursuant to the laws in effect in Executive's jurisdiction of residence at the
time of her death;

                  (e)      LTC shall make all payments pursuant to the foregoing
subsections (a) through (d) within seven (7) days following the date of
termination of Executive's employment or consummation of a Change in Control of
the Company, as applicable;

                                       4

<PAGE>

                  (f)      Notwithstanding the foregoing, LTC shall have no
liability under this Section if Executive's employment pursuant to this
Agreement is terminated by LTC for Cause or by Executive without a Good Reason;
provided, however, that if Executive's employment pursuant to this Agreement is
terminated by LTC for Cause or by Executive without a Good Reason at any time
after a Change of Control which did not result in Executive's employment being
terminated, such post-Change of Control termination by LTC for Cause or by
Executive without a Good Reason shall not affect in any way Executive's
entitlement to the lump sum severance payment described in Section 6(b) above or
any other rights, benefits or entitlements to which Executive may be entitled as
a result of such Change of Control;

                  (g)      Gross-Up.

                           (i)      If it shall be determined that any payment,
distribution or benefit received or to be received by Executive from the Company
(whether payable pursuant to the terms of this Agreement or any other plan,
arrangements or agreement with the Company or a Affiliate (as defined above)
("Payments")) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive shall be entitled to receive an
additional payment (the "Excise Tax Gross-Up Payment") in an amount such that
the net amount retained by Executive, after the calculation and deduction of any
Excise Tax on the Payments and any federal, state and local income taxes and
excise tax on the Excise Tax Gross-Up Payment provided for in this Section 6(g),
shall be equal to the Payments. In determining this amount, the amount of the
Excise Tax Gross-Up Payment attributable to federal income taxes shall be
reduced by the maximum reduction in federal income taxes that could be obtained
by the deduction of the portion of the Excise Tax Gross-Up Payment attributable
to state and local income taxes. Finally, the Excise Tax Gross-Up Payment shall
be reduced by income or excise tax withholding payment made by the Company or
any affiliate of either to any federal, state or local taxing authority with
respect to the Excise Tax Gross-Up Payment that was not deducted from
compensation payable to Executive.

                           (ii)     All determinations required to be made under
this Section 6(g), including whether and when an Excise Tax Gross-Up Payment is
required and the amount of such Excise Tax Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, except as specified in Section
6(g)(i) above, shall be made by the Company's independent auditors (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and Executive. Such determination of tax liability made by the
Accounting Firm shall be subject to review by Executive's tax advisor and, if
Executive's tax advisor does not agree with such determination reached by the
Accounting Firm, then the Accounting Firm and Executive's tax advisor shall
jointly designate a nationally recognized public accounting firm, which shall
make such determination. All reasonable fees and expenses of the accountants and
tax advisors retained by either Executive or the Company shall be borne by the
Company. Any Excise Tax Gross-Up Payment, as determined pursuant to this Section
6(g), shall be paid by the Company to Executive within five days after the
receipt of such determination. Any determination by a jointly designated public
accounting firm shall be binding upon the Company and Executive.

                                       5

<PAGE>

                           (iii)    As a result of the uncertainty in the
application of Subsection 4999 of the Code at the time of the initial
determination thereunder, it is possible that Excise Tax Gross-Up Payments will
not have been made by the Company that should have been made consistent with the
calculations required to be made hereunder ("Underpayment"). In the event that
Executive thereafter is required to make a payment of any Excise Tax, any such
Underpayment calculated in accordance with and in the same manner as the Excise
Tax Gross-Up Payment in Section 6(g)(i) above shall be promptly paid by the
Company to or for the benefit of Executive. In the event that the Excise Tax
Gross-Up Payment exceeds the amount subsequently determined to be due, such
excess shall constitute a loan from the Company (together with interest at the
rate provided in Section 1274(b)(2)(B) of the Code).

         7.       Tax Liability Loan. Upon a Change in Control of the Company,
whether or not Executive's employment is terminated as a result thereof, the
Company shall offer Executive an unsecured loan in the amount necessary to fund
Executive's tax liability arising from the accelerated vesting of restricted
shares held by Executive, if any. Such loan shall be due, in full, in ten (10)
years from the date made and shall bear interest at the then-current Applicable
Federal Rate (the minimum rate necessary to avoid "unstated interest" under
Section 7872 of the Code) with interest payments to be paid to the Company
annually. Such loan shall be evidenced by a promissory note signed by, and with
full recourse to, Executive.

         8.       Indemnification. LTC shall indemnify Executive and hold her
harmless from and against all claims, actions, losses, damages, expense or
liabilities (including expenses of defense and settlement) ("Claim") based upon
or in any way arising from or connected with her employment by LTC, to the
maximum extent permitted by law. To the extent permitted by law, LTC shall
advance to Executive any expenses necessary in connection with the defense of
any Claim which is brought if indemnification cannot be determined to be
available prior to the conclusion of, or the investigation of, such Claim. The
parties hereto agree that each understands and has understood that
notwithstanding the above-stated provisions, nothing herein shall require LTC to
hold harmless or indemnify Executive with respect to any Claim which is brought
or asserted against Executive by LTC. LTC shall investigate in good faith the
availability and cost of directors' and officers' insurance and shall include
Executive as an insured in any directors and officers insurance policy of such
insurance it maintains.

         9.       Attorney Fees. In the event that any action or proceeding is
brought to enforce the terms and provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney fees.

         10.      Notices. All notices and other communications provided to
either party hereto under this Agreement shall be in writing and delivered by
certified or registered mail to such party at its/her address set forth below
its/her signature hereto, or at such other address as may be designated with
postage prepaid, shall be deemed given when received.

                                       6

<PAGE>

         11.      Construction. In constructing this Agreement, if any portion
of this Agreement shall be found to be invalid or unenforceable, the remaining
terms and provisions of this Agreement shall be given effect to the maximum
extent permitted without considering the void, invalid or unenforceable
provisions. In construing this Agreement, the singular shall include the plural,
the masculine shall include the feminine and neuter genders as appropriate, and
no meaning in effect shall be given to the captions of the sections in this
Agreement, which are inserted for convenience of reference only.

         12.      Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.

         13.      Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the internal laws of the State of
California as at the time in effect.

         14.      Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all other prior agreements (including the Prior
Employment Agreement) and undertakings, both written and oral, among Executive
and the Company, with respect to the subject matter hereof.

                  IN WITNESS WHEREOF, this Agreement shall be effective as of
the date specified in the first paragraph of this Agreement.

                                       LTC, PROPERTIES, INC.,
                                       a Maryland corporation

Address: 22917 Pacific Coast Hwy             /s/ ANDRE C. DIMITRIADIS
         Suite 350                         _____________________________________
         Malibu, California  90265                   Andre C. Dimitriadis
                                            Chairman and Chief Executive Officer

                                             /s/ EDMUND C. KING
                                       By: _____________________________________
                                           Compensation Committee Representative

                                             /s/ WENDY SIMPSON
Address: 5235 Linwood Drive                _____________________________________
         Los Feliz, CA  90027                          Wendy Simpson

                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>v98528exv10w2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement"), effective as of March 9,
2004, is by and between LTC PROPERTIES, INC., a corporation organized under the
laws of the State of Maryland ("LTC" or the "Company"), and ALEX CHAVEZ
("EXECUTIVE").

         NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

         1.       Appointment, Title and Duties. LTC hereby employs Executive to
serve as its Senior Vice President and Treasurer. In such capacity, Executive
shall report to the Chief Executive Officer and Chief Financial Officer of the
Company, and shall have such duties, powers and responsibilities as are
customarily assigned to a Senior Vice President and Treasurer of a publicly held
corporation, but shall also be responsible to the Board of Directors and to any
committee thereof. In addition, Executive shall have such other duties and
responsibilities as the Chief Executive Officer and Chief Financial Officer may
assign him, with his consent, including serving with the consent or at the
request of the Chief Executive Officer as an officer or on the board of
directors of affiliated corporations.

         2.       Term of Agreement. The term of this Agreement shall commence
as of the date hereof and shall extend such that at each and every moment of
time hereafter the remaining term shall be one year.

         3.       Acceptance of Position. Executive accepts the position of
Senior Vice President and Treasurer of LTC, and agrees that during the term of
this Agreement he will faithfully perform his duties and, except as expressly
approved by the Board of Directors of LTC, will devote substantially all of his
business time to the business and affairs of LTC, and will not engage, for his
own account or for the account of any other person or entity, in a business
which competes with LTC. It is acknowledged and agreed that Executive may serve
as an officer and/or director of companies in which LTC owns voting or
non-voting stock. In addition, it is acknowledged and agreed that Executive may,
from time to time, serve as a member of the board of directors of other
companies, in which event the Board of Directors of LTC must expressly approve
such service pursuant to a Board resolution maintained in the Company's minute
books. Any compensation or remuneration which Executive receives in
consideration of his service on the board of directors of other companies shall
be the sole and exclusive property of Executive, and LTC shall have no right or
entitlement at any time to any such compensation or remuneration.

         4.       Salary and Benefits. During the term of this Agreement:

                  (a)      LTC shall pay to Executive a base salary at an annual
rate of not less than One Hundred Fifty Thousand Dollars ($150,000) per annum
("Base Salary"), paid in approximately equal installments at intervals based on
any reasonable Company policy. LTC agrees from time to time to consider
increases in such base salary in the discretion of the Board of Directors. Any
increase, once granted, shall automatically amend this Agreement to provide that
thereafter Executive's base salary shall not be less than the annual amount to
which such base salary has been increased.

                                       1

<PAGE>

                  (b)      Executive shall participate in all health,
retirement, Company-paid insurance, sick leave, disability, expense
reimbursement and other benefit programs which LTC makes available to any of its
senior executives, and shall be eligible for bonuses in the discretion of the
Board of Directors.

                  (c)      Executive shall be entitled to reasonable vacation
time, not less than four (4) weeks per year, provided that not more than two (2)
weeks of such vacation time may be taken consecutively without prior notice to
and non-objection by the Compensation Committee of the Board of Directors or, if
there is no Compensation Committee, the Board of Directors.

         5.       Certain Terms Defined. For purposes of this Agreement:

                  (a)      Executive shall be deemed to be "disabled" if a
physical or mental condition shall occur and persist which, in the written
opinion of a licensed physician selected by the Board of Directors in good
faith, has rendered Executive unable to perform the duties set forth in Section
1 hereof for a period of sixty (60) days or more and, in the written opinion of
such physician, the condition will continue for an indefinite period of time,
rendering Executive unable to return to his duties;

                  (b)      A termination of Executive's employment by LTC shall
be deemed for "Cause" if, and only if, it is based upon (i) conviction of a
felony; (ii) material disloyalty to the Company such as embezzlement,
misappropriation of corporate assets or, except as permitted pursuant to Section
3 of this Agreement, breach of Executive's agreement not to engage in business
for another enterprise of the type engaged in by the Company; or (iii) the
engaging in unethical or illegal behavior which is of a public nature, brings
LTC into disrepute, and result in material damage to the Company. The Company
shall have the right to suspend Executive with pay, for a reasonable period to
investigate allegations of conduct which, if proven, would establish a right to
terminate this Agreement for Cause, or to permit a felony charge to be tried.
Immediately upon the conclusion of such temporary period, unless Cause to
terminate this Agreement has been established, Executive shall be restored to
all duties and responsibilities as if such suspension had never occurred;

                  (c)      A resignation by Executive shall not be deemed to be
voluntary and shall be deemed to be a resignation with "Good Reason" if it is
based upon (i) a diminution in Executive's title, duties, or salary; (ii) a
reduction in benefits which is not part of an across-the-board reduction in
benefits of all senior executive personnel; (iii) a direction by the Board of
Directors that Executive report to any person or group other than the Chief
Executive Officer and Chief Financial Officer or the Board of Directors, or (iv)
a geographic relocation of Executive's place of work a distance for more than
seventy-five (75) miles from LTC's offices located at 22917 Pacific Coast Hwy,
Suite 350, Malibu, California;

                  (d)      "Affiliate" means with respect to any Person, a
Person who, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control, with the Person
specified;

                                       2

<PAGE>

                  (e)      "Base Salary" means, as of any date of termination of
employment, the highest base salary of Executive in the then current fiscal year
or in any of the last four fiscal years immediately preceding such date of
termination of employment;

                  (f)      "Beneficial Owner" shall have the meaning given to
such term in Rule 13d-3 under the Exchange Act;

                  (g)      A "Change in Control" occurs if:

                           (i)      Any Person or related group of Persons
(other than Executive and his Related Persons, the Company or a Person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 30% or more of the combined voting
power of the Company's then outstanding securities; or

                           (ii)     The stockholders of the Company approve a
merger or consolidation of the Company with any other corporation (or other
entity), other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 66-2/3% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided, however,
that a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires 30% or more of the
combined voting power of the Company's then outstanding securities shall not
constitute a Change in Control; or

                           (iii)    The Stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
or

                           (iv)     A majority of the members of the Board of
Directors of the Company cease to be Continuing Directors;

                  (h)      "Code" means the Internal Revenue Code of 1986, as
amended.

                  (i)      "Continuing Directors" means, as of any date of
determination, any member of the Board of Directors who (i) was a member of such
Board of Directors on the date of the Agreement or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board of Directors at the
time of such nomination or election.

                  (j)      "Exchange Act" means the Exchange Act of 1934, as
amended.

                  (k)      "Person" means any individual, corporation,
partnership, limited liability company, trust, association or other entity.

                                       3

<PAGE>

                  (l)      "Related Person" means any immediate family member
(spouse, partner, parent, sibling or child whether by birth or adoption) of the
Executive and any trust, estate or foundation, the beneficiary of which is the
Executive and/or an immediate family member of the Executive.

         6.       Certain Benefits Upon Termination. Executive's employment
shall be terminated upon the earlier of (i) the voluntary resignation of
Executive with or without Good Reason; (ii) Executive's death or permanent
disability; or (iii) upon the termination of Executive's employment by LTC for
any reason at any time. In the event of such termination, the below provisions
of this Section 6 shall apply, and in the event of a Change of Control, whether
or not Executive's employment is terminated thereby, Section 6(b) shall apply,
and in the event of a Change in Control, whether or not Executive's employment
is terminated thereby, Section 6(b) shall apply.

                  (a)      If Executive's employment by LTC terminates for any
reason other than as a result of (i) a termination for Cause, or (ii) a
voluntary resignation by Executive without a Good Reason, or (iii) a Change in
Control of the Company, then LTC shall pay Executive a lump sum severance
payment equal to two times his Base Salary; provided that if employment
terminates by reason of Executive's death or disability, then such salary shall
be paid only to the extent the Company has available "key man" life, disability
or similar insurance relating to the death or disability of Executive;

                  (b)      Upon a Change in Control of the Company whether or
not Executive's employment is terminated thereby, in lieu of the severance
payment described in Section 6(a) above, LTC shall pay Executive a lump sum
severance payment in cash equal to $500,000, and all stock options and/or
restricted stock shall automatically vest concurrently upon a Change in Control,
notwithstanding any prior existing vesting schedule;

                  (c)      If Executive's employment by LTC terminates for any
reason, except for LTC's termination of Executive's employment for Cause or a
voluntary resignation by Executive without a Good Reason, LTC shall offer to
Executive the opportunity to participate in all Company-provided medical and
dental plans to the extent Executive elects and remains eligible for coverage
under COBRA and for a maximum period of eighteen (18) months at Company expense;
provided, however, in the event Executive's employment by LTC terminated upon a
Change in Control of the Company, then Executive shall not be given the
opportunity to participate in any of such medical and dental plans, except to
the extent required by law;

                  (d)      In the event that Executive's employment terminates
by reason of his death, all benefits provided in this Section 6 shall be paid to
his estate or as his executor shall direct, but payment may be deferred until
Executive's executor or personal representative has been appointed and qualified
pursuant to the laws in effect in Executive's jurisdiction of residence at the
time of his death;

                  (e)      LTC shall make all payments pursuant to the foregoing
subsections (a) through (d) within seven (7) days following the date of
termination of Executive's employment or consummation of a Change in Control of
the Company, as applicable;

                                       4

<PAGE>

                  (f)      Notwithstanding the foregoing, LTC shall have no
liability under this Section if Executive's employment pursuant to this
Agreement is terminated by LTC for Cause or by Executive without a Good Reason;
provided, however, that if Executive's employment pursuant to this Agreement is
terminated by LTC for Cause or by Executive without a Good Reason at any time
after a Change of Control which did not result in Executive's employment being
terminated, such post-Change of Control termination by LTC for Cause or by
Executive without a Good Reason shall not affect in any way Executive's
entitlement to the lump sum severance payment described in Section 6(b) above or
any other rights, benefits or entitlements to which Executive may be entitled as
a result of such Change of Control;

         7.       Tax Liability Loan. Upon a Change in Control of the Company,
whether or not Executive's employment is terminated as a result thereof, the
Company shall offer Executive an unsecured loan in the amount necessary to fund
Executive's tax liability arising from the accelerated vesting of restricted
shares held by Executive, if any. Such loan shall be due, in full, in ten (10)
years from the date made and shall bear interest at the then-current Applicable
Federal Rate (the minimum rate necessary to avoid "unstated interest" under
Section 7872 of the Code) with interest payments to be paid to the Company
annually. Such loan shall be evidenced by a promissory note signed by, and with
full recourse to, Executive.

         8.       Indemnification. LTC shall indemnify Executive and hold him
harmless from and against all claims, actions, losses, damages, expense or
liabilities (including expenses of defense and settlement) ("Claim") based upon
or in any way arising from or connected with his employment by LTC, to the
maximum extent permitted by law. To the extent permitted by law, LTC shall
advance to Executive any expenses necessary in connection with the defense of
any Claim which is brought if indemnification cannot be determined to be
available prior to the conclusion of, or the investigation of, such Claim. The
parties hereto agree that each understands and has understood that
notwithstanding the above-stated provisions, nothing herein shall require LTC to
hold harmless or indemnify Executive with respect to any Claim which is brought
or asserted against Executive by LTC. LTC shall investigate in good faith the
availability and cost of directors' and officers' insurance and shall include
Executive as an insured in any directors and officers insurance policy of such
insurance it maintains.

         9.       Attorney Fees. In the event that any action or proceeding is
brought to enforce the terms and provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney fees.

         10.      Notices. All notices and other communications provided to
either party hereto under this Agreement shall be in writing and delivered by
certified or registered mail to such party at its/his address set forth below
its/his signature hereto, or at such other address as may be designated with
postage prepaid, shall be deemed given when received.

                                       5

<PAGE>

         11.      Construction. In constructing this Agreement, if any portion
of this Agreement shall be found to be invalid or unenforceable, the remaining
terms and provisions of this Agreement shall be given effect to the maximum
extent permitted without considering the void, invalid or unenforceable
provisions. In construing this Agreement, the singular shall include the plural,
the masculine shall include the feminine and neuter genders as appropriate, and
no meaning in effect shall be given to the captions of the sections in this
Agreement, which are inserted for convenience of reference only.

         12.      Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.

         13.      Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the internal laws of the State of
California as at the time in effect.

         14.      Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all other prior agreements (including the Prior
Employment Agreement) and undertakings, both written and oral, among Executive
and the Company, with respect to the subject matter hereof.

                  IN WITNESS WHEREOF, this Agreement shall be effective as of
the date specified in the first paragraph of this Agreement.

                                      LTC PROPERTIES, INC.,
                                      a Maryland corporation

Address: 22917 Pacific Coast Hwy             /s/ ANDRE C. DIMITRIADIS
         Suite 350                        ______________________________________
         Malibu, California  90265         Andre C. Dimitriadis
                                           Chairman and Chief Executive Officer

                                             /s/ EDMUND C. KING
                                      By: ______________________________________
                                           Compensation Committee Representative

                                             /s/ ALEX CHAVEZ
Address: 127 Los Padres Dr.               ______________________________________
         Thousand Oaks, CA  91361          Alex Chavez

                                       6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>v98528exv31w1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<HTML>
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<TITLE>exv31w1</TITLE>
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<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;31.1</B>



<P align="left" style="font-size: 10pt"><B>CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</B>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I, Andre C. Dimitriadis, certify that:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>I have reviewed this quarterly report on Form 10-Q of LTC
Properties, Inc.;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) for the registrant and we have:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>Designed such disclosure controls and
procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this report is being prepared;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the registrant&#146;s
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change in the
registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter
(the registrant&#146;s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing
the equivalent functions):</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>All significant deficiencies and material
weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to
adversely affect the registrant&#146;s ability to record,
process, summarize and report financial information; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that
involves management or other employees who have a
significant role in the registrant&#146;s internal control over
financial reporting.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ ANDRE C. DIMITRIADIS
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Andre C. Dimitriadis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chairman, President and Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Principal Executive Officer)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">May&nbsp;7, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
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</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>v98528exv31w2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
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<TITLE>exv31w2</TITLE>
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<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;31.2</B>



<P align="left" style="font-size: 10pt"><B>CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</B>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I, Wendy L. Simpson, certify that:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>I have reviewed this quarterly report on Form 10-Q of LTC
Properties, Inc.;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) for the registrant and we have:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>Designed such disclosure controls and
procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this report is being prepared;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the registrant&#146;s
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change in the
registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter
(the registrant&#146;s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing
the equivalent functions):</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>All significant deficiencies and material
weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to
adversely affect the registrant&#146;s ability to record,
process, summarize and report financial information; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that
involves management or other employees who have a
significant role in the registrant&#146;s internal control over
financial reporting.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="46%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ WENDY L. SIMPSON
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wendy L. Simpson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Vice Chairman and Chief Financial Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Principal Financial Officer)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">May&nbsp;7, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>8
<FILENAME>v98528exv32.htm
<DESCRIPTION>EXHIBIT 32
<TEXT>
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<TITLE>exv32</TITLE>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;32</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a)
and (b)&nbsp;of section 1350, chapter 63 of Title 18, United States Code), each of
the undersigned officers of LTC Properties, Inc. (the &#147;Company&#148;) hereby
certifies with respect to the Quarterly Report on Form 10-Q of the Company for
the quarter ended March&nbsp;31, 2004 as filed with the Securities and Exchange
Commission (the &#147;Report&#148;) that to his or her knowledge:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities and Exchange Act of 1934; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in
all material respects, the financial condition and result of
operations of the Company.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ ANDRE C. DIMITRIADIS
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Andre C. Dimitriadis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chairman, President and Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">May&nbsp;7, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ WENDY L. SIMPSON</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wendy L. Simpson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Vice Chairman and Chief Financial Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">May&nbsp;7, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">NOTE:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A signed original of this written statement required by Section&nbsp;906, or
other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section&nbsp;906, has been provided to LTC
Properties, Inc. and will be retained by LTC Properties, Inc. and
furnished to the Securities and Exchange Commission or its staff upon
request.</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">26
</DIV>


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