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                                                                   EXHIBIT 99.2

LTC HEALTHCARE, INC.
PRO-FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)

<TABLE>
<CAPTION>

                                                                                                                    JUNE 30, 2000
                                                                         JUNE 30, 2000       ACTIVITY                PRO FORMA
                                                                         -------------       --------                ---------
<S>                                                                      <C>                 <C>                     <C>
 ASSETS
 Current Assets:
 Cash and cash equivalents                                                $     98           $    (62)                $     36
 Accounts receivable, net of allowance for doubtful accounts:

 2000 - $1,162;  1999 - $313                                                15,779                 -                    15,779
 Prepaid expenses and other current assets                                   3,114                 -                     3,114
                                                                          --------           --------                 --------
 Total current assets                                                       18,991                (62)                  18,929

 Property and Equipment:
 Buildings, improvements and equipment                                      50,603            (10,701)                  39,902
 Land                                                                        2,246               (578)                   1,668
 Accumulated depreciation                                                   (6,403)             2,560                   (3,843)
                                                                          --------           --------                 --------
 Property and equipment, net                                                46,446             (8,719)                  37,727

 Other Assets:
 Equity securities                                                           1,156                 -                     1,156
 Debt securities                                                            11,616                 -                    11,616
 Other assets                                                                  809                 -                       809
                                                                          --------           --------                 --------
 Total other assets                                                         13,581                 -                    13,581
                                                                          --------           --------                 --------
     Total assets                                                         $ 79,018           $ (8,781)                $ 70,237
                                                                          ========           ========                 ========

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
 Current Liabilities:
 Accounts payable                                                          $ 2,545               $ -                   $ 2,545
 Accrued salaries and benefits                                               3,371                 -                     3,371
 Current portion of mortgage loans payable                                     656                 -                       656
 Other accrued liabilities                                                   7,343             (4,597)                   2,746
                                                                          --------           --------                 --------
 Total current liabilities                                                  13,915             (4,597)                   9,318

 Mortgage Loans Payable                                                     46,563            (13,696)                  32,867
 Line of Credit from LTC Properties                                         19,495               (968)                  18,527
                                                                          --------           --------                 --------
     Total liabilities                                                      79,973            (19,261)                  60,712

 Minority Interest                                                           3,518                 -                     3,518
 Commitments and Contingencies                                                  -                  -                        -

 Stockholders' Equity (Deficit):
 Preferred stock $0.01 par value; 10,000,000 shares authorized                  -                  -                        -
 Common stock $0.01 par value; 40,000,000 shares authorized;
 shares issued: 2000 - 3,335,882; 1999 - 3,335,882                              33                 -                        33
 Capital in excess of par value                                             10,224                 -                    10,224
 Treasury stock: shares 2000 - 1,235,956; 1999 - 881,556                    (2,474)                -                    (2,474)
 Accumulated deficit                                                        (9,814)            10,480                      666
 Accumulated comprehensive loss                                             (2,442)                -                    (2,442)
                                                                          --------           --------                 --------
 Total stockholders' equity (deficit)                                       (4,473)            10,480                    6,007
                                                                          --------           --------                 --------
     Total liabilities and stockholders' equity (deficit)                 $ 79,018           $ (8,781)                $ 70,237
                                                                          ========           ========                 ========

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LTC HEALTHCARE, INC.
Condensed Consolidated Statement of Operations and
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except share and per share amounts)

<TABLE>
<CAPTION>

                                                                                                         PRO FORMA
                                                                   SIX MONTHS ENDED                  SIX MONTHS ENDED
                                                                     JUNE 30, 2000       ACTIVITY      JUNE 30, 2000
                                                                   ---------------       --------      -------------
<S>                                                                <C>                   <C>           <C>
Revenues:
Net patient revenues                                                 $    43,521         $     -       $    43,521
Rental income                                                              2,567             (809)           1,758
Interest and other income                                                  1,093               -             1,093
                                                                      ----------         --------      -----------
          Total revenues                                                  47,181             (809)          46,372


Costs and Expenses:
Salaries and benefits                                                     29,612                -           29,612
Supplies                                                                   5,980                -            5,980
Rent - LTC Properties, Inc.                                                4,087                -            4,087
Interest expense                                                           2,075             (637)           1,438
Interest expense on line of credit from LTC Properties, Inc.                 768                -              768
Depreciation                                                                 836             (191)             645
Minority interest                                                            172                -              172
Other operating and administrative                                         9,614               (4)           9,610
                                                                      ----------         --------      -----------
          Total expenses                                                  53,144             (832)          52,312

Loss before provision for income taxes                                    (5,963)             (23)          (5,940)
Provision for income taxes                                                    -                -                -
                                                                      ----------         --------      -----------
Net loss                                                              $   (5,963)        $    (23)     $    (5,940)
                                                                      ==========         ========      ===========

Weighted average shares outstanding                                    2,099,926                         2,099,926

Net Loss Per Common Share:
  Basic and diluted net loss per share                                $    (2.84)                      $     (2.84)
                                                                      ==========                       ===========
Comprehensive loss:
Net loss                                                              $   (5,963)                      $    (5,940)
Unrealized income (loss) on available-for-sale equity securities            (547)                             (547)
                                                                      ----------                       -----------
Total comprehensive loss                                              $   (6,510)                      $    (6,487)
                                                                      ==========                       ===========

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LTC HEALTHCARE, INC.
Consolidated Statement of Operation and
Pro Forma Consolidated Statement of Operation
(In thousand, except share and per share amounts)

<TABLE>
<CAPTION>

                                                                                                        UNAUDITED
                                                                                                        PRO FORMA
                                                                    YEAR ENDED           UNAUDITED      YEAR ENDED
                                                                 DECEMBER 31, 1999       ACTIVITY    DECEMBER 31, 1999
                                                                 -----------------       --------    -----------------
<S>                                                                <C>                   <C>           <C>
Revenues:
Net patient revenues                                                  $   11,713       $       -       $    11,713
Rental income                                                              6,692           (1,583)           5,109
Interest and other income                                                  2,344               -             2,344
                                                                      ----------       ----------      -----------
Total revenues                                                            20,749           (1,583)          19,166

Costs and Expenses:
Salaries and benefits                                                      8,295               -             8,295
Supplies                                                                   1,217               -             1,217
Rent - LTC Properties, Inc.                                                  779               -               779
Interest expense                                                           4,014           (1,290)           2,724
Interest expense on line of credit from LTC Properties, Inc.               1,514               -             1,514

Depreciation                                                               1,885             (382)           1,503
Minority interest                                                            343               -               343
Other operating and administrative                                         6,434               (5)           6,429
                                                                      ----------       ----------      -----------
          Total expenses                                                  24,481           (1,677)          22,804

Loss before provision for income taxes                                    (3,732)             (94)          (3,638)
Provision for income taxes                                                    -                -                -
                                                                      ----------       ----------      -----------
Net loss                                                              $   (3,732)      $      (94)     $    (3,638)
                                                                      ==========       ==========      ===========

Weighted average shares outstanding                                    2,696,691                         2,696,691

Net Loss Per Common Share:
  Basic and diluted net loss per share                                $    (1.38)                      $     (1.35)
                                                                      ==========                       ===========

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