1. Steve Monroe Managing Editor and Partner Irving Levin Associates, Inc. monroe@levinassociates.com www.levinassociates.com

6. The SeniorCare Investor The Senior Care Acquisition Report

7. The SeniorCare Investor

11. HJ Sims Presentation Anthony Argondizza Senior Vice President and Chief Operating Officer

12. Organizational Growth - 2014 and Beyond  Purpose Expand mission Lower overhead costs Improve revenue through management fees Serve new markets 12

13. New Construction  Long lead times  Entitlement approvals  Financing  Working capital  Finally break-even  Construction / Occupancy risk 13

14. Mergers / Affiliations  Shortened lead time  Zoning and approval issues easier  Capital considerations  Cash flow  Operating efficiencies – staff, systems, leverage  Access to capital and funding 14

15. Consideration  Affiliation  Merger  Shared services agreement 15

16. Growth Considerations  Geography  Risk profile  Mission  Culture residents, trustees, staff 16

17. Springpoint Merger Activity  Navesink Harbor – July 2006  Winchester Gardens – June 2013  Un-named CCRC 17

18. Case Study - The Atrium at Navesink Harbor  Extremely challenged Small units Physical disrepair Deferred maintenance No cash Financial distress Weak board Partially occupied 18

19. Case Study - The Atrium at Navesink Harbor  Repositioned: Façade replacement Total interior reconstruction  Larger units (total unit count: from 213 to 138) Deck replacement New addition – 60 units External challenges  2008!  Investment much larger than planned 19

20. Case Study - Winchester Gardens  Challenges we all face in CCRCs: Heating and cooling upgrades Decorating Changes in space utilization  Strengths: Very strong balance sheet Strong demographics CEO and Board of Trustees vision New marketplace for us Impossible entry otherwise 20

21. Summary Assumptions Projected Springpoint Savings Based on Preliminary Analysis – 2013: Administration$649,000 Dining$111,000 Marketing$250,000 Legal $53,000 Purchases and Insurance$264,000 Service Contracts$100,000 Refinancing$830,000 Forward Purchase Utility Contract$150,000 Total Projected Savings$2,400,700 21

22. Case Study - Unnamed CCRC  Similarities/Fits: Geography Familiar organizational type  Challenges: Declining occupancy (substantial) Capital needs ($10.0MM+) Decent demographics Very large debt burden Reputational risk Estimated 7-10 year fill 22

23. Clinical Decision Unit A new opportunity for growth of Skilled Nursing Home Services

24. Issues Facing Short Term stays.. Managed plans, “Medicare Advantage” Shorter Stays Decreased Reimbursement Part B Therapy Shrinking Narrowing Hospital Networks Short Term Beds are available, but not full!

25. The Opportunity A unique care opportunity Sought by managed care companies & “incentivized” primary care physicians A new ‘admission’ type to SNF Downstream impact to AL, Home Health etc. Alignment w/ a large primary care physician practice Alignment with Managed Care organizations Innovation is our mission ‘call’ Reduce the cost of care Add a new revenue stream to the CCRC Gain experience in “Incident of Care” risk based payments

26. What is a Clinical Decision Unit? Dedicated unit (5-10 bed) within a skilled nursing or short term rehabilitation facility Treat patients that don’t yet need hospital admission –Similar to a hospital Observation Unit Patients awaiting a “clinician’s decision” for care pathway Short length stays (3-10 days) Types of Diagnosis: –COPDPneumonia –CHFUncontrolled Blood Pressure –Failure to ThriveUncontrolled Blood Sugar Staffed by RN, (ratio 5 to 1) Supervised by “on site” Physician or Nurse Practioner

27. Proposed Clinical Structure Physicians will provide clinical support, on site and with EMR Patients will be “managed Medicare” ONLY!!! –Preapproved and Not Requiring the “3 day stay” Physicians will be initial referral stream: –From Observation Unit at Hospital and –Direct from Physician Offices Clinical Decision Unit will manage: –Transport from referral site –Lab and Imaging –Respiratory and Other therapy –IV Fluids –Pharmacy needs Patients will be monitored until Discharge (home or skilled unit)

28. Patient Flow AL, LTC, SNF Clinical Decision Unit Direct from Office COPC Patient Presents at ER Admit to Obs Unit Discharge to Home or Admitted Discharge to CDU DISHCHARGEDDISHCHARGED

29. Steps to CDU Opening Development of Financial Structures –Billing Status for Medicare –Avoidance of out-of-pocket costs for patients classified as observation –Contracts with Medigold and other payors partnered with COPC in risk management contracts Development of Clinical Pathways Staff Hiring and Training Projected opening date 6/1/14

30. 2014 HJ Sims Conference The 4 P’s of Marketing 1.Product. The right product. 2.Price. The right product offered at the right price. 3.Place. The right product at the right price available in the right place 4.Promotion. Informing prospects of the availability of the product, its price and its place. Todd Swortzel President and CEO

31. 2014 HJ Sims Conference

32. Product Rehabilitation / Physician Practice Business Pilot CMS Bundled Payment Project with Illinois Bone and Joint Institute Product/Catered Living for Independent Living (All IADL’s)

33. 2014 HJ Sims Conference Pricing

34. 2014 HJ Sims Conference Promotion

35. Let’s Hear from the Leaders Senior Living Trends March 6, 2014

36. AGENDA 36 Welcome Occupancy / Rate Trends Construction Activity Transaction Activity Trends in Acuity Regulatory Trends Impact of the Internet Technology March 6, 2014

37. Assisted Living occupancy strengthened in 2013 37 Note: Represents majority AL and MC, excludes IL and SNF March 6, 2014

38. Annual rent growth slows slightly in late 2013 1/10/2012 38 Note: Represents majority AL and MC, excludes IL and SNF Source: NIC MAP Data and Analysis Services March 6, 2014

39. Construction pace slows as completions outpace starts and inventory increases 39 March 6, 2014

40. 40 Public buyers, generally REITs, continue to be the most active buyers, however the private sector regained momentum after a lull in 2011 March 6, 2014

41. Trends in Acuity 41 Average age of our residents is 88, compared to 82 ten years ago 53% of our residents are on a care package which means they need assistance with Activities of Daily Living Today’s residents move-in with 3-5 ADL needs, where previously residents moved in for socialization 65% of our residents are receiving assistance with medications 72% of our residents take 3 or more medications, this number has more than doubled since 2010 In 2013, 43% of our residents moved out due to death Move-outs due to death in <1 year length of stay has increased 54% The Top 5 diagnosis for our resident population are: Hypertension, Dementia, Depression, Congestive Heart Failure, Diabetes March 6, 2014

42. Regulatory Trends Do current State Regulations Support Caring For Frail Residents? Basic assisted living, or create a second tier for providers who can offer “enhanced” services? Skilled nursing services within assisted living? Alzheimer’s Care: Training requirements, Safety precautions (such as “Silver Alerts”), Specialized Programs, Research Funding Prevention of Elder Abuse and Financial Exploitation: increasing emphasis on mandated reporting, prosecution Increased Consumer Disclosure requirements to clarify and manage expectations Medicaid & Assisted Living: Recent CMS regulation clarifies AL’s role in the Home & Community Based Waiver program Review of Life Safety Code issues 42 March 6, 2014

43. Impact of the Internet on Senior Living 43 60% of our leads come through the internet, both directly from our website and through paid internet sources (A Place for Mom, SeniorLiving.Net, Caring.com) Leads are coming to us much more educated from doing research online. Paid internet lead sources provide qualified leads to communities but there are numerous drawbacks Very costly – 70%-100% of one month’s rent/care - with residents coming in more frail and with shorter lengths of stay we are paying more and getting less. Internet sources pass along information to numerous communities Leads don’t always understand what is going to happen when they fill out a form and it can be a very overwhelming and frustrating experience and often makes the process more confusing Social Media is becoming a player in the marketing of senior living Facebook enhances the customer experience for residents and family members, engages associates and captures the true essence of a community for prospective residents and their families Online review sites are impacting the research and decision making process March 6, 2014