HispanicBusiness

2012 FOURTH QUARTER FINANCIAL REVIEW

----------------------------------------------------------------------------TABLE 1                                              Q4        Q4        Q3----------------------------------------------------------------------------(millions of dollars unless otherwise noted)       2012      2011      2012----------------------------------------------------------------------------RevenueU.S. operations (US$)                             313.6     342.2     316.2----------------------------------------------------------------------------U.S. operations (C$)                              310.8     350.3     314.6Canadian operations                               186.2     181.5     183.9----------------------------------------------------------------------------Total Revenue                                     497.0     531.8     498.5--------------------------------------------------------------------------------------------------------------------------------------------------------EBITDA(1)U.S. operations (US$)                              33.9      24.1      17.2----------------------------------------------------------------------------U.S. operations (C$)                               33.7      25.1      17.0Canadian operations                                19.2      15.0      20.3----------------------------------------------------------------------------Total EBITDA                                       52.9      40.1      37.3--------------------------------------------------------------------------------------------------------------------------------------------------------EBITDA margin                                      10.7%      7.5%      7.5%--------------------------------------------------------------------------------------------------------------------------------------------------------Average U.S./Canadian dollar exchange rate       0.9916    1.0217    0.9956----------------------------------------------------------------------------(1) Refer to discussion of non-GAAP measures.----------------------------------------------------------------------------

2012 Fourth Quarter Comparison to 2011 Fourth Quarter

Consolidated revenue from continuing operations declined by $24.4 million, excluding a $10.4 million negative effect of a stronger Canadian dollar. Disposals that included the impact of leasing out our Kentucky centers, net of new centers (collectively "non same-facility operations"), resulted in lower revenue of $29.3 million between periods. Growth in revenue from same-facility operations of $4.9 million was primarily from the Canadian operations with the U.S. operations essentially flat.

Revenue from U.S. operations declined by US$28.6 million to US$313.6 million in the 2012 fourth quarter compared to US$342.2 million in the 2011 fourth quarter. Non same-facility operations generated revenue of US$3.7 million this quarter compared to US$33.3 million in the 2011 fourth quarter, for a net decline of US$29.6 million. Revenue from same-facility operations improved by US$1.0 million between periods. Higher average rates increased our same-facility revenue by approximately US$8.5 million, while lower census levels reduced revenue by US$8.2 million. The remaining improvement of US$0.7 million related primarily to an increase in prior period settlement adjustments of US$1.4 million and growth in health technology services revenue of US$2.2 million, partially offset by declines in nursing ancillary and other revenue of US$2.9 million. Our same-facility average daily census (ADC) was lower by 201 this quarter, primarily due to a decline in Skilled Mix ADC of 191. Our same-facility Skilled Mix ADC represented 21.4% of residents this quarter compared to 22.5% in the 2011 fourth quarter.