8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2015

Genesis Healthcare, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-33459	20-3934755
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

101 East State Street
Kennett Square, PA	19348
(Address of Principal Executive Offices)	(Zip Code)

(610) 444-6350

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition.

On August 6, 2015, Genesis Healthcare, Inc. (“Genesis”) issued the press release furnished herewith as Exhibit 99.1 reporting its operating results for the quarter and six month periods ended June 30, 2015.

Certain information contained in the press release furnished as Exhibit 99.1 with this Current Report on Form 8-K refers to Non-GAAP measures and other definitions specific to Genesis’ businesses.

Definitions of key performance indicators and Non-GAAP measures used in the press release:

The following is a glossary of terms for some key performance indicators and Non-GAAP measures used in reference to Genesis:

“Actual Patient Days” is defined as the number of residents occupying a bed (or units in the case of an assisted living center) for one qualifying day in that period.

“Adjusted EBITDA” is defined as EBITDA adjusted for (1) the conversion to cash basis leases (2) newly acquired or constructed businesses with start-up losses and (3) other adjustments. See “Reasons for Non-GAAP Financial Disclosure” for an explanation of the adjustments and a description of Genesis’ uses of, and the limitations associated with non-GAAP measures.

“Adjusted EBITDAR” is defined as EBITDAR adjusted for (1) the conversion to cash basis leases (2) newly acquired or constructed businesses with start-up losses and (3) other adjustments. See “Reasons for Non-GAAP Financial Disclosure” for an explanation of the adjustments and a description of Genesis’ uses of, and the limitations associated with non-GAAP measures.

“Available Patient Days” is defined as the number of available beds (or units in the case of an assisted living center) multiplied by the number of days in that period.

“Average Daily Census” or “ADC” is the number of residents occupying a bed (or units in the case of an assisted living center) over a period of time, divided by the number of calendar days in that period; “EBITDA” is defined as EBITDAR less lease expense. See “Reasons for Non-GAAP Financial Disclosure” for an explanation of the adjustments and a description of Genesis’ uses of, and the limitations associated with non-GAAP measures.

“EBITDA” is defined as EBITDAR less lease expense. See “Reasons for Non-GAAP Financial Disclosure” for an explanation of the adjustments and a description of our uses of, and the limitations associated with non-GAAP measures.

“EBITDAR” is defined as net income or loss before depreciation and amortization expense, interest expense, lease expense, loss (gain) on extinguishment of debt, other (income) loss, transaction costs, long-lived asset impairment, income tax expense (benefit) and loss from discontinued operations. See “Reasons for Non-GAAP Financial Disclosure” for an explanation of the adjustments and a description of Genesis’ uses of, and the limitations associated with non-GAAP measures.

“Insurance” refers collectively to commercial insurance and managed care payor sources, but does not include managed care payers serving Medicaid residents, which are included in the Medicaid category.

“Occupancy Percentage” is measured as the percentage of Actual Patient Days relative to the Available Patient Days.

“Pro Forma Adjusted EBITDA” is defined as Adjusted EBITDA further adjusted to assume on a pro forma basis that Genesis and Skilled Healthcare Group, Inc. are combined for all periods presented.  See “Reasons for Non-GAAP Financial Disclosure” for an explanation of the adjustments and a description of our uses of, and the limitations associated with non-GAAP measures.

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“Pro Forma Adjusted EBITDAR” is defined as Adjusted EBITDAR further adjusted to assume on a pro forma basis that Genesis and Skilled Healthcare Group, Inc. are combined for all periods presented.  See “Reasons for Non-GAAP Financial Disclosure” for an explanation of the adjustments and a description of our uses of, and the limitations associated with non-GAAP measures.

“Skilled Mix” refers collectively to Medicare and Insurance payor sources.

“Therapist Efficiency” is computed by dividing billable labor minutes related to patient care by total labor minutes for the period.

Reasons for Non-GAAP Financial Disclosure:

The press release includes references to EBITDAR, Adjusted EBITDAR, Pro Forma Adjusted EBITDAR, EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA which are non-GAAP financial measures (collectively, the Non-GAAP Financial Measures). For purposes of SEC Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position and cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable financial measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable financial measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, Genesis has provided reconciliations of the Non-GAAP Financial Measures to the most directly comparable GAAP financial measures.

Genesis’ management believes that the presentation of these Non-GAAP Financial Measures provides useful information to investors regarding Genesis’ results of operations because these financial measures are useful for trending, analyzing and benchmarking the performance and value of its business. By excluding certain expenses and other items that may not be indicative of its core business operating results, these Non-GAAP Financial Measures:

·allow investors to evaluate its performance from management’s perspective, resulting in greater transparency with respect to supplemental information used by Genesis in its financial and operational decision making;

·facilitate comparisons with prior periods and reflect the principal basis on which management monitors financial performance;

·facilitate comparisons with the performance of others in the post-acute industry;

·provide better transparency as to the relationship each reporting period between Genesis’ cash basis lease expense and the level of operating earnings available to fund its lease expense; and

·allow investors to view Genesis’ financial performance and condition in the same manner its significant landlords and lenders require it to report financial information to them in connection with determining its compliance with financial covenants.

Genesis uses the Non-GAAP Financial Measures primarily as performance measures and believes that the GAAP financial measure most directly comparable to them is net income (loss). Genesis uses the Non-GAAP Financial Measures as measures to assess the relative performance of its operating businesses, as well as the employees responsible for operating such businesses. The Non-GAAP Financial Measures are useful in this regard because they do not include such costs as interest expense, income taxes and depreciation and amortization expense which may vary from business unit to business unit depending upon such factors as the method used to finance the original purchase of the business unit or the tax law in the state in which a business unit operates. By excluding such factors when measuring financial performance, many of which are outside of the control of the employees responsible for operating Genesis’ business units, management is better able to evaluate the operating performance of the business unit and the employees responsible for business unit performance. Consequently, management uses these non-GAAP measures to determine the extent to which Genesis’ employees have met performance goals, and therefore may or may not be eligible for incentive compensation awards.

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Genesis also uses the Non-GAAP Financial Measures in its annual budget process. Genesis believes these non-GAAP measures facilitate internal comparisons to historical operating performance of prior periods and external comparisons to competitors’ historical operating performance. The presentation of these Non-GAAP Financial Measures is consistent with Genesis’ past practice and Genesis believes these measures further enable investors and analysts to compare current non-GAAP measures with non-GAAP measures presented in prior periods.

Although Genesis uses the Non-GAAP Financial Measures as financial measures to assess the performance of Genesis’ business, the use of these non-GAAP measures is limited because they do not consider certain material costs necessary to operate its business. These costs include Genesis’ lease expense (only in the case of EBITDAR, Adjusted EBITDAR and Pro Forma Adjusted EBITDAR), the cost to service its debt, the depreciation and amortization associated with its long-lived assets, losses (gains) on extinguishment of debt, transaction costs, long-lived asset impairment charges, federal and state income tax expenses, the operating results of its discontinued businesses and the income or loss attributed to non-controlling interests. Because the Non-GAAP Financial Measures do not consider these important elements of Genesis’ cost structure, a user of Genesis’ financial information who relies on the Non-GAAP Financial Measures as the only measures of Genesis’ performance could draw an incomplete or misleading conclusion regarding Genesis’ financial performance. Consequently, a user of Genesis’ financial information should consider net income (loss) as an important measure of its financial performance because it provides the most complete measure of Genesis’ performance.

Other companies may define the Non-GAAP Financial Measures differently and, as a result, Genesis’ non-GAAP measures may not be directly comparable to those of other companies. The Non-GAAP Financial Measures do not represent net income (loss), as defined by GAAP. The Non-GAAP Financial Measures should be considered in addition to, not a substitute for, or superior to, GAAP financial measures.

This information and the information contained in the press release shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K is not incorporated by reference into any filings of the Company made under the Securities Act of 1933, as amended, whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in the filing, unless specifically stated so therein.

Item 7.01.  Regulation FD Disclosure

On or before August 10, 2015, Genesis Healthcare, Inc. (“Genesis”) will make available on its web site the investor presentation materials attached to this report as Exhibit 99.2.  This information and the information contained in the presentation materials shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K is not incorporated by reference into any filings of the Company made under the Securities Act of 1933, as amended, whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in the filing, unless specifically stated so thereinThe furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the investor presentation materials include material information regarding Genesis that is not otherwise publicly available.  In addition, Genesis does not assume any obligation to update such information in the future.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits.

Exhibit	Description
99.1	Earnings Release dated August 6, 2015
99.2	Investor presentation materials dated August 2015

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 6, 2015	GENESIS HEALTHCARE, INC.
	/s/ Michael S. Sherman
	Michael S. Sherman
	Senior Vice President, General Counsel, Secretary and Assistant Treasurer

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EXHIBIT INDEX

Exhibit	Description
99.1	Earnings Release dated August 6, 2015
99.2	Investor presentation materials dated August 2015

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Genesis HealthCare Contact:

Investor Relations

610-925-2000

GENESIS HEALTHCARE

REPORTS SECOND QUARTER 2015 RESULTS

·Strong Second Quarter Performance With Pro Forma(1) Adjusted:

·EBITDAR of $198.0 Million

·EBITDA of $76.6 Million

·Diluted EPS of $0.14

·Solid Pro Forma(1) EBITDAR and EBITDA Growth of 5.8% and 10.0%, Respectively

KENNETT SQUARE, PA — (August 6, 2015) — Genesis HealthCare (Genesis, or the Company) (NYSE:GEN), one of the largest post-acute care providers in the United States, today announced operating results for the quarter and six month periods ended June 30, 2015.

Highlights

·Previously announced expense reductions yield $9.0 million of savings in the quarter and $15.5 million of savings through the first six months of 2015; on track to realize $30 to $40 million in 2015;

·Skilled Healthcare integration continues as planned; approximately $3.0 million of transaction synergies realized in the second quarter and $4.0 million through the first six months of 2015; on track to realize $13 million in 2015;

·Controllable routine costs were well managed across all business lines; therapist efficiency of 70% improves 60bp over the prior year second quarter;

·On July 1st, Genesis closed on 91 previously announced new therapy contract starts and a 22- outpatient rehab site acquisition;

·During the quarter, Genesis announced the planned acquisition of Revera Inc.’s 24 skilled nursing facilities and contract rehabilitation business for $240 million; the deal is on track to close by year end, subject to additional due diligence, regulatory and licensing approvals, and other customary conditions;

“Second quarter earnings exceeded our expectations as we executed a smooth integration of the Skilled Healthcare business and continued to make excellent progress regarding Skilled merger synergies and cost savings initiatives,” comments George V. Hager, Jr., Chief Executive Officer of Genesis. “With our performance to date, we are already on a trajectory to exceed the mid-point of our earnings guidance for 2015.  Looking ahead, although we expect industry dynamics to remain challenging to the top line, we anticipate our planned cost reductions, recent and expected acquisition growth initiatives, and planned refinancing activities to allow us to grow our free cash flow meaningfully.”

Second Quarter 2015 Results

(Unaudited)

	Three months ended June 30, 2015					Three months ended June 30, 2014				Pro Forma(1) Non-GAAP Growth
				Pro Forma(1)				Pro Forma(1)
(IN THOUSANDS, EXCEPT PER SHARE DATA)	GAAP			Non-GAAP		GAAP		Non-GAAP		Dollars		Percentage
Net Revenues / Adjusted Net Revenues	$	1,419,475		$	1,410,261	$	1,200,651	$	1,403,225	$	7,036	0.5	%
EBITDAR / Adjusted EBITDAR	184,008			197,974		161,599		187,100		10,874		5.8	%
EBITDA / Adjusted EBITDA	145,049			76,557		128,690		69,602		6,955		10.0	%
Fully Diluted EPS / Adjusted Fully Diluted EPS	(0.20		)	0.14		Not applicable as Genesis was privately held

	Six months ended June 30, 2015					Six months ended June 30, 2014				Pro Forma(1) Non-GAAP Growth
				Pro Forma(1)				Pro Forma(1)
(IN THOUSANDS, EXCEPT PER SHARE DATA)	GAAP			Non-GAAP		GAAP		Non-GAAP		Dollars		Percentage
Net Revenues / Adjusted Net Revenues	$	2,762,476		$	2,812,787	$	2,387,195	$	2,795,486	$	17,301	0.6	%
EBITDAR / Adjusted EBITDAR	359,355			383,339		309,854		361,749		21,590		6.0	%
EBITDA / Adjusted EBITDA	283,977			142,778		244,146		129,550		13,228		10.2	%
Fully Diluted EPS / Adjusted Fully Diluted EPS	(1.58		)	0.21		Not applicable as Genesis was privately held

(1) To facilitate comparisons, pro forma results for the three and six months ended June 30, 2015 and 2014 were prepared on a basis assuming the combination of Skilled Healthcare and Genesis HealthCare occurred at the beginning of the respective period presented rather than as of February 2, 2015, which is the actual date of the combination. See reconcilition of pro forma results to GAAP results in the tables in this release.

Assuming Genesis and Skilled Healthcare were fully combined in all periods presented, Genesis’ adjusted revenue of $1.410 billion in the second quarter of 2015 would have increased $7.0 million or 0.5% over the prior year quarter.  Revenue growth in the second quarter of 2015 was negatively impacted $9.0 million by the divestiture of three facilities and $7.6 million due to the loss of therapy contracts.  Both elements of divested revenue were considered in the Company’s full year guidance.  As reported GAAP basis revenue of $1.419 billion in the second quarter of 2015 increased $218.8 million or 18.2% over the prior year quarter, principally due to the combination with Skilled Healthcare in February 2015.

Assuming Genesis and Skilled Healthcare were fully combined in all periods presented, Genesis’ adjusted revenue of $2.813 billion in the six months ended June 30, 2015 would have increased $17.3 million or 0.6% over the prior year period.  Revenue growth in the six months ended June 30, 2015 was negatively impacted $18.0 million by the divestiture of three facilities and by $16.6 million due to the loss of therapy contacts.  Both elements of divested revenue were considered in the Company’s full year guidance.  As reported GAAP basis revenue of $2.762 billion in the in the six months ended June 30, 2015 would have increased $375.3 million or 15.7% over the prior year period, principally due to the combination with Skilled Healthcare in February 2015.

Assuming Genesis and Skilled Healthcare were combined in all periods presented, adjusted EBITDAR of $198.0 million in the second quarter of 2015 would have increased $10.9 million or 5.8% over the prior year quarter. Adjusted EBITDAR growth in the second quarter of 2015 was driven by $9.0 million of planned cost reductions and approximately $3.0 million of Skilled Healthcare transaction synergies. GAAP basis loss from continuing operations of $33.2 million in the second quarter of 2015 increased $2.4 million or 7.6% over the prior year quarter.

Assuming Genesis and Skilled Healthcare were combined in all periods presented, adjusted EBITDAR of $383.3 million in the six months ended June 30, 2015 would have increased $21.6 million or 6.0% over the prior year period. Adjusted EBITDAR growth in the six months ended June 30, 2015 was driven by $15.5 million of planned cost reductions and approximately $4.0 million of Skilled Healthcare transaction synergies. GAAP basis loss from continuing operations of $151.6 million in the six months

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ended June 30, 2015 increased $79.9 million over the prior year period principally due to $88.7 million of transaction costs incurred in the Skilled combination and other transactions, offset by the incremental earnings generated by the combined business.

Business Development, Acquisitions and Divestitures

During the second quarter of 2015, as previously announced, Genesis closed a transaction to acquire two PowerBack-like buildings in Texas.  One facility in Richardson, TX was lease financed.  The other is in San Antonio, TX, and was purchased by Genesis for $13 million, including $8 million of assumed HUD debt.  Genesis intends to convert these facilities to the PowerBack Rehabilitation brand over the next several months.

Effective July 1, 2015, as previously announced, Genesis Rehab Services (GRS) signed 91 new therapy contracts with four key customers and acquired 22 outpatient sites.  GRS now provides contract therapy services for more than 1,700 locations across 46 states, the District of Columbia and China. The new contracts are expected to contribute an additional $7.5 million in annual EBITDAR and was considered in the Company’s full year guidance.

During the second quarter, Genesis announced the planned acquisition of Revera Inc.’s 24 skilled nursing facilities and contract rehabilitation business for $240 million.  Genesis has substantially completed its due diligence period and confirms the acquisition is on track to close by year end, subject to additional due diligence, regulatory and licensing approvals, and other customary conditions.  This acquisition is expected to be accretive to 2016 earnings and increase the Company’s fixed charge coverage.  On a pro forma basis, after considering the expected repurchase of 21 currently leased facilities, the Revera transaction will increase Genesis’ facility ownership from 15% to 23%.

Genesis continues to strategically look to monetize non-core assets and either redeploy the capital to investments providing greater return to shareholders or to repay Genesis’ most expensive debt. Over the next nine months, Genesis looks to sell certain of its non-core assets having the potential to produce $100 million to $150 million of net cash proceeds.

2015 Guidance

The Company reaffirms its previously announced 2015 adjusted EBITDAR guidance of $755.0 million to $770.0 million and adjusted EBITDA of $267.6 million to $282.6 million.  In connection with further refinement to projected depreciation and amortization expense, the Company is adjusting its previous 2015 net income from continuing operations on a diluted basis from a range of $0.29 to $0.34 per share to a revised range of $0.34 to $0.39 per share.

The 2015 guidance is based on 154.6 million diluted weighted average common shares outstanding and common stock equivalents on a fully exchanged basis. The Company’s earnings guidance was prepared on a pro forma basis to reflect full year estimates assuming the operations of Skilled Healthcare were combined with those of Genesis HealthCare as of January 1, 2015.

Conference Call

Genesis HealthCare will hold a conference call at 8:30 a.m. Eastern Time on Friday, August 7, 2015 to discuss financial results for the first quarter.  Investors can access the conference call by calling (855) 849-2198 or live via a listen-only webcast through the Genesis web site at http://www.genesishcc.com/investor-relations/, where a replay of the call will also be posted for one year.

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About Genesis HealthCare

Genesis HealthCare (NYSE: GEN) is a holding company with subsidiaries that, on a combined basis, comprise one of the nation’s largest post-acute care providers with more than 500 skilled nursing centers and assisted/senior living communities in 34 states nationwide. Genesis subsidiaries also supply rehabilitation and respiratory therapy to more than 1,600 healthcare providers in 46 states, the District of Columbia and China.  References made in this release to “Genesis,” “the Company,” “we,” “us” and “our” refer to Genesis HealthCare and each of its wholly-owned companies. Visit our website at www.genesishcc.com.

Forward-Looking Statements

This release includes “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain words such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue,” “pursue, “plans” or “prospect,” or the negative or other variations thereof or comparable terminology. They include, but are not limited to, statements about Genesis’ expectations and beliefs regarding its future financial performance, its anticipated synergy cost savings from the Skilled Healthcare combination, anticipated operating expense reductions, anticipated acquisitions, anticipated divestitures, anticipated development opportunities and anticipated deleveraging opportunities. These forward-looking statements are based on current expectations and projections about future events, including the assumptions stated in this release, and there can be no assurance that they will be achieved or occur, in whole or in part, in the timeframes anticipated by the Company or at all.

Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, the actual performance of Genesis may differ materially from that expressed or implied by such forward-looking statements.

These risks and uncertainties include, but are not limited to the following:

·reductions in Medicare reimbursement rates, or changes in the rules governing the Medicare program could have a material adverse effect on our revenue, financial condition and results of operations;

·continued efforts of federal and state governments to contain growth in Medicaid expenditures could adversely affect our revenue and profitability;

·recent federal government proposals could limit the states’ use of provider tax programs to generate revenue for their Medicaid expenditures, which could result in a reduction in our reimbursement rates under Medicaid;

·revenue we receive from Medicare and Medicaid is subject to potential retroactive reduction;

·our success is dependent upon retaining key executive and personnel;

·health reform legislation could adversely affect our revenue and financial condition;

·annual caps that limit the amounts that can be paid for outpatient therapy services rendered to any Medicare beneficiary may negatively affect our results of operations;

·we are subject to a Medicare cap amount for our hospice business. Our net patient service revenue and profitability could be adversely affected by limitations on Medicare payments;

·we are subject to extensive and complex laws and government regulations. If we are not operating in compliance with these laws and regulations or if these laws and regulations change, we could be required to make significant expenditures or change our operations in order to bring our facilities and operations into compliance;

·we face inspections, reviews, audits and investigations under federal and state government programs and contracts. These audits could have adverse findings that may negatively affect our business;

·significant legal actions, which are commonplace in our professions, could subject us to increased operating costs and substantial uninsured liabilities, which would materially and adversely affect our results of operations, liquidity and financial condition;

·insurance coverage may become increasingly expensive and difficult to obtain for health care companies, and our self-insurance may expose us to significant losses;

·we may be unable to reduce costs to offset decreases in our patient census levels or other expenses completely;

·future acquisitions may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities;

·we lease a significant number of our facilities and may experience risks relating to lease termination, lease extensions and special charges;

·our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our financial obligations;

·following the combination of FC-GEN Operations Investment LLC and Skilled Healthcare Group, Inc., we may

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not be able to continue to successfully integrate our operations, which could adversely affect us and the market price of our common stock;

·we have incurred substantial costs and expect to incur additional transaction and integration costs in connection with the combination of FC-GEN Operations Investment LLC and Skilled Healthcare Group, Inc;

·the holders of a majority of the voting power of Genesis’ common stock have entered into a voting agreement, and the control group’s interests may conflict with yours;

·some of our directors are significant stockholders or representatives of significant stockholders, which may result in the diversion of corporate opportunities and other potential conflicts; and

·we are a “controlled company” within the meaning of NYSE rules and, as a result, qualify for and rely on exemptions from certain corporate governance requirements.

The Company’s Annual Report on Form 10-K for the year ended December 31, 2014, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the U.S. Securities and Exchange Commission, including the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015 when it is filed, discuss the foregoing risks as well as other important risks and uncertainties of which investors should be aware. Any forward-looking statements contained herein are made only as of the date of this release. Genesis disclaims any obligation to update the forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements.

Note Regarding Use of Non-GAAP Financial Measures

For a discussion of the reasons why the Company utilizes non-GAAP financial measures and believes that the presentation of such measures provides useful information to investors regarding the Company’s financial condition and results of operations, see the Current Report on Form 8-K furnished to the U.S. Securities and Exchange Commission on August 6, 2015.

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GENESIS HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Net revenues	$	1,419,475		$	1,200,651		$	2,762,476		$	2,387,195
Salaries, wages and benefits	820,926			717,215			1,611,659			1,438,477
Other operating expenses	348,236			269,603			660,797			533,149
General and administrative costs	44,983			35,980			86,516			71,844
Provision for losses on accounts receivable	22,113			17,080			45,509			35,596
Lease expense	38,959			32,909			75,378			65,708
Depreciation and amortization expense	53,605			48,930			113,538			96,430
Interest expense	126,385			109,900			247,698			218,650
Loss on extinguishment of debt	—			181			3,234			680
Investment income	(431		)	(436		)	(847		)	(1,379		)
Transaction costs	2,642			1,298			88,710			3,547
Other loss (income)	50			(667		)	(7,560		)	(667		)
Equity in net income of unconsolidated affiliates	(360		)	(390		)	(513		)	(346		)
Loss before income tax benefit	(37,633		)	(30,952		)	(161,643		)	(74,494		)
Income tax benefit	(4,419		)	(96		)	(10,067		)	(2,850		)
Loss from continuing operations	(33,214		)	(30,856		)	(151,576		)	(71,644		)
Loss from discontinued operations, net of taxes	(1,722		)	(1,176		)	(1,610		)	(4,370		)
Net loss	(34,936		)	(32,032		)	(153,186		)	(76,014		)
Less net loss (income) attributable to noncontrolling interests	15,750			(224		)	21,434			(409		)
Net loss attributable to Genesis Healthcare, Inc.	$	(19,186	)	$	(32,256	)	$	(131,752	)	$	(76,423	)
Loss per common share:
Basic and diluted:
Weighted average shares outstanding for basic and diluted loss from continuing operations per share	89,211			49,865			82,279			49,865
Basic and diluted net loss per common share:
Loss from continuing operations attributable to Genesis Healthcare, Inc.	$	(0.20	)	$	(0.63	)	$	(1.58	)	$	(1.44	)
Loss from discontinued operations	(0.02		)	(0.02		)	(0.02		)	(0.09		)
Net loss attributable to Genesis Healthcare, Inc.	$	(0.22	)	$	(0.65	)	$	(1.60	)	$	(1.53	)

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GENESIS HEALTHCARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(IN THOUSANDS)

	June 30, 2015			December 31, 2014
Assets:
Current assets:
Cash and equivalents	$	82,963		$	87,548
Accounts receivable, net of allowances for doubtful accounts	753,563			605,830
Other current assets	142,302			202,808
Total current assets	978,828			896,186
Property and equipment, net of accumulated depreciation	3,995,294			3,493,250
Identifiable intangible assets, net of accumulated amortization	225,945			173,112
Goodwill	431,515			169,681
Other long-term assets	471,796			409,179
Total assets	$	6,103,378		$	5,141,408
Liabilities and Stockholders’ Deficit:
Current liabilities:
Accounts payable and accrued expenses	$	360,956		$	320,339
Accrued compensation	226,745			192,838
Other current liabilities	162,661			147,405
Total current liabilities	750,362			660,582
Long-term debt	1,031,626			525,728
Capital lease obligations	1,044,208			1,002,762
Financing obligations	2,965,326			2,911,200
Other long-term liabilities	556,398			498,626
Stockholders’ deficit	(244,542		)	(457,490		)
Total liabilities and stockholders’ deficit	$	6,103,378		$	5,141,408

GENESIS HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN THOUSANDS)

	Six months ended June 30,
	2015			2014
Net cash (used in) provided by operating activities	$	(7,729	)	$	36,361
Net cash used in investing activities	(28,867		)	(47,495		)
Net cash provided by financing activities	32,011			1,348
Net decrease in cash and equivalents	(4,585		)	(9,786		)
Beginning of period	87,548			61,413
End of period	$	82,963		$	51,627

7

GENESIS HEALTHCARE, INC.

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	As reported			Adjustments												As adjusted
							Newly acquired or constructed
	Three months ended June 30, 2015			Conversion to cash basis leases (a)			businesses with start-up losses (b)			Other adjustments (c)			Total adjustments			Three months ended June 30, 2015
Net revenues	$	1,419,475		$	—		$	(8,982	)	$	(232	)	$	(9,214	)	$	1,410,261
Salaries, wages and benefits	820,926			—			(5,447		)	—			(5,447		)	815,479
Other operating expenses	348,236			—			(4,183		)	(11,220		)	(15,403		)	332,833
General and administrative costs	44,983			—			—			(2,079		)	(2,079		)	42,904
Provision for losses on accounts receivable	22,113			—			(251		)	—			(251		)	21,862
Lease expense	38,959			84,437			(1,979		)	—			82,458			121,417
Depreciation and amortization expense	53,605			(34,197		)	(199		)	—			(34,396		)	19,209
Interest expense	126,385			(103,980		)	(8		)	—			(103,988		)	22,397
Other income	50			—			—			(50		)	(50		)	—
Investment income	(431		)	—			—			—			—			(431		)
Transaction costs	2,642			—			—			(2,642		)	(2,642		)	—
Equity in net income of unconsolidated affiliates	(360		)	—			—			—			—			(360		)
(Loss) income before income tax benefit	$	(37,633	)	$	53,740		$	3,085		$	15,759		$	72,584		$	34,951
Income tax (benefit) expense	(4,419		)	12,474			716			3,658			16,848			12,429
(Loss) income from continuing operations	$	(33,214	)	$	41,266		$	2,369		$	12,101		$	55,736		$	22,522
Loss from discontinued operations, net of taxes	1,722			460			—			—			460			2,182
Net (loss) income attributable to noncontrolling interests	(15,750		)	15,036			863			4,409			20,308			4,558
Net (loss) income attributable to Genesis Healthcare, Inc.	$	(19,186	)	$	25,770		$	1,506		$	7,692		$	34,968		$	15,782
Depreciation and amortization expense	53,605			(34,197		)	(199		)	—			(34,396		)	19,209
Interest expense	126,385			(103,980		)	(8		)	—			(103,988		)	22,397
Other income	50			—			—			(50		)	(50		)	—
Transaction costs	2,642			—			—			(2,642		)	(2,642		)	—
Income tax (benefit) expense	(4,419		)	12,474			716			3,658			16,848			12,429
Loss from discontinued operations, net of taxes	1,722			460			—			—			460			2,182
Net (loss) income attributable to noncontrolling interests	(15,750		)	15,036			863			4,409			20,308			4,558
EBITDA / Adjusted EBITDA	$	145,049		$	(84,437	)	$	2,878		$	13,067		$	(68,492	)	$	76,557
Lease expense	38,959			84,437			(1,979		)	—			82,458			121,417
EBITDAR / Adjusted EBITDAR	$	184,008		$	—		$	899		$	13,067		$	13,966		$	197,974
(Loss) income per common share:
Diluted:
Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d)	89,211															153,671
Diluted net (loss) income from continuing operations per share (e)	$	(0.20	)													$	0.14

See (a), (b), (c), (d) and (e) footnote references contained herein.

8

GENESIS HEALTHCARE, INC.

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	As reported			Adjustments												As adjusted			Non-GAAP as adjusted			Pro forma adjusted
	Six months ended June 30, 2015			Conversion to cash basis leases (a)			Newly acquired or constructed businesses with start-up losses (b)			Other adjustments (c)			Total adjustments			Six months ended June 30, 2015			Skilled Healthcare Group, Inc. one month ended January 31, 2015			Six months ended June 30, 2015
Net revenues	$	2,762,476		$	—		$	(21,365	)	$	388		$	(20,977	)	$	2,741,499		$	71,288		$	2,812,787
Salaries, wages and benefits	1,611,659			—			(12,513		)	—			(12,513		)	1,599,146			43,926			1,643,072
Other operating expenses	660,797			—			(9,653		)	(11,220		)	(20,873		)	639,924			19,946			659,870
General and administrative costs	86,516			—			—			(3,762		)	(3,762		)	82,754			—			82,754
Provision for losses on accounts receivable	45,509			—			(251		)	—			(251		)	45,258			—			45,258
Lease expense	75,378			168,345			(4,928		)	—			163,417			238,795			1,766			240,561
Depreciation and amortization expense	113,538			(67,789		)	(1,443		)	—			(69,232		)	44,306			1,998			46,304
Interest expense	247,698			(206,314		)	(40		)	—			(206,354		)	41,344			2,521			43,865
Loss on extinguishment of debt	3,234			—			—			(3,234		)	(3,234		)	—			—			—
Other income	(7,560		)	—			—			7,560			7,560			—			11			11
Investment income	(847		)	—			—			—			—			(847		)	—			(847		)
Transaction costs	88,710			—			—			(88,710		)	(88,710		)	—			—			—
Equity in net income of unconsolidated affiliates	(513		)	—			—			—			—			(513		)	(146		)	(659		)
(Loss) income before income tax benefit	$	(161,643	)	$	105,758		$	7,463		$	99,754		$	212,975		$	51,332		$	1,266		$	52,598
Income tax (benefit) expense	(10,067		)	24,548			1,732			23,155			49,435			39,368			494			39,862
(Loss) income from continuing operations	$	(151,576	)	$	81,210		$	5,731		$	76,599		$	163,540		$	11,964		$	772		$	12,736
Loss from discontinued operations, net of taxes	1,610			920			—			—			920			2,530			—			2,530
Net (loss) income attributable to noncontrolling interests	(21,434		)	29,591			2,088			27,911			59,590			38,156			531			38,687
Net (loss) income attributable to Genesis Healthcare, Inc.	$	(131,752	)	$	50,699		$	3,643		$	48,688		$	103,030		$	(28,722	)	$	241		$	(28,481	)
Depreciation and amortization expense	113,538			(67,789		)	(1,443		)	—			(69,232		)	44,306			1,998			46,304
Interest expense	247,698			(206,314		)	(40		)	—			(206,354		)	41,344			2,521			43,865
Loss on extinguishment of debt	3,234			—			—			(3,234		)	(3,234		)	—			—			—
Other income	(7,560		)	—			—			7,560			7,560			—			11			11
Transaction costs	88,710			—			—			(88,710		)	(88,710		)	—			—			—
Income tax (benefit) expense	(10,067		)	24,548			1,732			23,155			49,435			39,368			494			39,862
Loss from discontinued operations, net of taxes	1,610			920			—			—			920			2,530			—			2,530
Net (loss) income attributable to noncontrolling interests	(21,434		)	29,591			2,088			27,911			59,590			38,156			531			38,687
EBITDA / Adjusted EBITDA	$	283,977		$	(168,345	)	$	5,980		$	15,370		$	(146,995	)	$	136,982		$	5,796		$	142,778
Lease expense	75,378			168,345			(4,928		)	—			163,417			238,795			1,766			240,561
EBITDAR / Adjusted EBITDAR	$	359,355		$	—		$	1,052		$	15,370		$	16,422		$	375,777		$	7,562		$	383,339
(Loss) income per common share:
Diluted:
Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d)	82,279																					153,671
Diluted net (loss) income from continuing operations per share (e)	$	(1.58	)																			$	0.21

See (a), (b), (c), (d) and (e) footnote references contained herein.

9

GENESIS HEALTHCARE, INC.

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	As reported			Adjustments												As adjusted			Non-GAAP as adjusted			Pro forma adjusted
	Three months ended June 30, 2014			Conversion to cash basis leases (a)			Newly acquired or constructed businesses with start-up losses (b)			Other adjustments (c)			Total adjustments			Three months ended June 30, 2014			Skilled Healthcare Group, Inc. three months ended June 30, 2014			Three months ended June 30, 2014
Net revenues	$	1,200,651		$	—		$	(4,294	)	$	—		$	(4,294	)	$	1,196,357		$	206,868		$	1,403,225
				—
Salaries, wages and benefits	717,215			—			(3,302		)	94			(3,208		)	714,007			128,515			842,522
Other operating expenses	269,603			—			(1,800		)	(714		)	(2,514		)	267,089			44,052			311,141
General and administrative costs	35,980			—			—			—			—			35,980			6,656			42,636
Provision for losses on accounts receivable	17,080			—			—			—			—			17,080			3,664			20,744
Lease expense	32,909			80,317			(650		)	—			79,667			112,576			4,922			117,498
Depreciation and amortization expense	48,930			(33,525		)	(22		)	—			(33,547		)	15,383			6,034			21,417
Interest expense	109,900			(97,660		)	—			—			(97,660		)	12,240			7,643			19,883
Loss (gain) on extinguishment of debt	181			—			—			(181		)	(181		)	—			—			—
Other (income) loss	(667		)	—			—			667			667			—			(123		)	(123		)
Investment income	(436		)	—			—			—			—			(436		)	—			(436		)
Transaction costs	1,298			—			—			(1,298		)	(1,298		)	—			—			—
Equity in net income of unconsolidated affiliates	(390		)	—			—			—			—			(390		)	(92		)	(482		)
(Loss) income before income tax benefit	$	(30,952	)	$	50,868		$	1,480		$	1,432		$	53,780		$	22,828		$	5,597		$	28,425
Income tax (benefit) expense	(96		)	3,215			94			91			3,400			3,304			2,447			5,751
(Loss) income from continuing operations	$	(30,856	)	$	47,653		$	1,386		$	1,341		$	50,380		$	19,524		$	3,150		$	22,674
Loss (income) from discontinued operations, net of taxes	1,176			(437		)	—			—			(437		)	739			—			739
Net loss attributable to noncontrolling interests	224			—			—			—			—			224			—			224
Net (loss) income attributable to Genesis Healthcare, Inc.	$	(32,256	)	$	48,090		$	1,386		$	1,341		$	50,817		$	18,561		$	3,150		$	21,711
Depreciation and amortization expense	48,930			(33,525		)	(22		)	—			(33,547		)	15,383			6,034			21,417
Interest expense	109,900			(97,660		)	—			—			(97,660		)	12,240			7,643			19,883
Loss (gain) on extinguishment of debt	181			—			—			(181		)	(181		)	—			—			—
Other (income) loss	(667		)	—			—			667			667			—			(123		)	(123		)
Transaction costs	1,298			—			—			(1,298		)	(1,298		)	—			—			—
Income tax (benefit) expense	(96		)	3,215			94			91			3,400			3,304			2,447			5,751
Loss (income) from discontinued operations, net of taxes	1,176			(437		)	—			—			(437		)	739			—			739
Net income attributable to noncontrolling interests	224			—			—			—			—			224			—			224
EBITDA / Adjusted EBITDA	$	128,690		$	(80,317	)	$	1,458		$	620		$	(78,239	)	$	50,451		$	19,151		$	69,602
Lease expense	32,909			80,317			(650		)	—			79,667			112,576			4,922			117,498
EBITDAR / Adjusted EBITDAR	$	161,599		$	—		$	808		$	620		$	1,428		$	163,027		$	24,073		$	187,100
Loss per common share:
Diluted:
Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d)	49,865
Diluted net (loss) income from continuing operations per share (e)	$	(0.63	)																			Not calculated

See (a), (b), (c), (d) and (e) footnote references contained herein.

10

GENESIS HEALTHCARE, INC.

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	As reported			Adjustments												As adjusted			Non-GAAP as adjusted			Pro forma adjusted
	Six months ended June 30, 2014			Conversion to cash basis leases (a)			Newly acquired or constructed businesses with start-up losses (b)			Other adjustments (c)			Total adjustments			Six months ended June 30, 2014			Skilled Healthcare Group, Inc. six months ended June 30, 2014			Six months ended June 30, 2014
Net revenues	$	2,387,195		$	—		$	(7,178	)	$	1,166		$	(6,012	)	$	2,381,183		$	414,303		$	2,795,486
				—
Salaries, wages and benefits	1,438,477			—			(5,044		)	(1,706		)	(6,750		)	1,431,727			259,934			1,691,661
Other operating expenses	533,149			—			(3,052		)	(833		)	(3,885		)	529,264			89,012			618,276
General and administrative costs	71,844			—			—			—			—			71,844			12,300			84,144
Provision for losses on accounts receivable	35,596			—			—			—			—			35,596			6,478			42,074
Lease expense	65,708			157,880			(1,085		)	—			156,795			222,503			9,696			232,199
Depreciation and amortization expense	96,430			(65,393		)	(73		)	—			(65,466		)	30,964			12,120			43,084
Interest expense	218,650			(193,068		)	—			—			(193,068		)	25,582			15,639			41,221
Loss (gain) on extinguishment of debt	680			—			—			(680		)	(680		)	—			—			—
Other (income) loss	(667		)	—			—			667			667			—			(162		)	(162		)
Investment income	(1,379		)	—			—			—			—			(1,379		)	—			(1,379		)
Transaction costs	3,547			—			—			(3,547		)	(3,547		)	—			—			—
Equity in net income of unconsolidated affiliates	(346		)	—			—			—			—			(346		)	(638		)	(984		)
(Loss) income before income tax benefit	$	(74,494	)	$	100,581		$	2,076		$	7,265		$	109,922		$	35,428		$	9,924		$	45,352
Income tax (benefit) expense	(2,850		)	6,357			132			460			6,949			4,099			4,448			8,547
(Loss) income from continuing operations	$	(71,644	)	$	94,224		$	1,944		$	6,805		$	102,973		$	31,329		$	5,476		$	36,805
Loss (income) from discontinued operations, net of taxes	4,370			(1,964		)	—			—			(1,964		)	2,406			—			2,406
Net loss attributable to noncontrolling interests	409			—			—			—			—			409			—			409
Net (loss) income attributable to Genesis Healthcare, Inc.	$	(76,423	)	$	96,188		$	1,944		$	6,805		$	104,937		$	28,514		$	5,476		$	33,990
Depreciation and amortization expense	96,430			(65,393		)	(73		)	—			(65,466		)	30,964			12,120			43,084
Interest expense	218,650			(193,068		)	—			—			(193,068		)	25,582			15,639			41,221
Loss (gain) on extinguishment of debt	680			—			—			(680		)	(680		)	—			—			—
Other (income) loss	(667		)	—			—			667			667			—			(107		)	(107		)
Transaction costs	3,547			—			—			(3,547		)	(3,547		)	—			—			—
Income tax (benefit) expense	(2,850		)	6,357			132			460			6,949			4,099			4,448			8,547
Loss (income) from discontinued operations, net of taxes	4,370			(1,964		)	—			—			(1,964		)	2,406			—			2,406
Net income attributable to noncontrolling interests	409			—			—			—			—			409			—			409
EBITDA / Adjusted EBITDA	$	244,146		$	(157,880	)	$	2,003		$	3,705		$	(152,172	)	$	91,974		$	37,576		$	129,550
Lease expense	65,708			157,880			(1,085		)	—			156,795			222,503			9,696			232,199
EBITDAR / Adjusted EBITDAR	$	309,854		$	—		$	918		$	3,705		$	4,623		$	314,477		$	47,272		$	361,749
Loss per common share:
Diluted:
Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d)	49,865
Diluted net (loss) income from continuing operations per share (e)	$	(1.44	)																			Not calculated

See (a), (b), (c), (d) and (e) footnote references contained herein.

11

(a)  Our leases are classified as either operating leases, capital leases or financing obligations pursuant to applicable guidance under U.S. GAAP.  We view the primary provisions and economics of these leases, regardless of their accounting treatment, as being nearly identical.  Virtually all of our leases are structured with triple net terms, have fixed annual rent escalators and have long-term initial maturities with renewal options.  Accordingly, in connection with our evaluation of the financial performance of the Company, we reclassify all of our leases to operating lease treatment and reflect lease expense on a cash basis.  This approach allows us to better understand the relationship in each reporting period of our operating performance, as measured by EBITDAR and Adjusted EBITDAR, to the cash basis obligations to our landlords in that reporting period, regardless of the lease accounting treatment.  This presentation and approach is also consistent with the financial reporting and covenant compliance requirements contained in all of our major lease and loan agreements.  The following table summarizes the reclassification adjustments necessary to present all leases as operating leases on a cash basis.

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
	(in thousands)
Lease expense:
Cash rent - capital leases	$	22,923		$	22,384		$	45,848		$	44,394
Cash rent - financing obligations	64,065			61,097			126,835			119,632
Non-cash - operating lease arrangements	(2,551		)	(3,164		)	(4,338		)	(6,146		)
Lease expense adjustments	$	84,437		$	80,317		$	168,345		$	157,880
Depreciation and amortization expense:
Capital lease accounting	$	(9,296	)	$	(9,281	)	$	(18,075	)	$	(18,280	)
Financing obligation accounting	(24,901		)	(24,244		)	(49,714		)	(47,113		)
Depreciation and amortization expense adjustments	$	(34,197	)	$	(33,525	)	$	(67,789	)	$	(65,393	)
Interest expense:
Capital lease accounting	$	(26,157	)	$	(25,087	)	$	(51,643	)	$	(49,209	)
Financing obligation accounting	(77,823		)	(72,573		)	(154,671		)	(143,859		)
Interest expense adjustments	$	(103,980	)	$	(97,660	)	$	(206,314	)	$	(193,068	)
Total pre-tax lease accounting adjustments	$	(53,740	)	$	(50,868	)	$	(105,758	)	$	(100,581	)

(b)  The acquisition and construction of new businesses has become an important element of our growth strategy.  Many of the businesses we acquire have a history of operating losses and continue to generate operating losses in the months that follow our acquisition.  Newly constructed or developed businesses also generate losses while in their start-up phase.  We view these losses as both temporary and an expected component of our long-term investment in the new venture.  We adjust these losses when computing Adjusted EBITDAR and Adjusted EBITDA in order to better evaluate the performance of our core business.  The activities of such businesses are adjusted when computing Adjusted EBITDAR and Adjusted EBITDA until such time as a new business generates positive Adjusted EBITDA.  The operating performance of new businesses are no longer adjusted when computing Adjusted EBITDAR and Adjusted EBITDA beginning the period in which a new business generates positive Adjusted EBITDA and all periods thereafter.  There were seven acquired or newly constructed businesses eliminated from our reported results when computing adjusted results for the three and six months ended June 30, 2015 and 2014, respectively.  The results for the six months ended June 30, 2015 were also adjusted for losses incurred in our rehabilitation services start-up activities in China.

(c)  Other adjustments represent costs or gains associated with transactions or events that we do not believe are reflective of our core recurring operating business.  Other adjustments also include the effect of expensing non-cash stock-based compensation related to restricted stock units.  The following items were realized in the periods presented.

12

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
	(in thousands)
Severance and restructuring (1)	$	720		$	(94	)	$	2,379		$	1,706
Regulatory defense and related costs (2)	1,317			714			1,961			1,500
New business development costs (3)	—			—			—			499
Self insurance adjustment (4)	10,500			—			10,500			—
Transaction costs (5)	2,642			1,298			88,710			3,547
Loss on early extinguishment of debt	—			181			3,234			680
Other income (6)	50			(667		)	(7,560		)	(667		)
Stock based compensation (7)	530			—			530			—
Tax benefit from total adjustments	(3,658		)	(91		)	(23,155		)	(460		)
Total other adjustments	$	12,101		$	1,341		$	76,599		$	6,805

(1)  We incurred costs related to the termination, severance and restructuring of certain components of the Company’s business.

(2)  We incurred legal defense and other related costs in connection with certain matters in dispute or under appeal with regulatory agencies.

(3)  We incurred business development costs in connection with the evaluation and start-up of services outside our existing service offerings.

(4) We incurred a self-insured program adjustment for the actuarially developed GLPL and worker’s compensation claims related to policy periods 2014 and prior.  The Company also recorded approximately $3.6 million of incremental development related to the first six months of 2015, which has not been excluded from our non GAAP results.

(5)  We incurred costs associated with transactions including the combination with Skilled Healthcare Group, Inc. and other transactions.

(6)  We realized a net gain on the sale of certain assets in the six months ended June 30, 2015.

(7)  We incurred $0.5 million of non-cash stock-based compensation related to restricted stock units.

(d)  Assumes 153.7 million diluted weighted average common shares outstanding and common stock equivalents on a fully exchanged basis.

(e)  Pro forma adjusted income from continuing operations per share assumes a calculated tax rate of 40%, and is computed as follows:  Pro forma adjusted income before income taxes of $17.6 million x (1 - 40% tax rate) / 153.7 million diluted weighted average shares on a fully exchanged basis.

13

SKILLED HEALTHCARE GROUP, INC.

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR

(UNAUDITED)

(IN THOUSANDS)

	GAAP as						Non-GAAP as			GAAP as						Non-GAAP as			GAAP as						Non-GAAP as
	reported						adjusted			reported						adjusted			reported						adjusted
	One month						One month			Three months						Three months			Six months						Six months
	ended January						ended January			ended June						ended June			ended June						ended June 30,
	31, 2015			Adjust			31, 2015			30, 2014			Adjust			30, 2014			30, 2014			Adjust			2014
Net revenues	$	71,288		$	—		$	71,288		$	206,979		$	(111	)	$	206,868		$	414,279		$	24		$	414,303
Salaries, wages and benefits	44,842			(916		)	43,926			128,819			(304		)	128,515			260,246			(312		)	259,934
Other operating expenses	17,486			(345		)	17,141			51,990			(7,938		)	44,052			97,967			(8,955		)	89,012
General and administrative costs	1,516						1,516			7,287			(631		)	6,656			13,371			(1,071		)	12,300
Provision for losses on accounts receivable	1,289			—			1,289			3,720			(56		)	3,664			6,625			(147		)	6,478
Lease expense	1,766			—			1,766			4,922			—			4,922			9,696			—			9,696
Depreciation and amortization expense	1,998			—			1,998			6,034			—			6,034			12,120			—			12,120
Interest expense	2,521			—			2,521			7,643			—			7,643			15,639			—			15,639
Loss on extinguishment of debt	—			—			—			822			(822		)	—			822			(822		)	—
Impairment of long-lived assets	—			—			—			82			(82		)	—			82			(82		)	—
Other (income) loss	11			—			11			(123		)	—			(123		)	(162		)	—			(162		)
Transaction costs	4,638			(4,638		)	—			—			—			—			—			—			—
Equity in net income of unconsolidated affiliates	(146		)	—			(146		)	(92		)	—			(92		)	(638		)	—			(638		)
Income tax (benefit) expense	(1,807		)	2,301			494			(1,345		)	3,792			2,447			(3		)	4,451			4,448
Net (loss) income	$	(2,826	)	$	3,598		$	772		$	(2,780	)	$	5,930		$	3,150		$	(1,486	)	$	6,962		$	5,476
Depreciation and amortization expense	1,998			—			1,998			6,034			—			6,034			12,120			—			12,120
Interest expense	2,521			—			2,521			7,643			—			7,643			15,639			—			15,639
Loss on extinguishment of debt	—			—			—			822			(822		)	—			822			(822		)	—
Impairment of long-lived assets	—			—			—			82			(82		)	—			82			(82		)	—
Other (income) loss	11			—			11			(123		)				(123		)	(107		)	—			(107		)
Transaction costs	4,638			(4,638		)	—			—			—			—			—			—			—
Income tax (benefit) expense	(1,807		)	2,301			494			(1,345		)	3,792			2,447			(3		)	4,451			4,448
EBITDA / Adjusted EBITDA	4,535			1,261			5,796			10,333			8,818			19,151			27,067			10,509			37,576
Lease expense	1,766			—			1,766			4,922			—			4,922			9,696			—			9,696
EBITDAR / Adjusted EBITDAR	$	6,301		$	1,261		$	7,562		$	15,255		$	8,818		$	24,073		$	36,763		$	10,509		$	47,272

The following adjustments represent costs or gains associated with transactions or events that we do not believe are reflective of Skilled Healthcare Group’s recurring operating business.

	One month ended January 31, 2015			Three months ended June 30, 2014			Six months ended June 30, 2014
Severance and restructuring	$	1,220		$	631		$	1,071
Regulatory defense and related costs	41			—			—
Exist costs of divested facilities	—			(27		)	340
Professional fees related to non-routine matters	—			7,205			7,519
Losses at skilled nursing facility not at full operation	—			133			133
Loss on extinguishment of debt	—			822			822
Non-cash stock compensation	371			876			1,446
Impairment of long-lived assets	—			82			82
Transaction costs	4,267			—			—
Tax benefit of total adjustments	(2,301		)	(3,792		)	(4,451		)
Total adjustments	$	3,598		$	5,930		$	6,962

14

GENESIS HEALTHCARE, INC.

KEY FINANCIAL PERFORMANCE INDICATORS

(UNAUDITED)

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
	(In thousands)				(In thousands)
Financial Results
Net revenues	$	1,419,475	$	1,200,651	$	2,762,476	$	2,387,195
EBITDAR	184,008		161,599		359,355		309,854
EBITDA	145,049		128,690		283,977		244,146
Adjusted EBITDAR	197,974		163,027		375,777		314,477
Adjusted EBITDA	76,557		50,451		136,982		91,974
Pro forma adjusted EBITDAR	197,974		187,100		383,339		361,749
Pro forma adjusted EBITDA	76,557		69,602		142,778		129,550

INPATIENT SEGMENT:

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Occupancy Statistics - Inpatient
Available licensed beds in service at end of period	56,730			46,451			56,730			46,451
Available operating beds in service at end of period	55,087			45,057			55,087			45,057
Available patient days based on licensed beds	5,154,768			4,231,255			9,930,941			8,420,379
Available patient days based on operating beds	4,996,311			4,103,685			9,625,192			8,164,113
Actual patient days	4,338,337			3,675,482			8,427,184			7,307,551
Occupancy percentage - licensed beds	84.2		%	86.9		%	84.9		%	86.8		%
Occupancy percentage - operating beds	86.8		%	89.6		%	87.6		%	89.5		%
Skilled mix	21.8		%	22.2		%	22.3		%	22.2		%
Average daily census	47,674			40,390			46,559			40,373
Revenue per patient day (skilled nursing facilities)
Medicare Part A	$	503		$	493		$	502		$	492
Medicare total (including Part B)	543			531			538			530
Insurance	454			448			446			447
Private and other	310			319			312			320
Medicaid	217			213			216			213
Medicaid (net of provider taxes)	195			193			195			193
Weighted average (net of provider taxes)	$	272		$	271		$	273		$	271
Patient days by payor (skilled nursing facilities)
Medicare	573,295			537,626			1,153,193			1,067,923
Insurance	307,163			224,319			594,922			448,606
Total skilled mix days	880,458			761,945			1,748,115			1,516,529
Private and other	277,038			239,345			563,624			480,968
Medicaid	2,866,194			2,434,581			5,512,696			4,834,342
Total Days	4,023,690			3,435,871			7,824,435			6,831,839
Patient days as a percentage of total patient days (skilled nursing facilities)
Medicare	14.2		%	15.6		%	14.7		%	15.6		%
Insurance	7.6		%	6.5		%	7.6		%	6.6		%
Skilled mix	21.8		%	22.1		%	22.3		%	22.2		%
Private and other	6.9		%	7.0		%	7.2		%	7.0		%
Medicaid	71.3		%	70.9		%	70.5		%	70.8		%
Total	100.0		%	100.0		%	100.0		%	100.0		%

15

GENESIS HEALTHCARE, INC.

KEY FINANCIAL PERFORMANCE INDICATORS

(UNAUDITED)

	Three months ended June 30,		Six months ended June 30,
	2015	2014	2015	2014
Facilities at end of period
Skilled nursing facilities
Leased	384	356	384	356
Owned	33	2	33	2
Joint Venture	5	5	5	5
Managed *	36	14	36	14
Total skilled nursing facilities	458	377	458	377
Total licensed beds	55,605	45,964	55,605	45,964
Assisted living facilities:
Leased	29	27	29	27
Owned	22	1	22	1
Joint Venture	1	1	1	1
Managed	4	4	4	4
Total assisted living facilities	56	33	56	33
Total licensed beds	3,962	2,731	3,962	2,731
Total facilities	514	410	514	410
Total Jointly Owned and Managed– (Unconsolidated)	19	17	19	17

REHABILITATION THERAPY SEGMENT:

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Revenue mix %:
Company-operated	39		%	37		%	39		%	37		%
Non-affiliated	61		%	63		%	61		%	63		%
Sites of service (at end of period)	1,499			1,367			1,499			1,367
Revenue per site	$	171,570		$	176,104		$	336,478		$	352,856
Therapist efficiency %	70		%	69		%	70		%	70		%

* In 2015, includes 20 facilities located in Texas for which the real estate is owned by Genesis.

16

GENESIS HEALTHCARE, INC.

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR

2015 GUIDANCE - LOW END OF RANGE

(IN THOUSANDS, EXCEPT EPS)

				Adjustments									As adjusted
							Newly acquired or
	Twelve months ended December 31, 2015			Conversion to cash basis leases (a)			constructed businesses with start-up losses (b)			Other adjustments (c)			Twelve months ended December 31, 2015
Net revenues	$	5,684,197		$	—		$	(25,759	)	$	—		$	5,658,438
Salaries, wages and benefits	3,506,752			—			(16,175		)	—			3,490,577
Other operating expenses	1,427,595			—			(11,734		)	—			1,415,861
Lease expense	157,874			334,941			(5,383		)	—			487,432
Depreciation and amortization expense	234,511			(137,324		)	(2,675		)	—			94,512
Interest expense	507,203			(421,251		)	—			—			85,952
Investment income	(2,000		)	—			—			—			(2,000		)
Transaction costs	88,989			—			—			(88,989		)	—
Equity in net income of unconsolidated affiliates	(1,050		)	—			—			—			(1,050		)
(Loss) income before income tax expense	$	(235,677	)	$	223,634		$	10,208		$	88,989		$	87,154
Income tax expense (benefit)	(94,271		)	89,454			4,083			35,596			34,862
Income (loss) from continuing operations	$	(141,406	)	$	134,180		$	6,125		$	53,393		$	52,292
Earnings (loss) per share, diluted:	$	(0.91	)										$	0.34
Weighted-average common shares outstanding, diluted, on a fully exchanged basis	154,603												154,603
Adjustments to Compute EBITDA/Adjusted EBITDA and EBITDAR / Adjusted EBITDAR
Depreciation and amortization expense	234,511			(137,324		)	(2,675		)	—			94,512
Interest expense	507,203			(421,251		)	—			—			85,952
Transaction costs	88,989			—			—			(88,989		)	—
Income tax expense (benefit)	(94,271		)	89,454			4,083			35,596			34,862
EBITDA / Adjusted EBITDA	$	595,026		$	(334,941	)	$	7,533		$	—		$	267,618
Lease expense	157,874			334,941			(5,383		)	—			487,432
EBITDAR / Adjusted EBITDAR	$	752,900		$	—		$	2,150		$	—		$	755,050

17

GENESIS HEALTHCARE, INC.

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR

2015 GUIDANCE - HIGH END OF RANGE

(IN THOUSANDS, EXCEPT EPS)

				Adjustments									As adjusted
							Newly acquired or
	Twelve months ended December 31, 2015			Conversion to cash basis leases (a)			constructed businesses with start-up losses (b)			Other adjustments (c)			Twelve months ended December 31, 2015
Net revenues	$	5,764,197		$	—		$	(25,759	)	$	—		$	5,738,438
Salaries, wages and benefits	3,554,512			—			(16,175		)	—			3,538,337
Other operating expenses	1,446,798			—			(11,734		)	—			1,435,064
Lease expense	157,874			334,941			(5,383		)	—			487,432
Depreciation and amortization expense	235,515			(137,324		)	(2,675		)	—			95,516
Interest expense	508,003			(421,251		)	—			—			86,752
Investment income	(3,000		)	—			—			—			(3,000		)
Transaction costs	88,989			—			—			(88,989		)	—
Equity in net income of unconsolidated affiliates	(2,000		)	—			—			—			(2,000		)
(Loss) income before income tax expense	$	(222,494	)	$	223,634		$	10,208		$	88,989		$	100,337
Income tax (benefit) expense	(88,998		)	89,454			4,083			35,596			40,135
Income (loss) from continuing operations	$	(133,496	)	$	134,180		$	6,125		$	53,393		$	60,202
Earnings (loss) per share, diluted:	$	(0.86	)										$	0.39
Weighted-average common shares outstanding, diluted, on a fully exchanged basis	154,603												154,603
Adjustments to Compute EBITDA/Adjusted EBITDA and EBITDAR / Adjusted EBITDAR
Depreciation and amortization expense	235,515			(137,324		)	(2,675		)	—			95,516
Interest expense	508,003			(421,251		)	—			—			86,752
Transaction costs	88,989			—			—			(88,989		)	—
Income tax (benefit) expense	(88,998		)	89,454			4,083			35,596			40,135
EBITDA / Adjusted EBITDA	$	610,013		$	(334,941	)	$	7,533		$	—		$	282,605
Lease expense	157,874			334,941			(5,383		)	—			487,432
EBITDAR / Adjusted EBITDAR	$	767,887		$	—		$	2,150		$	—		$	770,037

18

EX-99.2

Exhibit 99.2

Genesis HealthCare A Leading National Provider of Post-Acute Services August 2015

Safe Harbor Statement Certain statements in this presentation regarding the expected benefits of the Skilled Healthcare transaction, future opportunities for the Company and any other statements regarding the Company’s future expectations, beliefs, goals, strategies or prospects contained in this presentation constitute “forward-looking statements” under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be preceded by, followed by or include the words “may,” “will,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “could,” “might,” or “continue” or the negative or other variations thereof or comparable terminology. A number of important factors could cause actual events or results to differ materially from those indicated by such forward-looking statements, including changes in the Company’s reimbursement rates; healthcare reform legislation; the impact of government investigations and legal actions against the Company’s centers and other factors described in the most recent Annual Report on Form 10-K of the Company and elsewhere in the Company’s filings with the Securities and Exchange Commission. You should not place undue reliance on any of these forward- looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any such statement to reflect new information, or the occurrence of future events or changes in circumstances. References made in this presentation to "Genesis," "the Company," "we," "us" and "our" refer to Genesis HealthCare, Inc. and each of its wholly-owned companies. 1

Genesis’ Growth Strategy Financial Summary AGENDA Genesis HealthCare Overview

Genesis HealthCare 3 Genesis HealthCare is now one of the largest providers of post-acute care services in the nation. Recent key acquisitions: December 1, 2012, acquired Sun HealthCare February 2, 2015, acquired Skilled Healthcare Genesis Pre-Acquisition Addition of Sun Addition of Skilled Total # of total Employees ~50,000 ~28,000 ~15,000 ~100,000 # of States (SNF & ALF Business) 13 22 8 34 # of Centers (SNF & ALF Facilities) 229 181 96 506 Competitive Strengths 196 clinical specialty units. More than 350 Genesis physicians and nurse practitioners. Strong referral network with hospitals. Genesis also supplies contract rehabilitation services across 46 states.

Broad Combined Geographic Scale Pro Forma Inpatient Services Footprint Skilled Healthcare Facilities Genesis HealthCare Facilities Over 500 SNF and ALF facilities across 34 states Top 5 states by licensed beds: PA: 10.7% NJ: 9.1% MD: 7.8% CA: 7.3% MA: 7.1% ___________________________ Source: Company information, March 2015 4

195 Genesis Rehabilitation Services 12 16 7 8 6 13 33 46 142 6 4 2 19 37 69 111 90 90 69 13 25 16 46 15 45 28 28 103 14 9 57 8 DC 4 Hawaii 4 Expansive Service Contract Footprint 3 126 6 9 1 9 20 9 38 4 42 1 Hawaii 4 Genesis is the 2nd largest contract rehabilitation therapy provider in the U.S. 5 ___________________________ Note: Facility counts by state are for GRS Only, March 2015.

Genesis’ Growth Strategy Financial Summary AGENDA Genesis HealthCare Overview

Genesis Growth Strategy Develop specialized post-acute / long-term care services & buildings Grow through selective acquisitions and successful integration Leverage growth in rehab therapy segment including home-based services and China expansion Position for success in a post-healthcare reform environment 7

Specialized Services & Buildings Aggressive, highly personalized rehabilitation designed to get patients home sooner 5 Reconfigured 3 New build, state-of-the art facilities 3 Acquired Accelerate growth in higher margin, higher skilled services 11 operational PowerBack facilities across 5 states Additional facility set to open in 2016 100% Short-Stay / Post-Acute Facilities 8

Acquisition & Development Strategy Transformative Acquisitions Opportunities Pursue smaller, attractive M&A and development opportunities Small Scale Acquisitions 2013 - 2015 Development Projects Beds Type Facility State Opening Date 124 SNF PowerBack NJ January 2013 120 SNF Replacement MA February 2013 124 SNF PowerBack NJ December 2014 120 SNF Replacement MD December 2014 99 SNF PowerBack CO May 2015 130 SNF Replacement MD October 2015 124 SNF PowerBack NJ October 2015 9 Beds Type State Acquisition Date 108 PowerBack CO Mar-14 120 SNF NJ May-14 104 SNF DE Aug-14 125 SNF AL Sep-14 32 ALF AL Sep-14 68 SNF NH Nov-14 140 SNF TX Feb-15 90 PowerBack TX May-15 60 PowerBack TX May-15 Acquisition of 24 Revera facilities planned for end of year 2015 16 recent or planned smaller scale acquisitions / development projects $250 million of steady state total revenue $47 million of steady state EBITDAR Accretive Smaller Scale Opportunities Sun Healthcare – 2012 $1.9 Billion in Revenues Skilled Healthcare - 2015 $0.85 Billion in Revenues

Growth Strategies: Genesis Rehab Services 10 Organic net location growth – 100 per year On July 1, 2015, signed 91 new contract sites + 22 outpatients rehab sites; Genesis/Formation acquisition/development strategy Expand into new states post Skilled transaction Expansion of Outpatient Services Vitality @ Home National / regional Home Health collaboration Expansion to China

Post-Healthcare Reform Environment Managed Care Strategy Build upon strong relationships with national and regional managed care plans Reduces readmissions Improves quality outcomes Creates efficiency in the healthcare delivery system Capture additional patient referrals resulting from expanded coverage through healthcare reform Readmission Incentive programs 11

3 Centers 4/1/15 7/1/15 10/1/15 3/31/18 6/30/18 9/30/18 3-Year Demonstration Period Genesis Bundled Payment Participation $13MM Medicare Costs Under Management 10 Centers $35MM Medicare Costs Under Management 19 Centers $80MM Medicare Costs Under Management Participating in the Model 3 BPCI Initiative with 32 Centers: 38 of the available 48 Episode Families selected; 90-day episodes of care 12

Enhancing Skilled Mix through Focus on High Acuity Patients Specialty Care Units As of August 2015 # of Specialty Units Short-Term Specialties PowerBack Rehabilitation 11 Transitional Care Units 108 Progression Orthopedic Units 4 Long-Term Specialties Alzheimer’s Units 56 Ventilator Care Units 8 Dialysis Units 9 13 Transitional Care Units A rapid recovery option for patients requiring post-acute rehab and medical services due to illness, surgery or injury. Offers enhanced clinical services in a designated unit with higher licensed clinical staffing Homestead (Alzheimer’s) Offers a safe, secure, home-like environment with consistent staff to promote relationships and stable family atmosphere Progression Unit A short stay option for patients requiring orthopedic rehabilitation after hospital discharge, but before going home Ventilator Care Designed for patients who need short-term or continuous ventilator care or rehab Dialysis On-site services for patients requiring treatment for end-stage renal disease along with skilled care PowerBack Aggressive, highly personalized care plans designed to get patients home sooner

Genesis Physician Services (“GPS”) 14 Group practice specializing in sub-acute, skilled nursing & long-term care Dedicated Medical Directors & full-/ part-time Attending Physicians, NPs and PAs Clinical care partners for the entire Genesis care team 70% of facility admissions are seen by GPS providers (where a GPS presence exists) 525,000 patient visits annually Full & Part-Time Provider Growth 74 95 128 160 197 208 101 115 122 150 162 160 175 210 250 310 359 368 0 50 100 150 200 250 300 350 400 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Jun-15 Nurse Practitioners Physicians

Genesis’ Growth Strategy Financial Summary AGENDA Genesis HealthCare Overview

Pro Forma Financial Summary – Six Months Ended June 30, 2015 Adjusted EBITDAR 16 13.6% Highlights: Strong pro forma margin expansion $15.5 M in expense reductions $4.0 M of Skilled Healthcare synergies realized Controllable expenses well managed Improved therapist efficiency in Q2 Looking Ahead: Expense reductions continue to ramp $30-$40 M annual reduction Skilled Healthcare combination synergies continue to ramp $13 M expected in 2015 Signed 91 new therapy contract sites and 22 outpatient rehab clinics effective July 1, 2015 Revera acquisition by year-end $361.7 M $383.3 M $350.0 $360.0 $370.0 $380.0 $390.0 Six Months Ended June 2014 Six Months Ended June 2015 In millions 6.0% 12.9%

2015 Guidance (As Included in Earnings Release Dated Aug. 6, 2015) 17 Adjusted EBITDAR Guidance Range Bridge ($ in millions) Low End High End 2014 Genesis & Skilled pro forma combined Adjusted EBITDAR $ 688.6 $ 688.6 Combination synergies expected to be realized in 2015 13.0 13.0 Impact of cost reduction initiatives 30.0 40.0 Incremental earnings from completed new builds / acquisitions 9.0 11.0 Organic growth - rehabilitation therapy segment 7.0 9.0 Organic growth - inpatient segment 7.4 8.4 2015 Genesis Healthcare, Inc. Guidance $ 755.0 $ 770.0 Mid-point of EBITDAR Guidance implies: 10.7% EBITDAR 25.4% EBITDA Growth vs. 2014 (in thousands, except EPS) Low End of Range High End of Range Net revenues 5,658,438 $ 5,738,438 $ Adjusted EBITDAR 755,050 770,037 Adjusted EBITDA 267,618 282,605 Earnings per share, diluted 0.34 $ 0.39 $ Guidance

Capital Strengthening Initiatives 18 Initiative Timing Impact HUD Refinancing $360 M Bridge Loan $400 M Add’l Capacity Requested Approval expected in 3Q 2015 Closing late 2015 / early 2016 $14 M annual pre-tax interest savings Attractive financing for future acquisitions Non-Core Asset Sales $27M sales completed $100 to $150M potential over 6-12 months Proceeds redeployed at accretive return or pay down 10% term debt REIT Transactions 21 facility acquisitions 12 facility divestitures Rent pre-payments 3 divestures & 1 acquisition complete yielding $6.0M reduced rent Remainder to close in stages – majority 2016 Annual pre-tax rent reduced $35 M Facility ownership increased from 15% to 23% (pro forma for Revera) Reducing fixed charges, increasing facility ownership and reducing cost of capital

Projected Value Creation of Known Transactions Purpose: To illustrate the estimated the accretive impact of all significant transactions that have closed or are expected to close through 2016. This schedule excludes routine organic growth. * - Proceeds of non-core asset sales, if any, estimated between $100 M to $150 M will be used to finance the equity component of the Revera Acquisition and the REIT Transactions. 19 $ in millions Mid-point 2015 Guidance Incremental Skilled Transaction Synergies Year over Year Impact of Recently Added Therapy Contracts Completed New Builds & Acquisitions HUD Refi Revera Acquisition REIT Transactions Non Core Asset Sales * $ % Revenue 5,758.4 $ 1.1 $ 35.0 $ 79.0 $ - $ 281.1 $ (46.8) $ (168.7) $ 180.7 $ 3.1% EBITDAR 762.5 11.2 3.8 17.5 - 34.3 (3.2) (15.8) 47.7 6.3% Cash Basis Rent 487.4 - 0.4 9.9 - 4.0 (31.0) (2.8) (19.5) EBITDA 275.1 11.2 3.4 7.6 - 30.3 27.8 (13.0) 67.3 24.5% Free Cash Flow 70.7 6.7 2.0 4.6 8.6 15.7 17.1 (7.8) 47.0 66.5% Net Debt 950.0 - - - - 175.0 175.0 - 350.0 Expected Timing Complete Complete Complete Expected before Jan 1, 2016 Expected before Jan 1, 2016 expected during 2015 and 2016 Expected by mid 2016 2016 Impact If All Transactions Were in Place January 1, 2016 Total Impact

Recent Successes and Opportunities Integration of Skilled Healthcare going well Strong EBITDA growth quarter-over-quarter Expanding real estate ownership Consolidated rent coverage improvement Positive capital structure momentum Favorable industry fundamentals 20

Appendix

Use of Non-GAAP Measures This presentation includes references to EBITDAR, Adjusted EBITDAR, EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. For purposes of SEC Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position and cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable financial measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable financial measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, Genesis has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. We believe that the presentation of EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR provides consistency in our financial reporting and provides a basis for the comparison of results of core business operations between our current, past and future periods. EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR are primary indicators management uses for planning and forecasting in future periods, including trending and analyzing the core operating performance of our business from period-to-period without the effect of expenses, revenues and gains (losses) that are unrelated to the day-to-day performance of our consolidated and segmented business but are required to reported in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). We also use EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR to benchmark the performance of our consolidated and segmented business against expected results, analyzing year-over-year trends as described below and to compare our operating performance to that of our competitors. Management uses EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR to assess the performance of our core business operations, to prepare operating budgets and to measure our performance against those budgets on a consolidated and segment level. Segment management uses these metrics to measure performance on a business unit by business unit basis. We typically use Adjusted EBITDA and Adjusted EBITDAR for these purposes on a consolidated basis as the adjustments to EBITDA and EBITDAR are not generally allocable to any individual business unit and we typically use EBITDA and EBITDAR to compare the operating performance of each skilled nursing and assisted living facility, as well as to assess the performance of our operating segments. EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR are useful in this regard because they do not include such costs as interest expense (net of interest income), income taxes, depreciation and amortization expense, rent cost of revenue (in the case of EBITDAR and Adjusted EBITDAR) and special charges, which may vary from business unit to business unit and period-to-period depending upon various factors, including the method used to finance the business, the amount of debt that we have determined to incur, whether a facility is owned or leased, the date of acquisition of a facility or business, the original purchase price of a facility or business unit or the tax law of the state in which a business unit operates. These types of charges are dependent on factors unrelated to the underlying business unit performance. As a result, we believe that the use of adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR provides a meaningful and consistent comparison of our underlying business units between periods by eliminating certain items required by U.S. GAAP which have little or no significance to their day-to-day operations. The use of EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and other non-GAAP financial measures has certain limitations. Our presentation of EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR or other non-GAAP financial measures may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of EBITDA, EBITDAR, Adjusted EBITDA or Adjusted EBITDAR. Each of these items should also be considered in the overall evaluation of our results. Additionally, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance. EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and certain other non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with U.S. GAAP. EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and other non-GAAP financial measures should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by U.S. GAAP, nor should these measures be relied upon to the exclusion of U.S. GAAP financial measures. EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and other non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our U.S. GAAP results and the reconciliations to the corresponding U.S. GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. You are strongly encouraged to review our financial information in its entirety and not to rely on any single financial measure.

Condensed Consolidated Statements of Operations 2015 2014 2015 2014 Net revenues 1,419,475 $ 1,200,651 $ 2,762,476 $ 2,387,195 $ Salaries, wages and benefits 820,926 717,215 1,611,659 1,438,477 Other operating expenses 348,236 269,603 660,797 533,149 General and administrative costs 44,983 35,980 86,516 71,844 Provision for losses on accounts receivable 22,113 17,080 45,509 35,596 Lease expense 38,959 32,909 75,378 65,708 Depreciation and amortization expense 53,605 48,930 113,538 96,430 Interest expense 126,385 109,900 247,698 218,650 Loss on extinguishment of debt - 181 3,234 680 Investment income (431) (436) (847) (1,379) Transaction costs 2,642 1,298 88,710 3,547 Other loss (income) 50 (667) (7,560) (667) Equity in net income of unconsolidated affiliates (360) (390) (513) (346) Loss before income tax benefit (37,633) (30,952) (161,643) (74,494) Income tax benefit (4,419) (96) (10,067) (2,850) Loss from continuing operations (33,214) (30,856) (151,576) (71,644) Loss from discontinued operations, net of taxes (1,722) (1,176) (1,610) (4,370) Net loss (34,936) (32,032) (153,186) (76,014) Less net loss (income) attributable to noncontrolling interests 15,750 (224) 21,434 (409) Net loss attributable to Genesis Healthcare, Inc. (19,186) $ (32,256) $ (131,752) $ (76,423) $ Loss per common share: Basic and diluted: Weighted average shares outstanding for basic and diluted loss from continuing operations per share 89,211 49,865 82,279 49,865 Basic and diluted net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. (0.20) $ (0.63) $ (1.58) $ (1.44) $ Loss from discontinued operations (0.02) (0.02) (0.02) (0.09) Net loss attributable to Genesis Healthcare, Inc. (0.22) $ (0.65) $ (1.60) $ (1.53) $ CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Six months ended June 30, (UNAUDITED) GENESIS HEALTHCARE, INC. Three months ended June 30,

Condensed Consolidated Balance Sheets June 30, 2015 December 31, 2014 Assets: Current assets: Cash and equivalents 82,963 $ 87,548 $ Accounts receivable, net of allowances for doubtful accounts 753,563 605,830 Other current assets 142,302 202,808 Total current assets 978,828 896,186 Property and equipment, net of accumulated depreciation 3,995,294 3,493,250 Identifiable intangible assets, net of accumulated amortization 225,945 173,112 Goodwill 431,515 169,681 Other long-term assets 471,796 409,179 Total assets 6,103,378 $ 5,141,408 $ Liabilities and Stockholders' Deficit: Current liabilities: Accounts payable and accrued expenses 360,956 $ 320,339 $ Accrued compensation 226,745 192,838 Other current liabilities 162,661 147,405 Total current liabilities 750,362 660,582 Long-term debt 1,031,626 525,728 Capital lease obligations 1,044,208 1,002,762 Financing obligations 2,965,326 2,911,200 Other long-term liabilities 556,398 498,626 Stockholders' deficit (244,542) (457,490) Total liabilities and stockholders' deficit 6,103,378 $ 5,141,408 $ (IN THOUSANDS) (UNAUDITED)

Condensed Consolidated Statements of Cash Flows 2015 2014 Net cash (used in) provided by operating activities (7,729) $ 36,361 $ Net cash used in investing activities (28,867) (47,495) Net cash provided by financing activities 32,011 1,348 Net decrease in cash and equivalents (4,585) (9,786) Beginning of period 87,548 61,413 End of period 82,963 $ 51,627 $ (IN THOUSANDS) Six months ended June 30, (UNAUDITED) GENESIS HEALTHCARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Reconciliation of Net (Loss) Income to EBITDA, EBITDAR, Adj. EBITDA & Adj. EBITDAR As reported As adjusted Three months ended June 30, 2015 Conversion to cash basis leases (a) Newly acquired or constructed businesses with start-up losses (b) Other adjustments (c) Total adjustments Three months ended June 30, 2015 Net revenues 1,419,475 $ - $ (8,982) $ (232) $ (9,214) $ 1,410,261 $ Salaries, wages and benefits 820,926 - (5,447) - (5,447) 815,479 Other operating expenses 348,236 - (4,183) (11,220) (15,403) 332,833 General and administrative costs 44,983 - - (2,079) (2,079) 42,904 Provision for losses on accounts receivable 22,113 - (251) - (251) 21,862 Lease expense 38,959 84,437 (1,979) - 82,458 121,417 Depreciation and amortization expense 53,605 (34,197) (199) - (34,396) 19,209 Interest expense 126,385 (103,980) (8) - (103,988) 22,397 Other income 50 - - (50) (50) - Investment income (431) - - - - (431) Transaction costs 2,642 - - (2,642) (2,642) - Equity in net income of unconsolidated affiliates (360) - - - - (360) (Loss) income before income tax benefit (37,633) $ 53,740 $ 3,085 $ 15,759 $ 72,584 $ 34,951 $ Income tax (benefit) expense (4,419) 12,474 716 3,658 16,848 12,429 (Loss) income from continuing operations (33,214) $ 41,266 $ 2,369 $ 12,101 $ 55,736 $ 22,522 $ Loss from discontinued operations, net of taxes 1,722 460 - - 460 2,182 Net (loss) income attributable to noncontrolling interests (15,750) 15,036 863 4,409 20,308 4,558 Net (loss) income attributable to Genesis Healthcare, Inc. (19,186) $ 25,770 $ 1,506 $ 7,692 $ 34,968 $ 15,782 $ Depreciation and amortization expense 53,605 (34,197) (199) - (34,396) 19,209 Interest expense 126,385 (103,980) (8) - (103,988) 22,397 Other income 50 - - (50) (50) - Transaction costs 2,642 - - (2,642) (2,642) - Income tax (benefit) expense (4,419) 12,474 716 3,658 16,848 12,429 Loss from discontinued operations, net of taxes 1,722 460 - - 460 2,182 Net (loss) income attributable to noncontrolling interests (15,750) 15,036 863 4,409 20,308 4,558 EBITDA / Adjusted EBITDA 145,049 $ (84,437) $ 2,878 $ 13,067 $ (68,492) $ 76,557 $ Lease expense 38,959 84,437 (1,979) - 82,458 121,417 EBITDAR / Adjusted EBITDAR 184,008 $ - $ 899 $ 13,067 $ 13,966 $ 197,974 $ (Loss) income per common share: Diluted: Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d) 89,211 153,671 Diluted net (loss) income from continuing operations per share (e) (0.20) $ 0.14 $ See (a), (b), (c), (d) and (e) footnote references contained herein. GENESIS HEALTHCARE, INC. RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND ADJUSTED EBITDAR (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA) Adjustments

Reconciliation of Net (Loss) Income to EBITDA, EBITDAR, Adj. EBITDA & Adj. EBITDAR As reported As adjusted Non-GAAP as adjusted Pro forma adjusted Six months ended June 30, 2015 Conversion to cash basis leases (a) Newly acquired or constructed businesses with start-up losses (b) Other adjustments (c) Total adjustments Six months ended June 30, 2015 Skilled Healthcare Group, Inc. one month ended January 31, 2015 Six months ended June 30, 2015 Net revenues 2,762,476 $ - $ (21,365) $ 388 $ (20,977) $ 2,741,499 $ 71,288 $ 2,812,787 $ Salaries, wages and benefits 1,611,659 - (12,513) - (12,513) 1,599,146 43,926 1,643,072 Other operating expenses 660,797 - (9,653) (11,220) (20,873) 639,924 19,946 659,870 General and administrative costs 86,516 - - (3,762) (3,762) 82,754 - 82,754 Provision for losses on accounts receivable 45,509 - (251) - (251) 45,258 - 45,258 Lease expense 75,378 168,345 (4,928) - 163,417 238,795 1,766 240,561 Depreciation and amortization expense 113,538 (67,789) (1,443) - (69,232) 44,306 1,998 46,304 Interest expense 247,698 (206,314) (40) - (206,354) 41,344 2,521 43,865 Loss on extinguishment of debt 3,234 - - (3,234) (3,234) - - - Other income (7,560) - - 7,560 7,560 - 11 11 Investment income (847) - - - - (847) - (847) Transaction costs 88,710 - - (88,710) (88,710) - - - Equity in net income of unconsolidated affiliates (513) - - - - (513) (146) (659) (Loss) income before income tax benefit (161,643) $ 105,758 $ 7,463 $ 99,754 $ 212,975 $ 51,332 $ 1,266 $ 52,598 $ Income tax (benefit) expense (10,067) 24,548 1,732 23,155 49,435 39,368 494 39,862 (Loss) income from continuing operations (151,576) $ 81,210 $ 5,731 $ 76,599 $ 163,540 $ 11,964 $ 772 $ 12,736 $ Loss from discontinued operations, net of taxes 1,610 920 - - 920 2,530 - 2,530 Net (loss) income attributable to noncontrolling interests (21,434) 29,591 2,088 27,911 59,590 38,156 531 38,687 Net (loss) income attributable to Genesis Healthcare, Inc. (131,752) $ 50,699 $ 3,643 $ 48,688 $ 103,030 $ (28,722) $ 241 $ (28,481) $ Depreciation and amortization expense 113,538 (67,789) (1,443) - (69,232) 44,306 1,998 46,304 Interest expense 247,698 (206,314) (40) - (206,354) 41,344 2,521 43,865 Loss on extinguishment of debt 3,234 - - (3,234) (3,234) - - - Other income (7,560) - - 7,560 7,560 - 11 11 Transaction costs 88,710 - - (88,710) (88,710) - - - Income tax (benefit) expense (10,067) 24,548 1,732 23,155 49,435 39,368 494 39,862 Loss from discontinued operations, net of taxes 1,610 920 - - 920 2,530 - 2,530 Net (loss) income attributable to noncontrolling interests (21,434) 29,591 2,088 27,911 59,590 38,156 531 38,687 EBITDA / Adjusted EBITDA 283,977 $ (168,345) $ 5,980 $ 15,370 $ (146,995) $ 136,982 $ 5,796 $ 142,778 $ Lease expense 75,378 168,345 (4,928) - 163,417 238,795 1,766 240,561 EBITDAR / Adjusted EBITDAR 359,355 $ - $ 1,052 $ 15,370 $ 16,422 $ 375,777 $ 7,562 $ 383,339 $ (Loss) income per common share: Diluted: Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d) 82,279 153,671 Diluted net (loss) income from continuing operations per share (e) (1.58) $ 0.21 $ See (a), (b), (c), (d) and (e) footnote references contained herein. (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA) Adjustments

Reconciliation of Net (Loss) Income to EBITDA, EBITDAR, Adj. EBITDA & Adj. EBITDAR As reported As adjusted Non-GAAP as adjusted Pro forma adjusted Three months ended June 30, 2014 Conversion to cash basis leases (a) Newly acquired or constructed businesses with start-up losses (b) Other adjustments (c) Total adjustments Three months ended June 30, 2014 Skilled Healthcare Group, Inc. three months ended June 30, 2014 Three months ended June 30, 2014 Net revenues 1,200,651 $ - $ (4,294) $ - $ (4,294) $ 1,196,357 $ 206,868 $ 1,403,225 $ - Salaries, wages and benefits 717,215 - (3,302) 94 (3,208) 714,007 128,515 842,522 Other operating expenses 269,603 - (1,800) (714) (2,514) 267,089 44,052 311,141 General and administrative costs 35,980 - - - - 35,980 6,656 42,636 Provision for losses on accounts receivable 17,080 - - - - 17,080 3,664 20,744 Lease expense 32,909 80,317 (650) - 79,667 112,576 4,922 117,498 Depreciation and amortization expense 48,930 (33,525) (22) - (33,547) 15,383 6,034 21,417 Interest expense 109,900 (97,660) - - (97,660) 12,240 7,643 19,883 Loss (gain) on extinguishment of debt 181 - - (181) (181) - - - Other (income) loss (667) - - 667 667 - (123) (123) Investment income (436) - - - - (436) - (436) Transaction costs 1,298 - - (1,298) (1,298) - - - Equity in net income of unconsolidated affiliates (390) - - - - (390) (92) (482) (Loss) income before income tax benefit (30,952) $ 50,868 $ 1,480 $ 1,432 $ 53,780 $ 22,828 $ 5,597 $ 28,425 $ Income tax (benefit) expense (96) 3,215 94 91 3,400 3,304 2,447 5,751 (Loss) income from continuing operations (30,856) $ 47,653 $ 1,386 $ 1,341 $ 50,380 $ 19,524 $ 3,150 $ 22,674 $ Loss (income) from discontinued operations, net of taxes 1,176 (437) - - (437) 739 - 739 Net loss attributable to noncontrolling interests 224 - - - - 224 - 224 Net (loss) income attributable to Genesis Healthcare, Inc. (32,256) $ 48,090 $ 1,386 $ 1,341 $ 50,817 $ 18,561 $ 3,150 $ 21,711 $ Depreciation and amortization expense 48,930 (33,525) (22) - (33,547) 15,383 6,034 21,417 Interest expense 109,900 (97,660) - - (97,660) 12,240 7,643 19,883 Loss (gain) on extinguishment of debt 181 - - (181) (181) - - - Other (income) loss (667) - - 667 667 - (123) (123) Transaction costs 1,298 - - (1,298) (1,298) - - - Income tax (benefit) expense (96) 3,215 94 91 3,400 3,304 2,447 5,751 Loss (income) from discontinued operations, net of taxes 1,176 (437) - - (437) 739 - 739 Net income attributable to noncontrolling interests 224 - - - - 224 - 224 EBITDA / Adjusted EBITDA 128,690 $ (80,317) $ 1,458 $ 620 $ (78,239) $ 50,451 $ 19,151 $ 69,602 $ Lease expense 32,909 80,317 (650) - 79,667 112,576 4,922 117,498 EBITDAR / Adjusted EBITDAR 161,599 $ - $ 808 $ 620 $ 1,428 $ 163,027 $ 24,073 $ 187,100 $ Loss per common share: Diluted: Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d) 49,865 Diluted net (loss) income from continuing operations per share (e) (0.63) $ Not calculated See (a), (b), (c), (d) and (e) footnote references contained herein. Adjustments (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)

Reconciliation of Net (Loss) Income to EBITDA, EBITDAR, Adj. EBITDA & Adj. EBITDAR As reported As adjusted Non-GAAP as adjusted Pro forma adjusted Six months ended June 30, 2014 Conversion to cash basis leases (a) Newly acquired or constructed businesses with start-up losses (b) Other adjustments (c) Total adjustments Six months ended June 30, 2014 Skilled Healthcare Group, Inc. six months ended June 30, 2014 Six months ended June 30, 2014 Net revenues 2,387,195 $ - $ (7,178) $ 1,166 $ (6,012) $ 2,381,183 $ 414,303 $ 2,795,486 $ - Salaries, wages and benefits 1,438,477 - (5,044) (1,706) (6,750) 1,431,727 259,934 1,691,661 Other operating expenses 533,149 - (3,052) (833) (3,885) 529,264 89,012 618,276 General and administrative costs 71,844 - - - - 71,844 12,300 84,144 Provision for losses on accounts receivable 35,596 - - - - 35,596 6,478 42,074 Lease expense 65,708 157,880 (1,085) - 156,795 222,503 9,696 232,199 Depreciation and amortization expense 96,430 (65,393) (73) - (65,466) 30,964 12,120 43,084 Interest expense 218,650 (193,068) - - (193,068) 25,582 15,639 41,221 Loss (gain) on extinguishment of debt 680 - - (680) (680) - - - Other (income) loss (667) - - 667 667 - (162) (162) Investment income (1,379) - - - - (1,379) - (1,379) Transaction costs 3,547 - - (3,547) (3,547) - - - Equity in net income of unconsolidated affiliates (346) - - - - (346) (638) (984) (Loss) income before income tax benefit (74,494) $ 100,581 $ 2,076 $ 7,265 $ 109,922 $ 35,428 $ 9,924 $ 45,352 $ Income tax (benefit) expense (2,850) 6,357 132 460 6,949 4,099 4,448 8,547 (Loss) income from continuing operations (71,644) $ 94,224 $ 1,944 $ 6,805 $ 102,973 $ 31,329 $ 5,476 $ 36,805 $ Loss (income) from discontinued operations, net of taxes 4,370 (1,964) - - (1,964) 2,406 - 2,406 Net loss attributable to noncontrolling interests 409 - - - - 409 - 409 Net (loss) income attributable to Genesis Healthcare, Inc. (76,423) $ 96,188 $ 1,944 $ 6,805 $ 104,937 $ 28,514 $ 5,476 $ 33,990 $ Depreciation and amortization expense 96,430 (65,393) (73) - (65,466) 30,964 12,120 43,084 Interest expense 218,650 (193,068) - - (193,068) 25,582 15,639 41,221 Loss (gain) on extinguishment of debt 680 - - (680) (680) - - - Other (income) loss (667) - - 667 667 - (107) (107) Transaction costs 3,547 - - (3,547) (3,547) - - - Income tax (benefit) expense (2,850) 6,357 132 460 6,949 4,099 4,448 8,547 Loss (income) from discontinued operations, net of taxes 4,370 (1,964) - - (1,964) 2,406 - 2,406 Net income attributable to noncontrolling interests 409 - - - - 409 - 409 EBITDA / Adjusted EBITDA 244,146 $ (157,880) $ 2,003 $ 3,705 $ (152,172) $ 91,974 $ 37,576 $ 129,550 $ Lease expense 65,708 157,880 (1,085) - 156,795 222,503 9,696 232,199 EBITDAR / Adjusted EBITDAR 309,854 $ - $ 918 $ 3,705 $ 4,623 $ 314,477 $ 47,272 $ 361,749 $ Loss per common share: Diluted: Weighted average shares outstanding for diluted (loss) income from continuing operations per share (d) 49,865 Diluted net (loss) income from continuing operations per share (e) (1.44) $ Not calculated See (a), (b), (c), (d) and (e) footnote references contained herein. (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA) Adjustments

Notes (a) Our leases are classified as either operating leases, capital leases or financing obligations pursuant to applicable guidance under U. S. GAAP. We view the primary provisions and economics of these leases, regardless of their accounting treatment, as being nearly identical. Virtually all of our leases are structured with triple net terms, have fixed annual re nt escalators and have long - term initial maturities with renewal options. Accordingly, in connection with our evaluation of the financial performance of the Company, we reclassify all of our leases to operating lease treatment and reflect lease expense on a cash basis. This approac h allows us to better understand the relationship in each reporting period of our operating performance, as measured by EBITDAR and Adjusted EBITDAR, to the cash basis obligations to our landlords in that reporting period, regardless of the lease accountin g treatment. This presentation and approach is also consistent with the financial reporting and covenant compliance requirements contained in all of our major lease and loan agreements. The following table summarizes the reclassification adjustments nece ssary to present all leases as operating leases on a cash basis. 2015 2014 2015 2014 Lease expense: Cash rent - capital leases 22,923 $ 22,384 $ 45,848 $ 44,394 $ Cash rent - financing obligations 64,065 61,097 126,835 119,632 Non-cash - operating lease arrangements (2,551) (3,164) (4,338) (6,146) Lease expense adjustments 84,437 $ 80,317 $ 168,345 $ 157,880 $ Depreciation and amortization expense: Capital lease accounting (9,296) $ (9,281) $ (18,075) $ (18,280) $ Financing obligation accounting (24,901) (24,244) (49,714) (47,113) Depreciation and amortization expense adjustments (34,197) $ (33,525) $ (67,789) $ (65,393) $ Interest expense: Capital lease accounting (26,157) $ (25,087) $ (51,643) $ (49,209) $ Financing obligation accounting (77,823) (72,573) (154,671) (143,859) Interest expense adjustments (103,980) $ (97,660) $ (206,314) $ (193,068) $ Total pre-tax lease accounting adjustments (53,740) $ (50,868) $ (105,758) $ (100,581) $ Three months ended June 30, Six months ended June 30, (in thousands) (b) The acquisition and construction of new businesses has become an important element of our growth strategy. Many of the businesses we acquire have a history of operating losses and c ontinue to generate operating losses in the months that follow our acquisition. Newly constructed or developed businesses also generate losses while in their start - up phase. We view these losses as both temporary and an expected component of our long - ter m investment in the new venture. We adjust these losses when computing Adjusted EBITDAR and Adjusted EBITDA in order to better evaluate the performance of our core business. The activities of such businesses are adjusted when computing Adjusted EBITDAR a nd Adjusted EBITDA until such time as a new business generates positive Adjusted EBITDA. The operating performance of new businesses are no longer adjusted when computing Adjusted EBITDAR and Adjusted EBITDA beginning the period in which a new business ge nerates positive Adjusted EBITDA and all periods thereafter. There were seven acquired or newly constructed businesses eliminated from our reported results when computing adjusted results for the three and six months ended June 30, 2015 and 2014, respecti vely. The results for the six months ended June 30, 2015 were also adjusted for losses incurred in our rehabilitation services start - up activities in China. (c) Other adjustments represent costs or gains associated with transactions or events that we do not believe are reflective of our core recurring operating business. Other adjustments also include the effect of expensing non - cash stock - based compensation related to restricted stock units. The following items were realized in the periods presented.

Notes 2015 2014 2015 2014 Severance and restructuring (1) 720 $ (94) $ 2,379 $ 1,706 $ Regulatory defense and related costs (2) 1,317 714 1,961 1,500 New business development costs (3) - - - 499 Self insurance adjustment (4) 10,500 - 10,500 - Transaction costs (5) 2,642 1,298 88,710 3,547 Loss on early extinguishment of debt - 181 3,234 680 Other income (6) 50 (667) (7,560) (667) Stock based compensation (7) 530 - 530 - Tax benefit from total adjustments (3,658) (91) (23,155) (460) Total other adjustments 12,101 $ 1,341 $ 76,599 $ 6,805 $ (in thousands) Three months ended June 30, Six months ended June 30,

Skilled Healthcare: Reconciliation of Net (Loss) Income to EBITDA, EBITDAR, Adj. EBITDA & Adj. EBITDAR GAAP as reported Non-GAAP as adjusted GAAP as reported Non-GAAP as adjusted GAAP as reported Non-GAAP as adjusted One month ended January 31, 2015 Adjust One month ended January 31, 2015 Three months ended June 30, 2014 Adjust Three months ended June 30, 2014 Six months ended June 30, 2014 Adjust Six months ended June 30, 2014 Net revenues 71,288 $ - $ 71,288 $ 206,979 $ (111) $ 206,868 $ 414,279 $ 24 $ 414,303 $ - - - - - - Salaries, wages and benefits 44,842 (916) 43,926 128,819 (304) 128,515 260,246 (312) 259,934 Other operating expenses 17,486 (345) 17,141 51,990 (7,938) 44,052 97,967 (8,955) 89,012 General and administrative costs 1,516 1,516 7,287 (631) 6,656 13,371 (1,071) 12,300 Provision for losses on accounts receivable 1,289 - 1,289 3,720 (56) 3,664 6,625 (147) 6,478 Lease expense 1,766 - 1,766 4,922 - 4,922 9,696 - 9,696 Depreciation and amortization expense 1,998 - 1,998 6,034 - 6,034 12,120 - 12,120 Interest expense 2,521 - 2,521 7,643 - 7,643 15,639 - 15,639 Loss on extinguishment of debt - - - 822 (822) - 822 (822) - Impairment of long-lived assets - - - 82 (82) - 82 (82) - Other (income) loss 11 - 11 (123) - (123) (162) - (162) Transaction costs 4,638 (4,638) - - - - - - - Equity in net income of unconsolidated affiliates (146) - (146) (92) - (92) (638) - (638) Income tax (benefit) expense (1,807) 2,301 494 (1,345) 3,792 2,447 (3) 4,451 4,448 Net (loss) income (2,826) $ 3,598 $ 772 $ (2,780) $ 5,930 $ 3,150 $ (1,486) $ 6,962 $ 5,476 $ Depreciation and amortization expense 1,998 - 1,998 6,034 - 6,034 12,120 - 12,120 Interest expense 2,521 - 2,521 7,643 - 7,643 15,639 - 15,639 Loss on extinguishment of debt - - - 822 (822) - 822 (822) - Impairment of long-lived assets - - - 82 (82) - 82 (82) - Other (income) loss 11 - 11 (123) (123) (107) - (107) Transaction costs 4,638 (4,638) - - - - - - - Income tax (benefit) expense (1,807) 2,301 494 (1,345) 3,792 2,447 (3) 4,451 4,448 EBITDA / Adjusted EBITDA 4,535 1,261 5,796 10,333 8,818 19,151 27,067 10,509 37,576 Lease expense 1,766 - 1,766 4,922 - 4,922 9,696 - 9,696 EBITDAR / Adjusted EBITDAR 6,301 $ 1,261 $ 7,562 $ 15,255 $ 8,818 $ 24,073 $ 36,763 $ 10,509 $ 47,272 $ The following adjustments represent costs or gains associated with transactions or events that we do not believe are reflective of Skilled Healthcare Group's recurring operating business. One month ended January 31, 2015 Three months ended June 30, 2014 Six months ended June 30, 2014 Severance and restructuring 1,220 $ 631 $ 1,071 $ Regulatory defense and related costs 41 - - Exist costs of divested facilities - (27) 340 Professional fees related to non-routine matters - 7,205 7,519 Losses at skilled nursing facility not at full operation - 133 133 Loss on extinguishment of debt - 822 822 Non-cash stock compensation 371 876 1,446 Impairment of long-lived assets - 82 82 Transaction costs 4,267 - - Tax benefit of total adjustments (2,301) (3,792) (4,451) Total adjustments 3,598 $ 5,930 $ 6,962 $ (UNAUDITED) (IN THOUSANDS)

2015 Guidance – Low End of Range Reconciliation of Net (Loss) Income to EBITDA, EBITDAR, Adj. EBITDA & Adj. EBITDAR As adjusted Twelve months ended December 31, 2015 Conversion to cash basis leases (a) Newly acquired or constructed businesses with start-up losses (b) Other adjustments (c) Twelve months ended December 31, 2015 Net revenues 5,684,197 $ - $ (25,759) $ - $ 5,658,438 $ Salaries, wages and benefits 3,506,752 - (16,175) - 3,490,577 Other operating expenses 1,427,595 - (11,734) - 1,415,861 Lease expense 157,874 334,941 (5,383) - 487,432 Depreciation and amortization expense 234,511 (137,324) (2,675) - 94,512 Interest expense 507,203 (421,251) - - 85,952 Investment income (2,000) - - - (2,000) Transaction costs 88,989 - - (88,989) - Equity in net income of unconsolidated affiliates (1,050) - - - (1,050) (Loss) income before income tax expense (235,677) $ 223,634 $ 10,208 $ 88,989 $ 87,154 $ Income tax expense (benefit) (94,271) 89,454 4,083 35,596 34,862 Income (loss) from continuing operations (141,406) $ 134,180 $ 6,125 $ 53,393 $ 52,292 $ Earnings (loss) per share, diluted: (0.91) $ 0.34 $ Weighted-average common shares outstanding, diluted, on a fully exchanged basis 154,603 154,603 Adjustments to Compute EBITDA/Adjusted EBITDA and EBITDAR / Adjusted EBITDAR Depreciation and amortization expense 234,511 (137,324) (2,675) - 94,512 Interest expense 507,203 (421,251) - - 85,952 Transaction costs 88,989 - - (88,989) - Income tax expense (benefit) (94,271) 89,454 4,083 35,596 34,862 EBITDA / Adjusted EBITDA 595,026 $ (334,941) $ 7,533 $ - $ 267,618 $ Lease expense 157,874 334,941 (5,383) - 487,432 EBITDAR / Adjusted EBITDAR 752,900 $ - $ 2,150 $ - $ 755,050 $ (IN THOUSANDS, EXCEPT EPS) Adjustments

2015 Guidance – High End of Range Reconciliation of Net (Loss) Income to EBITDA, EBITDAR, Adj. EBITDA & Adj. EBITDAR As adjusted Twelve months ended December 31, 2015 Conversion to cash basis leases (a) Newly acquired or constructed businesses with start-up losses (b) Other adjustments (c) Twelve months ended December 31, 2015 Net revenues 5,764,197 $ - $ (25,759) $ - $ 5,738,438 $ Salaries, wages and benefits 3,554,512 - (16,175) - 3,538,337 Other operating expenses 1,446,798 - (11,734) - 1,435,064 Lease expense 157,874 334,941 (5,383) - 487,432 Depreciation and amortization expense 235,515 (137,324) (2,675) - 95,516 Interest expense 508,003 (421,251) - - 86,752 Investment income (3,000) - - - (3,000) Transaction costs 88,989 - - (88,989) - Equity in net income of unconsolidated affiliates (2,000) - - - (2,000) (Loss) income before income tax expense (222,494) $ 223,634 $ 10,208 $ 88,989 $ 100,337 $ Income tax (benefit) expense (88,998) 89,454 4,083 35,596 40,135 Income (loss) from continuing operations (133,496) $ 134,180 $ 6,125 $ 53,393 $ 60,202 $ Earnings (loss) per share, diluted: (0.86) $ 0.39 $ Weighted-average common shares outstanding, diluted, on a fully exchanged basis 154,603 154,603 Adjustments to Compute EBITDA/Adjusted EBITDA and EBITDAR / Adjusted EBITDAR Depreciation and amortization expense 235,515 (137,324) (2,675) - 95,516 Interest expense 508,003 (421,251) - - 86,752 Transaction costs 88,989 - - (88,989) - Income tax (benefit) expense (88,998) 89,454 4,083 35,596 40,135 EBITDA / Adjusted EBITDA 610,013 $ (334,941) $ 7,533 $ - $ 282,605 $ Lease expense 157,874 334,941 (5,383) - 487,432 EBITDAR / Adjusted EBITDAR 767,887 $ - $ 2,150 $ - $ 770,037 $ 2015 GUIDANCE - HIGH END OF RANGE (IN THOUSANDS, EXCEPT EPS) Adjustments

Bifurcation Case Study Assumptions: Convert 10 buildings to short-stay model Convert 10 buildings to long-term care model Build 6 new non-Medicaid certified short-stay facilities Assumed Operating Metrics: Conversions Current Portfolio 10 Short-Stay 10 Long-Term Care 6 New Builds Pro Forma Portfolio Number of SNFs 360 - - 6 366 SNF Beds 42,418 - - 720 43,138 Avg Beds / SNF 118 - - 120 118 Occupancy 88.5% 85.0% 97.0% 85.0% 88.6% Skilled Mix 22.0% 100.0% 10.0% 100.0% 24.8%

Genesis BPCI Participation 38 of the available 48 Episode Families selected; 90-day episodes of care Includes 134 DRGs, primarily those with higher post-acute utilization Eligible beneficiaries must have both Medicare A and B; Medicare as primary payer (no Medicare Advantage) Estimate 60+% of total Medicare admissions eligible CMS sets Target Price based upon: Blend of participating centers’ historical (2009-2012) costs and state averages for similar episodes Updated quarterly using national cost trends by DRG Includes 3% CMS discount on total episode cost All billing and payments continue as usual Settlements of gains/losses are based upon quarterly reconciliations of episode costs to target prices

Opportunities of BPCI Participation Challenges Diversion to community-based services Pressure on length of stay New third-party entrants managing post-acute care Imperative of delivering market-leading outcomes consistently and universally Opportunities Diversion from IRF/LTAC Reframing the value proposition Hospitals Payers Creating the data-driven organization to achieve improved quality outcomes and healthcare efficiencies

BPCI Model 3 BPCI Model 3 Episode Cost Composition A majority of costs included in Genesis’ episodes are controllable by the participating center related to SNF days and hospital readmissions Average claims costs for a 90 day episode range from the lower end for single lower joint replacements, with lower readmission rates and SNF days, to strokes and sepsis on the higher end. 64% 18% 6% 6% 1% 3% 2% SNF Readmission HHA Professional DME Other Inpatient Outpatient