See for the list of current NRMSIRs and SIDs.

Municipal Secondary Market Disclosure Information Cover Sheet This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, Nationally Recognized Municipal Securities Information Repositories, and any applicable State Information Depository, whether the filing is voluntary or made pursuant to Securities and Exchange rule 15c2-12 or any analogous state statute. See www.sec.gov/info/municipal/nrmsir.htm for the list of current NRMSIRs and SIDs. If this filing relates to a Single Bond Issue: Provide name of bond issue exactly as it appears on the cover of the Official Statement (please include name of state where the Issuer is located). Provide 9-digit CUSIP* numbers to which the information relates: If this filing relates to all securities issued by the Issuer or all securities of a specific credit or issued under a single indenture: Issuer s Name (please include name of state where issuer is located): Abilene Health Facilities Development Corporation Other Obligated Person s Name (if any): Sears Methodist Retirement System Obligated Group Project (exactly as it appears on the Official Statement Cover) Provide six-digit CUSIP* number(s) of Issuer: See Attached *(Contact CUSIP s Municipal Disclosure Assistance Line at 212.438.6518 for assistance with obtaining the proper CUSIP numbers). Type of Filing: (X) Electronic (number of pages attached) 23 ( ) Paper (number of pages attached) If information is also available on the Internet, give URL:

What type of information are you providing? (Check all that apply) A. ( ) Annual Financial Information and Operating Data pursuant to Rule 15c2-12 (Financial information and operating data should not be filed with the MSRB) Fiscal Year Covered: B. ( ) Audited Financial Statements of CAFR pursuant to Rule 15c2-12 Fiscal Year Covered: C. ( ) Notice of Material Event pursuant to Rule 15c2-12 (Check as appropriate) 1. ( ) Principal and interest payment delinquencies 2. ( ) Non-payment related defaults 3. ( ) Unscheduled draws on debt service reserves reflecting financial difficulties 4. ( ) Unscheduled draws on credit enhancements reflecting financial difficulties 5. ( ) Substitution of credit or liquidity providers, or their failure to perform 6. ( ) Adverse tax opinions or events affecting the tax-exempt status of the security 7. ( ) Modifications to the rights of security holders 8. ( ) Bond calls 9. ( ) Defeasances 10. ( ) Release, substitution, or sale of property securing repayment of the securities 11. ( ) Rating changes D. ( ) Notice of Failure to Provide Annual Financial Information as Required E. (x ) Other Secondary Market Information (specify): Obligated Group Financial Statements August 31, 2012 I hereby represent that I am authorized by the issuer of obligor or its agent to distribute this information publicly: Issuer Contact: Name Title Employer City State Zip Code Telephone Fax Email Address Issuer Web Site Dissemination Agent Contact, if any: Name Title Employer City State Zip Code Telephone Fax Email Address Relationship to Issuer Obligor Contact, if any: Name Terry Myers Title CFO Employer Sears Methodist Retirement System, Inc. City Austin, TX State TX Zip Code 78746 Telephone 512.329.6716 Fax 512.329.0933 Email Address tmyers@sears-methodist.com Obligor Web Site www.sears-methodist.com Investor Relations Contact, if any: Name Title Telephone Email Address

CUSIPS Series 1998A 003453AJ6 003453AK3 003453AL1 003453AM9 003453AN7 003453AP2 Series 1998B 003453AA5 003453AU1 Series 1999 003453AW7 003453AX5 003453AY3 Series 2003 003453BB2 003453BC0 003453BD8 003453BE6 003453BF3 003453BG1 003453BH9 003453BJ5 003453BK2 003453BL0 003453BM8 003453BP1 003453BN6

SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF FINANCIAL POSITION - UNAUDITED August 31, 2012 Sears Sears Sears Parks Wesley Methodist Sears Methodist Panhandle Methodist Woods Subtotal Total Retirement Methodist Centers, Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Inc. Corporation Village Care Center Group Entries Group ASSETS 2,497,125 CURRENT ASSETS: Cash and cash equivalents 2,929,578 5,315,215 (1,796,741) (277,822) (5,215,059) (2,322) 952,849-952,849 Accounts receivable 22,599-573,537 769,984 984,106 97,386 2,447,613-2,447,613 Accrued interest receivable 71,488 - - 97,166 - - 168,655-168,655 Due from other campuses 9,232,424-11,415,403-79,439 79,296 20,806,562 11,063,715 9,742,847 Pledges receivable - - - - - - - - - Notes receivable - current - - - 500,000 - - 500,000-500,000 Inventories - - 19,295 52,024 12,850-84,168-84,168 Other current assets 288,088-19,462 12,890 11,420-331,861-331,861 AWUIL - required for current liabilities 7,676,102 - - - - - 7,676,102-7,676,102 Total Current Assets 20,220,280 5,315,215 10,230,957 1,154,242 (4,127,244) 174,360 32,967,811 11,063,715 21,904,095 FIXED ASSETS: Buildings and improvements 148,386-31,945,841 36,375,229 13,701,114-82,170,571-82,170,571 Building equipment - - 244,328 2,489,262 913,545-3,647,135-3,647,135 Department equipment 1,751,068-1,265,062 1,684,332 836,177-5,536,640-5,536,640 Vehicles - - 323,970 219,969 83,579-627,519-627,519 Construction in progress 833,503-2,046,516 272,151 883,048 (0) 4,035,217-4,035,217 2,732,957-35,825,717 41,040,943 16,417,464 (0) 96,017,082-96,017,082 Less accumulated depreciation 1,645,018-7,189,005 16,466,769 6,217,467-31,518,259-31,518,259 1,087,939-28,636,712 24,574,174 10,199,997 (0) 64,498,823-64,498,823 Land 830,150-949,358 1,393,963 615,897-3,789,367-3,789,367 Net Fixed Assets 1,918,089-29,586,070 25,968,137 10,815,894 (0) 68,288,190-68,288,190

SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF FINANCIAL POSITION - UNAUDITED August 31, 2012 Sears Sears Sears Parks Wesley Methodist Sears Methodist Panhandle Methodist Woods Subtotal Total Retirement Methodist Centers, Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Inc. Corporation Village Care Center Group Entries Group ASSETS WHOSE USE IS LIMITED: By board for benevolent care needs - 4,067,438 - - - - 4,067,438 2,889,196 1,178,242 By donor for specific purposes - 1,767,735 - - - - 1,767,735-1,767,735 By board for other needs - 4,858,802 - - - - 4,858,802-4,858,802 By board for depreciation reserve - - - - - - - - - By board for expansion projects - 303,132 - - - - 303,132-303,132 Under indenture - held by trustee 11,934,218 - - - - - 11,934,218-11,934,218 By board for deferred compensation 806,946 - - - - - 806,946-806,946 By board for accelerated debt retirement - - - - - - - - - Reserve for replacements - - - - - - - - - Residual receipts reserve - - - - - - - - - Resident trust fund deposits - - 393,576 7,987 8,073-409,636-409,636 Less AWUIL- required for current liabilities (7,676,102) - - - - - (7,676,102) - (7,676,102) Total Assets Whose Use is Limited 5,065,062 10,997,107 393,576 7,987 8,073-16,471,804 2,889,196 13,582,608 OTHER ASSETS: Bond issue costs, net of amortization 1,813,057 - - - - - 1,813,057-1,813,057 Notes Receivable 4,031,494 923,517 - - - - 4,955,012-4,955,012 Notes Receivable, net of current maturities - - - - - - - - - Investment in SMF 10,620,756-555,292 1,438,182 2,357,569 100 14,971,899 14,971,899 - Investment in CCIC 681,937 - - - - - 681,937-681,937 Investment in SS@H - - - - - - - - - Investment in SWAC 300,000 - - - - - 300,000-300,000 Pledges receivable, net of current maturities - - - - - - - - - Other assets 145,395 - - - 50,000-195,395-195,395 Total Other Assets 17,592,639 923,517 555,292 1,438,182 2,407,569 100 22,917,299 14,971,899 7,945,400 TOTAL ASSETS 44,796,071 17,235,839 40,765,895 28,568,547 9,104,293 174,460 140,645,105 28,924,810 111,720,294

SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF FINANCIAL POSITION - UNAUDITED August 31, 2012 LIABILITIES AND NET ASSETS Sears Sears Sears Parks Wesley Methodist Sears Methodist Panhandle Methodist Woods Subtotal Total Retirement Methodist Centers, Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Inc. Corporation Village Care Center Group Entries Group CURRENT LIABILITIES: Current maturities of long-term debt 76,375,000-351,623 - - - 76,726,623-76,726,623 Current maturities of annuities payable - 55,851 - - - - 55,851-55,851 Current maturies of capital lease 33,556 - - - - - 33,556-33,556 Note payable 16,657,401 - - - - - 16,657,401 2,288,640 14,368,761 Accounts payable 146,500-190,426 390,303 206,925-934,154-934,154 Due to other campuses 11,091,640-101,351-232 - 11,193,222 11,063,715 129,507 Accrued payroll and related taxes 380,117-227,452 236,905 136,738-981,212-981,212 Accrued interest payable 2,268,147 - - - - - 2,268,147 600,556 1,667,590 Construction and retainage payable - - - - - - - - - Medical claims payable 1,171,459 - - - - - 1,171,459-1,171,459 Deferred revenue 158,333-393,576 - - - 551,909-551,909 Other current liabilities 289,179-19,238 47,941 (29,610) - 326,748-326,748 Resident security deposits - - 1,328,548 84,878 31,084-1,444,510-1,444,510 Total Current Liabilities 108,571,332 55,851 2,612,212 760,027 345,369-112,344,791 13,952,911 98,391,880 LONG-TERM LIABILITIES: Bonds payable, less current maturities - - - - - - - - - Bond discount, net of accum. amort. (742,590) - - - - - (742,590) - (742,590) Notes/Leases Payable, net of current portion 4,492,219-0 - - - 4,492,220-4,492,220 Due to other campus - - - - - - - - - Deferred revenue - nonrefundable - - 436,655 335,107 208,529-980,291-980,291 Deferred revenue - refundable - - 8,204,139 5,708,920 2,611,982-16,525,042-16,525,042 Deferred compensation plan 916,304 - - - - - 916,304-916,304 Annuities and trust payable - 130,950 - - - - 130,950-130,950 Total Long-Term Liabilities 4,665,933 130,950 8,640,794 6,044,027 2,820,512-22,302,216-22,302,216 Total Liabilities 113,237,265 186,801 11,253,007 6,804,054 3,165,881-134,647,007 13,952,911 120,694,096

SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group UNRESTRICTED NET ASSETS: OPERATING REVENUE: Resident fees - - 6,065,948 5,679,371 2,536,983-14,282,302 796,962 13,485,340 Resident fees - charitable discounts - - (209,627) (182,985) (33,383) - (425,994) - (425,994) Resident fees - amort of deferred revenue - - 103,327 181,137 55,539-340,003-340,003 Medicaid - - - 1,662,262 2,381,173-4,043,435-4,043,435 Medicaid - contractual allowance - - - (619,451) (1,535,472) - (2,154,924) - (2,154,924) Medicare - - 1,207,554 2,246,086 2,656,921 (0) 6,110,561-6,110,561 Medicare - contractual allowance - - (421,382) (1,077,633) (1,118,854) - (2,617,869) - (2,617,869) HUD - - - - - - - - - Fees 3,216,000 - - - - - 3,216,000 1,232,000 1,984,000 Other revenue - 2,000 38,444 328,379 75,902-444,725 65,267 379,458 Total Operating Revenue 3,216,000 2,000 6,784,264 8,217,166 5,018,809 (0) 23,238,238 2,094,229 21,144,010 OPERATING EXPENSES: - - - - - - - - - Nursing - - 2,545,969 2,273,681 2,101,104-6,920,754 (796,962) 6,123,792 Activities - - 35,329 92,547 35,225-163,101-163,101 Environmental services - - 490,687 664,833 347,650-1,503,170-1,503,170 Utilities 46,520 1,400 319,248 355,429 219,807-942,403-942,403 Consultants 114-45,339 68,094 50,813-164,359-164,359 Specialty services - - - - - - - - - Pharmacy - - - - - - - - - Dietary - - 599,490 837,531 523,030-1,960,051-1,960,051 Social services - - 44,421 26,046 30,696-101,163-101,163 General and administrative 2,783,640 208,137 1,025,858 818,506 471,517-5,307,657 (1,232,000) 4,075,657 Development 162,868 - - - - - 162,868-162,868 Risk management and training 2,727-42,078 40,988 12,996-98,790-98,790 Marketing and admissions 279,436-92,807 164,876 110,735-647,854-647,854 Depreciation and amortization 271,965-643,348 823,744 367,129-2,106,186-2,106,186 Employee benefits and insurance 460,490-598,564 642,964 437,915-2,139,933-2,139,933 Total Operating Expenses 4,007,760 209,537 6,483,139 6,809,237 4,708,615-22,218,288 (2,028,962) 20,189,326 Excess (Deficiency) of Operating Revenue Over - - - - - - - - - Expenses (791,760) (207,537) 301,125 1,407,928 310,193 (0) 1,019,950 65,267 954,683

SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group Other Revenue (Expenses): - - - - - - - - - Contributions, net of fund raising exp 1,692 516,556 - - - - 518,248-518,248 Contributions, nonrefundable amort - 175,334 - - - - 175,334-175,334 Grant revenue - net of expenses 117,433 - - - - - 117,433-117,433 Interest income 191,504 95,089 (594) 28,522 2,837 60 317,418 60,896 256,522 Change in SMF Investment 587,818 - (615,541) 27,032 (43,525) (56,488) (100,705) (100,705) - Realized gains/(losses) on investments (15,648) - - - - - (15,648) - (15,648) Unrealized gains/(losses) on investments 14,892 7,940 - - - - 22,831-22,831 Gain/(Loss) on Sale of Asset - - (81,315) - - (74,744) (156,059) - (156,059) Gain/(Loss) on Early Extinguishment of Debt - - - - - - - - - Debt Service 5,600,000 - (2,000,000) (2,880,000) (720,000) - - - - Distribution to facilities - (450,213) - - - - (450,213) (450,213) - Interest expense (3,701,861) (78,641) (16,942) (610) (972) - (3,799,025) (60,896) (3,738,129) Transfers from Foundation 19,075-281,003 61,900 29,351-391,328 391,328 - Other revenue (expenses) (164,680) - 496,793 (37,604) (31,475) - 263,034-263,034 Total Other Revenue (Expenses) 2,650,224 266,065 (1,936,595) (2,800,760) (763,785) (131,172) (2,716,023) (159,589) (2,556,434) CHANGE IN UNRESTRICTED NET ASSETS 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) (94,323) (1,601,750) CHANGE IN TEMP RESTRICTED NET ASSETS - - - - - - - - - CHANGE IN PERM RESTRICTED NET ASSETS - - - - - - - - - CHANGE IN NET ASSETS BEFORE TAX 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) (94,323) (1,601,750) INCOME TAX (EXPENSE)/BENEFIT - - - - - - - - - CHANGE IN NET ASSETS AFTER TAX 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) (94,323) (1,601,750) NET ASSETS AT BEGINNING OF YEAR (70,299,659) 16,990,510 31,148,358 23,157,325 6,392,003 305,632 7,694,171 15,066,221 (7,372,050) TRANSFERS - - - (0) - - (0) - (0) NET ASSETS AT MONTH END (68,441,194) 17,049,039 29,512,888 21,764,494 5,938,412 174,460 5,998,098 14,971,898 (8,973,801)

SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF CASH FLOWS - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) 94,323 (1,601,750) Adjustments: - - - - - - - - - Depreciation and amortization 271,965-643,348 823,744 367,129-2,106,186-2,106,186 Amortization of deferred revenue - - (130,559) (233,558) (75,181) - (439,298) - (439,298) Non-Cash Gain from term. of interest rate swap - - - - - - - - - Non-Cash Loss from Early Extinguish. of Debt - - - - - - - - - Temporarily restricted net assets - - - - - - - - - Permanently restricted net assets - - - - - - - - - Gain or Loss on Sale or Disposal of Assets 15,648 (7,940) - - - - 7,708-7,708 (Increase) decrease in: - - - - - - - - - Accounts receivable 19,403-836,278 (167,191) 117,076 154,128 959,694-959,694 Due from other campuses (1,803,424) - (11,095,277) 2,280 3,620 (79,296) (12,972,096) 12,577,399 (394,697) Accrued interest receivable (21,996) - - - - - (21,996) - (21,996) Estimated third party settlements - - - - - - - - - Inventories - - 14,813 (14,646) 131-298 - 298 Other current assets 123,600-13,530 16,549 4,602-158,282-158,282 Pledges receivable - - - - - - - - - Other assets - - - - - - - - - Increase (decrease) in: - - - - - - - - - Accounts payable (265,460) (22,315) (150,716) 75,216 (97,327) (19,630) (480,232) - (480,232) Due to other campuses 11,061,640 (501) 41,075 (139) 232-11,102,306 (11,092,581) 9,725 Estimated third party settlements - - - - - - - - - Accrued payroll and related taxes 25,218 - (89,308) 28,002 (35,514) - (71,601) - (71,601) Increase(Decrease) in accrued int payable 1,104,973 - - - - - 1,104,973-1,104,973 Other accrued expenses 241,076 - (66,242) 34,900 (43,959) 5 165,780-165,780 Annuities Payable - (51,088) - - - - (51,088) - (51,088) Medical claims payable 310,466 - - - - - 310,466-310,466 Deferred revenue (33,333) - (22,798) - - - (56,132) - (56,132) Resident security deposits - - 664,906 (16,300) 2,300-650,906-650,906 Net Cash Flows From Operating Activities 12,908,242 (23,315) (10,976,420) (843,975) (210,483) (75,965) 778,083 1,579,140 2,357,223

SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF CASH FLOWS - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group CASH FLOWS FROM INVESTING ACTIVITIES: - - - - - - - - - Acquisitions of fixed assets (6,421) - (1,682,295) (434,717) (483,763) 14,440 (2,592,757) - (2,592,757) (Increase) decrease in construction - - - (257,147) - - (257,147) - (257,147) Issuance of notes receivable - - - - - - - - - (Increase) decrease in SMF Investment (587,818) - 615,541 (27,032) 43,525 56,488 100,705 (100,705) - Increase (decrease) in Construction Pay - - - - - - - - - Collections of notes receivable - - - - - - - - - (Increase) decrease in CCIC Investment - - - - - - - - - (Increase) decrease in SWAC Investment - - - - - - - - - Proceeds from sale of fixed assets - - - - - - - - - (Increase) decrease in AWUIL (4,013,062) 4,851,086 167,413 381 4,012-1,009,831 (1,478,435) (468,605) Net Cash Flows From Investing Activities (4,607,301) 4,851,086 (899,341) (718,515) (436,226) 70,928 (1,739,368) (1,579,140) (3,318,508) CASH FLOWS FROM FINANCING ACTIVITIES: - - - - - - - - - Cottage deposit proceeds - new unit - - 628,986 - - - 628,986-628,986 Cottage deposit proceeds - remarketed units - - 976,395 1,259,550 902,553-3,138,498-3,138,498 Cottage deposit refunds - - (624,336) (825,480) (614,616) - (2,064,432) - (2,064,432) Increase (Decrease) in bonds payable (731,615) - - - - - (731,615) - (731,615) Increase(Decrease) In bond issuance cost - - - - - - - - - Proceeds from notes payable - - - - - - - - - Payments on notes payable (1,045,364) - (26,229) - - - (1,071,593) - (1,071,593) Increase(Decrease) in Bond Discount - - - - - - - - - Increase (Decrease) in leases payable 33,707 - - - - - 33,707-33,707 Net Cash Flows From Financing Activities (1,743,272) - 954,816 434,070 287,937 - (66,449) - (66,449) Net Increase (Decrease) in Cash and - - - - - - - - - Cash Equivalents 6,557,669 4,827,771 (10,920,944) (1,128,420) (358,772) (5,037) (1,027,733) (0) (1,027,733) Cash and Cash Equivalents at December 31, 2011 (3,628,091) 487,444 9,124,203 850,598 (4,856,287) 2,714 1,980,582-1,980,582 Transfers - - - (0) - - (0) - (0) Cash and Cash Equivalents at August 31, 2012 2,929,578 5,315,215 (1,796,741) (277,823) (5,215,059) (2,323) 952,849 (0) 952,849

SEARS METHODIST RETIREMENT SYSTEM, INC. - OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the period ending August 31, 2012 Two Months Ending Inc/(Dec) Inc/(Dec) Eight Months Ending Inc/(Dec) Inc/(Dec) 8/31/2012 8/31/2011 $ % 8/31/2012 8/31/2011 $ % UNRESTRICTED NET ASSETS: OPERATING REVENUE: Resident fees 3,457,083 4,713,102 (1,256,019) -26.6% 13,485,340 18,157,018 (4,671,678) -25.7% Resident fees - charitable discounts (86,973) (133,656) 46,683 34.9% (425,994) (414,950) (11,044) -2.7% Resident fees - amortization of entrance fees 87,220 82,650 4,570 5.5% 340,003 315,441 24,562 7.8% Medicaid 1,020,976 1,988,145 (967,169) -48.6% 4,043,435 7,751,936 (3,708,501) -47.8% Medicaid - contractual allowance (542,468) (818,539) 276,071 33.7% (2,154,924) (3,183,157) 1,028,233 32.3% Medicare 1,547,723 2,048,754 (501,031) -24.5% 6,110,561 8,302,371 (2,191,810) -26.4% Medicare - contractual allowance (696,983) (636,514) (60,469) -9.5% (2,617,869) (2,679,467) 61,598 2.3% Fees 446,000 466,000 (20,000) -4.3% 1,984,000 2,284,000 (300,000) -13.1% Other revenue 110,089 330,580 (220,491) -66.7% 379,458 1,257,753 (878,295) -69.8% Total Operating Revenue 5,342,667 8,040,522 (2,697,854) -33.6% 21,144,010 31,790,944 (10,646,935) -33.5% OPERATING EXPENSES: Nursing 1,564,550 2,724,104 (1,159,555) -42.6% 6,123,792 10,263,530 (4,139,738) -40.3% Activities 41,844 66,236 (24,392) -36.8% 163,101 255,564 (92,463) -36.2% Environmental services 377,441 512,879 (135,438) -26.4% 1,503,170 1,918,460 (415,290) -21.6% Utilities 258,911 361,237 (102,326) -28.3% 942,403 1,183,602 (241,198) -20.4% Consultants 34,044 70,436 (36,392) -51.7% 164,359 268,061 (103,702) -38.7% Specialty services - 32,054 (32,054) -100.0% - 191,339 (191,339) -100.0% Pharmacy - - - 0.0% - - - 0.0% Dietary 507,042 679,321 (172,279) -25.4% 1,960,051 2,561,275 (601,224) -23.5% Social services 19,779 57,214 (37,435) -65.4% 101,163 208,939 (107,776) -51.6% General and administrative 979,510 1,402,353 (422,843) -30.2% 4,075,657 5,391,121 (1,315,464) -24.4% Development 40,935 50,283 (9,348) -18.6% 162,868 192,768 (29,900) -15.5% Risk management and training 19,405 52,560 (33,155) -63.1% 98,790 204,378 (105,589) -51.7% Marketing and admissions 163,439 202,963 (39,524) -19.5% 647,854 805,066 (157,212) -19.5% Interest expense 961,429 1,098,246 (136,817) -12.5% 3,738,129 4,348,377 (610,248) -14.0% Depreciation and amortization 528,270 604,710 (76,440) -12.6% 2,106,186 2,401,122 (294,936) -12.3% Employee benefits and insurance 515,571 825,571 (310,000) -37.5% 2,139,933 3,210,087 (1,070,154) -33.3% Total Operating Expenses 6,012,169 8,740,167 (2,727,998) -31.2% 23,927,455 33,403,688 (9,476,233) -28.4% Operating Income (Loss) (669,502) (699,645) 30,143 4.3% (2,783,446) (1,612,744) (1,170,702) -72.6%

SEARS METHODIST RETIREMENT SYSTEM, INC. OBLIGATED GROUP DEBT SERVICE COVERAGE RATIO CALCULATION As of August 31, 2012 Changes in net assets (1,601,750) Add: Depreciation and amortization 2,106,186 Interest expense 3,738,129 Net Turnover Entry Fees Received 1,074,066 (Gains)/losses and Property Retirement Cost 133,228 Deduct: Amortization of deferred revenue (515,337) Available Revenues 4,934,521 Annualized Available Revenues 7,401,782 Maximum Annual Debt Service 94,675,000 Debt Service Coverage Ratio 0.08

SEARS METHODIST RETIREMENT SYSTEM, INC. OBLIGATED GROUP DAYS CASH ON HAND As of August 31, 2012 Operating Expenses 23,927,455 Less: Deprecation and Amortization (2,106,186) 21,821,269 Number of Days in Period 244 Daily Operating Expenses 89,431 Cash and Unrestricted Investments 3,048,294 Days Cash on Hand 34