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Larry Robbins, CEO

Wow, That’s Cheap! Gotta Stick to the Fundamentals. We Want (and He Needs) the Cup!. Slides available at www.sohnconference.org. 19 th Annual Ira Sohn Investment Conference May 5, 2014. Larry Robbins, CEO. Legal Disclaimer. MAY 2014.

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Larry Robbins, CEO

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  1. Wow, That’s Cheap! Gotta Stick to the Fundamentals We Want (and He Needs) the Cup! Slides available at www.sohnconference.org 19th Annual Ira Sohn Investment Conference May 5, 2014 Larry Robbins, CEO
  2. Legal Disclaimer MAY 2014 THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL NOR THE SOLICITATION OF AN OFFER TO BUY ANY INTEREST IN ANY INVESTMENT FUND MANAGED BY GLENVIEW CAPITAL MANAGEMENT, LLC (“GLENVIEW”). SUCH OFFER OR SOLICITATION MAY ONLY BE MADE BY DELIVERY OF THE APPLICABLE FUND’S OFFERING DOCUMENTS, INCLUDING A PRIVATE PLACEMENT MEMORANDUM, APPLICABLE SUBSCRIPTION DOCUMENTS, APPLICABLE GOVERNING DOCUMENTS AND GLENVIEW’S FORM ADV PART 2, ALL OF WHICH MUST BE READ IN THEIR ENTIRETY. EACH FUND’S OFFERING DOCUMENTS CONTAIN A DESCRIPTION OF THE MATERIAL TERMS OF THE FUND, INCLUDING, WITHOUT LIMITATION, RISK FACTORS AND CONFLICTS OF INTERESTS RELATING TO THE FUND AND GLENVIEW. AMONG OTHER THINGS, THE RISK FACTORS PROVIDE THAT: AN INVESTOR MAY LOSE ALL OR PART OF ITS INVESTMENT, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS, THE FUNDS MAY NOT ACHIEVE THEIR INVESTMENT OBJECTIVES, THE FUNDS MAY UTILIZE LEVERAGE, AND THERE ARE RESTRICTIONS LIMITING AN INVESTOR’S ABILITY TO REDEEM OR TRANSFER ITS INVESTMENT IN THE FUNDS. ANY OFFERING WILL BE MADE ON A PRIVATE PLACEMENT BASIS TO A LIMITED NUMBER OF ELIGIBLE INVESTORS WHO MEET THE SUITABILITY REQUIREMENTS RELATING TO AN INVESTMENT IN THE APPLICABLE FUND AND WHO ARE WILLING AND ABLE TO CONDUCT AN INDEPENDENT INVESTIGATION OF THE RISKS INVOLVED. THE INFORMATION CONTAINED HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE APPLICABLE FUND’S OFFERING DOCUMENTS. THE INVESTMENT FUNDS MANAGED BY GLENVIEW (EACH, A “FUND”, TOGETHER THE “FUNDS”) MAY HAVE POSITIONS IN THE SECURITIES OF COMPANIES REFERENCED IN THIS PRESENTATION. THESE PORTFOLIOS ARE ACTIVELY MANAGED AND ANY SECURITIES DISCUSSED HEREIN MAY OR MAY NOT BE HELD IN THE PORTFOLIOS AT ANY GIVEN TIME. THE SECURITIES DISCUSSED HEREIN DO NOT REPRESENT AN ENTIRE PORTFOLIO OF A FUND AND IN AGGREGATE MAY ONLY REPRESENT A SMALL PERCENTAGE OF A FUND’S HOLDINGS. SPECIFIC SECURITIES HIGHLIGHTED HEREIN HAVE BEEN SELECTED TO ILLUSTRATE GLENVIEW’S INVESTMENT APPROACH AND ARE NOT INTENDED TO REPRESENT THE FUND’S PERFORMANCE NOR HAVE THEY BEEN SELECTED ON THE BASIS OF PERFORMANCE OR ANY PERFORMANCE-RELATED CRITERIA. NOTHING CONTAINED HEREIN SHALL CONSTITUTE AN ADVERTISEMENT, A SOLICITATION, RECOMMENDATION OR ENDORSEMENT TO BUY OR SELL ANY SECURITY OR OTHER FINANCIAL INSTRUMENT REFERENCED IN THIS PRESENTATION. ANY PROJECTIONS, TARGETS OR ESTIMATES IN THIS REPORT ARE FORWARD LOOKING STATEMENTS AND ARE BASED ON GLENVIEW’S RESEARCH, ANALYSIS, OPINIONS AND ASSUMPTIONS MADE BY GLENVIEW. THERE CAN BE NO ASSURANCE THAT SUCH PROJECTIONS, TARGETS OR ESTIMATES WILL OCCUR AND THE ACTUAL RESULTS MAY BE MATERIALLY DIFFERENT. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE FUNDS HAVE NOT BEEN APPROVED BY OR LICENSED OR REGISTERED WITH ANY LICENSING AUTHORITY OR GOVERNMENTAL AGENCY. THE INFORMATION CONTAINED IN THIS PRESENTATION IS FOR DISCUSSION AND INFORMATIONAL PURPOSES ONLY AND IS BEING FURNISHED ON A CONFIDENTIAL BASIS TO A LIMITED NUMBER OF ELIGIBLE INVESTORS. NO PORTION OF THIS PRESENTATION MAY BE COPIED, REPRODUCED, REPUBLISHED OR DISTRIBUTED IN ANY WAY WITHOUT THE EXPRESS WRITTEN CONSENT OF GLENVIEW. THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TO BE RELIED UPON AS INVESTMENT, LEGAL, TAX OR FINANCIAL ADVICE. ANY PROSPECTIVE INVESTOR MUST CONSULT WITH HIS OR HER INDEPENDENT PROFESSIONAL ADVISORS AS TO THE LEGAL, TAX, FINANCIAL OR OTHER MATTERS RELEVANT TO THE SUITABILITY OF AN INVESTMENT IN ANY INTEREST IN ANY INVESTMENT FUND MANAGED BY GLENVIEW. FOR IMPORTANT ADDITIONAL DISCLOSURES, PLEASE REFER TO PAGES 46-48 OF THIS PRESENTATION.
  3. So Nice We’ll Say It Twice MAY 2014 “Plain English” Legal Disclaimer In order to enhance current and prospective investor understanding of our process, approach and views, this presentation includes detailed discussions regarding selected positions in our Funds’ portfolios.  In doing so, we hope this transparency enhances your understanding of our views on the investment opportunities we see in the marketplace and why we have positioned the Funds’ portfolios the way we have.  With such information available to you, we believe current and prospective investors are better informed and equipped to challenge or diligence our views and approach to determine whether an investment in a Fund is consistent with the mandate of each individual investor.    As our focus is on current positions, we naturally have a constructive bias to these companies, which investors should weigh in determining their own views on our approach and the forward return opportunities of the Funds. As the legal disclaimers make clear, we are not discussing positions to highlight those that have performed well for us.  By and large the highlighted positions are current portfolio positions and their performance remains to be seen.  We have always had a mix of winners and losers and exactly how these positions perform over time will be judged with time.  To understand the past performance of our Funds, you should refer to the tables in the appendix where we lay out the monthly performance of our Funds since inception.  We have also included a section that shows our top 5 winners and bottom 5 losers during the last full calendar year to provide you with enhanced transparency.  Of course, this wouldn’t be a disclaimer, if we didn’t remind you that our past performance is not an indicator of how we will do in the future.  Nonetheless, our actual performance should be your guide for how we’ve done in the past, not the performance of individual securities.  We recognize that these materials are detailed and somewhat “opinionated”.  We have designed them that way so you can understand why we are enthusiastic about certain opportunities and what informs our market outlook.  In our view, transparency is paramount and we hope that these materials serve as a useful guide as you evaluate whether an investment in our funds is appropriate for you.
  4. Time Out: What’s the Play? The Best Things About May: March and April are over Stanley Cup Playoffs The Sohn Investment Conference 1 2 5 3 4 The Winning Playbook Perceived Bad Guys May Be Great Teammates HMOs, GMOs, and Hedge Fund CEOs Long Investment Ideas Secular Growth in Healthcare and Agriculture Make the Easy Play Humana WellPoint Monsanto (HUM: $109) (WLP: $101) (MON: $112) Ignore the Crowd Noise and Focus Watch Fundamentals Closely Give Yourself Multiple Chances to Win “Convertible Equities” Respectful Shareholder Engagement 110% Effort PAGE 3
  5. The Big Picture While there’s risk in the world, we aren’t in systemic crisis More times than not, the environment stays the same one year to the next Conditions are favorable for fundamental long investing over the medium term 1 Market multiples sourced from Baseline. ² S&P 500 Performance reflects (i) total price return for periods of negative performance and (ii) annualized price return for periods of positive performance. Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation. In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct.
  6. Previously, On the Last 104 Weeks’ Episodes…. S&P 500 Rolling 250-Day Correlation 1 Source: Strategas Group. 2Represents Q4 2011 and Q4 2013 annualized. 3 250-day correlation amongst S&P 500 stocks (each stock in index correlated to one another) is sourced from Strategas
  7. Drivers of Convergence We believe the fundamental backdrop for equity based investing strategies is constructive based upon the following factors: Leg 2: Excess Cash Leg 1: Cheap Valuations US Non-Financial Corps. Cash % Total Assets (4Q13 is most recent data) % Total Assets Leg 3: Exceedingly Low Borrowing Costs Leg 4: Shareholder Engagement1 1Examples of Shareholders Engagements. Data sourced from Strategas and Glenview figures. Please refer to pages 46-48 for important disclosure on highlighted securities, benchmark comparisons, performance data and forward looking statements, opinions and projections.
  8. From Drift Up to Lift Up Hard Work and Good Decisions Will Differentiate Drivers Results 2H 2012 & all of 2013 Lower Systemic Risk Valuation rebounded from lows Modest 6% earnings growth Stocks “drifted up” 2/3 of index return from multiple enhancement 2014 & beyond Capital Deployment Corporate actions / M&A Accelerated earnings Strengthening economy Potential for continued P/E restoration Board, Management and Owners must “lift up” Excess returns achievable but work needed Increased focus on contrarian ideas Opportunity Set - “Convertible Equities” A fictional concept that describes a low risk “base business” with one or more call options on value accelerants to lift up an ordinary investment return to an extraordinary return Convertible Equity = Cheap, Defensive Secular Growth + Call Options on: Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct.
  9. Everyman’s Trash is Glenview’s Treasure Past and Present Sohn Conference Contrarian Longs 2002 2005 2012 2014 2014 Securities highlighted in this slide have been selected to illustrate Glenview’s investment approach and/or market outlook and are not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future. These examples have been selected solely for this purpose and have not been selected on the basis of performance or any performance‐related criteria. In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation. PAGE 8
  10. HMOs: Don’t Let the Facts Get in the Way of a Good Argument A Single-Payor System would be more efficient than the Big Bad Private HMOs HMOs Profits are the reason healthcare costs are too high Myth 1: Myth 2: “We right now give $15 billion every year as subsidies to private insurers under the Medicare system. It doesn’t work any better through these private insurers; they just skim off $15 billion. That was a giveaway.” - President Obama, Sep 2008 “What’s hard is what millions of families and small businesses are going through because we allow the insurance industry to run wild in this country.” - President Obama, Mar 2010 Actions speak louder than words Mythbuster: Through consumer choice and policy decisions, government has increasingly transferred more business to the private sector: Entire Net Income of Public For-Profit HMO Industry Mythbuster: Medicaid Managed Care Management of Dual Eligibles Expansion or adoption since 2011 States pursuing Duals demos 2014E HMO Profits as a % of Healthcare Spending US Healthcare Spending HMO Profits ~0.4% Plus – ACA Medicaid Expansion Source: CMS, Kaiser Family Foundation, Credit Suisse. Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. PAGE 9
  11. How Do We Know HMOs are Hated? Multiple Ways! HMOs only group yet to recover S&P 500 Healthcare Index Managed Care1 Pharma Biotech Med Tech HC Services HCIT 11.7X (4%) (6%) 8% (6%) 12% (3%) NTM P/E Multiples (2%) (18%) Jun 2007 Jun 2007 Jun 2007 Jun 2007 Jun 2007 Jun 2007 Jun 2007 Jun 2007 Today Today Today Today Today Today Today Today Oct 2008 Oct 2008 Oct 2008 Oct 2008 Oct 2008 Oct 2008 Oct 2008 Oct 2008 HMOs are ABSOLUTELY Cheap 2015 Multiples2 Healthcare Index Managed Care Average1 WLP Bull Case HUM Bull Case 1 Large cap managed care firms (UNH, CI, AET, WLP) excluding HUM. 2 Multiples based on consensus and GCM 2015 EPS estimates. Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. PAGE 10
  12. Didn’t the Affordable Care Act Hurt HMOs? Yes, but They are Healing Well… Sources of Pain: 2007-2013 Let the Healing Begin: 2014-2019 Interest Rates2 Private Exchanges3 Unemployment1 – Projected Adoption – – Historical & Projected AA Corporate Yields – projected 1-2%/year EPS headwind 2008-13 Commercial Enrollments (5%) Members (M) projected CAGR 2014-18: 151% Employment Rate (%) 2013-18 Commercial Enrollments +9% ~2% per year 1-2%/year EPS tailwind 1Bureau of Labor Statistics, WLP estimates. 2Historical data based on the JPM AA-rated JULI index. Projected AA yields are based on the current JPM AA-rated JULI index spread + the 7-year US Treasury forward curve. 3 Accenture 2013 report on Private Exchanges. Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct.
  13. HMOs – From Investor Hell to Doing Well The negatives were absorbed or never happened… Single Payor couldn’t get traction in 2009 with the Democratic sweep Early read of ACA population is “acceptable” within risk corridors MLR Floors, MA cuts absorbed in 2011 Managed Care Tax, “Dumping” absorbed in 2014 Leaving a clear road ahead… Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct.
  14. Since the ACA, A Talented and Focused Wave of New Leaders Securities highlighted in this slide have been selected to illustrate Glenview’s investment approach and/or market outlook and are not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future. The securities discussed herein do not represent an entire portfolio and in the aggregate may only represent a small percentage of a Fund’s holdings. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  15. Case Study
  16. Humana: Healthy Investment Outlook Health Insurance Provider Financials MA Description Government pays private companies to manage Medicare coverage & develop their own plan designs, which results in richer benefit designs including vision, hearing, & dental care 75% MA / 25% Other Managed Care Attractive Core Waterfall 2015 and Beyond Revenues 9% EBIT 13% EPS 17% Numerous Areas of Upside Optionality PBM Outsourcing Adding leverage for accretive M&A / repurchase Expanding membership from retiree private exchanges, public exchanges, and state-based “Duals” contracts Long term: Potential acquisition target Overcapitalized 23% to 26% dry powder as % of market cap Cheap and Getting Cheaper Enhanced Focus on Shareholder Value New CEO and CFO focused on driving core value and addressing upside levers Data sourced from company materials and Glenview’s projections, which may not prove to be accurate or correct. This example has been selected to illustrate Glenview’s investment approach and/or market outlook and is not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future. This example has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria. In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.  PAGE 15
  17. There’s an Alarming Outbreak of Old People As Baby Boomers turn 65, population growth of 65 and over is 3% vs 0.70% national average… 4x the Growth! And they prefer Medicare Advantage over Straight Fee For Service Medicare… +5% growth/yr +3% growth/yr Medicare Advantage Penetration of >65 Population (%) MA penetration has grown steadily1 Year And they prefer Humana over other MA providers… Consolidation of plans with <100K members could add 3-5% growth as smaller rivals exit over next 5-10 years Other HUM UHC HUM share has grown steadily1 CIG Other (<100K) WLP Medicare Advantage Market Share (%) UHC AET HUM KFHP Other (>100K) KFHP AET WLP CIG 2013 Market Share1 Year 1 Based on CMS data. Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct.
  18. Seniors Vote for MA – Even the CBO Gets It Share of Medicare Beneficiaries Enrolled in MA1 MA Plans are high-quality & Seniors are very satisfied MA outperformed fee-for-service on 10 of 12quality measures2 ~9 out of 10 enrollees are satisfied with every aspect of their MA plan3 Despite ACA cuts, seniors stay in MA & CBO has increased its MA enrollment estimates States Senate Leadership State with 20%+ MA Swing State with 20%+ MA CBO 2014 Projected MA Enrollees (M) CBO 2012 High % MA States are Swing States & Populous CBO 2010 1 Kaiser Family Foundation, 2014. 2Am J Manag Care 16(11): 841-848, 2010 and 18(2): 96-104, 2012. 3 National Survey of Seniors Regarding Medicare Advantage Plans, North Star Opinion Research, Feb. 2013. Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. PAGE 17
  19. Which All Adds Up to 10-15% Organic Revenue Growth Humana MA Revenue Growth 2015 & Beyond 10-15% 1-2% 9-13% 3-5% Share Gains 3-5% = + = Penetration 3% Population Growth 9-13% MA growth is inline with recent organic growth… …and accelerates the earnings waterfall over time 2009-13 12.7% CAGR Medicare Advantage Consolidated HUM Medicare Advantage Members (‘000) HUM EBIT Growth (%) Other Year Year Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  20. Relieving Elbow Pain After 5 years of absorbing rate cuts resulting in no earnings growth, the pig is finally through the python, leading to sustained, defensive growth + convertible options Convertible Options: Phase-In of Medicare Advantage ACA Cuts1 1-2% Annual Rate Increase/Decrease2 About flat (~1%) (~2%) (~2%) (~3%) (~5%) 15-20% EPS Growth HumanaEPS 1 Based on JP Morgan estimates. 2 2011-15 estimated based on Humana’s disclosures. Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  21. Option 1: PBM – Time to Step On the Scale We believe that HUM could outsource parts of its PBM operations to another scale provider to reduce costs & enhance earnings from its PBM operations “We’ve Seen This Movie Before” Scale Matters – Significant Saving Opportunity to Humana Adjusted Rx Volume (Millions)1 AET CI X TBD “…We continuously – in fact we're in the process right now of evaluating our cost structure both from a fulfillment point of view and from a purchasing point of view to ensure that we are competitive. We've hired a third-party to do that evaluation and nothing to-date has given us an indication that we need to change that perspective.” - CEO Bruce Broussard (March 11, 2014) 1 CVS includes 890 M prescriptions filled at the pharmacy & 819 M through the PBM. CTRX totals are pro-forma and include CI scripts. Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  22. Option 2: Dry Powder – The General Can Fire Back 2015 Debt / Cap Current Dry Powder 13% LBO 22% Dry Powder 16-19% Dry Powder 23-26% 25% 40% Max leverage to maintain investment grade as per rating agencies Old “Target” of outgoing CFO 30% 35% While investors continue to value Humana using a rear view mirror, management should aggressively repurchase shares Data sourced from company materials and Bloomberg. Calculations are based on Glenview’s projections, which may not prove to be accurate or correct.  Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation. In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. 
  23. Option 3: Retiree Private Exchanges – More than Hot Air Private Exchange: A marketplace of health insurance & related products open to employees/retirees of a given employer sponsor Based on current market share, 50k-225k new MA lives for Humana 10-12M retirees have employer-sponsored health coverage 1.5-4.5M could move to Private Exchanges in the next 5 years 400k-1.5M of those will likely adopt MA plans: A membership tailwind for MA of up to 9% 0.5-2% Revenue Growth per year, 10-40c EPS Growth 1 Source: Aon 2013 Corporate Exchange Survey, Benfield 2013 Employer Healthcare Reform & Private Exchanges Survey, PwC 2013 Focusing on the Future of Healthcare Benefits Survey, TW 2013 Health Care Changes Ahead Survey, KFF 2013 Employer Health Benefits Survey, Alegeus 2013 Defined Contribution & Private Exchange Survey, Willis 2012-13 Healthcare Reform Survey, PwC 2012 Health & Well-Being Touchstone Survey, International Foundation of Employee Benefit Plans 2013 Employer-Sponsored Health Care Survey, Aon 2012 Retiree Health Care Survey, Aon 2013 Retiree Healthcare Survey. Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  24. Option 4: New Markets Medicare/Medicaid “Duals” Public Exchanges There are ~9M dual-eligible enrollees, accounting for $250B+ in annual healthcare spending 17 states are running or plan to run demonstration projects to coordinate care for these “Duals” Humana Public Exchange Lives (M) Lives (M) Project cleared by CMS Proposal pending Considered HUM recently won Duals contracts worth $5-7B HUM’s long-term target margin for state-based contracts is 3% 1M public exchange lives would add ~40-80c to EPS Already-won contracts add ~40-60c to EPS Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct.
  25. Valuation Consistent with the framework of a “Convertible Equity” we see healthy gains ahead for Humana, with the opportunity for extraordinary returns driven by PBM outsourcing and sound capital deployment. Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  26. Case Study
  27. WellPoint: Healthy Investment Outlook Health Insurance Provider Financials WLP Description Diversified health benefits company providing health, drug, dental, vision benefits including Blue Cross & Blue Shield plans The Blue network as 3x the market share of its next closest rival in the commercial health insurance market, and WLP has dominant 28% share in its markets Attractive Core Waterfall 2015 and Beyond Revenue 6% EBIT 9% EPS 14% Numerous Areas of Upside Optionality PBM asset value Cash EPS Excess subsidiary revenues Adding leverage for accretive M&A/repurchase Overcapitalized ~24-27% dry powder as % of market cap Cheap and Getting Cheaper Enhanced Focus on Shareholder Value New CEO (March 2013), new Head of Government Division, new Chief Strategy Officer, new CIO New Chairman of the Board and 4 new Directors Data sourced from company materials and Glenview’s projections, which may not prove to be accurate or correct. This example has been selected to illustrate Glenview’s investment approach and/or market outlook and is not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future. This example has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria. In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.  PAGE 26
  28. Who Doesn’t Love Options? WellPoint = All the benefits of the base case for HMOs, trading at 10x 2015 earnings Please refer to pages 46-48 for important disclosures regarding the use of forward-looking statements, opinions and projections in this presentation.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. PAGE 27
  29. So Nice, Let’s Sell It Twice In 2009, WLP announced the sale of their PBM assets and operations for the next 10 years to Express Scripts for $4.7B Thus, in Dec. 2019 they reclaim their PBM Investors value WLP PBM at zero. In 2019, we believe it’s worth $25-30 per share or $15 in present value today. Options to Unlock PBM Value which could happen as early as 2017: I. Improved Terms Improve terms of the current outsourcing arrangement with incumbent (ESRX) or another PBM, closer to comparable recent transactions Achieving terms similar to AET/CVS (2010) or CI/CTRX (2013) would add ~$750M to WLP EBIT (+19%) On reduced share count in 2019, this will add approximately $2 in EPS or $26-28 in future value II. Up-Front Payment Receive another up-front payment to renew the “long-term lease” on the outsourced PBM from the incumbent or another PBM ESRX paid $4.7B for the contract in Dec 2009 A new deal could be worth >$5B in 2017 (+16% of WLP market cap after taxes) III. In-Source Bring the PBM in-house (like UNH) We believe this option is least likely Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation. PAGE 28
  30. Buffett’s Right—Goodwill Doesn’t Amortize Companies should be valued based on “Cash EPS” (excl. acquisition amortization) when this metric is a more accurate reflection of FCF/share than GAAP EPS Several Healthcare companies have switched to Cash EPS in recent years, including… …and we think it is the right metric for WLP too Last Five Years Subsidiary Dividends >120% = Cash Net Income Switching to Cash EPS would add ~$0.50 (+6%) to WLP EPS Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation. PAGE 29
  31. Dry Powder – The Pendulum Has More Room to Swing 2015 Debt / Cap LBO Current Dry Powder 27% Dry Powder 19% Dry Powder 24% 37% 45% Max leverage to maintain investment grade as per rating agencies 43% Excess reserves at subsidiaries = 6% of market cap Data sourced from company materials and Bloomberg.  Calculations are based on Glenview’s projections, which may not prove to be accurate or correct.  Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation. In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. 
  32. Other Options & Target Price Interest rate increase of 280 bps based on the forward curve would worth $0.70 (+8%) to earnings power by 2018 Interest Rates CBO’s current schedule for Duals would be worth ~$0.60 (+7%) to earnings power by 2018 Duals If all of WLP’s states were to expand Medicaid today, it would be worth up to $0.30 (+4%) to earnings power Medicaid Expansion Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation. PAGE 31
  33. Case Study
  34. Feeding 9 Billion People The Inescapable Facts: Global Population & Food Consumption3,4 1 in 7 people today do not have access to sufficient protein and energy in their diet, and even more suffer from malnourishment1 1 High estimate 60%–100% Growth in Calories is Needed Low estimate Global Population (B) Global Food Consumption (M kcalper day) Between population growth and per capita consumption trends, food demand will nearly double by 20502 2 Population 9.5 B Population 3 Arable land is a finite resource 6.8 B ~1.5 BHectares Arable Land 1.4 BHectares 1State of Food Insecurity in the World, Food and Agricultural Organization of the United Nations. 2 “Food Security: The Challenge of Feeding Nine Billion People,” Godfray, H.C. et al., Science 327, 812-818 (2000). 3 Food and Agricultural Organization of the United Nations. 4Tilman et al. “Global Food and the Sustainable intensification of agriculture” Proc. Natl. Acad. Sci. USA. 108 (2011). Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  35. How to Feed the World…Without Destroying It GMO seeds are the world’s best option for sustainably meeting demand Issues Option #1 Option #2 Option #3 Option #4 Increase Arable Land Capital Equipment Fertilizer & Chemicals GMO Seeds Food Inflation High grain prices need for ROIC Can help with efficiency But, cap. intensive w/ quest. ROIC Positive impact on yield But, incr. costs at extreme prices Small % of farmer costs Seed prices increase with yields Environmental Impact Comes from deforestation Stresses water supply Increased fuel and emissions Toxic Studies say no negative impact Lower usage of toxic chemicals Drought-tolerance reduces H20 req. Structural Limit Government restrictions Infrastructure lacking Saturation in developed world Credit limits in emerging markets Limits on application rates Quick adopt. when gov’t not in way No capital or credit limitations Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  36. Separating Fact From Fiction Fiction Fact “GMOs are meddling with Mother Nature” Around 8500 BC people started breeding the desirable traits of wild plants into their crops to increase yields… it’s called farming “The WHO, the AMA, the U.S. National Academy of Sciences, the British Royal Society, and every other respected organization that has examined the evidence has come to the same conclusion: consuming foods containing ingredients derived from GM crops is no riskier than consuming the same foods containing ingredients from crop plants modified by conventional plant improvement techniques.” - American Association for the Advancement of Science, October 2012 “GMOs are unsafe” “Seed manufacturers benefit at the expense of farmers and society” MON earns a 25% incentive fee Revenues go up proportional to higher yields their products create Value to the Farmer U.S. Corn & Soy Since the Launch of GMO 23% increase in yields¹ Yield & Insecticide Use (Indexed,1996 = 100) 72% decrease in insecticide usage² 1 Yield data per USDA.2 Benbrook: Impacts of genetically engineered crops on pesticide use in the U.S. – the first sixteen years. Environmental Sciences Europe 2012 24:24. Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  37. Monsanto: All the Traits of a Great Investment Financials Seed & Trait Manufacturer Great Business Seeds and Traits (80% of profit) Defensive, recurring, acyclical Attractive Core Waterfall Revenues 7% GP 8% EBIT 12% EPS 15% Numerous Upside Levers Near-term: COGS, LatAm Soy Medium-term: Greater Yield, New Traits, DD Pricing Long-term: Precision Farming Massively Overcapitalized 27% to 56% dry powder Cheap and Getting Cheaper Enhanced Focus on Shareholder Value Data sourced from company reports.  Debt is pro forma for $1.0B of debt issued subsequent to FY2013 related to acquisition of Climate Corporation.  Calculations based on Glenview’s projections , which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.  
  38. Not to Sound Defensive, But Its Growth Is Organic High recurring revenue 70% seed and traits is non-discretionary Dominant share and presence Subject to weather not economic cycles Monsanto’s franchise and defensive characteristics are on par with the best 'large moat' businesses: Cell Towers Pharmaceutical Services Online Search, Shopping & Travel Massive barriers to entry: Seed shares are perpetual local monopolies based upon historical use Each year of efficient breeding grows yields by 3% Without a time machine, uncatchable lead Traits are progressively stacked and again winners create winners – seed industry must license MON traits Taken together, this creates attractive and defensive organic core growth Revenues 7% GP 8% EBIT 12% EPS 15% Data is sourced from company materials.  Calculations based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosure regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  39. Stacking Growth on Growth LatAm Soy Launch Accelerating Yields MON EPS Growth1 Corn Demand Will Nearly Double…Acres Will Not MON Provides the Solution U.S. Drought Resistant Corn (launched 2013) South American Corn Trade-up (launched 2012) Brazil: Singles to Doubles Argentina: Doubles to Triples Several natural disasters have led to a buildup of extraordinary costs which should unwind in coming years Future: 3% Yield = 9% MON Pricing = 15% EPS CAGR Yields must grow 75% by 2030 to feed the world 2% yield CAGR must accelerate to 3% North America 80M acres $1.7B Revenue today (11% of total) MON Price 8% CAGR Corn Demand Indexed to 2003 Hectares Planted (B) Bushels Harvested (B) Corn Yields 2% CAGR $2,668 Extra Costs 10% to 20% of EPS New Traits Year $2,225 COGS Relief $1,941 $1,796 South America 120M acres $0 revenue today DuPont price increases in Soy create competitive halo $1,507 DD paying more for MON traits To protect margin, they need to raise price Ironically, this also helps MON soy seed pricing 1-2% pricing uplift ¹ EPS growth based on Glenview’s projections  through end of Fiscal Year 2017; assumes midpoint of management “price/mix” guidance, reversal of extraordinary corn seed COGS, contribution from Intacta rollout and management guided South America corn trait trade up. LatAm Soy with $1.75 of EPS by 2017 Data sourced from company materials and Glenview’s projections, which may not prove to be accurate or correct. This example has been selected to illustrate Glenview’s investment approach and/or market outlook and is not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future. This example has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria. In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation. 
  40. Hey Batter Batter, Swing, Batter! You are here Net Cash LBO (0.1x) Dry Powder 2014 14% 2017 37% Dry Powder 2014 39% 2017 72% Dry Powder 2014 27% 2017 55% 1.0x 4.0x Peers If We Were King For a Day 2.5x Quality Chemicals As a defensive monopoly with multiple upside levers, Monsanto is suboptimally hoarding capital and value is trapped Data sourced from company materials and Bloomberg.  Calculations based on Glenview’s projections, which may not prove to be accurate or correct.  Please refer to pages 46-48 for important disclosure regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  41. Enhanced Focus on Shareholder Value Over the past nine months Management and the Board have taken small steps towards convergence: If Monsanto utilizes their dry powder well in addition to executing on the myriad of growth opportunities, we expect that shareholder value will grow “Based on our analysis and with feedback we've gotten from many of our owners, we are now moving to use the cash over and above our current levels to further prioritize our share buyback and dividend programs. The best example of that more aggressive approach is the recent authorization by our board of a new $2 billion three-year buyback program. Practically, this is the first time in our company's history where we've doubled the size of our buyback program. Our current program was approved in June of last year. So between what we spend for Q3, additional spending in the first month of Q4 and our expected program for the remainder of the quarter, we have accelerated the current buyback program.” – Pierre Courduroux, CFO ~$450M repurchase per quarter $2B repurchase authorization Discussion of enhanced dividends ~35% CAGR ~$15 ~24% CAGR ~$11 ~15% CAGR ~$8 This example has been selected to illustrate Glenview’s investment approach and/or market outlook and is not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future.  This example has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria.  In addition, certain statements contained herein are based on Glenview’s research, analysis, opinions and assumptions made by Glenview, which may not prove to be accurate or correct. This chart includes the following assumptions, projections, forward looking statements and opinions:  15% Base EPS growth assumes ~9% revenue, ~13% EBIT and 15% EPS growth. Assumes MON reaches 2.5x Net Debt / EBITDA during FY2014E and maintains that leverage. All free cash flow after dividends and proceeds from increased debt used to repurchase. Assumes 15% stock price appreciation per year. Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48  for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  42. Valuation Historically, Monsanto has traded at 20-22x forward earnings per share. Using a more conservative 17-20x multiple on FY17 earnings yields two year price appreciation in the range of 21% to as high as 168%, assuming capital deployment at 2.5x leverage. Importantly, these targets give no value to Monsanto’s investment in Precision Farming, as there is no positive earnings contribution assumed in the near-term Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  43. Planting a Seed for an Additional $24 of EPS in 10 Years1 MON has been investing in & developing "Integrated Farming Systems" or Precision Farming This is analogous to personalized medicine Using informatics and data to develop optimal solutions by farm Monsanto currently has 2 platforms FieldScripts(internally developed product) Timing: rolling out commercially for first time this year onto “hundreds of thousands of acres” Pricing: $10 per acre Value to farmer: gives farmers 5-10 bushels per acre (~$30 of value to farmer) Climate Corporation (acquired October 2013 for $930M) At its investor day in November 2013, MON estimated that these two platforms together can reach 1 billion acres at $20 per acre At 85% incremental margins, this equates to $24 in EPS on current shares, achievable over the coming decade 1 This calculation is based on Glenview’s research, analysis, projections and opinions, which may not prove to be accurate or correct.  Please refer to pages 46-48 for important disclosure regarding the use of forward looking statements, opinions and projections in this presentation. Securities highlighted in this slide have been selected to illustrate Glenview’s investment approach and/or market outlook and are not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future.  This example has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria. The securities discussed herein do not represent an entire portfolio and in the aggregate may only represent a small percentage of a Fund’s holdings. Data sourced from company materials. Please refer to pages 46-48 for important disclosure regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  44. We Like the AND Business Often times capital allocation choices are presented as mutually exclusive “OR” choices Will I invest in the business for the long-term? Will we pursue short-term value through share buybacks? OR We prefer the AND business Monsanto can: Continue to have strong business Invest >$1.7B annually in R&D Invest $300 million annually in technology acquisitions Increase leverage to 2.5x net Debt/EBITDA to drive per share value Have $8B available for opportunistic acquisitions Retain a strong, investment grade credit rating Pursue and invest in Precision Farming AND AND AND AND AND AND If Monsanto wishes to accelerate investment in Precision Farming, they may also: IPO <20% of this segment to raise cash for accelerated investment and development Allow growth investors to capitalize this segment on earnings potential while earnings-based investors may see the separated value of core Monsanto Calculations are based on Glenview’s projections, which may not prove to be accurate or correct. Please refer to pages 46-48 for important disclosures regarding the use of highlighted securities and the use of forward looking statements, opinions and projections in this presentation.
  45. From Managed Care to Managers That Care… DAN NIR DOUG HIRSCH EVAN SOHN 19 19 19 D. EINHORN 7 11 9 7 7 5 5 7 6 6 B. ACKMAN M. JULIS B. MILLER C. ICAHN M. PRICE J. CRAMER J. CHANOS L. ROBBINS E. FRIEDMAN J. GUNDLACH R. PZENA D. SINGH S. ZELL J. GRANT S. EISMAN J. DINAN S. MANDEL J. GREENBLATT 3 3 3 3 3 3 4 4 4 Glenview Capital is proud to be part of a team of hedge fund managers who have and will continue to support the critical work of the SohnFoundation
  46. Thank You “The name on the front is a hell of a lot more important than the one on the back!” – Herb Brooks, Miracle We Applaud the Men and Women Who Make the Work of the Foundation Possible
  47. Important Additional Disclosures This presentation does not constitute an offer to sell nor the solicitation of an offer to buy any interest in any investment fund (each, a “Fund” or together the “Funds”) managed by Glenview Capital Management, LLC ("Glenview"). Such offer or solicitation may only be made by delivery of offering documents containing a description of the material terms of any investment, including risk factors and conflicts of interest. Any such offering will be made on a private placement basis to a limited number of eligible investors. You should conduct your own investigation and analysis of Glenview and the Funds. Anyone considering an investment in the Funds should review carefully and completely the applicable Fund’s Offering Documents, including the Offering Memorandum of such Fund, the applicable subscription documents, the applicable Governing Documents and Glenview’s Form ADV Part 2, in their entirety and ask questions of representatives of the Funds before investing. Benchmark Comparisons Information about indices is provided to allow for comparisons to that of certain well‐known and widely‐recognized indices. Such information is included solely for the purpose of showing comparisons and general trends, as displayed in the relevant charts. Definitions for indices used in this presentation are included below: S&P 500 Index The Standard and Poor’s 500 Index (the “S&P 500 Index”) is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad U.S. economy through changes in the aggregate market value of 500 stocks representing all major industries. The S&P 500 Index was developed with a base level of 10 for the 1940-43 base period. Returns shown in this presentation for the S&P 500 Index reflect total returns, which captures the changes in the prices of the index components and which accounts for dividend reinvestment. S&P 500 Internet Retail Index The Standard and Poor’s 500 Internet Retail Index is a capitalization-weighted index of 500 stocks. The index was developed with a base level of 10 for the 1941-1943 base period. The parent index is the S&P 500 Index. This is a GICS Level 4 Sub-Industry group.
  48. Important Additional Disclosures Past performance is not indicative nor a guarantee of future results. There can be no assurance that any Fund will achieve comparable results in the future or that it will be able to avoid losses. There can be no assurance that Glenview will be able to implement its investment strategy or investment approach to receive comparable results. Additionally, Glenview may not be able to dispose of its investments on the terms or at the time it wishes to do so. Highlighted Securities Securities highlighted or discussed in this presentation have been selected to illustrate Glenview’s investment approach and/or market outlook and are not intended to represent the Funds’ performance or be an indicator for how the Funds have performed or may perform in the future. The securities discussed herein do not represent an entire portfolio and in the aggregate may only represent a small percentage of a Fund’s holdings. Each security discussed in this presentation has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria. The portfolios of the Funds are actively managed and securities discussed in this presentation may or may not be held in such portfolios at any given time. Nothing in this presentation shall constitute a recommendation or endorsement to buy or sell any security or other financial instrument referenced in this presentation. In addition, certain statements contained herein are based on Glenview’s research, analysis, forward looking statements, opinions, projections and assumptions made by Glenview. Forward Looking Statements, Opinions and Projections This presentation contains certain “forward looking statements”, opinions and projections that are based on the assumptions and judgments of Glenview and the Funds with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Glenview or the Funds. Because of the significant uncertainties inherent in these assumptions and judgments, you should not place undue reliance on these forward looking statements, nor should you regard the inclusion of these statements as a representation by Glenview or that the Funds will achieve and strategy, objectives or other plans. All forward looking statements and projections are made as of the date of this document. The opinions expressed herein are current opinions as of the date appearing in this material only. There is no obligation to update these forward looking statements, projections and/or opinions to reflect events or circumstances after the date hereof, nor is there any assurance that the policies, strategies or approaches discussed herein will not change. For the avoidance of doubt, any such forward looking statements, opinions, assumptions and/or judgments made by Glenview and the Funds may not prove to be accurate or correct.
  49. Important Additional Disclosures Information Obtained From Third-Party Sources Certain economic and market information contained herein has been obtained from published sources prepared by other parties, which in certain cases has not been updated through the date of the distribution of these materials. While such sources are believed to be reliable for the purposes used herein, Glenview does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Glenview considers to be reasonable. IRS Circular 230 Notice To ensure compliance with Internal Revenue Service Circular 230, each prospective investor is hereby notified that: (a) any discussion of United States federal tax issues in this presentation is not intended or written by any of the foregoing to be relied upon, and cannot be relied upon by prospective investors, for the purpose of avoiding penalties that may be imposed on investors under the internal revenue code; (b) such discussion is written in connection with the promotion or marketing of the transactions or matters addressed herein; and (c) each prospective investor should seek advice based on its particular circumstances from an independent tax advisor.
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