November 17, 2017 REVIEW OF PRELIMINARY PROPOSALS 191 North Wacker Drive, Suite 900 Chicago, IL 60606 www.juniperadvisory.com James Burgdorfer  312.506.3009  jburgdorfer@juniperadvisory.com Barry Sagraves  312.506.3008  bsagraves@juniperadvisory.com Jordan Shields  312.506.3005  jshields@juniperadvisory.com 1 PROCESS REVIEW process design & activities to date 3 SUITORS profiles of proposing companies 10 PROPOSALS review of responses 17 NEXT STEPS upcoming events 24 APPENDIX 28 This document was prepared exclusively for the benefit & internal use of the potential partner to whom it is addressed & delivered, including such partner’s subsidiaries, in order to assist the potential partner in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions. Neither this document nor any of its contents may be disclosed or used for any other purpose without the prior written consent of Juniper Advisory. The information in this document is based upon management forecasts supplied to Juniper Advisory & reflects prevailing conditions & our views as of this date, all of which are subject to change. Juniper Advisory’s opinions & estimates constitute Juniper Advisory’s judgment & should be regarded as indicative, preliminary, & for illustrative purposes only. In preparing this document, we have relied upon, without independent verification, the accuracy & completeness of all information available from public sources or which was provided to us by or on behalf of Methodist Hospitals, Inc. In addition, our analyses are not & do not purport to be appraisals of the assets, stock, or business of Methodist Hospitals, Inc. or any other entity. Juniper Advisory makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this document does not take into account the effects of a possible transaction or transactions involving an actual or potential combination. This document does not constitute a commitment by any Juniper Advisory entity to underwrite, subscribe for, or place any securities or to extend or arrange credit, or to provide any other services. Juniper Advisory is a marketing name for investment banking business of Juniper Advisory LLC. 1. PROCESS REVIEW process design 8 activities to date Objectives of process  Patient-first culture  Financial strength  Clinical quality  Physician recruitment, retention  Governance structure aligned with mission  Community support, engagement  Medical community, staff  Investments in technology, facilities, programs, people  Enhance market position  Population health capability  Access to care for residents of Indian River County 4 PROCESS to date Process design     Achieve objectives Basis of comparison External review Minimize disruption Meetings  Aug 21 to 23 & October 18, 19, 31  Marketing strategy  Approved suitor list Proposals  33 companies - - approached on August 15  12 companies - - received offering materials on October 6  8 proposals - - received on November 10 Juniper & suitors  Extensive communication PROCESS REVIEW 5 TIMELINE overall INITIAL PROPOSALS START VISITS WITH & TO FINALISTS SELECT PARTNER • Board • Trustees Aug 15 Oct 6 RELEASE INFORMATION TO MARKET PROCESS REVIEW Nov 10 Nov 17 SELECT FINALISTS DEFINITIVE AGREEMENTS • Board • Trustees Dec, Jan Jan REFINED PROPOSALS Jan Feb LETTER OF INTENT Jun Aug CLOSE 6 MARKET INPUT NONPROFIT INVESTOROWNED TOTAL APPROACHED 25 8 33 INITIAL INTEREST 7 5 12 4 4 8 • Confidentiality Agreement • Information Memorandum • Instruction Letter • Data room PROPOSALS PROCESS REVIEW 7 MARKET RESPONSE COMPANY Proposal Nonprofit Adventist Sunbelt Yes Cleveland Clinic Yes Health First Yes Martin Health System No Orlando Health Yes Trinity Health No UF Health No Investor-owned Duke LifePoint Healthcare No HCA Healthcare Yes RCCH HealthCare Partners Yes Steward Health Care System Yes Universal Health Services Yes PROCESS REVIEW 8 MARKET INTEREST Overall  Strong strategic interest  All reputable hospital companies Positive factors  Attractive market & region  Quality of services & medical staff  Opportunity for investment - Stem outmigration - Add centers of excellence & services Negative factors  Public process  Lease, especially reporting  Regional competition  Significant capital needs PROCESS REVIEW 9 2. SUITORS pro?les 8 comparison of proposing companies (I NI [?31 OVERVIEW suitors ADVENTIST SUNBELT CLEVELAND CLINIC Hospitals Florida 44 25 10 1 Ownership 501(c)3 501(c)3 Total Net Revenue $8,383 $8,037 Net Patient Revenue $8,042 $7,249 Debt Rating AA/Aa2/AA AA/Aa2 Cerner Epic ($ millions) EMR Source: Suitors, Audited financial statements (latest available), American Hospital Directory, Company websites, Definitive Healthcare SUITORS 11 OVERVIEW suitors HEALTH FIRST ORLANDO HEALTH 4 4 9 9 Ownership 501(c)3 501(c)3 Total Net Revenue $1,530 $2,456 Net Patient Revenue $899 $2,326 Debt Rating A/A2 A/A2/A Allscripts Allscripts ($ millions) Hospitals Florida EMR Source: Suitors, American Hospital Directory, Company websites, Definitive Healthcare SUITORS 12 OVERVIEW suitors HCA HEALTHCARE RCCH HEALTHCARE PARTNERS 177 49 16 0 Investor-owned, public Investor-owned, private Total Net Revenue $41,490 ~$2,000 Net Patient Revenue $41,490 $1,6301 Debt Rating Ba2 -- Meditech Cerner, Meditech ($ millions) Hospitals Florida Ownership EMR Source: Suitors, Audited financial statements (latest available), American Hospital Directory, Company websites, Definitive Healthcare 1. Per RCCH 2016 Cost Report. As a private company, RCCH does not provide its financial statements. SUITORS 13 OVERVIEW suitors STEWARD HEALTH CARE SYSTEM UNIVERSAL HEALTH SERVICES 33 3 27 3 Investor-owned, private Investor-owned, public Total Net Revenue ~$8,000 $9,766 Net Patient Revenue $4,6161 $9,766 Debt Rating -- Ba1/BB+ Meditech2 Cerner ($ millions) Hospitals Florida Ownership EMR Source: Suitors, Audited financial statements (latest available), American Hospital Directory, Company websites, Definitive Healthcare 1. Per Steward 2016 Cost Report. As a private company, Steward does not provide its financial statements. Notably, Steward has a health plan with 1.6 million covered lives as a part of its business. This revenue is not reflected in patient service revenue. 2. Steward is currently on Cerner in PA and OH and Pulse/DAR in FL. These three states are all in their central division and are moving to Meditech 6.1 which is scheduled to be completed 6.1.18. SUITORS 14 OVERVIEW suitors ($ millions) ADVENTIST CLEVELAND SUNBELT CLINIC HEALTH FIRST ORLANDO HEALTH IRMC Commonwealth Index1 98.53% 98.35% 99.51% 98.65% 97.99% % Patients Highly Satisfied2 75.26% 74.11% 77.50% 72.67% 65.00% US News & World Report National Rank -- #2 -- -- -- US News & World Report FL Rank3 #4 #8 #23 #4 -- 95% 100% 75% 100% B % Hospitals in FL with A or B Leapfrog Safety Source: Suitors, Audited financial statements (latest available), American Hospital Directory, Company websites, Definitive Healthcare, $ in millions, suitor proposals 1. Most recent available. Commonwealth Fund’s “Quality – Overall Recommended Care” 2. Systemwide, rating of 9 or 10. 3. Rank is for Florida Hospital – Orlando (Adventist), Orlando Regional Medical Center (Orlando Health), Cleveland Clinic Florida, Holmes Regional (Heath First) SUITORS 15 OVERVIEW suitors HCA RCCH STEWARD UHS IRMC Commonwealth Index1 99.27% 98.40% 97.81% 96.19% 97.99% % Patients Highly Satisfied2 69.54% 63.63% 62.25% 66.95% 65.00% US News & World Report National Rank -- -- -- -- -- US News & World Report FL Rank3 #33 n.a. -- -- -- % Hospitals in FL with A or B Leapfrog Safety4 70% n.a. 0% 0% B ($ millions) Source: Suitors, Audited financial statements (latest available), American Hospital Directory, Company websites, Definitive Healthcare, $ in millions, suitor proposals 1. Most recent available. Commonwealth Fund’s “Quality – Overall Recommended Care” 2. Systemwide 3. Rank for North Florida Regional Medical Center. 4. As reported in HCA proposal, Steward acquired all three of its FL hospitals in 2017 SUITORS 16 3. PROPOSALS review of responses ,llfNI PER NON financial COMPARISON ADVENTIST SUNBELT CLEVELAND CLINIC Structure Member substitution Member substitution Lease Amended Amended Governance, post transaction Local board Local board, FL regional board Services Focus on centers of excellence, grow services Expand tertiary services, expand centers of excellence Employees Continued employment for all front-line employees Appropriate evaluation of collective resources Charity care No less than IRMC No change Prohibition on re-sale 10 years In definitive agreement PROPOSALS 18 NON financial COMPARISON HEALTH FIRST ORLANDO HEALTH Structure Member substitution Asset purchase Lease Amended Amended Governance, post transaction Local board, one seat on parent board tbd Services Expand centers of excellence , grow services Focus on existing centers of excellence Employees All retained All retained Charity care No less than IRMC Local decision Prohibition on re-sale 10 years In definitive agreement PROPOSALS 19 NON financial COMPARISON HCA HEALTHCARE RCCH HEALTHCARE PARTNERS Structure Asset purchase Asset purchase Lease Amended Amended Governance, post transaction Local board, 1/3 - - District, IRMC, HCA Local board Services Make IRMC regional tertiary referral center Support and grow centers of excellence and services Employees All retained All retained Charity care Greater than currently provided Adopt IRMC policy Prohibition on re-sale 15 years ROFR PROPOSALS 20 NON financial COMPARISON STEWARD HEALTH UNIVERSAL HEALTH SERVICES Structure Asset purchase Asset purchase Lease Amended Amended Governance, post transaction Local board Local board Services Support development of centers of excellence Make IRMC regional tertiary referral center Employees All retained All retained Charity care No change Work with IRMC Prohibition on re-sale In definitive agreement Did not address PROPOSALS 21 financial COMPARISON ($ millions) unaudited FYE 9.30.17 ADVENTIST SUNBELT CLEVELAND CLINIC HEALTH FIRST ORLANDO HEALTH Member substitution Member substitution Member Substitution Asset purchase n.a. n.a. n.a. $100-$220 + Assets retained by IRMC $0 $0 $0 $64 - Liabilities retained by IRMC $0 $0 $0 $64 Gross Proceeds $0 $0 $0 $100-$220 Purchase Price $0 $0 $0 $100-$220 + Capital expenditures $200-$250 5 years tbd Cleveland Clinic standard $200, strategic $75, routine 5 years $40 3 years + tbd + Liabilities assumed1 by partner $102 $102 $102 $0 $302-$352 $102 + tbd capex $377 Structure Purchase Price Financial Consideration2 1. 2. 3. 3 $140-$260 Does not include certain current liabilities included in the calculation of net working capital. Components of consideration, collectively, could be rearranged. Health First has proposed that the IRMC Foundation will remain a separate entity within the Health First organization. Existing and future donor-restricted funds will be honored. Health First is open to considering structures in which the IRMC Foundation remains independent entity outside of the transaction. PROPOSALS 22 financial COMPARISON ($ millions) unaudited FYE 9.30.17 HCA HEALTHCARE RCCH HEALTHCARE PARTNERS STEWARD HEALTH CARE SYSTEM UNITED HEALTH SERVICES Asset Purchase Asset Purchase Asset purchase Asset purchase Purchase Price $150 $10 $105 $40 + Assets retained by IRMC $64 $75 $75 2 $71 - Liabilities retained by IRMC $64 $67 $44 2 $86 Gross Proceeds $150 $18 $136 $25 Purchase Price $150 $10 $105 1 $40 + Capital expenditures $265 10 years $140 rooms, IT, ASC $130 10 years $250 7 years $175, strategic + tbd routine + Liabilities assumed3 by partner $0 $0 $20 $0 $415 $280 $375 $215 + tbd routine Structure Financial Consideration 1. 2. 3. 1 Steward will pay IRMC $125 million less the pension liability which Steward will assume and guarantee which is $20.3 million per the unaudited September 2017 consolidated balance sheet. Based on consolidated financials. Does not include certain current liabilities included in the calculation of net working capital. PROPOSALS 23 ,l NI A 4. NEXT STEPS upcoming calendar 8 events 24 NEXT STEPS phase two  Select finalists - - those that you feel merit extensive further consideration  Site visits - - in Vero Beach - Presentation by suitors to Board & Trustees - Management visits with to suitors - Facility & market tours, likely with facility planners  Reverse due diligence visits - - to finalists - Trustees & Board & physicians - Tour hospital with physician leaders - Meet with suitor board representatives  Phase two proposals - Specificity regarding objectives, capital projects & lease treatment  Review & decision – Narrow transaction structures & features – Fair-market-value concepts reviewed – Select partner-of-choice  Letter of intent NEXT STEPS 25 TIMELINE overall INITIAL PROPOSALS START VISITS WITH & TO FINALISTS SELECT PARTNER • Board • Trustees Aug 15 Oct 6 RELEASE INFORMATION TO MARKET NEXT STEPS Nov 10 Nov 17 SELECT FINALISTS DEFINITIVE AGREEMENTS • Board • Trustees Dec, Jan Jan REFINED PROPOSALS Jan Feb LETTER OF INTENT Jun Aug CLOSE 26 Process OBJECTIVES  Patient-first culture  Financial strength  Clinical quality  Physician recruitment, retention  Governance structure aligned with mission  Community support, engagement  Medical community, staff  Investments in technology, facilities, programs, people  Enhance market position  Population health capability  Access to care for residents of Indian River County 27 (I l} PF. WOW: 5. APPENDIX 28 ADVENTIST  AHS is faith-based  Largest number of Florida hospitals  AHS has received the Gallup Great Workplace Award for seven consecutive years  AHS envisions strengthening IRMC’s position as a regional referral hospital for its primary and secondary market. AHS would attempt to grow services, relationships, regional revenue and the stature of IRMC  Would use internal funding sources for the transaction ADVENTIST 29 Cleveland CLINIC  Cleveland Clinic is an academic health system that includes its main campus, community regional hospitals and ambulatory sites in Northeast Ohio and Florida, as well as international healthcare facilities  Cleveland Clinic has achieved national recognition through a top US News & World Report ranking for 18 consecutive years - All 13 Cleveland Clinic specialties place in the top 10 nationally  Cleveland Clinic Florida is ranked #1 in Broward County, #2 in Miami-Ft. Lauderdale metro area, and 8th in Florida  Cleveland Clinic operates much like a physician group that owns and operates a health system rather than a health system that employs physicians  Cleveland Clinic has more than $8 billion in operating revenue, $777 million in EBITDA, and over $8 billion in cash and investments CLEVELAND CLINIC 30 HEALTH FIRST  Health First is a fully integrated network with four hospitals, employed and private practice physicians, a health plan, and a number of freestanding ambulatory services and wellness programs  Formed in 1995 when Holmes, Cape Canaveral and Palm Bay combined  Health First Health Plans began in 1996 and has 168,000 covered lives with a provider network of 4,000, 30 hospitals, and other services  Health First has provided a highly confident letter from Barclays Bank relative to their ability to arrange a credit facility HEALTH FIRST 31 ORLANDO HEALTH  Consists of nine hospitals and rehabilitation centers and is home to Central Florida’s only Level One Trauma Centers for adults and children  OH has partnered with UF Health to one create one of Florida’s four statedesignated Cancer Centers of Excellence and the only one in Central Florida  OH has successfully developed, partnered and acquired physician practices  Orlando Regional Medical Center is one of the nation’s busiest level-one trauma centers with over 4,190 cases in 2016 - The trauma center earned the only “A” grade in Florida, and an overall fifth ranking in the nation from The Leapfrog Group ORLANDO HEALTH 32 HCA HEALTHCARE  HCA is the largest health system in the United States with 177 hospitals, 119 ambulatory surgery centers, and 96 urgent care centers - HCA employs over 4,000 physicians and has approximately 37,000 affiliated physicians  CMS Core Measures composite score for HCA hospitals is 99.20% vs. a national average of 94.48% - - 78% of HCA hospitals are on The Joint Commission’s List of Top Performers, as compared to 37% of all TJCaccredited hospitals  HCA hospitals represent roughly 5% of major hospital services in the US with roughly 27 million patient encounters per year  In Florida, HCA operates 49 hospitals and 32 surgery centers including three that are located along the Treasure Coast HCA HEALTHCARE 33 RCCH HEALTHCARE PARTNERS  RCCH is a for-profit, private health system with 16 hospitals in 12 states  RCCH is backed by Apollo Global Management (AGM)  AGM is one of the largest alternative investment managers with total assets under management of ~$162 billion  In addition to RCCH’s hospitals, it has partnered with Billings Clinic, Baylor Scott & White, The Ohio State University Comprehensive Cancer Center, and UW Medicine RCCH HEALTHCARE PARTNERS 34 STEWARD HEALTH CARE SYSTEM  Steward is a for-profit, private health system with 33 (3 in Florida) acute care hospitals, 2 long term hospitals, and 1 behavioral health hospital  In addition, Steward operates a health plan with 1.6 million covered lives  Steward entered Florida by purchasing Sebastian River, Wuesthoff– Melbourne, and Wuesthoff Rockledge from CHS earlier this year  Steward has grown in 2017, with 8 hospitals acquired from CHS (3 states) and 18 hospitals acquired from IASIS (6 states) STEWARD HEALTH CARE SYSTEM 35 UNIVERSAL HEALTH SERVICES  UHS is one of the largest health systems in the U.S., with acute care hospitals and behavioral health facilities throughout the US, UK, Puerto Rico and US Virgin Islands - Including a strong Florida footprint  UHS operates 27 hospitals with 6,000 licensed beds, $5.1 billion in revenue, $827 million EBITDA, 317 inpatient and 37 outpatient behavioral facilities. UHS has $4.6 billion in patient revenue and $1.2 billion in EBITDA - UHS also operates a health plan that it purchased in 2014. It has 60,000 members - UHS is moving toward a population health focus in Florida  UHS has low-leverage compared to major for-profit public systems UNIVERSAL HEALTH SERVICES 36