Contract

Exhibit 99.2

On January 1, 2005, Assisted Living Concepts, Inc. (“ALC”) entered into a master lease agreement for five residences located in Oregon totaling 157 units. The master lease included what was determined at January 1, 2005 for accounting purposes to be a “bargain purchase option” and was accounted for as a capital lease. The master lease gave ALC the right to purchase all five buildings for total consideration of $10.3 million consisting of the assumption of $4.7 million of Oregon Housing and Community Services Bonds and $5.6 million in cash. The master lease provides that, in the event the option is not exercised, ALC will continue to lease one of the residences under a prior operating lease. Based upon the current operating performance, the assumption of bonds with an average rate of 8.03%, and various operating restrictions under the bond indentures, ALC determined it was not economically or operationally prudent to exercise the option to purchase these properties at the predefined price.

As a result, ALC expects to terminate operations at four residences consisting of 118 units on December 31, 2009 and to continue operating one residence consisting of 39 units under an operating lease expiring in February 2014 (with a right to extend an additional five years). At September 30, 2009, the decision not to exercise this option resulted in the reclassification of the operations of the four residences from continuing to discontinued operations.

The following unaudited financial information is provided to assist interested parties in determining the impact of discontinued operations on the historical statements of operations of ALC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. This financial information should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

ASSISTED LIVING CONCEPTS, INC.
Supplemental Financial Information of Discontinued Operations
(In thousands)
(Unaudited)

		Three Months Ended
		March 31,
		2009				2008
Revenues		$	567			$	714
Expenses:
Residence operations (exclusive of depreciation and amortization and residence lease expense shown below)			566				556
Residence lease expense			(3	)			(2	)
Depreciation and amortization			97				90
Total operating expenses			660				644
(Loss) income from operations			(93	)			70
Other expense:
Interest income			1				9
Interest expense			(140	)			(148	)
Loss from discontinued operations before income taxes			(232	)			(69	)
Income tax benefit			88				26
Net loss from discontinued operations		$	(144	)		$	(43	)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenues		$	698			$	652			$	1,265			$	1,366
Expenses:
Residence operations (exclusive of depreciation and amortization and residence lease expense shown below)			518				537				1,084				1,093
Residence lease expense			(3	)			(2	)			(6	)			(4	)
Depreciation and amortization			98				94				195				184
Total operating expenses			613				629				1,273				1,273
Income (loss) from operations			85				23				(8	)			93
Other expense:
Interest income			1				2				2				11
Interest expense			(139	)			(146	)			(279	)			(294	)
Loss from discontinued operations before income taxes			(53	)			(121	)			(285	)			(190	)
Income tax benefit			19				45				107				71
Net loss from discontinued operations		$	(34	)		$	(76	)		$	(178	)		$	(119	)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Revenues		$	743			$	627			$	2,008			$	1,993
Expenses:
Residence operations (exclusive of depreciation and amortization and residence lease expense shown below)			516				558				1,600				1,651
Residence lease expense			(5	)			(3	)			(11	)			(7	)
Depreciation and amortization			105				96				300				280
Loss on impairment			1,231				—				1,231				—
Total operating expenses			1,847				651				3,120				1,924
Loss from operations			(1,104	)			(24	)			(1,112	)			69
Other expense:
Interest income			1				3				3				14
Interest expense			(137	)			(145	)			(416	)			(439	)
Loss from discontinued operations before income taxes			(1,240	)			(166	)			(1,525	)			(356	)
Income tax benefit			438				61				545				132
Net loss from discontinued operations		$	(802	)		$	(105	)		$	(980	)		$	(224	)

		Three
		Months				Year
		Ended				Ended
		December 31,
		2008				2008
Revenues		$	516			$	2,509
Expenses:
Residence operations (exclusive of depreciation and amortization and residence lease expense shown below)			555				2,206
Residence lease expense			(3	)			(10	)
Depreciation and amortization			97				377
Total operating expenses			649				2,573
Loss from operations			(133	)			(64	)
Other expense:
Interest income			2				16
Interest expense			(139	)			(578	)
Loss from discontinued operations before income taxes			(270	)			(626	)
Income tax benefit			100				232
Net loss from discontinued operations		$	(170	)		$	(394	)