#1Citi Banking, Capital Markets & Advisory | Real Estate & Lodging February 2, 2023 Project Newbury Presentation to the Special Committee Strictly Private and Confidential cíti#2Disclaimer The accompanying pages contain material provided to the Special Committee (the "Special Committee") of the Board of Directors of AlerisLife Inc. ("Aleris", "ALR" or the "Company") by Citigroup Global Markets Inc. ("Citi") in connection with a potential transaction involving AlerisLife and ABP Trust ("ABP"), of which Adam Portnoy is a principal. The accompanying material was compiled or prepared on a confidential basis solely for the use of the Special Committee and not with a view toward public disclosure under any securities laws or otherwise. The information contained in the accompanying material was obtained from the Company and other sources. Any estimates and projections contained herein have been prepared or adopted by management of the Company, obtained from public sources, or are based upon such estimates and projections, and involve numerous and significant subjective determinations, and there is no assurance that such estimates and projections will be realized. Citi does not take responsibility for such estimates and projections, or the basis on which they were prepared. No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. In preparing the accompanying material, Citi assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi and upon the assurances of the management of the Company that it is not aware of any relevant information that has been omitted or that remains undisclosed to Citi. The accompanying material was not prepared for use by readers not as familiar with the Company as the Special Committee and, accordingly, neither the Company nor Citi nor their respective legal or financial advisors or accountants take any responsibility for the accompanying material if used by persons other than the Special Committee. The accompanying material is necessarily based upon information available, and financial, stock market and other conditions and circumstances existing and disclosed, to Citi as of the date of the accompanying material. Citi does not have any obligation to update or otherwise revise the accompanying material. Nothing contained herein shall be construed as legal, tax or accounting advice. 1 cíti#31. Situation Overview#4Situation Overview • Aleris Life Inc. (Nasdaq: "ALR"), f/k/a Five Star Senior Living Inc., operates an evolving portfolio of residential and lifestyle services for older adults 2 • Facing financial and operational difficulties, ALR began restructuring its business in 2019 by reaching an agreement with its main landlord, Diversified Healthcare Trust (Nasdaq: "DHC"), f/k/a as Senior Housing Properties Trust, to restructure the business arrangement between the parties - In addition to the replacement of master leases with management agreements, the agreement provided for the issuance of ALR stock to DHC (externally managed by The RMR Group LLC, a subsidiary of The RMR Group Inc. (collectively, "RMR")), resulting in DHC becoming a significant shareholder of AlerisLife (currently owning 32.8% of ALR's common stock) • ABP Trust ("ABP"), a private entity owned and controlled by Adam Portnoy, approached ALR in late 2022 with the intention to acquire ALR in coordination with DHC in an all-cash transaction (2) (3) (4) Separately, ALR has a business management agreement with RMR - Following several weeks of negotiations, ABP proposed an offer price of $1.31 per share, representing a premium of approximately 62% over the closing share price on February 2, 2023 Capitalization As of Year End 2022 ($ in millions, except per share data) Share Price Fully Diluted Shares Outstanding (2) Total Implied Equity Capitalization Mortgage Notes Senior Secured Term Loan Total Debt (-) Cash and Cash Equivalents(3 Net Debt Total Implied Enterprise Value (TEV) Selected Implied EBITDA Multiples TEV / 2022E EBITDA TEV / 2023E EBITDA Source: ALR Management, public filings, press releases and FactSet as of 02/02/2023. Note: ALR projections and 2022 YE capitalization per ALR management as of February 2023. "NM denotes not meaningful. (1) At Market share price as of 02/02/2023. TEV / 2024E EBITDA Selected Implied Leverage Multiples Net Debt / 2023E EBITDA Fully diluted shares outstanding as of 02/02/2023 per ALR management. 2022 YE cash balance of $49.6 excluding cash held by ALR's captive insurance entity and not readily available for general operating purposes per ALR management. EBITDA burdened by non-cash stock-based compensation. 2022E EBITDA includes three quarters of actuals and one quarter of projections. Statistic(4) ($15.6) 4.3 18.0 At Market $0.81(¹) 33.5 $27.1 6.4 67.6 $74.0 (49.6) $24.4 $51.5 Metric NM 11.9x 2.9 5.6x At Transaction $1.31 33.5 $43.8 6.4 67.6 $74.0 (49.6) $24.4 $68.2 Metric NM 15.7x 3.8 5.6x cíti#5Timeline of Transaction Events 3 Late 2022 Dec. 22, 2022 Jan. 6, 2023 Jan. 9, 2023 Jan. 11, 2023 Weeks of Jan. 16 and Jan. 23, 2023 Jan. 26, 2023 Feb. 1, 2023 Feb. 2, 2023 ● ● ● ALR's Board of Directors was made aware of ABP's intention to acquire all of the outstanding shares of common stock of ALR that it does not already own ABP conveyed a verbal all-cash offer to acquire all shares of ALR not already owned by ABP for $0.95 per share Indicated that based on discussions, DHC (a 32.8% shareholder) will enter into a tender and assignment agreement with ABP Each of ABP and DHC have stated that it will not sell shares of AlerisLife common stock held by it to any other party ABP separately indicated that it would like to effect the transaction via a tender offer subject to a negotiated merger agreement After its initial evaluation of the proposal, the Special Committee authorized a response to ABP that the Special Committee would be willing to consider a potential transaction at a higher price ABP responded with a proposal of $1.05 per ALR share, which was subsequently raised to $1.10 on the same day ABP also clarified that the tender offer is expected to be subject to a minimum acceptance condition of a majority of the outstanding ALR shares, followed by a short-form merger Separately, ABP represented that it would fund the transaction through cash on hand and offered to provide documentation evidencing availability of such funds Special Committee evaluated the revised proposal and indicated its general interest in continuing to evaluate a potential transaction with ABP subject to completion of its due diligence on ALR ALR management provided detailed information on ALR's tax attributes as well as further information to support the financial due diligence conducted on behalf of the Special Committee sent an unsolicited proposal to ALR indicating its desire to acquire ALR Letter lacked support for proposed offer price per share, level of committed funding sources, due diligence undertaken to date and level of expertise in public company transactions Special Committee determined that the proposal from was not creditable Separately, the Special Committee articulated the desire to ask ABP to (a) increase its proposal and (b) drop the termination fee In subsequent discussions, ABP proposed a revised offer of $1.20 per ALR share and agreed to drop the termination fee Management provided further due diligence information around the year-end 2022 balance sheet position and share count Based upon review of such information the Special Committee decided to discuss those findings and its implications with ABP ABP subsequently agreed to increase its proposed offer price to $1.31 per ALR share citi#6ALR Share Price Development Over Time ALR Share Price and Daily Trading Volume Share Price 4 $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 Daily Trading Volume (in 000s): 12/1/22 12/8/22 December 22, 2022: Initial ABP Proposal of $0.95 Source: FactSet as of 02/02/2023. 12/15/22 12/22/22 12/29/22 January 9, 2023: Revised ABP Proposal of $1.10 1/5/23 February 1, 2023: Revised ABP Proposal of $1.20 1/12/23 February 2, 2023: Revised ABP Proposal of $1.31 1/19/23 $0.81 January 26, 2023: Unsolicited Proposal by 1/26/23 1,200 1,000 800 600 400 200 0 2/2/23 Daily Trading Volume (000s) cíti#7Summary of Selected Transaction Terms 5 Structure Consideration Deal Protection Certain Closing Conditions Certain Termination Rights Expense Reimbursement ● ● ● Acquisition by ABP of AlerisLife through a tender offer by a wholly owned subsidiary of ABP Acquisitions LLC ("Parent" and, such subsidiary, "Purchaser") for all outstanding shares of AlerisLife common stock not owned directly or indirectly by Parent, Purchaser and certain other persons (the "Tender Offer"), followed by the merger of Purchaser with and into AlerisLife, with AlerisLife continuing as the surviving corporation (the "Merger" and, taken together with the Tender Offer as an integrated transaction, the "Transaction") - As of September 30, 2022, ABP owned approximately 5.5% of outstanding shares of AlerisLife common stock(1) $1.20 per share of AlerisLife common stock payable in the Transaction, to be funded with cash on hand - Implies $40.2mm AlerisLife equity market capitalization No-shop obligation, subject to ability of AlerisLife Board or Special Committee to make an adverse recommendation change or terminate the merger agreement in connection with a superior proposal or make an adverse recommendation change in connection with an intervening event (unrelated to an acquisition proposal), in each case, after affording Parent matching rights Tender of shares of Aleris common stock that, together with such shares owned by any person that directly or indirectly owns the outstanding equity interests of Purchaser, or any wholly owned subsidiary of Parent, represents at least a majority of the then-outstanding shares of AlerisLife common stock at the Tender Offer expiration time No AlerisLife material adverse effect Receipt of DHC consent (required pursuant to master management agreement with AlerisLife and also containing an agreement by DHC to tender its shares of AlerisLife common stock into the Tender Offer and the right of DHC to purchase, prior to December 31, 2023, shares of the surviving corporation equal to the number of shares of AlerisLife common stock held by DHC immediately prior to the Tender Offer acceptance time based on the $1.20 per share consideration) and MidCap consent (required pursuant to a credit and security agreement with AlerisLife and related documents) Consummation of the Tender Offer (in the case of the Merger) By AlerisLife or Parent if (i) Tender Offer acceptance time has not occurred by 11:59 p.m., Eastern time, on a specified date or (ii) final and non-appealable legal restraint is imposed prohibiting consummation of the Tender Offer By Parent if (i) AlerisLife Board or Special Committee makes an adverse recommendation change, (ii) AlerisLife breaches merger agreement giving rise to a condition failure or (iii) the Tender Offer expires without acceptance for payment of shares of AlerisLife pursuant to the Tender Offer when all offer conditions have been satisfied or waived (other than the minimum acceptance condition) By AlerisLife (i) to accept a superior proposal, (ii) if Parent breaches merger agreement giving rise to a condition failure or (iii) if Purchaser fails to accept for payment all shares of AlerisLife common stock tendered pursuant to the Tender Offer Expense reimbursement of up to $750,000 if merger agreement is terminated (i) in connection with an adverse recommendation change or to accept a superior proposal or (ii) (A) because the Tender Offer fails to close by the outside date, AlerisLife breaches merger agreement giving rise to condition failure or the Tender Offer expires without acceptance for payment of shares of AlerisLife pursuant to the Tender Offer when all offer conditions have been satisfied or waived (other than the minimum acceptance condition), (B) an acquisition proposal has been publicly disclosed and not withdrawn and (C) a definitive agreement in respect of an acquisition proposal is entered into, or an acquisition proposal is consummated, within 12 months of such termination citi Source: Draft, dated February 1, 2023, of Agreement and Plan of Merger and ALR Management. Separately, Adam Portnoy, a principal of ABP, owns 0.2% of the outstanding AlerisLife common stock and is the majority owner of RMR, which owns 0.5% of AlerisLife common stock.#82. Company Financial Projections#9Selected Assumptions Underlying Financial Projections for ALR Senior Living Communities - Owned Portfolio Lifestyle Services Assumptions Management Fees Revenue G&A Acq. & Disp. Of Property & Equipment Net Working Capital ● ● Source: ALR Management as of 02/02/2023. Average occupancy for the owned portfolio is forecasted to increase 780 bps (Average Daily Census, "ADC," increase of 164) in 2023, 500 bps (ADC increase of 105) in 2024, 320 bps (ADC increase of 67) in 2025, 170 bps (ADC increase of 36) in 2026 and 60 bps (ADC increase of 13) in 2027 RevPOR is forecasted to increase 11% in 2023, 9% in 2024, 5% in 2025 and 3% in 2026 and 2027 Residential wages and benefits as a percentage of residential revenues are forecasted to decrease to 62% in 2023, 59% in 2024 and 58% from 2025 through 2027 Decrease in wages and benefits as a percentage of revenues will be driven by the operational efficiencies and increase in occupancy Other residential operating expenses as a percentage of residential revenues are forecasted to decrease to 35% in 2023, 30% in 2024 and 27% from 2025 through 2027 Forecast assumes opening of 18 Ageility outpatient locations in 2023 and 9 Ageility outpatient locations in 2024 Years 2025 through 2027 assume focus on growing revenues at existing locations Revenue is forecasted to grow 1% quarterly from 2025 through 2027 Residential management fee revenue is driven by average occupancy growth of 600 bps (ADC increase of 1,100) in 2023, 480 bps (ADC increase of 849) in 2024, 240 bps (ADC increase of 439) in 2025, 130 bps (ADC increase of 227) in 2026 and 50 bps (ADC increase of 88) in 2027 RevPOR is forecasted to increase 7% in 2023, 11% in 2024, 5% in 2025 and 3% in 2026 and 2% in 2027 Forecast assumes fee eligible capital spend of approximately $100 million each year on behalf of managed communities Forecast does not assume DHC exercises any contractual termination rights in the case that profitability at any managed community drops below a contractually defined threshold Management fee revenues does not include potential to earn 15% incentive fees on excess of portfolio EBITDA target. G&A expenses forecasted as ~31% of total revenue (excl. reimbursements) in 2023E, decreasing to -28% by 2027E G&A expenses forecasted to decrease -16% in 2023E and increase -3% in 2024E, -4% in 2025E, -3% in 2026 and -2% in 2027E Acquisition and Disposition of Property and Equipment expense of $16.4mm in 2023E, $8.4mm in 2024E, and $6.0mm thereafter Increase in Net Working Capital of $1.0mm in 2023E, $2.1mm in in 2024E, $0.6mm in 2025E, $0.3mm in 2026E, and $0.1mm in 2027E citi#10ALR Financial Projections ($ in millions) Lifestyle Services Revenue Residential Revenue Residential Management Fee Revenue Incentive Fees Other Operating Income Total Revenue (Excl. Reimbursements) (YoY% Growth) Reimbursed Costs Incurred on Behalf of Managed Communities Other Reimbursed Expenses Total Revenue (Yo Y% Growth) Lifestyle Service Expenses Residential Living Wages and Benefits Other Residential Operating Expenses Rent Expense General and Administrative Expenses Restructuring Expenses Cash Expenses (Excl. Reimbursed Costs) (YoY% Growth) Reimbursed Costs Incurred on Behalf of Managed Communities Total Cash Expenses (Yo Y% Growth) Other Adjustments) EBITDA (EBITDA Margin %) Depreciation and Amortization EBIT 7 Interest and Other Expense Interest, Dividend and Other Income Profit Before Tax Memo: Acquisition and Disposition of Property and Equipment, net Change in Net Working Capital Stock Based Compensation Expense(3) Source: ALR Management as of 02/02/2023. Note: - denotes not applicable. 2020A $82.0 77.0 62.9 3.4 $225.4 $916.2 25.6 $1,167.2 ($66.3) (41.8) (27.5) (1.3) (86.9) (0.3) ($224.1) ($916.2) ($1,140.2) ($22.0) $4.9 2.2% ($11.0) ($6.1) (1.6) 0.8 ($6.9) 2021A $68.0 64.6 47.5 7.8 $187.9 $722.9 31.6 $942.4 ($59.3) (39.0) (30.3) (86.0) (18.9) ($233.5) ($722.9) ($956.4) ($2.5) ($16.5) (8.8%) ($11.9) ($28.4) (1.7) 0.4 ($29.7) 3Q 2022 LTM $59.0 63.9 36.9 1 0.0 $159.7 $533.5 14.7 $708.0 ($56.0) (36.5) (26.0) (72.0) (4.3) ($194.7) ($533.5) ($728.3) ($1.4) ($21.6) (13.5%) ($12.5) ($34.1) (4.1) 0.5 ($37.6) -(1) 2022E $58.9 67.5 37.0 0.0 $163.3 $534.7 14.8 $712.9 ($56.7) (39.2) (24.5) (69.1) (3.0) ($192.4) ($534.7) ($727.1) ($1.4) ($15.6) (9.5%) ($13.0) ($28.6) (5.3) 0.4 ($33.4) 2023E $60.2 82.4 41.6 $184.2 $570.6 16.5 $771.3 ($58.9) (50.9) (28.5) (58.0) (0.1) ($196.4) ($570.6) ($767.0) $4.3 2.4% ($15.0) ($10.7) (6.3) ($17.0) $16.4 1.0 2.0 2024E $63.2 95.4 48.3 $206.9 12.3% $631.3 17.2 $855.4 10.9% ($61.3) (56.7) (28.3) (59.7) ($206.1) 4.9% ($631.3) ($837.4) 9.2% $18.0 8.7% ($15.5) $2.5 (7.2) ($4.6) $8.4 2.1 2.0 Projections 2025E $67.0 103.8 51.6 $222.3 7.5% $631.9 17.4 $871.7 1.9% ($65.3) (60.4) (28.1) (62.3) ($216.2) 4.9% ($631.9) ($848.1) 1.3% $23.6 10.6% ($15.5) $8.0 (7.5) $0.5 $6.0 0.6 2.0 2026E $68.3 108.7 53.7 $230.7 3.8% $638.4 17.9 $886.9 1.8% ($66.6) (63.1) (29.4) (63.9) ($223.0) 3.1% ($638.4) ($861.3) 1.6% $25.6 11.1% ($16.7) $8.9 (7.4) $1.5 $6.0 0.3 2.0 2027E $69.7 112.5 55.0 $237.2 2.8% $656.3 18.3 $911.8 2.8% ($68.0) (64.9) (30.7) (65.4) ($229.0) (1) Includes three quarters of actuals and one quarter of projections. (2) Other Adjustments includes Loss on Termination of Leases, Unrealized Gain on Equity Investments, Realized Gain (Loss) on Sale of Debt Equity Investments (net of tax), and Equity in Earnings (Losses) of an Investee. (3) Included in General & Administrative Expenses. 2.7% ($656.3) ($885.2) 2.8% $26.5 11.2% ($17.9) $8.6 (6.8) $1.8 $6.0 0.1 2.0 '23E-'27E CAGR 3.7% 8.1 7.2 6.5% 3.6% 2.6 4.3% 3.6% 6.3 1.8 3.0 3.9% 3.6% 3.7% 57.3% 29.4% 20.5% cíti#11ALR Estimated Federal Taxable Income Summary ($ in millions) Profit Before Tax Total Book to Tax Adjustments (1) Taxable Income (Loss) before NOL Utilization Net Operating Loss Deduction (2) Estimated Tax Rate (3) Estimated Tax Amount 8 Memo: NOLs at Year End 2021A ($29.7) ($2.6) ($32.3) 26% $120.9(4) 2022E ($33.4) $11.9 ($21.6) 26% $142.5 2023E ($17.0) $9.3 ($7.7) 26% $150.1 2024E Marginal tax rate of 26% based on 21% federal income tax rate and 5% state income tax as per ALR Management. Includes $5.8mm of federal NOLS generated prior to the change-of-control restructuring in early 2020, restricting those NOLS to a utilization rate. ($4.6) $8.5 $3.9 ($3.1) 26% $0.2 $147.0 Source: ALR Management as of 02/02/2023. Comprised primarily of adjustments related to tax depreciation, business interest expense, gains/losses on asset sales and unrealized gains/losses on investments. (2) Post TCJA (Tax Cuts and Jobs Act) losses, limited to 80% of taxable income. (3) 2025E $0.5 $7.2 $7.7 ($6.2) 26% $0.4 $140.8 2026E $1.5 $6.8 $8.3 ($6.7) 26% $0.4 $134.2 2027E $1.8 $6.5 $8.3 ($6.7) 26% $0.4 $127.5 citi#123. Financial Analysis#13ALR Financial Analysis Summary For informational Purposes Discounted Cash Flow Analysis Selected Precedent Transactions Analysis Select Public Companies (4) Selected 13E-3 Precedent Transactions Market Statistics Methodology Unlevered DCF (Incl. and Excl. NOL Utilization) EV / NTM EBITDA EV / 2023E EBITDA Offer Premium to Unaffected Share Price 1-Year High/Low 6-Month High/Low 3-Month High/Low Implied Per Share Equity Value Reference Range $1.54 Range Excl. NOL Utilization $1.00 $0.55 $0.88 $0.55 $1.19 $0.55 $1.00 $1.34 $1.39 $1.17 $1.78 Range Incl. NOL Utilization $0.95 $2.11 $1.71 Offer Price: $1.31 Source: ALR Management, press releases, Wall Street Research and FactSet as of 02/02/2023. Shown for informational purposes. Implied firm value calculated using YE 2022 net debt balance of $24.4mm and fully diluted shares outstanding of 33.5mm as of 02/02/2023 as provided by ALR management. (2) (3) (4) $2.96 Implied Firm Value ($mm)(¹) $57.7 -$84.02) $58.0-$70.9 $69.2 - $95.1 $53.7-$63.4 $42.8-$123.4 $42.8-$81.6 $42.8-$56.2 Commentary • WACC range of 17.7% -19.8% ● Terminal year perpetuity growth rate range of 1.0% to 3.0% • Selected multiples range of 9.2x - 11.2x and ALR mgmt. 2023E EBITDA of $6.3mm (3) • Selected multiples range of 10.9x - 15.0x and ALR mgmt. 2023E EBITDA of $6.3mm(3) • Based on 25th to 75th percentile offer premium range of 8.2% to 43.9% and ALR unaffected closing share price of $0.81 on 02/02/2023 Based on Implied Per Share Equity Value range of $1.00 to $1.78. Represents ALR Adj. EBITDA not burdened by $2.0mm annual Stock-Based Compensation expense. Selected public companies include BKD, SNDA, ENSG and PNTG. cíti#14Discounted Cash Flow Analysis Assumptions • Terminal year perpetuity growth rate of 1.0% to 3.0% • Cash flows discounted to 12/31/2022 using discount rate range of 17.7% to 19.8% • Excludes any tax attributes Total Revenue (Excl. Reimbursements) EBITDA(¹) % Growth (-) Depreciation and Amortization EBIT (-) Income Taxes (2) NOPAT (+) Depreciation and Amortization (-) Acq. & Disp. of Property & Equipment, net (-) Increase in Net Working Capital Unlevered Free Cash Flow % Growth Implied Enterprise Value (@WACC of 18.8% and Perpetuity Growth Rate of 2.0%) Unlevered Free Cash Flows (2023E-27E) PV of Unlevered Free Cash Flows Terminal Year FCF Terminal Year Value Discount Factor PV of Terminal Value 2023E $184.2 $4.3 (15.0) ($10.7) ($10.7) 15.0 (16.4) (1.0) ($13.0) $43.9 $19.0 18.5 110.4 0.42x $46.7 Period Ending December 31 2024E 2025E $65.7 (24.4) $41.4 33.5 $1.24 $206.9 $18.0 315.7% (15.5) $2.5 (0.7) $1.9 15.5 (8.4) (2.1) $6.8 ΝΑ Discount Rate 17.7% $222.3 $23.6 18.8% 30.8% Sensitivity Implied Equity Value Per Share 19.8% (15.5) $8.0 (2.1) $6.0 15.5 (6.0) (0.6) $14.9 117.3% 1.0% $1.31 1.14 2026E 1.00 $230.7 $25.6 8.6% Implied Enterprise Value (-) Net Debt Implied Equity Value Fully Diluted Share Count Implied Equity Value Per Share Source: AlerisLife Management as of 02/02/2023. Note: Aleris Life YE 2022 capitalization per ALR management as of February 2023. ALR's net debt balance of $24.4mm excludes cash held by ALR's captive insurance entity per ALR management. (1) ALR EBITDA burdened by annual Stock-Based Compensation expense of $2.0mm, included in General & Administrative expense. 10 (2) Marginal tax rate of 26% based on 21% federal income tax rate and 5% state income tax. Analysis assumes no further tax attributes utilized during forecast period. (16.7) $8.9 (2.3) $6.6 16.7 (6.0) (0.3) $17.0 14.2% 2.0% Perpetuity Growth Rate $1.42 1.24 1.07 2027E $237.2 $26.5 3.7% (17.9) $8.6 (2.2) $6.4 17.9 (6.0) (0.1) $18.1 6.8% Terminal Year $18.5 2.0% 3.0% $1.54 1.34 1.16 citi#15Discounted Cash Flow Analysis of Tax Attributes Assumptions • NOL utilization during forecast period as projected by management; post forecast period perpetuity growth rate of 1.0% to 3.0% Savings from NOLS are discounted to 12/31/2022 using discount rate range of 17.7% to 19.8% ALR Management Forecast Extrapolated Forecast 2023E 2024E 2025E 2026E 2027E 2028F 2029F 2030F 2031F 2032F 2033 2034F 2035F 2036F 2037F 2038F 2039F 2040F 2041F 2042F 2043F 2044F (S in millions) Profit Before Tax Total Book to Tax Adjustments(¹) Taxable income (Loss) before NOL Utilization NOL Utilization¹2) Annual Growth (%) Implied Savings from NOLS Memo: Federal NOLS (EOY) 2021A 20228 ($29.7) ($33.4) ($2.6) $11.9 11 ($17.0) ($32.3) ($21.6) ($7.7) $9.3 PV of Total NOL Savings (2023 Onward) Fully Diluted Share Count Implied NOL Savings Per Share ($4.6) $8.5 $3.9 ($3.1) $0.8 $0.5 $7.2 $7.7 Implied Savings From NOLS (@WACC of 18.8% and Perpetuity Growth Rate of 2.0%) $1.6 $1.5 $6,8 $8.3 $1.8 ($6.2) ($6.7) ($6.7) ($6.8) $1.7 $6.5 $8.3 $1.7 2.0% $1.8 $120.93) $142.5 $150.1 $147.0 $140.8 $134.2 $127.5 $120.7 $113.8 ($6.9) ($7.1) ($7.2) ($7.3) ($7.5) ($7.6) 2.0% $1.8 $7.2 $106.8 33.5 2.0% $0.22 $1.8 2.0% $1.9 $99.6 2.0% Discount Rate $1.9 $92.2 2.0% $1.9 $84.7 17.7% 18.8% 19.8% 2.0% $2.0 (2) (3) Includes $5.8mm of Federal NOLS generated prior to the change-of-control restructuring in early 2020, restricting those NOLS to a utilization rate. ($7.8) ($8.0) ($8.1) 2.0% Sensitivity Implied NOL Savings Per Share $2.0 2.0% Source: AlerisLife Management as of 02/02/2023. Comprised primarily of adjustments related to tax depreciation, business interest expense, gains/losses on asset sales and unrealized gains/losses on investments. Post TCJA losses, limited to 80% of taxable income. $2.1 $77.1 $69.3 $61.3 $0.23 0.21 2.0% 0.20 $2.1 ($8.3) 2.0% $2.2 $53.2 $44.9 ($8.4) ($8.6) ($8.8) ($9.0) ($9.1) ($1.0) 2.0% $2.2 2.0% $2.2 $36.5 $27.9 $19.1 $0.23 2.0% Perpetuity Growth Rate of NOL Utilization 1.0% 2.0% 0.22 $2.3 0.20 2.0% $2.3 $10.1 2.0% $2.4 $1.0 $0.3 3.0% $0.24 0.22 0.21 cíti#16Selected Precedent Transactions Analysis Healthcare Operator Transactions ($ in millions) Acquiror Cogir Management U.S. Physical Therapy, Inc. Lee Equity Partners / Coastwood Senior Discovery Senior Living Housing Partners Conversant Capital LLC(¹) Sonida Senior Living Atria Senior Living (3) Holiday Retirement RCCH HealthCare Partners KKR ProMedica / Welltower Humana, Inc.; TPG Capital and Welsh, Carson, Anderson & Stowe Kindred Healthcare, Inc. Genesis Healthcare, LLC Brookdale Gentiva Health Services, Inc. High Mean Median Low Target Cadence Living 14-Clinic Physical Therapy Practice 12 LifePoint Health, Inc. Envision Healthcare Corporation HCR ManorCare Kindred Healthcare, Inc. Gentiva Health Services, Inc. Skilled Healthcare Group, Inc. Emeritus Corporation Harden Healthcare Holdings, Inc. Primary Business Senior Living Physical Therapy Senior Living Senior Living Senior Living Inpatient / Outpatient/ Post-Acute Services Post-Acute Care Post-Acute Services / Long-Term Care Post-Acute & Rehabilitation Services Post-Acute & Rehabilitation Services Skilled Nursing Senior Living Post-Acute & Rehabilitation Services Ale risLife 2023E EBITDA $6.3(5) Announcement Date Nov-22 Nov-22 Oct-22 Oct-21 Jun-21 Jul-18 Jun-18 Apr-18 Dec-17 Feb-15 Aug-14 Jul-14 Sep-13 Low (6) 9.2x Deal Value ($mm) ΝΑ EV / NTM EBITDA $32 ΝΑ $155(2) ΝΑ $5,600 $9,9004) $5,749 $4,100 $1,800 High (6) 11.2x ΝΑ $1,400 $409 EV / NTM EBITDA NA ΝΑ ΝΑ 10.3x(2) ΝΑ ΝΑ $58.0 (24.4) $33.6 33.5 $1.00 10.1x4 NA ΝΑ ΝΑ ΝΑ ΝΑ ΝΑ (4) 10.3x 10.2 10.2 10.1 For informational purposes: EV / LTM EBITDA NA ΝΑ NA 6.5x(2) Implied Equity Value Per Share Low High ΝΑ 8.5x 10.9x (4) 16.8x $70.9 (24.4) $46.5 33.5 $1.39 10.0x 9.3x 14.1x 9.8x 11.1x AlerisLife Implied Firm Value (-) Net Debt Implied Equity Value FDSO AlerisLife Implied Equity Value Per Share Source: AlerisLife Management, press releases, public filings, Wall Street research and S&P Capital IQ as of 02/02/2023. Note: "NA" denotes not publicly available. Metrics other than EV/NTM EBITDA shown for informational purposes. (1) (2) In October 2021, Sonida Senior Living (f/k/a Capital Senior Living) announced that it had entered into an Amended and Restated Investment Agreement with affiliates of Conversant Capital LLC whereby it would raise a total of $154.8mm through various financing transactions with Conversant. Represents NTM EBITDA based on actual Q4 2021-Q3 2022 Adj. EBITDA of $15.1mm, as reported by Sonida Senior Living. Adj. EBITDA not burdened by Stock-Based Compensation expense. No EBITDA projections available for Sonida since 2019, NTM EBITDA multiple calculated as transaction value of $155mm divided by NTM EBITDA of $15.1mm. LTM EBITDA multiple calculated as $155mm divided by Q4 2020-Q3 2021 reported Adj. EBITDA of $24mm. In June 2022, Atria Senior Living acquired the management services business of Holiday Retirement for an undisclosed price, while Welltower purchased the 86 properties that Holiday owned and self-managed for $1.58bn. Represents NTM EBITDA based on transaction value of $9.9bn and NTM EBITDA multiple of 10.1x, as disclosed in public filings. LTM EBITDA multiple of 10.9x as disclosed in public filings. (3) (4) (5) Represents ALR Adj. EBITDA not burdened by $2.0mm annual Stock-Based Compensation expense. cíti (6) EV/NTM EBITDA range based on +/-10% of median NTM EBITDA multiple of 10.2x.#17Appendix (For Informational Purposes) cíti#18Selected Public Companies ($ in millions, expect per share values) Company Brookdale Senior Living Inc. Sonida Senior Living, Inc. Ensign Group, Inc. The Pennant Group, Inc. High Mean Median Low For informational purposes: AlerisLife Inc.(¹) Share Price as of 02/02/23 13 $2.87 13.64 93.98 12.76 $0.81 AlerisLife Implied Firm Value (-) Net Debt Implied Equity Value FDSO AlerisLife Implied Equity Value Per Share (EV / 2023E EBITDA) Fully Diluted Market Cap $537.4 91.0 5,260.3 378.7 $27.1 AlerisLife 2023E Adj. EBITDA $6.3 (2) Firm Value $3,996.1 772.3 5,098.1 437.7 $51.5 EV / 2023E Revenue EV / 2023E Adj. EBITDA (x) Low (x) 10.9x 1.3x ΝΑ 1.5 0.9 1.5x 1.2 1.3 0.9 0.3x High (x) 15.0x EV / 2023E EBITDA 15.0x ΝΑ 11.9 10.9 15.0x 12.6 11.9 10.9 8.1x(2) 2023E EBITDA Margin (24.4) $44.9 33.5 $1.34 8.9% Source: AlerisLife Management, public filings, and FactSet as of 02/02/2023. Note: ALR YE 2022 capitalization and projections per ALR management as of February 2023. Financials and projections per public filings and FactSet for selected companies. Metrics other than EV / 2023E EBITDA shown for informational purposes. "NA" denotes not publicly available. (1) Based on ALR Management forecast. (2) Represents ALR Adj. EBITDA not burdened by $2.0mm annual Stock-Based Compensation expense. ΝΑ 12.7 8.1 12.7% 9.9 Implied Equity Value Per Share Low High $69.2 8.9 8.1 2.4x $95.1 (24.4) $70.7 33.5 $2.11 cíti#19Selected Public Healthcare Operators A Alerislife Never stop advancing ($ in millions) Portfolio Business Mix Selected Financial Metrics Profitability & Growth Outlook Primary Business Geographic Diversity Facility Types Community Mix (% of Total Communities) Owned Leased Managed Business Mix (% of 3Q22 Revenue) Senior Living Home Care Facility-Based Services Hospice Other (3) Enterprise Value Market Capitalization Net Debt / LTM EBITDA Price / 2023E EPS Revenue Growth 2023E-2024E 2023E EBITDA 2024E EBITDA 2025E EBITDA EBITDA Growth 2023E-2024E EBITDA Growth 2024E-2025E Senior Living / Rehabilitation 30 States 140 Senior Living Communities/ 203 Outpatient Locations/ 8 Inpatient Clinics 14% O 86% 35% 65% $51(4) 27(4) NM NM 12.3% $4.3 18.0 23.6 315.7% 30.8 BROOKDALE SENIOR LIVING- Senior Living 41 States 672 Senior Living Communities 51% 100% $3,996 537 13.4x NM 7.7% $266.2 329.7 ΝΑ 23.8% ΝΑ 45% Sonida SENIOR LIVING Senior Living 18 States 76 Senior Living Communities O 18% O 100% $772 91 NM NM ΝΑ ΝΑ ΝΑ ΝΑ 82% ΝΑ ΝΑ Source: Public filings as of 09/30/2022 and FactSet as of 02/02/2023. Note: ALR financial information per ALR management. "NA" denotes not publicly available. (1) Pennant's subsidiaries lease and operate but do not own the underlying real estate of the operations. Pennant does not own any operating assets. (2) -1% of Facility-Based Services comes from the Windsong Home Health brand. (3) "Other" for Ensign includes real estate under Standard Bearer that is leased to skilled nursing and senior living operators. 14 (4) YE capitalization per ALR management, YE estimated net debt balance of $24.4mm excludes cash held by ALR's captive insurance entity per ALR management. ENSIGN Post-Acute Care 22 States 206 Central Locations 27% 73% 2% 4% 94% $5,098 5,260 NM 20.1 7.5% $428.4 GROUP 468.6 511.1 9.4% 9.1 ΡΕΝΝΑΝΤ Home Health / Hospice /Senior Living 14 States 94 HH&H Agencies/ 49 Senior Living Facilities 100% (¹) 34% 28% 38% $438 379 3.2x 17.5 6.7% $40.0 43.9 49.7 GROUP 9.6% 13.4 cíti#20Selected 13E-3 Precedent Transactions All Industries excl. Energy(¹) Ann. Date Acquiror 5/25/2022 Axar Capital Management LP 8/30/2021 Geneve Holdings Inc 7/2/2021 Banco Santander, S.A. 11/12/2020 Sumitovant Biopharma Ltd 9/4/2020 Farm Bureau Property & Casualty 8/31/2020 konis Pharmaceuticals 8/19/2020 Dufry AG 11/27/2019 KYOCERA Corp 4/23/2019 Sonic Financial Corp 3/4/2019 BBX Capital Corp 11/16/2018 Employers Mutual Casualty Co 11/9/2018 NASCAR Media Group LLC 6/19/2018 Roche Holding AG 1/9/2018 Michael Karfunkel Family 2005 Trust 3/9/2016 Hallmark Cards Inc 3/7/2016 American Financial Group Inc 2/29/2016 Icahn Enterprises LP 1/15/2016 Existing Management 2/5/2014 Great American Insurance Group 2/19/2013 Chiesi Farmaceutici SpA 12/13/2012 Sprint Nextel Corp 11/28/2012 Danfoss A/S 11/14/2011 BFC Financial Corp 11/1/2010 CNA Financial Corporation 8/26/2010 Berkshire Hathaway Inc 12/22/2009 Danfoss Acquisition Inc. 9/9/2009 Tilman J. Fertitta 1/18/2005 Liberty Media 3/18/2002 Network Associates Inc. 8/30/2000 AXA SA 75th Percentile Average Median 25th Percentile For informational purposes: Pending ABP Trust 15 Target StoneMor Inc Independence Holding Co Santander Consumer USA Holdings Inc Urovant Sciences Ltd FBL Financial Group Inc Akcea Therapeutics Inc Hudson Ltd AVX Corp (1) Speedway Motorsports Inc Bluegreen Vacations Corp EMC Insurance Group Inc International Speedway Corp Foundation Medicine Inc Amtrust Financial Services Inc Crown Media Holdings Inc National Interstate Corp Federal-Mogul Holdings Corporation Synutra International Inc National Interstate Corporation Cornerstone Therapeutics Inc Clearwire Corp Sauer-Danfoss Inc Bluegreen Corp CNA Surety Corporation Wesco Financial Corp. Sauer-Danfoss Inc. Landry's Restaurants Inc. UnitedGlobalCom Inc. McAfee.com Corp. AXA Financial Inc. AlerisLife Inc. Consideration % Cash 100% 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 20 52 65 100% ALR Unaffacted Share Price $0.81 % Stock AlerisLife Implied Equity Value Per Share Source: Deal Point Data, FactSet and public filings as of 02/02/2023. Note: Selected announced transactions from January 1, 2000, to August 5, 2022, where acquiror with > 50% existing ownership stake in a U.S. public company target acquired the remaining stake it did not already own in the target company. Excludes transactions with 100% cash consideration announced prior to January 1, 2010, Metrics other than unaffected premium shown for informational purposes. Excludes transactions where target company operates in energy, metals & mining or chemicals industry. 80 48 35 Existing Deal Value Own. (%) (Smm) 72% 63 80 72 61 76 57 72 72 90 54 84 57 51 90 51 82 64 52 58 50 76 54 62 80 76 55 53 75 60 39%(3) $428 313 2,512 169 587 445 303 1,031 900 115 356 1,167 2,261 1,447 176 312 305 128 290 112 3,330 693 157 478 545 156 178 3,618 230 11,189 $68 Price Per Share Initial Final $3.50 57.00 41.50 16.25 61.00 18.15 7.70 $3.50 50.00 39.00 16.25 47.00 15.50 6.25 19.50 18.00 16.00 30.00 42.00 133.00 12.25 5.05 30.00 7.00 5.91 28.00 6.55 2.60 49.00 5.70 22.00 353.00 10.10 13.00 9.34 7.43 49.44 $0.95 21.75 19.75 16.00 36.00 45.00 137.00 14.75 5.05 32.50 10.00 6.05 30.00 9.50 5.00 58.50 10.00 26.55 390.54 14.00 24.50 9.45 15.43 54.63 $1.31 Premium(2) Unaffected 1-Day 1-Month Premium to Unaffacted Share Price Low(4) 8.2% High (4) 43.9% 54% 14 14 96 25 (1) 50 45 42 2 15 15 0 45 (1) 10 38 25 3 39 58 11 390 15 8 21 120 13 (21) 4 44% 38 15 8 62% 52% 36 14 105 64 59 46 45 44 19 50 14 29 45 2 44 101 58 35 73 82 49 381 38 20 53 126 11 (1) 5 59% 57 45 22 64% 40% 27 7 81 77 67 89 34 16 50 22 69 46 18 40 110 25 30 70 125 49 403 47 14 54 158 24 (5) 43 70% 62 44 25 138% 1 2 4 2 3 2 2 5 3 3 3 5 1 1 3 5 4 3 1 1 8 3 6 2 43 3 1 Price Increases Total (%) Avg. (%) 14 6 30 17 23 12 10 20 7 3 8 20 0 8 43 2 7 45 92 19 75 21 11 39 88 1 108 10 28% 24 13 7 38% Implied Equity Value Per Share Low High $1.17 $0.88 Based on final price and target company stock price one-day and one-month prior to unaffected date. Includes shares held by DHC subject to the terms of a separate agreement between DHC and ABP (see "Certain Closing Conditions on slide 5). Premium to unaffected share price range based on 25th to 75th percentile of selected precedent transactions. 14 6 15 4 12 4 5 - 10 1 1 7 392 7 15 18 5 25 5 11 39 11 0 18 5 13% 9 7 4 9% cíti#21WACC Calculation WACC Calculation Inputs Target Capital Structure (Net Debt / Total Capital)(¹): 20.0 10.0 % After-Tax Cost of Debt: Expected Long-Term Yield(2): - Current Statutory Marginal Tax Rate: Cost of Equity: Risk-Free Rate (20-Year CMT Bond): Assumed Equity Market Risk Premium - low: Assumed Equity Market Risk Premium - high: 6.5% Equity Market Risk Premium 20.9 - 7.5% Equity Market Risk Premium 21.9 - Relevered Equity Beta: - Unlevered Asset Beta: - Implied Net Debt / Equity Ratio: Small Cap Risk Premium: High Yield Issuer? (Y/N) 16 0.94- (1) (2) (3) 4.9 % 6.6 % 26.0 % 20.6 % 21.5 % 3.7 % 6.5 % 7.5% 0.88 0.84 25.0 11.1 % 11.2 % Weighted Average Cost of Capital: 17.7 17.7 18.5 6.5% Equity Market Risk Premium 7.5% Equity Market Risk Premium The low-end of the WACC is based upon the low-end of the equity market risk premium (6.5%) and the high-end of the net debt / total capital ratio. The high-end is based on the high-end of the equity market risk premium (7.5%) and the low-end of the capital structure. Y 19.8 % 19.0 % 19.8 % Cost of Net Debt-Related Metrics AlerisLife Cost of Equity-Related Metrics AlerisLife Source: ALR Management, public filings, Wall Street Research, Bloomberg and FactSet as of 02/02/2023. Based on estimated capital structure of senior housing operators. Based on High Yield BB Index as of 02/02/2023. Adj. Equity Beta as of 04/02/2019 when ALR announced the restructuring of its management agreements with DHC. Value of Net Debt $24 Adjusted Equity Beta (Bloomberg) 1.197 Market Value of Equity $27 Beta Estimation Period (Yrs) 3.8 (3) Capital Structure Net Debt / Total Capital Ratio 47.3% High Yield Issuer Y Debt Beta 0.3 Current Statutory Long Term Marginal Tax Rate Yield(2) 26.0% Unlevering Tax Rate 26.0 6.6% Unlevered Asset Beta 0.839 Unlevering tax rate represents a blended average tax rate based on the number of days for which different statutory marginal tax rates were in effect during the beta estimation period. cíti