AlerisLife (ALR) 8-K Financial statements and exhibits

FOR IMMEDIATE RELEASE

Contact:  Evrett W. Benton,

President or Bruce J. Mackey Jr.,

Treasurer at 617-796-8387

www.fivestarqualitycare.com

Five Star Quality Care, Inc. Announces Financial Results for the Quarter Ended June 30, 2003

Newton, MA (August 13, 2003).  Five Star Quality Care, Inc. (AMEX: FVE) today announced its financial results for the periods ended June 30, 2003, compared to the same periods in 2002, as follows

(dollars in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
Total Revenues	$	142,490		$	130,793		$	286,062		$	248,542
Total Expenses	144,210			137,114			290,130			257,996
(Loss) Income from Continuing Operations	$	(1,720	)	$	(6,321	)	$	(4,068	)	$	(9,454	)
Loss from Discontinued Operations	(357		)	(1,009		)	(444		)	(1,245		)
Net (Loss) Income	$	(2,077	)	$	(7,330	)	$	(4,512	)	$	(10,699	)
Average Shares Outstanding	8,456			8,445			8,454			6,644
Net (Loss) Income per Share from Continuing Operations	$	(0.20	)	$	(0.75	)	$	(0.48	)	$	(1.42	)
Net (Loss) Income per Share	$	(0.24	)	$	(0.87	)	$	(0.53	)	$	(1.61	)

Five Star Quality Care, Inc. is an operator of senior living communities.  FVE owns and leases 107 communities with 14,223 living units located in 25 states.  These communities include independent and assisted living communities and skilled nursing facilities.  FVE is headquartered in Newton, Massachusetts.

(end)

Supplemental information, page 1 of 3

Five Star Quality Care, Inc.

Condensed Consolidated Statement Of Operations

(amounts in thousands, except per share data)

	Three months ended June 30,						Six months ended June 30,
	2003			2002			2003			2002
Revenues:
Net revenues from residents and patients	$	142,413		$	130,757		$	285,925		$	248,360
Interest income	77			36			137			182
Total revenues	142,490			130,793			286,062			248,542
Expenses:
Wages and benefits	78,710			71,960			160,750			148,578
Other operating expenses	36,727			36,956			71,711			54,766
Management fee to Sunrise Senior Living, Inc.	4,279			4,267			8,595			8,056
Rent to Senior Housing Properties Trust	19,052			17,476			38,039			33,406
General and administrative	4,169			4,206			8,616			7,929
Depreciation and amortization	965			488			1,826			671
Impairment of assets	—			1,649			—			1,649
Restructuring costs	—			112			—			112
Interest expense	308			—			593			—
Spin off and merger expense, non recurring	—			—			—			2,829
Total expenses	144,210			137,114			290,130			257,996
Loss from continuing operations before income taxes	(1,720		)	(6,321		)	(4,068		)	(9,454		)
Provision for income taxes	—			—			—			—
Loss from continuing operations	(1,720		)	(6,321		)	(4,068		)	(9,454		)
Loss from discontinued operations	(357		)	(1,009		)	(444		)	(1,245		)
Net loss	$	(2,077	)	$	(7,330	)	$	(4,512	)	$	(10,699	)
Weighted average shares outstanding	8,456			8,445			8,454			6,644
Basic and diluted loss per share from:
Continuing operations	$	(0.20	)	$	(0.75	)	$	(0.48	)	$	(1.42	)
Discontinued operations	(0.04		)	(0.12		)	(0.05		)	(0.19		)
Net loss per share	$	(0.24	)	$	(0.87	)	$	(0.53	)	$	(1.61	)

Supplemental information, page 2 of 3

Five Star Quality Care, Inc.

Condensed Consolidated Balance Sheet Data

(in thousands, except share data)

	June 30, 2003		December 31, 2002
Assets
Current assets:
Cash and cash equivalents	$	4,463	$	10,270
Accounts receivable, net	30,976		33,877
Prepaid expenses and other current assets	8,842		9,434
Total current assets	44,281		53,581
Property and equipment, net	75,433		70,329
Other long term assets	21,365		9,287
Total assets	$	141,079	$	133,197
Liabilities and Shareholders’ Equity
Current liabilities	$	45,267	$	34,445
Long term liabilities (1)	13,946		17,723
Mortgage payable (long term)	15,732		15,982
Shareholders’ equity: 8,457,634 common shares outstanding	66,134		65,047
Total liabilities and shareholders’ equity	$	141,079	$	133,197

(1)Long term liabilities principally include obligations to residents at FVE communities operated by Sunrise Senior Living, Inc. who have prepaid with deposits.  These prepayments are amortized into revenues over the periods in which the service obligations are expected to be satisfied.

Supplemental information, page 3 of 3

Five Star Quality Care, Inc.

As Reported (includes facilities from the date operations by Five Star commenced):

	Three Months ended 6/30								Six months ended 6/30
	2003			2002			% Change		2003			2002			% Change
Revenues from residents (in 000s)	$	142,413		$	130,757		9	%	$	285,925		$	248,360		15	%
Facility expenses (in 000s)	$	115,437		$	108,916		6	%	$	232,465		$	203,344		14	%
Total expenses (in 000s)	$	144,210		$	137,114		5	%	$	290,130		$	257,996		13	%
No. of facilities (end of period)	107			89			—		107			89			—
No. of living units (end of period)	14,223			13,123			—		14,223			13,123			—
Occupancy	89		%	90		%	-1	%	89		%	90		%	-1	%
Average daily rate	$	124		$	122		2	%	$	125		$	116		8	%
Revenue per day per available unit	$	110		$	109		1	%	$	111		$	105		6	%
Percent of revenues from Medicare / Medicaid	39		%	39		%	—		39		%	37		%	2	%
Percent of revenues from Private / Other	61		%	61		%	—		61		%	63		%	-2	%

“Same Store” Facilities (facilities Five Star operated continuously since April 1, 2002, and January 1, 2002, respectively):

	Three Months ended 6/30								Six months ended 6/30
	2003			2002			% Change		2003			2002			% Change
Revenues from residents (in 000s)	$	133,668		$	130,665		2	%	$	115,734		$	110,396		5	%
Facility expenses (in 000s)	$	108,370		$	108,790		—		$	106,491		$	103,820		3	%
No. of facilities (end of period)	89			89			—		53			53			—
No. of living units (end of period)	13,062			13,062			—		4,877			4,877			—
Occupancy	90		%	88		%	2	%	89		%	89		%	—
Average daily rate	$	125		$	124		—		$	147		$	140		5	%
Revenue per day per available unit	$	112		$	110		2	%	$	131		$	125		5	%
Percent of revenues from Medicare / Medicaid	42		%	42		%	—		80		%	79		%	1	%
Percent of revenues from Private/ Other	58		%	58		%	—		20		%	21		%	-1	%

Total Portfolio at 6/30/03 (includes data for periods prior to Five Star operation of certain facilities*):

	Three Months ended 6/30								Six months ended 6/30
	2003			2002			% Change		2003			2002			% Change
Revenues from residents (in 000s)	$	143,086		$	140,067		2	%	$	287,918		$	278,220		3	%
Facility expenses (in 000s)	$	115,703		$	116,350		-1	%	$	233,980		$	222,506		5	%
No. of facilities (end of period)	107			107			—		107			107			—
No. of living units (end of period)	14,223			14,223			—		14,223			14,223			—
Occupancy	89		%	90		%	-1	%	89		%	90		%	-1	%
Average daily rate	$	125		$	121		3	%	$	126		$	128		-2	%
Revenue per day per available unit	$	111		$	108		3	%	$	112		$	110		2	%
Percent of revenues from Medicare / Medicaid	39		%	39		%	—		39		%	38		%	1	%
Percent of revenues from Private/ Other	61		%	61		%	—		61		%	62		%	-1	%

*Based on data provided to us from prior owners.