Slide 1: Successfully Stabilized Business and on the Right Path to Unlock Shareholder Value
enhabit Home Health & Hospice \ t Successfully Stabilized Business and on the Right Path to Unlock Shareholder Value July 1, 2024
Slide 2: Forward-Looking Statements
enhabit Home Health & Hospice Forward-Looking Statements Statements contained in this presentation which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking information speaks only as of the date here
Slide 3: What This Contest is About: The Best Path Forward
What This Contest is About: The Best Path Forward We and AREX agree that the only thing that matters now is setting the Company on a path that will unlock Enhabit's substantial value for all stockholders Enhabit Home Health & Hospice
Slide 4: Contents
Contents Executive Summary Introduction to Enhabit Proven Value Proposition and Growth Strategy Driving Results Recently Refreshed, Highly Qualified Board with the Right Mix of Skillsets and Experience AREX’s Campaign and Slate of Less Experienced Director Candidates Threatens to Disrupt Our Stabili
Slide 5: Executive Summary
Executive Summary
Slide 6: Executive Summary
Executive Summary Recent Performance Demonstrates Operational Improvements Despite Headwinds Our Proposed Board is Specifically Designed to Possess Relevant Industry and Public Company Oversight Exper Board Has Taken Actions in Light of the Challenges Faced by Enhabit Since the Separa AREX’s Proposa
Slide 7: Introduction to Enhabit
Introduction to Enhabit
Slide 8: Enhabit Overview
Enhabit Overview We are a leading provider of home health and hospice 255 1 1 2 1 07 services that strives to provide superior, cost-effective Home Health Locations”) Hospice Locations”) hospice locations co- care where patients prefer it: in their homes located with home health locations 0 ae 10 ~6
Slide 9: Home Health Industry Overview
Home Health Industry Overview ( Home Health + Home health provides skilled medical care by a medical professional, such as a registered nurse or physical therapist in the home instead of a hospital or doctor's office. Home health care is usually less expensive, and more convenient, and effective hom
Slide 10: Hospice Industry Overview
Hospice Industry Overview Va Hospice >) Hospice care focuses on providing pain and for ill patients and support for the family Hospice services include physician, nurse and medical services, certified home care aid, social worker and volunteer services, durable medical equipment, medical supplies, m
Slide 11: Attractive Industry Tailwinds
Attractive Industry Tailwinds Demographic Trends and Our Ability to Deliver Cost-Effective, High Quality Care Supports Long-term Growth Cost Efficiency of Home Health Care’ 80.0 | | prual weieos growth in target : i 70.0 Oforteaen over ine! Post-Acute Medicare Cost Per 60.0 next three years? I Se e
Slide 12: Challenging Industry and Market Dynamics Since the Separation from Encompass
Challenging Industry and Market Dynamics Since the Separation from Encompass (July 1, 2022) Medicare Advantage Beneficiary Growth Gin Inflationary Wage Trends & Labor Market Shortage B® ex Challenging CMS Rate Environment Ss Interest Rates (1) KFF: Medicare Advantage in 2023: Enrollment Update and K
Slide 13: Enhabit's Medicare Fee-For-Service Faced Additional Idiosyncratic Headwinds
Enhabit’s Medicare Fee-For-Service Faced Additional Idiosyncratic Headwinds Encompass Referral Approach Payor Contracting in Medicare Advantage Enhabit's home health business benefits from a diversity of referral sources. Historically, we received a significant portion of our referrals through clini
Slide 14: Industry Dynamics Have Impacted Enhabit and its Closest Peers Differently
Industry Dynamics Have Impacted Enhabit and its Closest Peers Differently Sit medi S»vitalcari 1 enhabit @ amedisys “vitalcaring Home Health & Hospice szn0240m Care & Other 4 m som 13% pawn non nnn n= . 1% nom Hoge nn nnnnnn a ‘VitalCaring missed internal Pediat ibudget estimates for Q1-Q3 | 8 ! ' $
Slide 15: Timeline of Key Events Prior to Separation
Timeline of Key Events Prior to Separation Dec. 9, a 2020 Encompass announces plan to separate home health and hospice Jan. 19, pr 2022 Encompass Health Corporation explores strategic alternatives for home health and hospice segment partial separation of the home health and hospice 2022 business thr
Slide 16: Timeline of Key Events After Separation
Timeline of Key Events After Separation Announces Q1 2024 earnings 2" consecutive quarter of beating Enhabit files proxy : utive qu it i is a materials and issues AREX sends private letter Announces Q4 2023 adj. EBITDA consensus estimates. press release to Enhabit Board Earnings A \ f strategi ; + A
Slide 17: Stock Price Declined ~20% Post Separation Prior to Initial Earnings Call
Stock Price Declined ~20% Post Separation Prior to Initial Earnings Call | Recent Stock Price Performance Reflects Operational Improvements Enhabit Share Price Following Separation (July 1, 2022) Enhabit Share Price Since Q4’23 Earnings (March 6, 2024) $25 July 1, 2022 Following Q2 ’22 earnings, 20,
Slide 18: While We are Not Satisfied with Historical Performance, Recent Performance Reflects Business Turnaround
While We are Not Satisfied with Historical Performance, Recent Performance Reflects Business Turnaround Since Immediately Prior To First Material Announcement as a Public Company Since Immediately After Reporting Earnings from Q2 2022, a Period When Enhabit (Q2 2022 Earnings on August 1, 2022)" Was
Slide 19: Enhabit Has Repositioned its Business Along Key Operational Metrics Following Separation
Enhabit Has Repositioned its Business Along Key Operational Metrics Following Separation At time of separation, company faced growing labor costs and staffing challenges Today, fully eliminated high-cost contract labor in both home health and hospice Hosp spice y ry segments Cost Per Patient Day / A
Slide 20: Proven Value Proposition and Growth Strategy Driving Results
Proven Value Proposition and Growth Strategy Driving Results
Slide 21: We Have Been Taking Decisive Actions to Stabilize the Business
We Have Been Taking Decisive Actions to Stabilize the Business and Position for Profitable Growth Home Health + Leverage stabilization of Medicare as a relative % of home health revenue Leverage payor innovation strategy — Improve Medicare Advantage rates — Increase admissions Grow admissions throug
Slide 22: Stabilizing Medicare in Home Health
Stabilizing Medicare in Home Health Enhabit’s Home Health Medicare payor mix now roughly in-line with Amedisys . . a Enhabit’s Home Health business Growing Contribution from N historically had a relatively high mix of Medicare Payors (S) Medicare business Declining Medicare % of Total Home Health Re
Slide 23: Growing Our Payor Network
> Se > Growing Our Payor Network cts Adi Increased Payor Innovation Con as a % of Total Admi ions Key Actions in our Payor Strategy It takes ~12-18 months to negotiate a new payor contract 80% Working closely with each sales team member 1% to ensure that each "book of business" is 70% 63% optimized
Slide 24: Driving Home Health Admissions
XN N D Home Health > > De Driving Home Health Admissions Early Proof Points Demonstrating Tangible Results of Our Strategy Re-designed Business Development Strategy Home Health Consolidated Admissions crown G2) Continued Progress in Payor Lineetiter Contracts Strategy Increased favorable payor contr
Slide 25: Improving Our Medicare Advantage Rate
SD > SS > a Improving Our Medicare Advantage Rate . driving steady increases in our 38% of non-Medicare visits are : In non-Medicare revenue per visit now in payor innovation contracts at improved rates ... Non-Medicare revenue per visit: Visits from payor innovation contracts as a percentage of tot
Slide 26: Increasing Hospice Census and Admissions
a > = > > a Increasing Hospice Census and Admissions Enhancing our Hospice Operating Model ... ... Leading to Tangible Results Monthly Ce: Trend‘ Case + New staffing model in place as of Q3 of 2023 Management . pi _— Staffing Staffing constraints eliminated Model + Recruitment and retention improvem
Slide 27: De Novo Strategy Launched in 2022
a > Se > ee De Novo Strategy Launched in 2022 | Cumulative De Novos Opened Since 2022] De Novos | Cumulative De Novos Opened Since 2022] Since 2022 De Novo Growth Accelerates top-line growth with a capital light model Continues to invest in attractive markets for overlap, scale and density Attractiv
Slide 28: Robust People Strategy
a a a > Robust People Strategy Enhabit’s People Strategy ensures the attraction and retention of top performing talent, aligns compensati with the jpany’s strategic priorities, and uses data analytics and incentive plans romote employee accountabili Talent Attraction + Successful employer brand tran
Slide 29: Integrated Approach is Yielding Tangible Results
Integrated Approach is Yielding Tangible Results Case Study — Local Branch Performance Payor Strategy Adding payor contracts at better rates allows the business development team to reduce friction for referral sources resulting in: + Additional admissions * Stabilization of Medicare fee-for-service
Slide 30: Delivering Consistently Excellent Care to Our Patients
Delivering Consistently Excellent Care to Our Patients Standardized Protocols > «a Disciplined Use of Technology > as Motivated Clinicians > as Superior Performance National Average Enhabit 89% of our home health agencies are 3 Stars or higher; 34% are 4 Stars or higher’ 99% of our home health agenc
Slide 31: Enhabit's Strategy Continues to Improve the Business
Enhabit’s Strategy Continues to Improve the Business Enhabit’s business has stabilized and is positioned for profitable growth Leerink May 30, 2024 UBS May 9, 2024 “EHAB continues to progress on payor innovation strategy. EHAB reinforced the importance of their payor innovation team and the steps th
Slide 32: Management Team with Deep Experience and Expertise
Management Team with Deep Experience and a6 8 Expertise (Q@ Barb Jacobsmeyer President & Chief Executive Officer since June 2021 Previously served as Executive Vice President of Operations at Encompass Health Joined Encompass Health in 2007 and served in various executive roles including President o
Slide 33: Refreshed, Highly Qualified Board with the Right Mix of Skillsets and Experience
Refreshed, Highly Qualified Board with the Right Mix of Skillsets and Experience
Slide 34: Refreshed Board with Governance Best Practices in Place
Refreshed Board with Governance Best Practices in Place Board Succession Plan July 1, 2022 (11 Directors) March 30, 2023 (13 Directors) July 25, 2024 (9 Directors) _——————— 2 director additions 5 former Encompass [ 2 director additions | 4 former directors Encompass KO) Stuart McGuigan directors not
Slide 35: Robust Mix of Skills, Operational Experience and Perspectives
Robust Mix of Skills, Operational Experience and Perspectives Contributing to Our Diverse Board RPROSIEY, Charles | M. Susan A. Stuart M. Gregory Ss. Barry P. Jeffrey W. Tina L. Brown- Bolton Stevenson Hosfiinger Jasobomeyer La Monica McGuigan Schochet Industry / Operations v v v v v v Public Compan
Slide 36: Enhabit's Independent Directors are Fit for Purpose (1/2)
Enhabit’s Independent Directors are Fit for Purpose (1/2) Strategic Initiative: Deep experience with health care networks: enhances Enhabit's ability to improve perating performance Leveraging over two public stances defending Pee Jeffrey W. Bolton 2022; Chairman-El Corporate Governance Committee 20
Slide 37: Enhabit's Independent Directors are Fit for Purpose (2/2)
Enhabit’s Independent Directors are Fit for Purpose (2/2) Susan A. La Monica 2022; Chair of ion & Extensive Human Capital Experience » CHRO at Citizens Financial Group (Citizens) (NYSE: CFG) > Held senior human resources leadership roles at Royal Bank of Scotland (RBS) + Held a number of senior huma
Slide 38: Enhabit's Nominees are Superior to AREX's Slate
Enhabit’s Nominees are Superior to AREX’s Slate AREX Nominees Enhabit Nominees Payor experience is stale, short-term and less relevant than Enhabit nominees’ director experience at payors Reimbursement / Payor Experience Two members have complementary experience directly at payors Admissions / Hospi
Slide 39: AREX's Campaign and Slate Threatens to Disrupt Our Stabilized Business
AREX’s Campaign and Slate of Less Experienced Director Candidates Threatens to Disrupt Our Stabilized Business
Slide 40: AREX's Effort to Replace a Majority of Directors Threatens Recent Progress
AREX’s Effort to Replace a Majority of Directors Threatens to Jeopardize Recent Progress + For over a year, up to our announcement of the termination of the strategic review, AREX was singularly focused on a sale of the Company and insisted that a sale was the only acceptable outcome After initiatin
Slide 41: We Have Engaged Extensively with AREX Over the Past Year
We Have Engaged Extensively with AREX Over the Past Year and in Recent Weeks May 5, 2023 May 21, 2023 August 14, 2023 June 12, 2024 AREX sent a private Ms. Jacobsmeyer,on AREX issued a May 8, 2024 May 23, 2024 AREX relayed an dune 25, 2024 letter to the Board behalf of the Board, public letter The C
Slide 42: Until Only a Few Weeks Ago, AREX Has Singularly Prioritized Its Demand for a Sale
Until Only a Few Weeks Ago, AREX Has Singularly Prioritized Its Demand for a Sale = “We are highly confident that a full and fair strategic alternatives review will make it very clear to the Board that, ¥ = as compared to the risks and potential rewards inherent in the status quo, a sale is the obvi
Slide 43: AREX Repeatedly Distorts the Facts (1/5)
enhabit AREX Repeatedly Distorts the Facts (1/5) "omreanctons My’ The Board received and declined viable proposals to acquire the Company since the separation (first stated in May 2023) The Board conducted a flawed strategic review process Encompass rejected a $3.6 billion offer for Enhabit made by
Slide 44: AREX Repeatedly Distorts the Facts (2/5)
enhabit AREX Repeatedly Distorts the Facts (2/5) "omreanctons My’ Enhabit’s hospice business continues to lag Enhabit’s overhead is not optimized Enhabit Home Health & Hospice AREX’s Narrative = = The Facts To increase hospice admissions and census, we first implemented a new staffing model i enhanc
Slide 45: AREX Repeatedly Distorts the Facts (3/5)
enhabit AREX Repeatedly Distorts the Facts (3/5) "omreanctons My’ Enhabit is hemorrhaging Fee-For- Service home health market share Enhabit Home Health & Hospice AREX’s Narrative = The Facts AREX's critique focuses on Enhabit’s performance going back to the first quarter of 2021, at least six quarte
Slide 46: AREX Repeatedly Distorts the Facts (4/5)
enhabit AREX Repeatedly Distorts the Facts (4/5) "omreanctons My’ The Company’s “original sin” was the replacement of a “deeply experienced senior management team” with executives who lack prior hands-on involvement in the Home Health or Hospice industries AREX’s slate consists of a diverse group of
Slide 47: AREX Repeatedly Distorts the Facts (5/5)
enhabit AREX Repeatedly Distorts the Facts (5/5) "omreanctons Myt Enhabit’s transitional directors (who AREX’s Narrative ly served on the board) were granted “Founders Awards ” of stock that other Enhabit did not receive, ga poor corporate governance practice Enhabit Home Health & Hospice = The Fact
Slide 48: AREX's Comprehensive Five-Point Plan
AREX’s AREX’s “Comprehensive Five-Point Plan” Create a ic Tr to help management correct Enhabit's operational Unmet ance inan urgent and comprehensive manner. market share in Home lost icare fee-for Health by sales and and training and assessing the sales organization to ensure alignment around the
Slide 49: Experience of AREX's Individual Nominees is Inferior to Enhabit's Nominees
Experience of AREX’s Individual Nominees is Inferior to Experience of Enhabit’s Nominees A Only public board experience ended in bankruptcy 0 listed public company board experience Megan Ambers Maxine Hochhauser Mark W. Ohlendorf Anna-Gene O'Neal Dr. Gregory S. Sheff Juan Vallarino James T. Corcoran
Slide 50: AREX's Nominees are Not in the Best Interests of All Stockholders
AREX’s Nominees are Not in the Best Interests of All Stockholders and Would Severely Jeopardize Our Path Forward Experience That Would be Lost by Replacing Enhabit’s Directors with AREX’s Nominees = . Executive leadership experience executing strategies and managing teams through headwinds . Deep ex
Slide 51: AREX Has a History of Company Sales at Discounted Prices
AREX Has a History of Company Sales at Discounted Prices... Z\GG FIESTAS $18 $16 $14 oo @ AREX campaign launch © ©, suspends strategie $8 review Cooperation agreement for 2 board seats? © Company acauired for g $4.45 per share 2 E E ee d 5 $6 ¥ ~(66)pp 5 Stock price performance vs & (2) Russell 2000
Slide 52: The Only Public Company Where James Corcoran was a Director Ultimately Filed for Bankruptcy
...and the Only Public Company Where James Corcoran was a Director Ultimately Filed for Bankruptcy ‘Stock Price Performance “ies Morning Cooperation agreement with Purple Mountain Holdings and Jeereddi Partners for 1 board seat $4 (James Corcoran)? Mr. Corcoran is elected at Tuesday Morning's 2017 A
Slide 53: Key Takeaways
Key Takeaways
Slide 54: Why Our Slate is the Right Path Forward
Why Our Slate is the Right Path Forward Despite our challenges over our first 18 months, the business is now stabilized and positioned for 1 I al growth ° x Gy The Company has the right plan, people and path to leverage the stabilized business to drive ca shareholder value rt) Our Board is well-desi
Slide 55: Vote FOR ALL of Enhabit's Director Nominees on the YELLOW Proxy Card Today
Vote “FOR ALL” of Enhabit’s Director Nominees on the YELLOW Proxy Card Today enhabit Home Health & Hospice
Slide 56: Appendix
Appendix Enhabit Home Health & Hospice
Slide 57: Only Amedisys and VitalCaring Have a Similar Business and Payor Mix
Only Amedisys and VitalCaring (Private) Have a Similar Business and Payor Mix ( Revenue Breakdown (Q1 2024) > enhabit Balnteleits @ amedisys High Acuity Care Mavdus Home Health PY aveanna wectncore Medical Solutions Roto- ENSIGN SS crovr All Other vitalcaring * Care & Other Pediatric Hospice Private
Slide 58: Glossary
Glossary Admissions Average Daily Census (ADC) Center for Medicare & Medicare Services (CMS) Clinical Collaboration Community Care Convenor Episode of Care Home Health Hospice Inpatient Rehabilitation Facility (IRF) Medicaid Medicare Medicare Advantage Medicare Fee-For-Service Outpatient Rehabilitat
Slide 59: Overview of Strategic Review
Overview of Strategic Review i) AREX Demands a Review of Strategic Alternatives Company Initiates a Strategic Review Initial Indications of Interest and Diligence Focused Engagement with Two Parties In May 2023, AREX sent a private letter to the Board urging a review of strategic alternatives In Jun
Slide 60: Thoughtfully Structured Compensation Program
Thoughtfully Structured Compensation Program Aligned with the Interests of All Stockholders Executive Compensation Program Highlights Executive Compensation Highlights Base Salaries Annual Incentive — Senior Management Bonus Plan Long-Term Performance Awards Executive Severance Plans Enhabit Home He
Slide 61: Reconciliation of Net Income to Adjusted EBITDA — Consolidated
Reconciliation of Net Income to Adjusted EBITDA — Consolidated ($ in millions) Three Months Ended March 31, 2024 Income tax expense Interest expense and amortization of debt discounts and fees 11.1 9.5 Depreciation and amortization 7.8 7.8 Gain on disposal or impairment of assets (0.2) _ Stock-based
Slide 62: Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA ($ in millions) Three Months Ended March 31, 2024 23 Net cash provided by operating activities $17.3 Current portion of income tax expense 1.4 Interest expense, excluding amortization of debt discounts and fees 10.7 Chang
Slide 63: Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow ($ in millions) Three Months Ended March 31, 2024 Net cash provided by operating activities Unusual or nonrecurring items that are not typical of ongoing operations) Capital expenditures for maintenance (1.8) (0.6
Slide 64: Reconciliation of Gross Margin to Adjusted EBITDA
Reconciliation of Gross Margin to Adjusted EBITDA Margin Three Months Ended March 31, 2024 2023 Gross margin as a percentage of revenue 48.9 % 50.0 % General and administrative expenses (41.0)% (41.7)% Unusual or nonrecurring items that are not typical of ongoing operations) 14% 0.9% Stock-based com