INVESTOR PRESENTATION Q2 2014 Cautionary Statements This - PDF document

INVESTOR PRESENTATION Q2 2014

Cautionary Statements This presentation contains forward-looking information that reflects the current expectations, estimates and projections of management about the future results, performance, achievements, prospects or opportunities for Chartwell and the seniors housing industry. The words “plans”, “expects”, “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes” or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved” or “continue” and similar expressions identify forward-looking statements. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond our control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. While we anticipate that subsequent events and developments may cause our views to change, we do not intend to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents our views as of the date of this presentation and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. See "Risks and Uncertainties" in our 2013 MD&A and risk factors highlighted in materials filed with the securities regulatory authorities in Canada from time to time, including but not limited to our most recent Annual Information Form. Non-GAAP Measures In this document we use a number of performance measures that are not generally accepted accounting principles (“GAAP”) such as Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), Net Operating Income (“NOI”), “Same Property NOI,” “Same Property Revenue,” “Same Property Direct Operating Expenses,” “G&A Expenses as a percentage of Revenue,” “Interest Coverage Ratio,” “Indebtedness Ratio,” “Net Debt to Adjusted EBITDA Ratio,” “Chartwell’s Interests” and any related per unit amounts to measure, compare and explain the operating results and financial performance of the Trust (collectively, the “Non -GAAP Measures”) . These Non-GAAP Measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and, therefore, may not be comparable to similar measures presented by other publicly- traded entities. Please refer to the “Non -GAAP Measures” section of our Q2 2014 MD&A for details. Making People’s Lives Better 2

Why Chartwell? 1. Unmatched national operating platform 2. Well-located and maintained real estate portfolio 3. Significant long-term growth potential • Demographic trends = more demand • Government fiscal constraints = more private pay demand • Fragmented industry = consolidation opportunities 4. Strong earnings growth potential • 1% growth in occupancy or rate = 3 cents growth in AFFO 5. Improving financial position and lower interest costs on refinancing = reduced portfolio risk Making People’s Lives Better 3

Profile Serving Full Continuum Geographically Diversified of Care British Independent Columbia, 8% Living, 4% Long T erm Care, 16% Alberta, 3% Memory T exas, 4% Care, 1% Florida, 7% Assisted Ontario, 36% Living, 4% Colorado, 4% Other U.S., 8% Independent Total Canada – 77% Supported Total U.S. – 23% Quebec, 30% Living, 75% • Focus on growth in Canada • Narrowing U.S. holdings to Florida, Texas and Colorado # of Suites # of Trust Units Market Revenue Adjusted Owned, Leased (000s) Cap ($ millions) EBITDA and Managed ($ billions) ($ millions) As at June 30, 2014 12 months ended June 30, 2014 30,577 (1) 176,893 (2) $1.9 (3) $947.1 $258.3 (1) Includes suites in properties classified as assets held for sale (2) Includes Trust Units, Class B Units, Deferred Trust Units, Trust Units issued under LTIP (3) June 30, 2014 closing price was $10.84 Making People’s Lives Better 4

Building Sustainable Value Strategic Priorities Grow core Maintain a property strong portfolio financial contribution position Improve quality and Build value of efficiency of our real our corporate estate support portfolio services Making People’s Lives Better 5

Building Sustainable Value Grow core property portfolio contribution Maintain and grow Grow revenue Control costs occupancy • • • Quality resident Occupancy Labour relations care and • • services Ancillary Centralized 54% very satisfied residents in services purchasing 2013, 52% in 2012 program • Branding • Energy Making People’s Lives Better • Rate management management • Sales and suite Improved training programs turnover Performance-based compensation • Knowing our 2.4% 3.2% customer in 2014 YTD * in 2014 YTD* NOI 0.5% in 2014 YTD* * Same property for six months ended June 30, 2014 compared to the same period of 2013 Making People’s Lives Better 6

Building Sustainable Value Maintain a strong financial position 2014 2013 Net debt to adjusted EBITDA ratio (1) 8.6 8.5 Interest coverage ratio (2) 2.14 2.17 Indebtedness ratio (3) 56.2% 56.6% Weighted average interest rate (4) 5.02% 4.92% Average term to maturity (4) 7.1yrs 6.7yrs (1) Based on June 30, 2014 and 2013 Net Debt balances and Adjusted EBITDA for the 12-month periods ended June 30, 2014 and 2013 (2) For the six-month periods ended June 30, 2014 and 2013 (3) As at June 30, 2014 and December 31, 2013, including convertible debentures (4) Mortgage portfolio as at June 30, 2014 and December 31, 2013 • Mortgage refinancing program generates interest savings and extends maturities • Adjusting for non-recurring items, interest coverage in 2014 YTD would have been 2.17 Making People’s Lives Better 7

Building Sustainable Value Improve quality and efficiency of our corporate support services 2010 – Labour cost management tool 2011 – Budgeting and forecasting system Continuing 2012 – Consolidation and reporting system 2013 – Core financial system investments 2013 – Prospect management system in IT 2013 – Standardized IT infrastructure rollout initiatives 2013 – Capital budget system 2014 – Procurement and payment system 2014 – Fixed assets management and reporting system Blog Website Online Social Media presence Search Engine Optimization and Marketing strategy Chartwell Contact Centre Making People’s Lives Better 8

Building Sustainable Value Build value of our real estate portfolio Completed acquisitions of interests in four retirement residences and a medical office building in Ontario and Quebec for $87.4 million Completed development of one retirement residence in Ontario with two other projects in progress for completion in 2014 and 2015 Completed sales of interests in 19 non-core properties in Ontario and U.S. for $225.2 million Making People’s Lives Better 9

Financial Performance Q2 2014 Highlights • AFFO of 18 cents per unit diluted • Same property NOI decreased 1.3% • Same property portfolio occupancy decreased 0.3pp • Expect improving performance in the second half of 2014 driven by stronger leasing activities and realization of the benefits of centralized procurement initiatives and lower utility costs Increase/ Key Performance Indicators Q2 2014 Q2 2013 (Decrease) Average occupancy – same property 89.3% 89.6% (0.3pp) NOI – same property ($ millions) $62.4 $63.3 ($0.9) AFFO ($ millions) $31.9 $32.3 ($0.4) AFFO per unit diluted $0.18 $0.18 - Distributions declared as a 74.9% 72.6% 2.3pp percentage of AFFO Making People’s Lives Better 10

Financial Performance Ontario Retirement Platform Q2 2014 Q2 2013 Increase/(Decrease) $ % Same property statistics: NOI ($ millions) $17.7 $18.7 ($1.0) (5.1%) Occupancy 86.4% 88.0% N/A (1.6pp) • Continued competitive pressures, utility and real estate taxes impacted results • Slower pace of new supply and stronger leasing activity expected to support improving occupancy and NOI growth Occupancy Q2 14 86.4% 87.7% Q1 14 Q4 13 88.3% Q3 13 87.6% 88.0% Q2 13 70 75 80 85 90 95 100 Making People’s Lives Better 11