q2 2014 conference call 2014... · 2014. 8. 8. · q2 2014 conference call august 8, 2014 . making...

Q2 2014 Conference Call

August 8, 2014

2 Making People’s Lives Better

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.


Building Sustainable Value

Strategic Priorities

Grow core property portfolio

contribution

Maintain a strong

financial position

Improve quality and efficiency of

our corporate support services

Build value of our real estate

portfolio


Affinity programs and Partners Day

National resident referral program

Fall national advertising campaign

Enhanced social media presence

Strategies to increase leads:

Website

Call centre

Phone system

Strategies to increase permanent move-ins:

Sales training focused on purposeful follow-up

DRS ability to listen to sales calls and coach Sales Consultants

Enhanced hiring and performance management of Sales Consultants

Occupancy

Effectiveness of marketing and sales processes

Sales

Marketing


Operations Initiatives

To provide a happier, healthier and more fulfilled life

experience for seniors

Driving

additional

care revenue

Enhanced

ancillary care

services

National

purchasing

contracts

New resident

satisfaction

survey with

comparative

benchmarks

Final pieces of

operational

reorganization

in place

FINANCIAL REVIEW

Financial Review


Solid Financial Performance

• 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

Q2 2014 Highlights

Key Performance Indicators Q2 2014 Q2 2013 Increase/(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 percentage of AFFO 74.9% 72.6% 2.3pp


Ontario Retirement Platform

• 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 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)

86.4%

87.7%

88.3%

87.6%

88.0%

70 75 80 85 90 95 100

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14


Western Canada Platform

• Continuing occupancy and rental rate growth contributed to the results

• Positive conditions in most of our markets

Occupancy


$ %


NOI ($ millions) $9.1 $8.8 $0.3 4.3%

Occupancy 92.4% 91.4% N/A 1.0pp

92.4%

91.2%

92.3%

92.0%

91.4%

70 75 80 85 90 95 100

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14


Quebec Platform

• Higher utilities and real estate taxes impacted results

• Strong leasing expected to support improving occupancy and NOI growth in the second half of

2014

Occupancy


$ %


NOI ($ millions) $12.9 $13.1 ($0.2) (1.4%)

Occupancy 87.2% 87.1% N/A 0.1pp

87.2%

87.6%

88.1%

87.5%

87.1%

70 75 80 85 90 95 100

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14


Ontario LTC Platform

• Increased funding and preferred accommodation rates

• High occupancy

• Disciplined expense management

Occupancy


$ %


NOI ($ millions) $7.3 $7.2 $0.1 1.3%

Occupancy 98.5% 98.5% N/A -

98.5%

98.6%

98.7%

98.4%

98.5%

70 75 80 85 90 95 100

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14


U.S. Platform

• Short-term move-in incentives, higher staffing costs and lower occupancies impacted results

• Expect improving performance in the remainder of 2014

Occupancy


$ %


NOI (U.S. $ millions) $15.3 $15.5 ($0.2) (1.2%)

Occupancy 88.1% 88.6% N/A (0.5pp)

88.6%

89.7%

88.7%

87.4%

88.1%

70 75 80 85 90 95 100

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14


Financial Performance

Percentage of Revenue

• Higher legal fees related to the settled litigation in the U.S. added $0.4 million of G&A expense

in Q2 2014

Managing G&A Expenses

Total G&A Expenses ($ millions)

$7.8

$6.8

$8.5

$9.9

$8.3

3.4%

2.9%

3.6%

4.2%

3.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

$0

$5

$10

$15

Q2 13 Q3 13 Q4 13 Q1 14 Q2 14

Outlook


Outlook

Strategic Priorities

Growth in core property portfolio

contribution

New brand rollout

Focus on occupancy, ancillary services and cost control

Broader assisted living options

Growth from lease-up properties

Maintaining a strong financial position

Prudent distributions policy

Reducing debt leverage over time

Extending mortgage terms

Staggering debt maturities

Improvements in quality and efficiency

of our corporate support services

IT investments

Online presence

Streamlined supply chain processes

Building value of our real estate portfolio

Ongoing asset management programs in Canada and the

U.S.

Strong development pipeline

Acquisition opportunities

Divesting non-core assets

Q3 2012 Conference Call

November 14, 2012 Q2 2014 Conference Call

August 8, 2014

q2 2014 conference call 2014... · 2014. 8. 8. · q2 2014 conference call august 8, 2014 . making...

Documents