W. Brent Binions – President and Chief Executive Officer Karen Sullivan – Chief Operating Officer Vlad Volodarski – Chief Financial Officer

Jonathan Kelcher – TD Securities Alex D. Avery – CIBC World Markets, Inc. Jason Kepecs – GMP Securities LP Neil Downey – RBC Capital Markets Corp. Walter Maughan – Ronin Management Inc. Pammi S. Bir – Scotia Capital Markets

Good morning, ladies and gentlemen. Welcome to the Chartwell Retirement Residences Second Quarter Conference Call. Following the formal comments, we will hold a question-and-answer session. Please be advised that this call is being recorded. I would now like to turn the meeting over to Mr. Brent Binions, President and Chief Executive Officer of Chartwell Retirement Residences. Please go ahead, Mr. Binions. W. Brent Binions: Thank you. Good morning. Thank you for joining us today. There is a slide presentation to accompany this conference call available on our website at chartwell.com under the Investor Relations tab. Joining me today is Vlad Volodarski, our Chief Financial Officer; and Karen Sullivan, our Chief Operating Officer. Let me remind everyone that during this call, we may make statements containing forward-looking information. I direct you to our MD&A and other Securities filings for information about the assumptions, risks and uncertainties inherent in such forward-looking information. These documents can be found on our website or at sedar.com. With our objective of building lasting value for our investors, I am pleased with the progress we have made on our strategic priorities as shown on Slide 3. Our focus on growing the core property portfolio of contribution, resulted in our AFFO increasing by $4.4 million or 15.9% compared to Q2 2012. The growth in AFFO was primarily due to acquisitions, increased same property portfolio NOI and higher management fee income generated from the Maestro Properties acquired in 2012, partly offset by the growth in our general and administrative expenses as we added staff to support our almost 50% growth in suites under management in Canada, and due to our continuing investments in information management systems and employee development. We’re continuing to make steady progress in strengthening our financial position and balance sheet debt metrics, improving Chartwell’s risk profile and assuring that we are well positioned to take advantage of growth opportunities and weather economic and market volatility should they occur. At June 30, 2013, we had cash on hand of $21.9 million and $46.5 million available borrowing capacity on our secured credit facility. In Q2 2013, we renewed our credit facility for a two-year term, increasing its borrowing capacity to $95 million, while reducing cost of borrowing. We’re also pleased with continuous improvements in our indebtedness, interest coverage and net debt to adjusted EBITDA ratios, demonstrating progress in reducing our debt leverage. Progress is also evident in the execution of our ambitious corporate transformation program. The re-branding activities are well underway with all Chartwell-HCN properties’ re-branding fully completed and the remainder of the Canadian portfolio will be re-branded by the end of the year. Initiatives are underway to continue raising the public awareness of the Chartwell brand. Our investments in information systems continue. To-date in 2013, we completed the implementation of a new core financial system, a new prospect management system and we’ve continued functionality improvements to our website and financial reporting system, and in Q3, we have just completed the implementation of a new capital budgeting system. We are confident that our development program will create significant value to Chartwell overtime. Our development team completed the redevelopment of a 64-bed long term care residence in Ontario and has three more projects in progress for completion this year. In Q3 2013, the team will begin construction of additions to two of our existing residences, one in Florida and one in Ontario. Our pipeline of potential acquisitions remains strong and in Q2 2013, we completed the acquisition of a 171-suite independent supportive living residence and a 65-bed long term care residence both located within our Cite Jardin campus in Gatineau, Quebec. We now control 100% of this campus’ six towers with 863 suites, one of the largest retirement campuses in Canada. I will now turn the call over to Karen Sullivan, our Chief Operating Officer to discuss some interesting new operations and sales initiatives. Karen?

Thanks, Brent. One of the best ways to drive occupancy in our sector is to have our current residents to refer their friends, so that they can also make the decision to live in a Chartwell Retirement Home. There is compelling research that very satisfied residents are actually four times more likely to refer their friends than those who are merely satisfied. Based on this research and our own intuitive understanding of the importance of a positive customer experience, we are focusing on enhancing customer satisfaction across the country. This includes the establishment of a customer commitment team that has developed Chartwell’s Service Philosophy and Service Standards, which will be launched at our National Conference later this fall. A comprehensive long-term program that will integrate our new approach into our hiring practices, orientation, training, recognition, and accountability processes, is being developed. We will be building off of our most recent resident satisfaction survey results, which saw an increase of almost 4% in the number of very satisfied residents in our homes in 2013, compared to 2012. We’ve also been focused on sales and marketing strategies, including continuing to enhance our recruitment orientation and training programs for our sales consultants. We’re utilizing the valuable data that is now available through our customer relationship management system to better understand sales activity and improve occupancy in our home. Our marketing efforts include a new service on our website called Click-to-Connect that was launched yesterday. The first of its kind in our sector in Canada, this centralized call center is staffed with Chartwell representatives who, as we continue to ramp-up the program, will be available to provide information on our homes across the country by phone or e-mail seven days a week. We’re also very focused on ensuring that we provide high quality care and service for our residents in both our retirement and long term care homes. This includes ensuring regular resident assessments are in place and providing support to our homes through our corporate nursing managers and consultants, including new resources that are being added to assist us with our memory care programs. I’ll now turn it over to Vlad to discuss our Q2 2013 financial performance.

Thanks, Karen. In the second quarter of 2013, our AFFO grew by $4.4 million or 15.9% as shown on Slide 7. On a per unit basis, AFFO increased to $0.18 per unit from $0.16 per unit in Q2 2012. This growth was primarily driven by positive contributions from our core property portfolio, higher management fee income, partially offset by the higher G&A expenses primarily related to staff additions to support the growth in our suites under management and due to increased investments in information management systems. Our same property portfolio posted a strong 4.2% increase in NOI in Q2 2013, due to improved occupancies, continued growth in ancillary services revenue and focus on expense management, partially offset by the final residual impact of higher residents move-in incentives related to our 2012 promotional program. Same property occupancy increased by 0.9 percentage points to 89.4% from 88.5% in Q2 2012. As shown on Slide 8, same property NOI in our Ontario Retirement Portfolio increased by 3.2% in Q2 2013, primarily due to higher ancillary revenues, lower property taxes, partially offset by higher temporary resident move-in incentives and higher utility costs. Occupancies declined slightly to 87.2% in Q2 2013 from 87.6% in Q2 2012. Our leasing activity has improved in the last few months and we expect to see improving occupancies in Ontario for the remainder of 2013. Performance of our Western Canada platform is outlined on Slide 9. In Q2 2013, our Western Canada platform delivered strong 6.3% same property NOI growth with occupancy growing by one percentage point to 92.4%, compared to Q2 2012. The corresponding growth in revenues was partially offset by higher utility costs and property taxes. Although strong competition exists in some select markets in British Columbia, we expect continuous growth in same property occupancies and NOI in our Western Canada platform in 2013. : As outlined on Slide 11, our Ontario Long Term Care platform same property NOI grew by 8.9% in the second quarter of 2013 compared to the second quarter of 2012, primarily due to increased government funding and increased preferred accommodation rates. Occupancy remains high at 98.8%, as we continue our progress on providing quality care and services to our residents. Our U.S. platform delivered 3% same property NOI growth in the second quarter of 2013, compared to the second quarter 2012, as outlined on Slide 12. This solid growth was driven by substantial improvement in occupancy from 87.4% in Q2 2012 to 89.3% Q3 2013. This was offset by higher marketing, insurance, staffing, food and utility costs. New property construction starts remained at historically low levels in the U.S., which we believe will support continuous occupancy improvements and same property NOI growth in our U.S. portfolio in 2013. As Brent mentioned, we continued making solid progress improving our balance sheet debt metrics as shown on Slide 13. Our indebtedness ratio improved to 56.9% at June 30, 2013 from 57.9% at June 30, 2012. Our interest coverage ratio improved to 2.26 times in Q2 2013 from 1.95 times in Q2 2012, and our net debt to adjusted EBITDA improved to 8.5 times at June 30, 2013, from 8.9 times at June 30, 2012. In 2013 year-to-date, we closed on $56 million of new mortgages with a weighted average interest rate of 3.48% and weighted average term to maturity of 16 years, locking in this historically low interest rate as longer-term. I will now turn the call back to Brent to wrap up. W. Brent Binions: Thanks, Vlad. As shown on Slide 15, our key priority remains growing the contribution to AFFO from our core property portfolio. We expect that our strong brand and innovative marketing and sales strategies will contribute to further occupancy growth in our portfolio. We continue to develop programs to provide new services to our residents including assisted living options and generating additional revenue streams. A number of our properties are still in lease up and we will see a growing contribution from these communities over the near-term. Our focus will also remain on maintaining a strong balance sheet and flexible liquidity position. We continue to access low cost, longer-term, fixed rate debt and short-term variable rate construction financing on flexible terms and manage our interest rate risk by spreading our debt maturities over time. We also remain committed to our target of reducing our debt ratios over time and maintaining a prudent distribution policy ensuring we are well positioned for sustainable success. We will continue improving our information management systems to gain efficiencies in information processing and speed and decision making throughout the company. Turning to Slide 16, we will continue to build value through our development program. We are working on a number of interesting new development opportunities and are also looking for suitable sites in a number of key markets across Canada. We will continue to optimize our portfolio, replacing over time older non-strategic assets with newer product. In addition, we are evaluating a number of opportunities to add to our portfolio pursuant to our growth strategies. Competition for quality acquisitions remains strong and even though, we are aggressively pursuing such opportunities, there cannot be any certainty we will complete any of these potential acquisitions. We will always be prudent in our underwriting to make sure that we are able to successfully deliver on our projections. I’d like to thank you for your time and attention this morning, and we’d now be pleased to answer any questions you may have. Operator?

Thank you, Mr. Binions. We will now take questions from the telephone lines. (Operator Instructions) Thank you for your patience. And the first question is from Jonathan Kelcher from TD Securities. Please go ahead. Jonathan Kelcher – TD Securities: Thanks. Good morning. W. Brent Binions: Good morning. Jonathan Kelcher – TD Securities: Just on the Ontario vacancy, where there some pockets in the Province where the vacancies are higher, where there some issues? W. Brent Binions: Karen, would you like to answer that? Please.

Yeah, there is additional supply in the GTA, I think of Pickering, Vaughan, Mississauga; those areas as well as Ottawa and Windsor. So we are starting to see that supply being absorbed and a less flatter supply in the future. So we’re starting to see positive trends in terms of our net future occupancy in Ontario because of that. Jonathan Kelcher – TD Securities: Okay. So would it be fair to expect to see the occupancy ramp up similar to what we saw last year over the back half of the year in Ontario? W. Brent Binions: It may not ramp up quite as quickly as last year. You may recall we ran quite an aggressive program last year. I don’t think there’s any intention to run a program as broadly as that, although, we are certainly looking at options in terms of driving occupancy on a more local basis. And I think you can expect to see some pretty good improvements in any event, so. Jonathan Kelcher – TD Securities: Okay. And then, how much of that incentive program burned off in Q2? How much of a drag on revenue was that? W. Brent Binions: It wasn’t significant in the Q2 compared to what it was in the previous months. We just witnessed the impact of the program. I don’t have the exact number with me. Jonathan, I can call you back with that. Jonathan Kelcher – TD Securities: Okay. And then, secondly, just on the LTC portfolio, those were obviously very strong results. How much of that was due to the timing of flow throughs and how much would you call sustainable? W. Brent Binions: Most of that would be sustainable, the impact of the increase in the preferred accommodation rates is here to stay, and there is going to be additional, hopefully, growth in that as well. So I’d say most of it is sustainable. Jonathan Kelcher – TD Securities: Okay. So sort of mid single digits would not be unreasonable for the… W. Brent Binions: I don’t expect 9% growth... Jonathan Kelcher – TD Securities: Well, yeah, that’s what… W. Brent Binions: …every quarter from long term care, if that’s the question. no, we’ve been running ahead of what we guide. We normally say, we expect about 1.5%, 2% growth in that platform. Jonathan Kelcher – TD Securities: Right. W. Brent Binions: But with the increase that came into the preferred that rose in over a period of time, because it doesn’t impact every resident. It impacts new residents coming in. So we should be running a little ahead of what we’ve said in the past over the next couple of quarters. Jonathan Kelcher – TD Securities: Okay, thanks. I’ll turn it back. W. Brent Binions: Thank you.

Thank you. The next question is from Alex Avery from CIBC. Please go ahead. Alex D. Avery – CIBC World Markets, Inc.: Thank you. Just wanted to dig into the Ontario Retirement a little bit more. Obviously, that was one of the markets where you had the incentive program through last fall. Can you guess, I guess, maybe not just on individual properties or pockets of weakness, but just talk about the overall level of momentum that you’re seeing, I mean same property NOI growth was up, but occupancy was down in the quarter, how should we interpret that?

Well, certainly, as I said on the go-forward, we’re already seeing more positive trends in terms of our net future occupancy. So, we think that a number of our strategies that we have in place for sales and marketing are starting to see results as well as the fact that the supply in some of those areas that have been that oversupplied, it’s starting to flatten out.

And the other area, Alex where we’ve seen good improvements in our NOI contribution is from the Ontario Revenue programs. These programs have been now in place for a couple of years and Ontario is perhaps, probably benefit the most from the push on making sure that we are providing necessary services to our residents and charging for them. Alex D. Avery – CIBC World Markets, Inc.: So is it fair to say that you’re expecting continued improvement in terms of the financial performance of that?

Yeah. Alex D. Avery – CIBC World Markets, Inc.: Yeah, okay. And then just turning to Quebec, it seems like things are going better there. I guess from a momentum perspective, it’s going well and you expect to continue improvement?

Yes, we do. Yeah. For the same reasons, we’ve invested in a number of sales and marketing initiatives that we think are going to continue to help us all across the country. W. Brent Binions: And our features in Quebec, Karen?

Also positive. W. Brent Binions: Thank you. Alex D. Avery – CIBC World Markets, Inc.: Okay. and then just finally on the G&A, you noted that this higher level is probably more of an ongoing, I guess increase. Were there any gives and takes in the quarter in terms of things that may not recur or is that a pretty good run rate?

No, this is pretty consistent with what we’ve been indicating now for probably four quarters in the row. We needed sometime to add sufficient staffing to be able to appropriately service the additional units that we acquired within partnership with HCN. and so for the last two quarters, I would say that the G&A level has kind of stabilized at the levels that we should expect going forward. You note though that those numbers are based on only 50% of the revenue that we get from HCN, as opposed to 100%. We still carry the staff forward. and so it’s not apples-to-apples with the old numbers. Alex D. Avery – CIBC World Markets, Inc.: Yeah, yeah, okay. That’s great. Thank you.

Thank you. The next question is from Jason Kepecs from GMP Securities. Please go ahead. Jason Kepecs – GMP Securities LP: Hi, thanks. Would you be able to tell us what the NOI associated with the seven U.S. assets held for sale would have been in the quarter?

No, we don’t disclose the information about the individual properties’ performance, but I can tell you that the seven assets have been performing to our expectations. and we’ll continue to do so up until the closing, we expect to close that sale at the end of this month. Jason Kepecs – GMP Securities LP: Okay. you mentioned you’re looking to; you’re pursuing two or three potential acquisitions. Would there be larger transactions? and are you considering other sort of atypical assets and potentially triple net leases, expanding the asset class into hospitals or building memory care centers?

I’ll answer the second question first, our intent of the present time is to kind of stick to anything and do what we know we’re doing well, and acquire seniors housing residences, which we manage. In terms of the acquisitions side, we have seen quite an increase in terms of the opportunities in the second quarter of this year, and we’re validating quite a number of those. but as Brent said, there is no guarantee that we’re actually closing any of these acquisitions, because we are really paying attention to the underwriting, and in many cases, then those expectations may not match, economically out that we’ve seen these acquisitions. but the pipeline is a lot larger now than it was in the first quarter, we’ve said about it. Hopefully, over time, we’ll able to close and sell them. Jason Kepecs – GMP Securities LP: Okay. So you said they’re not just one-off or typical, your tuck-in acquisitions there, they’re larger?

Most of them are one-off acquisitions or smaller portfolios. Jason Kepecs – GMP Securities LP: Okay. and looking into the supply side in Ontario with their corner market in a bit of disarray. And last time we saw that landholders as condo developers were selling land to seniors developers. So are we seeing more development, more supply side development and more potential of that coming up? W. Brent Binions: There is no evidence of that at the present time. Suppliers definitely dropped off, which is what happens when you build too much. It makes for a little bit of glut in the marketplace on the retirement home side. And so it has slowed down pretty dramatically, down around just under a 2% growth at the present time in our market. So we’ve seen no evidence of that ramping up based on the condo market at the present of time. We’ll keep an eye on it, but nothing at the present time. : Jason Kepecs – GMP Securities LP: Okay great thanks a lot.

Thank you. The next question is from Neil Downey from RBC Capital Markets. Please go ahead. Neil Downey – RBC Capital Markets Corp.: Hi good morning everyone. W. Brent Binions: Good morning. Neil Downey – RBC Capital Markets Corp.: On the subject of development, you did allude to the fact that Chartwell tends to start two or three new projects before year-end. Are you in a position to elaborate it all in terms of potential number of beds, the amount of total capital that might be invested into these projects and the timeline through until delivery presumably that would be over to 2015 at this point. W. Brent Binions: Sure, I’ll ask Vlad to speak to that.

We are planning to start two projects literally this month or next month, one is the addition of the memory care 24-unit, 24 beds to our property in Florida. The second project is an addition of 30 beds, it’s a combination [AR] and memory care to our property in Ontario. Those two will certainly go in the ground, we have two projects that are also close to start, we may or may not start both of them this year. And so really for sure, this year, we’re starting about 54 beds. In addition total cost is about $13 million of these. Neil Downey – RBC Capital Markets Corp.: Okay, thank you. And one other question, your disclosures do note that there was a modest AFFO deficit in the quarter from properties that are still under lease-up, up at the NOI line was there a positive contribution from those assets?

Yes, Neil they’re breaking in effectively in the quarter on the NOI basis but still there is a negative AFFO contribution after that. Neil Downey – RBC Capital Markets Corp.: And in total dollar terms, roughly how far are those properties from stabilized NOIs. So if NOI in the quarter was effectively nil, what would it look like pro forma of those properties being stabilized?

These properties are the down 50% occupancy at the present time, so say they’re just over halfway there. Neil Downey – RBC Capital Markets Corp.: Sorry, I guess my question was maybe a little more specifically in total dollar terms, hundreds of thousands or millions of dollars per quarter. Can you give any guidance in that regard?

These properties were built at about $26 million each and the cap rate on cost for these properties should be at about 8.5%. So I don’t have the exact numbers, but those are the parameters. Neil Downey – RBC Capital Markets Corp.: Okay. That’s a good framework. Thank you.

Thank you. (Operator Instructions) And the next question is from Walter Maughan from Ronin. Please go ahead. Walter Maughan –: First off, congratulations on your strong operating performance, I always ask the question from the investors perspective. Your stock, your units have suffered on the marketplace and probably beyond what normal REIT suffering has been in this rising interest rate environment. It would indicate to me that your yield has slipped down from being very attractive, to being just so sold. And I’m wondering if there is any prospect now with the good operating metrics and cash position and outlook that you have put forward today, that you were going to be increasing the distribution to unitholders. The only mention that you have made so far in this entire conference call is as to a prudent distribution policy, which does not give me great hope. Ronin Management Inc.: First off, congratulations on your strong operating performance, I always ask the question from the investors perspective. Your stock, your units have suffered on the marketplace and probably beyond what normal REIT suffering has been in this rising interest rate environment. It would indicate to me that your yield has slipped down from being very attractive, to being just so sold. And I’m wondering if there is any prospect now with the good operating metrics and cash position and outlook that you have put forward today, that you were going to be increasing the distribution to unitholders. The only mention that you have made so far in this entire conference call is as to a prudent distribution policy, which does not give me great hope. W. Brent Binions: Well, we stand by our position. We will always do what’s prudent and we also always do what’s in the best interest of the company. Now, I have said numerous times that our goal had been to reduce our debt metrics to get them in better shape. Walter Maughan –: I have already congratulated you on that one. Ronin Management Inc.: I have already congratulated you on that one. W. Brent Binions: And we have made significant progress in that area and we have extremely pleased with it, the specific question you ask, is a decision of the Board and it’s an item that we will obviously be looking at, but I would have nothing to report to you at this time. Walter Maughan –: That’s consistent with your previous answers during which time your operating metrics really did require a great deal of improvement. You’ve accomplished a great deal of that now. I do hope that the Board of Directors is being guided by management as much as any Board of Directors ever is guided by management towards the need for a good, strong, for one of a better word, share price. Ronin Management Inc.: That’s consistent with your previous answers during which time your operating metrics really did require a great deal of improvement. You’ve accomplished a great deal of that now. I do hope that the Board of Directors is being guided by management as much as any Board of Directors ever is guided by management towards the need for a good, strong, for one of a better word, share price. W. Brent Binions: We fully understand that and all those factors are discussed on a regular basis and taken into account. And we certainly understand the request that you’re looking for and it is a matter of that that we will continue to address. Walter Maughan –: I look forward to a positive outcome. Ronin Management Inc.: I look forward to a positive outcome. W. Brent Binions: Thank you.

Thank you. The next question is from Pammi Bir from Scotia Capital. Please go ahead. Pammi S. Bir – Scotia Capital Markets: Thanks and good morning. Just with respect to the remaining non-core U.S. asset sales, how is that process going, and what are your thoughts with respect to maybe possible timing and how the pricing parameters may compare to the previously terminated sale? W. Brent Binions: Pammi, we are still engaged with a number of parties in discussions with respect to the remaining of the U.S. assets. We think that there are certainly four or five assets that we should be able to sell, probably announce this year sometime and close sometime early next year. The remaining of the U.S. assets, we will keep for about 24 months or so to stabilize the performance and then attempt to dispose of at that time. In terms of the pricing, we expect that there are, at the present time, I don’t see any changes that we should be expecting in terms of the valuation of these portfolios. Pammi S. Bir – Scotia Capital Markets: But I guess, if we compare to the last, I guess, the last, the previous announcement, I think it was $165 million, if I assume that you’ll be selling fewer properties and the proceeds, in terms of the potential proceeds on this transaction would be less than the net amount obviously? W. Brent Binions: Yes, that would be our expectation. There will be fewer properties than was previously attempted to sell. Pammi S. Bir – Scotia Capital Markets: Okay. Just going back to acquisitions for a minute, can you talk about what you’re seeing in terms of cap rates in the current bond yield environment and how you feel relative to your cost of capital, in terms of putting capital to work into acquisitions? W. Brent Binions: The vast majority of the acquisition opportunities that we are seeing, Pammi, are non-stabilized properties in the present times. The discussion of cap rate is very theoretical. I mean, it is theoretical, the best times when we talk about stabilized properties well in terms to non-stabilized properties. It’s really the question about the NOI underwriting, and certainly, our cost of capital has increased given the increase in the bond deals and corresponding debt cost and the unit price decline, and we are incorporating that in our underwriting as we go. But in terms of the cap rates and expectations of the vendors, they have not changed substantially, so that certainly makes our underwriting or that makes our ability to meet those a little bit more difficult. But we take it on a one at a time basis, when we’re looking at the transactions and certainly incorporating the high cost of capital on underwriting. Pammi S. Bir – Scotia Capital Markets: And so where would you sort of peg, let’s say stable, better quality independent living king retirement home at, and I know they are obviously our geographic differences, but if there is a range that you can think of, on what you range. W. Brent Binions: That’s between 7% and 7.5% on a cap rate basis. Pammi S. Bir – Scotia Capital Markets: So really not much movement, I guess, from your prior – from let's say a few months ago. W. Brent Binions: Not significantly, no. Pammi S. Bir – Scotia Capital Markets: Yeah. Okay, great, thank you.

Thank you. There are no further questions registered at this time. I’d like to turn the meeting back over to Mr. Binions. W. Brent Binions: Thank you, Dona. And so thank you for your time and attention this morning, and this wraps up our conference call and as all if you have any further questions, please don’t hesitate to give us a call. Thanks and good-bye.

Thank you. The conference has now ended. Please disconnect your lines at this time and thank you for your participation.