Brent Binions - President, Chief Executive Officer Vlad Volodarski - Chief Financial Officer Karen Sullivan - Chief Operating Officer

Jonathan Kelcher - TD Securities Heather Kirk - BMO Capital Markets Alex Avery - CIBC Jimmy Shan - GMP Securities Pammi Bir - Scotia Capital

Good morning, ladies and gentlemen. Welcome to the Chartwell Retirement Residences' Third Quarter 2014 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.

Thank you. Good morning and thank you for joining us today. There is a slide presentation to accompany this conference call available on our Web site at chartwell.com under the Investor Relations tab. Joining me today are Vlad Volodarski, Chief Financial Officer; and Karen Sullivan, 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 Web site or at sedar.com. With our objective of building lasting value for our unit holders, I'm pleased with the progress we are making in 2014 on our strategic priorities as shown on Slide 3. We had an operationally strong Q3 in 2014 with all our platforms contributing positively to the 2.6% growth in same-property NOI. Our same-property portfolio occupancies improved by 30 basis points to 90.2%. Rebranding of our Canadian communities is complete and our new brand awareness and social media strategies have proven to be successful in generating a notable increase in sales enquiries and personal visits to our properties in the fall of this year. Our financial position continues to gradually improve as shown on Slide 4. Our interest coverage ratio improved to 2.4 times in Q3 2014 from 2.27 times in the same quarter last year. Our net debt to adjusted EBITDA ratio was 8.5 and our indebted ratio was 55.2% at September 30, 2014. Also at September 30, 2014 we had cash on hand of $14.3 million and 77.6 million of available borrowing capacity under our credit facilities. In addition to a number of new IT and communication systems implemented in the first part of 2014, in Q3 we completed a major update to our Web site which is already generating significant improvements to several key online metrics. So far in 2014, we completed acquisitions of interest in four retirement residences and a medical office building for a total of $87.4 million. We also completed divestitures of 19 non-core properties in Ontario and the U.S. for approximately $225 million, with proceeds being used to fund acquisitions and development activities and to reduce our debt levels. In 2014, we completed development of one retirement residence in Ontario and one residence in Florida with three other projects in progress for completion in 2015. These projects add new competitive properties to our portfolio and generate very attractive financial returns. I would now like to turn it over to Karen Sullivan, our Chief Operating Officer, to talk about some operational initiatives that she and her team are working on. Karen?

Thanks Brent. Turning to Slide 5, as Brent mentioned our fall national advertising campaign which included prints and television commercials and search engine marketing strategies was very successful. A call to action in the first three weeks of the campaign was to attend an Open House at any of our properties across Canada on September 28. Over 5,500 people attended these events, an increase of 52% compared to a similar Open House held last year at the same time. This has provided our sales consultants with a pipeline of potential prospects to follow up with throughout the fall. We're also taking advantage of our exclusive preferred partnership arrangements with CARP as well as our newest affinity partnership with the National Association of Federal Retirees which combined have resulted in over 200 new leases signed this year. In addition, we continue to optimize our centralized call center which received over 2,700 sales enquiries in Q3. This convenient service unique to our sector now allows prospects to book personal visits at any of homes across the country through one of our centralized call center agents. As shown on Slide 6, we continue to focus on enhancing customer experience, including piloting a service mapping approach to help our homes effectively deal with service issues that arise and make overall service improvements. Recently we received the results of our new resident satisfaction survey which was designed by ProMatura, the firm that analyzes the NIC Data in the U.S. These results will be used as our new baseline to continue to increase the number of very satisfied residents. Our results were slightly above other U.S. Seniors' housing providers who utilized comparative quality of life questions. In addition, we continue to negotiate favorable contracts with national vendors for kitchen equipment, uniforms, furniture, vehicles, paint, flooring, carpeting and medical supplies and equipment. We expect to see continued cost savings based on these arrangements in Q4 and throughout 2015. Finally, on the long term care side of the business, Ontario Ministry of Health and Long-Term Care announced a new initiative to create an enhanced long-term care renewal strategy to support operators in redeveloping B and C Class long-term care homes. The announcement includes establishing a dedicated project office increasing construction funding, supporting increases to preferred accommodation premiums, extending the maximum LTC license term from 25 years to 30 years for homes that redevelop. Establishing a committee to review various requests from design standards and scheduling long-term care homes for redevelopment. This was a positive announcement, as there will be tables for stakeholders to consult with the government this fall and into the early spring to continue the dialog on the details with a view to making this initiative successful. I will now turn it over to Vlad to discuss our Q3, 2014 financial performance.

Thanks Karen. As shown on Slide 8, in the third quarter of 2014 our operations generated AFFO of 33.9 million or $0.19 per unit diluted compared to AFFO of 32.6 million or $0.18 per unit diluted in Q3, 2013. This growth in AFFO was primarily driven by 2.6% NOI growth in the same-property portfolio, the growing contributions from newly acquired and developed properties, interest cost savings, the positive impact of foreign exchange in the U.S. dollar and lower G&A cost partially offset by the impact of non-core asset sales and lower management fee income. As shown on Slide 9, our Ontario retirement same-property portfolio delivered same-property NOI growth of 1.9%. Average occupancy in Q3 2014 was 87%, a 60 basis points increase from the previous quarter, however still below the 87.6% occupancy in Q3 2013. The growth in the same-property NOI is attributable to revenue growth in regular rental rate increases and ancillary services partially offset by lower occupancies, higher moving incentives, higher staffing food and property tax expenses. Our Western Canada platform delivered a 1.7% same-property NOI growth in Q3 2014 as shown on Slide 10. Importantly, our Western Canada occupancies reached a multi-year high of 93.5% a strong 150 basis points growth from Q3 2013. The growth in the same-property NOI has been driven by regular annual rent increases in line with competitive market conditions and higher ancillary revenue from enhanced services provided to our residents and higher occupancies. These were partially offset by higher staffing property tax and food expenses. Conditions in most of our Western Canada markets remain positive and we expect continuing strong performance in Q4 2014 and in 2015. On Slide 11, you'll see the results of our Quebec platform. Q3 2014 same-property NOI increased $700,000 or 4.9% and occupancy improved by 120 basis points to 88.7% in Q3 2013. The growth in NOI was primarily due to regular annual rental rate increases in line with competitive market conditions, higher ancillary revenue from enhanced services provided to our residents and higher occupancies. These were partially offset by higher utilities and food expenses. Leasing activity remained strong in most of our Quebec markets. Our Ontario long-term care platform same-property NOI increased $200,000 or 2.8% in Q3 2014, primarily due to higher preferred accommodation rates and strong expense controls as shown on Slide 12. Our U.S. platform results are shown on Slide 13, same-property NOI increased $300,000 or 1.8% as a result of regular annual rent increases and lower management cost offset by the impact of lower occupancies, higher staffing food property taxes, insurance and utility. The competition in some of our U.S. markets has started to increase, in order to remain competitive we have been allocating and we'll continue to allocate capital investment to strategically improve select properties in these markets. As outlined on Slide 14, our Q3 2014 G&A expenses decreased by $400,000 or 5.3% compared to the Q3 2013, primarily due to a reduction in legal cost as a result of settling the litigation in the U.S. earlier this year. In addition, timing of certain expenses also contributed to a reduction in our Q3 2014 G&A. I'll now turn the call back to Brent to wrap up.

Thanks Vlad. As shown on Slide 16, our key priority remains growing the contribution to AFFO from our core property portfolio. We expect that our strong brand and new 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 at our properties, including assist to 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 properties over the near term. Our focus on process improvements is resulting in better support for our operating teams and we expect measurable expense savings over time. We will continue to improve our information management systems to gain efficiencies and information processing and speed and decision making throughout the country and expect to begin the development of care assessment and billing and human resource management systems. We expect to continue to invest in our development program, prioritizing projects on site adjacent to our existing properties where we can, driving operating synergies by adding new capacity. We are working on a number of interesting new development opportunities and expect to commit several new projects in 2015. We will continue to optimize our portfolio replacing over time older non-strategic assets with newer products. We will also continue to evaluate a number of acquisition opportunities to add to our portfolio pursuant to our growth strategies. Finally, our focus remains on maintaining a strong balance sheet and a 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 risk by spreading our debt maturities over time. We remain committed to our target of reducing our debt ratios over time. Thank you for time and attention this morning and we'll now be pleased to answer any of your questions you may have. Valerie, over to you.

Thank you, Mr. Binions. We will now take questions from the telephone lines. (Operator Instructions) Our first question is from Jonathan Kelcher with TD Securities. Please go ahead. Jonathan Kelcher - TD Securities: Just on the advertising campaign, was that a national program or was that targeted?

It was national and it ran in the four provinces which we operate. Jonathan Kelcher - TD Securities: So, if you look at -- if you had 5,500 people come in, what would be the historical conversion rate from visits to tenants?

Well, you're talking about a single issue which is the Open House and that's a pretty broad group of people that come in, you'll get tire kickers and you'll get people just wanting to understand and you'll get people coming in for the food. So it's a broad thing, what happens is we actually track that, we put them in our system every single person that comes in gets put in our prospect relationship management system and we interact with them, we continue to interact with them over time. In the big picture of things not directly only looking at Open Houses, but looking at the broader aspect of all new enquiries that we get or initial contacts as we call them as we get them, we convert close to -- between 10% and 12% depending on where we are across the country. Probably a little lower percentage in the timeframe that we calculate these things for an Open House, but on the broad range that's what we would convert. Jonathan Kelcher - TD Securities: And what would be a typical timeline if they're actually -- when there is such a thing from say you convert somebody from the time of initial contact to the time where they move in?

The average is between 90 days and 120 days. Jonathan Kelcher - TD Securities: And just on the Ontario portfolio, is it the same three markets that are sort of holding back occupancy gains?

Yes, it is, yes. Jonathan Kelcher - TD Securities: And then are you seeing -- are you starting to see improvements there or maybe a little bit of color on those three markets?

Yes, no, we are starting to -- we think that our sales and marketing initiatives as well as the operational re-org that we did earlier this year are all starting to help across Ontario but also in those three markets. Jonathan Kelcher - TD Securities: So, would you expect the Ontario portfolio to gain occupancy over the next few quarters?

Just like it did in Q3 over Q2, we have pretty significant occupancy gain in Ontario, we would expect the Q4 to continue in that direction. Q1 is always a difficult period for us. In occupancy it's the flu season so, if you check our numbers you'll see every year over the last 10 years there's been a dip in Q1, that's why we wouldn't expect any different this year, we hope maybe it's a little lower, but it really depends on the weather and how things are going.

And how bad the flu is as well. Jonathan Kelcher - TD Securities: But you'd hope it's above Q1 last year then?

We would hope that's the case, yes.

Yes.

Thank you. Our next question is from Heather Kirk with BMO Capital Markets. Please go ahead. Heather Kirk - BMO Capital Markets: Just expanding on your comments with respect to the Ontario Ministry, can you just explain a little bit what that potentially could mean for Chartwell in terms of what they've announced?

Well it's really hard to say at this stage of the game, what they-- they didn't actually announce the program, they announced a consultation process to come up with the program. So, between now and the spring we are going to meet with the government, there's various committees meetings on specific issues, one of which is on how we're going to make sure that the funding in place is enough to make this work which is one of the variables and we don't know what those numbers are yet, because there's a lot of work left to be done and that's -- which is a good thing, it's better than the government just announcing here's the program and off you go which didn't work all that well last time. They actually announced the process to figure it out and make sure it works better, we're very pleased with that, but we cannot give you anything at the present time, because nothing's been decided. Heather Kirk - BMO Capital Markets: So still early days and not a sort of concrete opportunity?

Very early days, we know we have 9 properties to redevelop here and we have every expectation that we'll be able to do that, but I cannot give you any details with any accuracy at the present time. Heather Kirk - BMO Capital Markets: You mentioned in your disclosure that development is becoming more of a focus, can you give us a sense of sort of what kind of quantum do you think that might ramp up to over the next couple of years?

Sure, Heather we have several projects that have received internal approvals, they totaled close to $250 million of construction cost. We expect to start those in next year and in 2016. A lot of these projects are additions on the land that we already own to the existing properties, in fact it is in three provinces in DC, Ontario and Quebec and some of these projects we think we will do in partnership with our new partners in Quebec as well. Heather Kirk - BMO Capital Markets: So that 250 -- would that include the stuff that would be going to mezzanine financing program or is that on book kind of stuff that Chartwell is spending?

That is without mezzanine finance project, this is Chartwell project. Heather Kirk - BMO Capital Markets: And just a final question, given what's been going on in the U.S. on the M&A front and sort of clearly a heavy transaction activity. Has there been any thought consideration given to just selling off the U.S. assets or potentially bringing in a partner for Canadian assets given how much activity we're seeing south of the border?

We are always looking at all the options for this company, what's in our best interest as you know, we've been narrowing our footprint in the U.S. marketplace and we continue to look what the options are both on this side of the border and south of the border, but there is nothing that I can share with you at the present time. Heather Kirk - BMO Capital Markets: So, would it be accurate to characterize it that there isn't sort of a strong -- but if there wasn't an opportunity that Chartwell might consider just completely exiting the U.S?

We will keep all options open for this company and we'll do what we think at the end is in the best long-term interest of our unit holders.

Thank you. Our next question is from Alex Avery with CIBC. Please go ahead. Alex Avery - CIBC: Thank you. Brent when you look at your U.S. operations does the change and exchange rate year-to-date have any influence on your thinking from a strategic perspective?

No, I mean exchange rates go up and down on a very wide basis they move around, we're at par, we were down at $0.80 a while ago and now we're in the middle of that, we do not actually make our strategic decisions based on the variations in the exchange rates, it's a factor in our discussions but it doesn't drive the decision. Alex Avery - CIBC: And then when you look at the business you've had a lot of good things going on reducing leverage, rent growth, same-property NOI growth all sorts of good things, but it seems that the one area that's been I guess stubbornly difficult to move is the overall occupancy, as you look back over the last couple of years I think certainly we expected occupancy to have moved higher than where it is today, is there anything you can comment on that front in terms of what's your expectations are from here and perhaps what some of the challenges have been?

Yes, sure. We said numerous times in our discussions that there was serious overbuilding in Ontario through '9,'10,'11 and '12 and it has the impact on occupancy in Ontario for many of the players in the province. So now it's flattened out, it's come back into what we'd call normal development rates at the present time and I think we've always said as soon as occupancy begins to -- as soon as construction begins to flatten out we should begin to see the occupancy gains. I think you saw at this last quarter, you seen BC where new builds stopped more or less 18 months ago, you've seen significant move in that direction. Quebec continues to grow and our occupancy continues about the same, sorry -- development continues about the same pace it has. In '13 finally development slowed down in Ontario to a more normative pace, '14 has been a normative pace. So we had to absorb a fair bid of occupancy, I think we're starting to see Ontario move in the right direction now. Alex Avery - CIBC: Okay, so you think you can move occupancy sustainably higher it's just perhaps the timing?

I believe that you will see occupancy begin to move sustainably higher. Again, I caution Q1 tends to be softer, but I think you're going to continue to see occupancy on the whole begin to move up in the province.

Thank you. (Operator Instructions) Our next question is from Jimmy Shan with GMP Securities. Please go ahead. Jimmy Shan - GMP Securities: Thanks. Maybe another way to tackle the U.S. strategy question, is the occupancy in the U.S. have been sitting around 88% for your portfolio for a while, is it your view that you think you can achieve a much higher occupancy in the short term before you can give any consideration to selling the portfolio?

That's called timing in the market, we continue to do everything we can to work with our partners to drive occupancy in the U.S. that's all is an issue every day for us. It's not a timing issue, it's something we focus on on a daily basis, with respect to the strategy it's always a function of, is it the right time, do you get the right offer? We will look at all options as I said before and try and make the decision that we think is best for the company. Jimmy Shan - GMP Securities: I don't know if you've done a comparison with the Holiday portfolio in the U.S., how would you say -- how would you characterize your core markets in the U.S., the portfolio in your core markets relative to the Holiday portfolio, any thoughts on that?

I'm not sure I'll be able to directly compare our portfolio to the Holiday portfolio, I can tell you that our Colorado properties and six properties that we have there have been consistently performing at a very high occupancy and delivered continuous NOI growth. Our portfolio in Florida are in various markets and there's properties that are new or there are properties that are not so new and we invest in significant capital to upgrade the properties that are not very new and the Texas portfolio has been pretty steady performer over the long period of time. I do not have Jimmy direct comparison to the Holiday portfolio. Jimmy Shan - GMP Securities: Okay. And then finally just on the debt for next year, I think the blended average expiring rate is 5%, I don’t know if you've mentioned it earlier in the call, but what would be the breakdown in terms of interest rate between the U.S. maturities and the Canadian maturities and what would be your expectation of refinancing terms?

There is a $130 million give or take of the U.S. maturities that are included in 2015, those loans are at 5.75% rate, 10 year U.S. money today would be at about 4.6% - 4.7% so there certainly we expecting to generate some significant savings on this refinancing. With respect to the Canadian maturities, as you know we've been early refinancing 2015 mortgages and you'll see some few more of these completed in Q4 and whatever is going to be left in 2015 is not going to add to the significant amount or these would be properties that are not yet stabilized than they're financed with floating rate mortgages.

Thank you. Our next question is from Pammi Bir with Scotia Capital. Please go ahead. Pammi Bir - Scotia Capital: Thanks, good morning. Just going back to the Ontario retirement homes for a minute, can you just describe the nature of the incentives that were used and should we expect any incremental NOI impact in the next couple of quarters?

With respect to the affinity partnerships that we have? Pammi Bir - Scotia Capital: No, there was mention of incentives in your Ontario -- same-property NOI portfolio discussion in the MD&A. So I'm just curious as to what types of incentives those were?

Just the normal incentives that we use which are sometimes moving fees or one free month nothing out of the ordinary. We're not running a big program like we have in other years. Pammi Bir - Scotia Capital: So that's what I sort of get into, so nothing like we saw I think about a year ago or a bit longer. And then just on the -- just given where the payer ratio is, it's obviously in pretty good shape now, but how do you feel about the distribution more discussions are sort of being had at the Board and I guess as you try to balance that with your leverage reduction goals as well.

So that's always a matter of that we look at with the Board, we look at it on a more of an annual basis at this time, we're in certainly much better shape than we've ever been before, we look at -- I have to look at all aspects it's our strategy though and our projections and our budgets et cetera. This is a matter that we'll come up with the Board again as it always does as part of the year end review process, but I would have nothing more to comment on it at this time. Pammi Bir - Scotia Capital: So if anything were to happen perhaps it could be in 2015.

That's -- far more likely than 2014. Pammi Bir - Scotia Capital: And then just maybe Vlad, just on the G&A, you mentioned some timing difference that may have I guess contributed to some of the quarter-over-quarter decline, but can you just give us some sense of what we should expect in the next 12 months?

Yes Pammi, I think I've been for now a couple of years saying that the run-rate -- you really shouldn't be looking at the G&A and actually at our business overall on a quarter-to-quarter basis the G&A expenses fluctuate. This quarter we had some lower professional fees, for example that we had in the comparative quarters before, as I said before $7.5 million to $8 million run-rate would be probably reasonable if you'd just normalize all these expenses.

Thank you. There are no further questions registered at this time. I would like to turn the meeting back over to you Mr. Binions.

Thank you. That wraps up today's conference call. Thanks again to everybody for joining us, as always if you have any further questions don't hesitate to give us a call. Thanks and goodbye.

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