Mr. Brent Binions reports

CHARTWELL ANNOUNCES FIRST QUARTER 2018 RESULTS

Chartwell Retirement Residences Real Estate Investment Trust has released its results for the first quarter ended March 31, 2018.

Q1 2018 highlights:

• Funds from operations (FFO) up 1.7 per cent;
• Same-property adjusted net operating income (NOI) up 1.3 per cent;
• Same-property occupancy of 92.1 per cent.

"Our teams delivered solid operating results in the first quarter of 2018, despite some strong headwinds from increased competition in certain markets and another tough flu season," commented Brent Binions, president and chief executive officer. "In April, we completed the previously announced acquisition of four residences in Alberta and issued $150-million of a new series of unsecured debentures maturing in 2025, further strengthening our balance sheet and our foundation for continued success."

                         FINANCIAL HIGHLIGHTS
        (in thousands of dollars, except per-unit amounts) 
 
                                           Three months ended March 31,  
                                                  2018            2017            
                                                                                       
Resident revenue                         $     193,605   $     180,279   
Direct property operating expense        $     135,347   $     125,943   
Net income (loss)                        $      15,514   $      (4,167)  
FFO                                      $      42,820   $      42,106  
FFO per unit                             $        0.20   $        0.22

In Q1 2018, resident revenue and direct property operating expenses increased 7.4 per cent and 7.5 per cent, respectively, primarily due to the growing contribution from developments and acquisitions and growth in resident revenue, primarily due to rental rate increases and growth in direct operating expenses in the same-property portfolio.

In Q1 2018, net income was $15.5-million, compared with net loss of $4.2-million in Q1 2017. The increase in net income was primarily due to the gain on sale of properties, higher resident revenues and positive changes in fair values of financial instruments, partially offset by higher direct property operating, general administrative and trust (G&A), depreciation and amortization expenses, and finance costs.

In Q1 2018, FFO increased $700,000, primarily due to higher adjusted NOI and management fees, partially offset by higher financing costs, G&A expenses, and other items. In Q1 2018, FFO was reduced by $800,000 (Q1 2017: $1.4-million) of lease-up losses related to properties in development. The per-unit amounts were impacted by higher weighted average units outstanding from the public offering of trust units completed on Nov. 24, 2017, to finance the acquisition of four properties in Alberta, which did not close until Q2 2018.

                   OPERATING PERFORMANCE
                 (in thousands of dollars,
                     except occupancy)

                              Three months ended March 31,
                                       2018          2017

Same-property occupancy               92.1%         92.7%
Same-property adjusted NOI     $     66,048  $     65,228
G&A expenses                   $     12,530  $     10,405

In Q1 2018, same-property occupancy declined by 0.6 percentage point due to short-term competitive pressures from new developments, primarily in some Quebec markets.

In Q1 2018, same-property adjusted NOI increased by $800,000, or 1.3 per cent, driven primarily by regular annual rental rate increases in line with competitive market conditions and lower utilities expenses, partially offset by lower occupancies, higher staffing and food costs, and timing of certain expenses.

In Q1 2018, G&A expenses increased by $2.1-million, primarily due to higher staffing costs incurred to support the growing property portfolio and development activities, including management of Batimo projects, as well as higher training and education expenses, which were partially timing related.

Financial position

At March 31, 2018, liquidity amounted to $369.8-million, which included $15.4-million of cash and cash equivalents and $354.4-million of available borrowing capacity on the company's credit facilities. In addition, Chartwell's share of cash and cash equivalents held in its equity-accounted joint ventures was $7.1-million.

The interest coverage ratio on the rolling 12-month basis remained strong at 3.2 at March 31, 2018, compared with 3.5 at Dec. 31, 2017. The net debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) ratio at March 31, 2018, was 7.7, compared with 6.9 at Dec. 31, 2017.

Chartwell's financial statements, including its MD&A, are available on its website. A detailed list of Chartwell's property portfolio can also be obtained under "supplementary information" in the investor relations section of the website.

Recent developments

On April 13, 2018, Chartwell entered into amending agreements with its banking syndicate to extend the maturity of its credit facilities by one year to May 29, 2021, reduce interest rates and amend certain covenants related to its unsecured credit facility.

On April 23, 2018, Chartwell completed the previously announced acquisition of four retirement communities in Edmonton, Alta., comprising 775 suites, for a contractual purchase price of $297.4-million and entered into a forward purchase agreement to acquire an additional 256-suite residence upon completion of its development, expected in Q4 2019, for a contractual purchase price of $120-million. The vendor will provide $7.5-million of income support to Chartwell for two years after opening.

On April 27, 2018, Chartwell issued $150-million of 4.211 per cent Series B unsecured debentures due on April 28, 2025. DBRS Ltd. assigned a credit rating of BBB (low) with a stable trend to the Series B debentures. The net proceeds were used to partially repay amounts outstanding on its credit facilities.

On April 30, 2018, Chartwell entered into an agreement to acquire a 104-suite independent supportive living residence in Edmonton, Alta., for a contractual purchase price of $20-million. The closing is expected in Q2 2018.

Investor conference call

A conference call hosted by Chartwell's senior management team will be held Friday, May 11, 2018, at 10 a.m. ET. The telephone numbers for the conference call are 416-340-2217 (local) or 866-696-5910 (toll-free). The passcode for the conference call is 7105087 followed by the number sign. The conference call can also be listened to over the Internet by accessing the Chartwell website, clicking on "investor relations" and following the link at the top of the page. A slide presentation to accompany management's comments during the conference call will be available on the website. Please log on at least 15 minutes before the call commences.

The telephone numbers to listen to the call after it is completed (instant replay) are 905-694-9451 (local) or 800-408-3053 (toll-free). The passcode for the instant replay is 4757336 followed by the number sign. The call, along with the accompanying slides, will also be archived on the Chartwell website.

About Chartwell Retirement Residences Real Estate Investment Trust

Chartwell is an unincorporated, open-ended trust that indirectly owns and operates a complete range of senior housing communities, from independent supportive living through assisted living to long-term care. It is the largest operator in the Canadian senior living sector with over 200 quality retirement communities in four provinces.

We seek Safe Harbor.