Chartwell Announces Third Quarter 2012 Results

Chartwell Announces Third Quarter 2012 Results 
MISSISSAUGA, ONTARIO -- (Marketwire) -- 11/13/12 -- Chartwell Seniors
Housing Real Estate Investment Trust (TSX:CSH.UN) ("Chartwell")
announced today results for the three and nine months ended September
30, 2012. 
Q3 2012 Highlights 


 
--  Adjusted funds from operations ("AFFO") up 40.4%. 
--  Same property net operating income ("NOI") up 6.6% with occupancies
    growing to 90.3%. 
--  Integration of the recently-acquired Maestro portfolio continues with
    financial results ahead of expectations.

 
"We are pleased with the continued strong performance of each of our
operating platforms, which is a direct result of our ongoing
investments in new sales and marketing initiatives and focus on
operating efficiencies and expense controls," commented Brent
Binions, Chartwell's President and CEO. "The recently-acquired
Maestro portfolio is performing ahead of expectations and the
integration is progressing well. We continue to make solid progress
on a number of transformative initiatives in the areas of operations,
sales, marketing and information technology that will accelerate the
achievement of our strategic goals and support our vision of Making
People's Lives Better." 
Financial Highlights 


 
                                 Three Months Ended       Nine Months Ended 
                                       September 30            September 30 
                                   2012        2011        2012        2011 
----------------------------------------------------------------------------
                                                                            
AFFO ($000s) (1)             $   31,409  $   22,368  $   81,452  $   64,494 
AFFO per unit diluted (1)    $     0.18  $     0.15  $     0.49  $     0.44 
                                                                            
Funds from operations                                                       
 ("FFO") ($000s) (1)         $   35,432  $   24,958  $   90,736  $   71,655 
FFO per unit diluted (1)     $     0.20  $     0.17  $     0.54  $     0.49 
                                                                            
Distributions declared                                                      
 ($000s)                     $   23,266 
 $   19,649  $   67,371  $   58,732 
Distributions declared per                                                  
 unit                        $     0.14  $     0.14  $     0.41  $     0.41 
Distributions declared as a                                                 
 percentage of AFFO                74.1%       87.8%       82.7%       91.1%
                                                                            
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(1)  AFFO, AFFO per unit diluted, FFO, and FFO per unit diluted are measures
     used by management in evaluating operating performance. Please refer to
     the cautionary statements under the heading "Non-IFRS Measures" in this
     press release.                                                         

 
AFFO in the third quarter of 2012 was $31.4 million ($0.18 per unit
diluted) compared to $22.4 million ($0.15 per unit diluted) in the
third quarter of 2011, representing an increase of 40.4%. For the
nine-month period ended September 30, 2012, AFFO was $81.5 million
($0.49 per unit diluted) compared to $64.5 million ($0.44 per unit
diluted) in the same period of 2011, an increase of 26.3%.
Incremental contribution from the property portfolio, due to
acquisitions and same property NOI growth and new management fees
from the Maestro portfolio, were partially offset by higher interest
expenses incurred to support the significant growth in the property
portfolio and higher negative AFFO from properties in lease-up. Per
unit amounts were impacted by the increases in the weighted average
number of units outstanding. 
In the third quarter of 2012, FFO increased to $35.4 million ($0.20
per unit diluted) from $25.0 million ($0.17 per unit diluted) in the
third quarter of 2011. For the nine-month period ended September 30,
2012, FFO increased to $90.7 million ($0.54 per unit diluted) from
$71.7 million ($0.49 per unit diluted) in the same period of 2011. In
addition to the items discussed above, FFO has also been impacted by
changes in the amortization of financing costs and the amortization
of fair value adjustments on mortgages payable. 
Operating Performance 


 
                                                         Three Months Ended 
                                                               September 30 
                                                                  Increase/ 
                                           2012          2011    (Decrease) 
----------------------------------------------------------------------------
                                                                            
Same property occupancy (1)                90.3%         89.5%        0.8pp 
                                                                            
Same property NOI ($000s) (2) (3)  $     53,791  $     50,437  $      3,354 
                                                                            
General, administrative and trust                                           
 ("G&A") expenses ($000s) (4)      $      5,847  $      4,621  $      1,226 
G&A as a percentage of revenue              2.5%          2.5%            - 
                                                                            
Net loss ($000s)                   $    (18,538) $       (770) $    (17,768)
                                                                            
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                                                          Nine Months Ended 
                                                               September 30 
                                                                  Increase/ 
                                           2012          2011    (Decrease) 
----------------------------------------------------------------------------
                                                                            
Same property occupancy (1)                89.9%         89.2%        0.7pp 
                                                                            
Same property NOI ($000s) (2) (3)  $    156,444  $    147,814  $      8,630 
                                                                            
General, administrative and trust                                           
 ("G&A") expenses ($000s) (4)      $     18,976  $     17,163  $      1,813 
G&A as a percentage of revenue              2.9%          3.1%       (0.2pp)
                                                                            
Net loss ($000s)                   $   (100,788) $    (38,082) $    (62,706)
                                                                            
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(1)  pp = percentage points                                                 
(2)  NOI is a measure used by management in evaluating operating            
     performance. Please refer to the cautionary statements under the       
     heading 
"Non-IFRS Measures" in this press release.                     
(3)  Excludes the effects of foreign exchange on U.S. dollar-denominated    
     NOI.                                                                   
(4)  Excludes Q3 2011 non-recurring severance costs of $1.4 million.        

 
Same property weighted average occupancy in the three and nine months
ended September 30, 2012, improved by 0.8 and 0.7 percentage points,
respectively, compared to the same periods of 2011, as all operating
platforms delivered strong occupancy growth. 
Same property NOI improved by $3.4 million or 6.6% and $8.6 million
or 5.8% for the three and nine months ended September 30, 2012,
respectively, compared to the same periods of 2011. All operating
platforms delivered strong growth in the third quarter of 2012
compared to the same period of last year with the Canadian retirement
portfolio same property NOI growing by 7.1%, the Canadian LTC
portfolio same property NOI growing by 7.5% and the U.S. portfolio
same property NOI growing by 5.1%. 
G&A expenses, excluding severance costs increased by $1.2 million and
$1.8 million in the three and nine months ended September 30, 2012,
respectively, compared to the same periods of 2011. The increases are
primarily due to higher staffing costs to support the significant
growth in the portfolio under management. 
In addition to the items discussed above, the net loss for the three
and nine months ended September 30, 2012 was impacted by higher
depreciation and amortization charges resulting from acquisitions,
acquisition-related costs, convertible debenture issuance costs and
changes in fair values of certain financial instruments. 
Financial Position 
At September 30, 2012, cash on hand was $16.9 million and the unused
borrowing capacity on the Credit Facility was $23.3 million.  
At September 30, 2012, the Interest Coverage Ratio for the three and
nine months ended September 30, 2012 was 2.13 and 1.98, respectively,
compared to Interest Coverage Ratios of 1.95 and 1.91 in the same
periods of 2011. The Indebtedness Ratio, excluding assets held for
sale and related debt, was 54.1% (57.9% including convertible
debentures), compared to 57.0% (59.2% including convertible
debentures) at December 31, 2011. The average term to maturity of the
mortgage portfolio was 6.2 years with a contractual weighted average
interest rate of 5.20%. 
Recent Developments 
In October 2012, Spectrum Seniors Housing Development LP ("Spectrum")
completed sales of two of its retirement residences to a third party
and, with part of the proceeds, paid Chartwell $16.6 million in full
settlement of its obligations under various settlement, mezzanine
loan, and management and development agreements. As a result, in the
fourth quarter of 2012, Chartwell expects to record a reduction in
carrying balances of its mezzanine loans receivable of $4.4 million,
reversal of previously recorded impairment provisions and settlement
fee income of $10.9 million and interest, fee and various expense
reimbursements of $1.3 million. Chartwell's mezzanine loan portfolio
is now reduced to loans on three properties totalling $6.4 million,
against which an impairment provision of $6.4 million remains
recorded. As a result of this settlement, Chartwell expects to incur
SIFT taxes in 2012. Chartwell estimates that the negative impact on
AFFO of these SIFT taxes in 2012, 2013 and 2014 will be less than
$0.02 per unit, annually.  
Chartwell's financial statements, including its Management's
Discussion and Analysis ("MD&A"), are available at www.chartwell.com.
A detailed list of Chartwell's property portfolio can also be
obtained under "Supplementary Information" in the "Investor
Relations" section of the web site.  
Investor Conference Call 
A conference call hosted by Chartwell's senior management team will
be held Wednesday, November 14, 2012 at 10:00 AM ET. The telephone
numbers for the conference call are: Local (416) 849-5562 or Toll
Free (866) 269-7096. The conference call can also be heard over the
Internet by accessing the Chartwell website at www.chartwell.com,
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: Local (416) 915-1035 or Toll-Free (866)
245-6755. The Passcode for the Instant Replay is 439270#. The call,
along with the accompanying slides, will also be archived on the
Chartwell website at www.chartwell.com.  
Chartwell is a real estate investment trust which indirectly owns and
operates a complete range of seniors housing communities from
independent supportive living through assisted living to long term
care. It is one of the largest participants in the seniors housing
business in North America. Chartwell's aim is to capitalize on the
strong demographic trends present in its markets to maximize the
value of its existing portfolio of seniors housing communities, and
prudently avail itself of opportunities to grow internally and
through accretive acquisitions. 
Chartwell's Distribution Reinvestment Plan ("DRIP") allows
unitholders to have their monthly cash distributions used to purchase
units without incurring commission or brokerage fees, and receive
bonus units equal to 3% of their monthly cash distributions. More
information can be obtained at www.chartwell.com. 
Forward-Looking Information 
This press release 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 press release 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 estimated 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 2011 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-IFRS Measures 
FFO, AFFO, NOI, Interest Coverage Ratio and Indebtedness Ratio are
not measures defined by International Financial Reporting Standards
("IFRS"). They are presented because management believes these
non-IFRS measures are relevant and meaningful measures of Chartwell's
performance. FFO, AFFO,
 NOI, Interest Coverage Ratio and Indebtedness
Ratio as computed may differ from similar computations as reported by
other issuers and may not be comparable to those reported by such
issuers. Chartwell's Q3 2012 MD&A contains a reconciliation of Net
Income/Loss to FFO and the calculation of AFFO for the three and nine
months ended September 30, 2012. Detailed descriptions of these terms
are contained in Chartwell's Q3 2012 MD&A, available at
www.sedar.com.
Contacts:
Chartwell Seniors Housing Real Estate Investment Trust
Vlad Volodarski
Chief Financial Officer
(905) 501-4709
(905) 501-4710 (FAX)
vvolodarski@chartwellreit.ca
www.chartwell.com
 
 
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