Chartwell Retirement Residences (CSHUN) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Unitholders of Chartwell Retirement Residences. Please note that today's meeting is being recorded. The meeting is being held in person and online via live audio webcast. During the meeting, we'll have a question-and-answer session. If attending online, you can submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to Huw Thomas. Mr. Thomas, the floor is yours.

Thank you, and good afternoon, and welcome to the Annual and Special Meeting of the Unitholders of Chartwell Retirement Residences. My name is Huw Thomas, and I am the Chair of the Board. 2025 was a record year for Chartwell, both strategically and operationally. On behalf of the Board of Directors, I would like to thank every member of the Chartwell staff from the senior leadership team to the employees in the corporate office and all of our homes for their contributions in delivering a strong operating and financial performance and achieving all of Chartwell's 2025 strategic targets and the core objective of making people's lives better. Earlier this calendar year, Ann Davis and Jamie Scarlett stepped down from the Board. I wanted to specifically acknowledge their contributions to Chartwell's progress and thank them for their dedication to Chartwell's governance and strategic development during their tenure. We are pleased to continue to offer a virtual option today for those of you who aren't able to join us here in person in Mississauga. This format allows all unitholders and proxy holders from any location to attend, participate and vote at the meeting. Guests are also welcome to attend, listen to our meeting and ask questions. I will set out a few rules now for the orderly conduct of the meeting. For virtual and in-person attendees, firstly, questions in respect of a motion can be submitted by any registered unitholder or duly appointed proxy holder using the instant messaging feature of the virtual interface. When sending a question, please provide your name and if you are representing an entity, which is a unitholder please provide the name of the entity you represent. General questions will be addressed during the question period at the end of the meeting, which the operator of the call will facilitate and I request that you hold any general questions until that time. Questions regarding procedural matters or directly related to the motions before the meeting will be addressed at the appropriate time. For those attending in person, all the votes today will be conducted by ballot. A number of registered unitholders or proxy holders have provided their voting instructions in advance of the meeting. If you are a registered unitholder or proxy holder attending in person, you will have received ballots when you arrived at the meeting and registered with Computershare. If you are a proxy holder and did not receive your ballots or if you receive the ballots and have not turned them in, please raise your hand now and the scrutineer will assist you. Unitholders and proxy holders attending virtually and who have logged into the meeting using their control number are able to vote on each matter until voting is closed. You will be able to see on the screen or motions and can vote online by clicking as appropriate at the top of the screen and completing the ballot. If you have already voted by proxy before the meeting, voting online will revoke your previously submitted proxy. Once voting is closed, your online ballot will automatically be submitted. Voting on all matters is now open and will remain open until I close voting shortly before the end of the formal part of the meeting. We will now proceed with the formal portion of today's meeting. I will now call the meeting to order. I will act as Chair of the meeting. Jonathan Boulakia, will act as Secretary of the meeting. And Computershare Trust Company of Canada, through its representative, Louise Waltenbury, will act as scrutineer to compute the votes of any polls taken at the meeting and to report the results to me. The purposes of today's meeting are set out in the Management Information Circular of Chartwell dated April 24, 2026. For notice, management information circular and proxy form were provided on or around May 12, 2026 to each unitholder of record as of April 24, 2026. Our transfer agent, Computershare, has attested to the proper mailing of the notice calling this meeting, proof of which will be annexed to the minutes of this meeting as a schedule. With the consent of the meeting, we will dispense with the reading of the minutes of the last annual meeting of unitholders. The agenda, today's meeting will be as follows: Firstly, the presentation of the financial statements of Chartwell for the year ended December 31, 2025. Secondly, the election of the trustees of Chartwell, the nomination of trustees for CHS Trust and the nomination of directors for Chartwell Master Care Corporation. Thirdly, the reappointment of auditors for Chartwell. Fourthly, amendments to CHS Trust Declaration of Trust. Fifthly, amendments to Chartwell MastercareLP Limited Partnership Agreement. Sixth, an advisory resolution on Chartwell's approach to executive compensation. And finally, management's presentation to unitholders, followed by a question period. I would like to take this opportunity to introduce the other trustees and directors and senior officers of Chartwell in the room or online. We have Brent Binions, Director; Rael Diamond, Director; Alka Gautam, Director; Valerie Pisano, Director; Sharon Sallows, Director; Gary Whitelaw, Director; Vlad Volodarski, Director and Chief Executive Officer; Jeff Brown, Chief Financial Officer; Aaron Sullivan, President and Chief Operating Officer; Jonathan Boulakia, Chief Investment Officer, Chief Legal Officer and Secretary; and finally, Gordon Chiu, Chief Technology Officer. Notice of this meeting and for those who requested it, the management information circular were mailed to unitholders and the transfer agent has provided us with proof of this mailing. The scrutineer has reported on the number of units represented at this meeting and has computed and recorded the votes received to date on the matters submitted for consideration at this meeting. I am therefore advised that a quorum of unitholders is present. I declare the meeting to be duly called and properly constituted for the transaction of business. Moving now to the business to be transacted at the meeting. Firstly, financial statements. I wish to present to the meeting the financial statements of Chartwell for the year ended December 31, 2025, and the report of the auditors on those statements. Copies of these financial statements were mailed to those unitholders of Chartwell, who requested them and are available on our website at www.chartwell.com. I do not propose to read the financial statements to the meeting nor is the approval by the unitholders required. Secondly, election of trustees of Chartwell. The next group of related items of business is the election of trustees for Chartwell, the approval of directions regarding the election of trustees of CHS Trust and direction regarding the election of directors of Chartwell Mastercare Corporation. Chartwell has a policy that entitles unitholders to vote for each nominee on an individual basis. We will proceed first with the election of the trustees of Chartwell. The numbers of trustees of Chartwell has been fixed at 3. I will now ask Jonathan Boulakia to nominate the 3 trustees.

I nominate Alka Gautam, Huw Thomas and Gary Whitlaw to serve as trustees of Chartwell Retirement Residences.

As no other nominations were submitted within the required time frame set out in Chartwell's Declaration of Trust, I declare the nominations closed. Unitholders of Chartwell are also entitled to direct the trustees of Chartwell to elect nominees who will serve as the 3 trustees of CHS Trust. I will now ask Jonathan to move a motion in favor of the election of nominees as the 3 trustees of CHS Trust.

I move that the trustees of Chartwell be directed to vote the units of CSH Trust held by Chartwell in favor of the election of all Rael Diamond, Valerie Pisano and Sharon Sallows as trustees of CSH Trust.

I would ask someone to second the motion?

I second the motion.

Thank you, Karen. As no other nominations were submitted within the required time frame, I declare the nominations closed. Unitholders of Chartwell are also entitled to direct the trustees of Chartwell to elect nominees who will serve as the 9 directors of Chartwell Mastercare Corporation. I will now ask Karen Sullivan to move a motion in favor of the election of nominees as the 9 directors of Chartwell Mastercare Corporation.

I move that the trustees of Chartwell be directed to vote the common shares of Chartwell Master Care Corporation held by Chartwell in favor of the election of Brent Binions, Rael Diamond, Alka Gautam, Douglas McClatchy, Valerie Pisano, Sharon Sallows, Huw Thomas, Vlad Volodarski and Gary Whitelaw as Directors of Chartwell Master Care Corporation.

I second the motion.

As no other nominations were submitted within the required time frame set out in Chartwell's Declaration of Trust, I declare the nominations closed. Next, the appointment of auditors for Chartwell. The next item of business is the reappointment of auditors for Chartwell. I will now ask Jeff Brown to please move a motion in this regard.

I move that KPMG LLP be reappointed auditors of Chartwell until the next annual meeting or until a successor is appointed and that their remuneration as such be fixed by the Directors of Chartwell Master Care Corporation.

I second the motion.

Next, the amendment to the CHS Trust declaration. The next item of business is to consider and if thought advisable, to approve the resolution included in Appendix A of the information circular authorizing certain amendments to CHS Trust declaration of trust as set out on Page 27 of the management information circular. I will now ask Jonathan Boulakia, to please move a motion in this regard.

I move that the CHS Trust resolution set out as Appendix A to the management information circular be approved.

And I have a seconder?

I second the motion.

Are there any questions on the motion? Hearing none, we move to amendments to the partnership agreement. The next item of business is to consider and if thought advisable, to approve the resolution included in Appendix B of the information circular, authorizing certain amendments to Chartwell MastercareLPs Limited Partnership Agreement as set out on Page 28 of the Management Information Circular. I will now ask Karen Sullivan to please move a motion in this regard.

I move that the partnership agreement resolution set out as Appendix B Management Information Circular be approved.

And I have a second.

I second the motion.

Again, are there any questions on the motion? Hearing none, we move to advisory resolution on executive compensation. The last item of business to consider and if thought advisable, to approve the advisory resolution on approach to executive compensation set out on Page 29 of the Management Information Circular. I will now ask Karen Sullivan to move a motion in favor of the resolution.

I move that the resolution as set out on Page 29 of the Management Information Circular be approved.

And I have a second.

I second the motion.

Again, are there any questions on this motion? Hearing none, we now move to voting. As mentioned earlier, virtual voting will be conducted by electronic ballot, which has been open since the start of the meeting for registered holders and appointed proxy holders. Voting is still open. Those who wish to register your votes by accessing the voting page and selecting the for or withhold buttons next to the name of each proposed trustee and Director; and next to the resolution with respect to the appointment of KPMG as Chartwell's auditor may proceed. Please register your votes by selecting for or against next to the resolutions with respect to the CHS Trust resolution, the partnership agreement resolution and the advisory resolution on executive compensation. We will provide registered unitholders and duly appointed proxy holders approximately 1 more minute to complete their ballots. [Voting]

Voting is now closed. Would the scrutineer please collect any remaining paper ballots from those in the room who wish to vote. I would ask that the scrutineer tabulate the results of voting. We will disclose the official voting results shortly after the meeting on sedarplus.ca. However, based on the proxies we have received to date, I do have a preliminary report from the scrutineer, with respect to each of the motions voted upon at the meeting, and I can now confirm the results of your votes today either in person or virtually by duly appointed proxy holders. The results are as follows. On the first motion, the election of trustees of Chartwell, each of the 3 nominees has been elected. I declare Alka Gautam, Huw Thomas and Gary Whitelaw to be duly elected as trustees of Chartwell Retirement Residences. On the second motion, the nomination of trustees of CSH Trust the nomination of all 3 nominees has been approved. I declare the trustees of Chartwell are hereby directed to vote the units of CSH Trust held by Chartwell in favor of the election of Reale Diamond, Valerie Pisano, Darren Sallows and as trustees of CSH Trust. On the third motion, the nomination of directors of Chartwell Master Care Corporation, the nomination of all 9 nominees has been approved. I declare the trustees of Chartwell are directed to vote the common shares of Chartwell Mastercare Corporation held by Chartwell in favor of the election of Brent Binions, Reale Diamond, Alka Gautam, Douglas McClatchy, Valerie Pisano, Darren Sallows; myself, Huw Thomas, Vlad Volodarski and Gary Whitelaw as Directors of Chartwell Mastercare Corporation. I would like to specifically welcome as new directors, Reale Diamond and Douglas McClatchy, both of whom bring a wealth of relevant experience to Chartwell and who I'm sure will make valuable contributions to the Board discussions during their tenure. On the motion to appoint auditors, I declare KPMG LLP have been appointed auditors of Chartwell in accordance with the motion and that the Directors of Chartwell Mastercare Corporation are authorized to fix their remuneration. On the CSH Trust Declaration of Trust Resolution, the resolution has been approved by a majority of votes cast by the unitholders represented at this meeting. Accordingly, I declare the resolution carried. On the Chartwell Master Care LP Limited Partnership Agreement resolution, the resolution has been approved by a majority of votes cast by the unitholders represented at this meeting. Accordingly, I declare the resolution carried. On the advisory resolution on executive compensation, the resolution has been approved by a majority of votes cast by the unitholders represented at this meeting. Accordingly, I declare the resolution carried. The formal business of the meeting is now concluded. As there is no further business, with the consent of the meeting, I now terminate the meeting and hand it over to Vlad Volodarski, the management's presentation to unitholders. On behalf of Chartwell, I would like to thank you all for attending today's meeting.

Thank you, Huw. I will now make some remarks about the operations of Chartwell, which will be followed by a general question period. For those in the room, if you have a question, please raise your hand and a microphone will be brought to you. For virtual attendees, I would like -- who would like to ask a question, I ask that you use the instant messaging feature of the virtual interface to do so. We will answer as many questions as time permits. For each question we answer, we will read out or summarize the question, and we will read out the name of the person who asked such question, and if applicable, the entity such person represents. I would like to remind you that questions which were already answered or that are redundant repetitive or inappropriate will not be answered or published. During this presentation, we may make statements containing forward-looking information and non-GAAP measures and ratios. 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 and details of such non-GAAP measures and ratios. More specifically, I direct you to the disclosures in our 2025 MD&A under the headings 2026 outlook in risks and uncertainties and forward-looking information. These documents can be found on our website or at sedarplus.ca. 2025 was a record year for Chartwell. Last year, same property occupancy increased by 480 basis points. Same-property net operating income grew 18.4% and funds from operations per unit increased by 25% year-over-year. That strong broad-based performance, and it reflects disciplined execution across the business. Those results start and end with our people. In 2025, our combined resident satisfaction score reached 82%, including 67% of residents who said that they were very satisfied living at Chartwell. On the employee side, 85% of our team members reported being engaged at work, including 57% who were highly engaged. Those numbers matter because they reflect real experiences inside of our homes every day. Strong operating momentum continued into the first quarter of 2026. Compared to Q1 of last year, occupancy improved 400 basis points. Same-property net operating income increased 15.6% and funds from operations per unit grew 35%. This is a strong start to the year, driven by demand, operating focus and great work of our teams. Looking ahead, the demand for senior housing is expected to grow 4% to 5% per year over the next decade, driven by the rapid growth in the population over the age of 80 years old. At the same time, new supply has been muted and is expected to remain so for at least 2 years. Against that backdrop, we are continuing to reposition our portfolio towards newer, higher growth assets in attractive markets, while also enhancing the effectiveness and efficiency of our operations. Our people give me confidence in Chartwell's ability to continue delivering exceptional services to our residents, peace of mind to their families, opportunity for growth for our employees and creation of sustainable value for our unitholders for many years to come. So our residents and their families, thank you for your trust. For our investors, thank you for your continued support. We do not take it for granted. My fellow directors and our executive leadership team, thank you for your guidance, commitment and courage. And to our Chartwell people in residences, regional offices and corporate support teams. You are the heart of this organization. Thank you for what you do every day. We are excited about the road ahead, and we remain focused on delivering results that matter for our residents, our employees, our communities and our unitholders. We would now be pleased to answer your questions.

Hello. My name is Gary. In addition to being an extremely small investor in Chartwell, I'm a regular volunteer at the Chartwell granted year across the street from Highpark in Central Toronto. And I have a certain amount of insight into the operation of the place. I had a brief chat with Vlad on the way in and it wasn't entirely satisfied with the procedures or determining simple things like well, the architectural arrangements, there's a major renovation going on there now. I might mention that Chartwell Grenadier, I believe, is at 100% occupancy. So it's the [indiscernible] project, getting a French stairway removed, and there really is a necessity for another elevator, but I haven't seen that, that is part of the plan. And there wasn't as far as I can tell, any real significant reference to the residents as to where they would regard their priorities in this whole process. I did mention to a Vlad that a certain amount of the renovation is a restoration of how the facility was before the last makeover, which I believe was 7 or 8 years ago, things carpeting and coloring and so on. The whole place, basically, all the hallways we painted gray, which a resident that I was chatting with former social worker mentioned, yes, I've seen that color before at the Metro East Detention Center. And the general opinion was not favorable about that. I take it we're now getting a bland base or cream color as the default color. And as I mentioned to head that this is not a matter of taste that there is a body of scientific research into the psychological effects of color in people with different ages and so on. So I just wanted to get on the record that as I say, a minor investor in the company. I think that the interest of an impossible business. I realize you have shareholders on 1 side and you have the responsibility for caring for vulnerable people in their final years on the other. But the employees and residents may it might be advisable to try and work out better procedures for gathering opinion and processing the outcomes. Our swimming pool would be nice, but I don't think that's going to happen.

Thank you, Mr. Norris for your question. More importantly, thank you for following hearing at the residents is extremely important part of what we create in our PAUSE communities, it's not just created by the residents and staff, but also volunteers play an important role in that. So thank you for doing that. Reader, in fact, is undergoing a significant renovation and it's a very important project for Chartwell because it is one of our core properties that -- and a great example of how we invest back in the properties that we consider to be core to Chartwell. They are going to be a several year long project because it's a significant renovation. We're completely revamping the building, and it will look ready when it's done. We have to operate within the confines of the envelope that we have. So things like elevators and swimming pools are a lot more difficult to create impossible impact in these situations. But I can assure you that the process that the team goes through in designing the environments is exhaustive. They are using a lot of science that is out there. They are consulting numerous design firms. And our teams staying out of or watching the current trends in design as it relates to senior leading, but also not in senior living as well because people that are coming in may not necessarily be comparing us to senior living, then you compare us to other places that we will be competing with. And so all of that takes -- is being taken into consideration when we design our buildings. So that development is -- I call it development because it's of the size of development. It's a large building, and we're investing a lot of capital in it, and we are all very excited about that particular investment and what this building will look like and services that we will continue to deliver to our residents there.

Question. What is the budget for the the upgrade of the graded year?

It is 1 million.

Other questions? Right. There's no questions then this will wrap up today's meeting. Thank you, everybody, for joining us. And as always, if you have any further questions, please do not hesitate to contact any one of us. Bye.

Thank you. This concludes the meeting. You may now disconnect.