Q2 2024 Sienna Senior Living Inc Earnings Call

Operator: Ladies and gentlemen, welcome to Sienna Senior Living Inc.'s Q2 2024 conference call. Today's call is hosted by Nitin Jain, President and Chief Executive Officer, and David Hung, Chief Financial Officer of Sienna Senior Living Inc. Please be aware that certain treatments or information discussed today are forward-looking, and actual results could differ materially; the company does not undertake to update any forward-looking statement or information. Please refer to the Forward-Looking Information and Risk Factors section of the company's public filings, including in its most recent MD&A and AIF, for more information.

Operator: Ladies and gentlemen, welcome to Sienna Senior Living Inc.'s Q2 2020 work conference call.

Operator: You will also find a more fulsome discussion of the company's results in its MD&A and financial statements for the period, which are posted on CDAR Plus and can be found on the company's website, SiennaLiving.ca. Today's call is being recorded, and a replay will be available. Instructions for accessing the call are posted on the company's website, and the details are provided in the company's news release. The company has posted slides which accompany the host's remarks on its website under events and presentations. With that, I will now turn the call over to Mr. Jain. Please go ahead, Mr. Jain. Thank you.

Ladies and gentlemen, welcome to Sienna Senior living Inc, Q2, 2024 conference call.

Operator: Today's call is hosted by Nitin Jain, President and Chief Executive Officer, and David Hung, Chief Financial Officer of Sienna Senior Living Inc. Please be aware that their improvements for information discussed today are forward-looking, and actual results could differ materially. The company does not undertake to update any forward-looking statement or information.

Speaker Change: This call is hosted by knit and James President and Chief Executive Officer, and David <unk>, Chief Financial Officer of Sienna Senior living Inc.

Speaker Change: You see there that certain statements or information discussed today are forward looking and actual results could differ materially.

Speaker Change: The company does not undertake to update any forward looking statement or information.

Operator: Please refer to the forward-looking information and risk factors section of the company's public filings, including in its most recent MD&A and AIS, for more information.

Speaker Change: Please refer to the forward looking information and risk factors section of the company's public filings, including in its most recent MD&A and Aif for more information.

Operator: You will also find a more fulsome discussion of the company's results in its MD&A and financial statements for the period, which are posted on Cedar Plus and can be found on the company's website, TiennaLiving.ca.

Speaker Change: You will also find a more fulsome discussion of the company's results in its MD&A and financial statements for the period, which are posted on SEDAR plus and can be found on the company's website Jana living dossier.

Operator: Today's call is being recorded, and a replay will be available. Instructions for accessing the call are posted on the company's website, and the details are provided in the company's news release. The company has posted slides which accompany the host remarks on the company's website under Events and Presentations.

Speaker Change: This call is being recorded and a replay will be available instructions for accessing the call are posted on the company's website and the details are provided in the company's news release.

Speaker Change: The company has posted slides, which accompany the host's remarks on the company's website under events and presentations.

Operator: With that, I will now turn the call over to Mr. Jain. Please go ahead, Mr. Jain.

Speaker Change: With that I'll now turn the call over to Mr. James. Please go ahead Mr. Jain.

Nitin Jain: Thank you, Brianna.

James Jain: Thank you Briana good morning, everyone and thank you for joining us on our call today.

Nitin Jain: Good morning, everyone, and thank you for joining us on our call today. Our second quarter demonstrates the strength and tremendous potential of our company. The effectiveness of our strategic initiatives to improve and expand our operations, and the favorable demographics of an aging population, is evident in our results. But most importantly, our strong performance is a reflection of the commitment of our 12,500 team members. They are the key reason behind our operational strength. For the past six quarters, we have consistently achieved year-over-year growth in our operating results across both lines of our businesses. Supporting a long-term care results, this quarter are fully occupied homes with higher revenues from preferred accommodations, and the increased government funding in Ontario, which offsets high inflation in recent years.

Nitin Jain: Thank you, Brianna. Good morning, everyone, and thank you for joining us on our call today. Our second quarter demonstrates the strength and tremendous potential of our company. The effectiveness of our strategic initiatives to improve and expand our operations and the favorable demographics of an aging population are evident in our results. But most importantly, our strong performance is a reflection of the commitment of our 12,500 team members. They're the key reason behind our operational strength.

Mr. James: Our second quarter demonstrates the strength and tremendous potential of our company.

Mr. Jain: The effectiveness of our strategic initiatives to improve and expand our operations and the favorable demographics of an aging population is evident in our results.

Mr. Jain: But most importantly, our strong performance is a reflection of the commitment of our $12 5000 team members that the key reason behind their operational strength.

Nitin Jain: For the past six quarters, we have consistently achieved year-over-year growth in our operating results across both lines of our business. Supporting our long-term care results this quarter are fully occupied homes with higher revenues from preferred accommodations, and increased government funding in Ontario, which offsets high inflation in recent years. On the retirement side, growing demand and limited new supply, combined with targeted marketing and sales campaigns at homes with lower occupancy levels, were key drivers of improved occupancy and rate increases.

Mr. Jain: For the past six quarters, we have consistently achieved year over year growth in operating results across both lines of our businesses.

Mr. Jain: Supporting our long term care results. This quarter are fully occupied homes with higher revenues from preferred accommodations.

Mr. Jain: And then increased government funding in Ontario, which offsets high inflation in recent years.

Nitin Jain: On the retirement side, growing demand and limited new supply, combined with the targeting marketing and sales campaigns at homes with lower occupancy levels, were key drivers of improved occupancy and rate increases. Further supporting our results are enhancements to our leadership team and ongoing improvements to our operations that are focused on our residents' experience, including dining, engagement, and care. As a result, our total same property NOI increased by 7.2 million to 46.1 million year-over-year in the second quarter. This is an increase of 18.5%. Due to the second quarter, we continue to make steady progress towards the goal of stabilizing the time and occupancy of 95%.

Mr. Jain: On the retirement side growing demand and limited new supply combined with the targeting marketing and sales campaigns at homes with lower occupancy levels were.

Mr. Jain: Key drivers of improved occupancy and rate increases.

Nitin Jain: Further supporting our results are enhancements to our leadership team and ongoing improvements to our operations that are focused on our residents' experience, including dining, engagement, and care. As a result, our total same property NOI increased by $7.2 million to $46.1 million year over year in the second quarter. This is an increase of 18.5%.

Mr. Jain: Further supporting our results are an enhancement to our leadership team and ongoing improvements to our operations that are focused on our residents' experience, including dining engagement and care.

Mr. Jain: As a result, our total same property NOI increased by $7 2 million to $46 $1 million year over year in the second quarter. This is an increase of 18, 5%.

Mr. Jain: Yeah.

Nitin Jain: During the second quarter, we continued to make steady progress towards a goal of stabilized retirement occupancy of 95%. Same property occupancy grew to 88.6%, which is an improvement of 180 basis points year-over-year since last year. Occupancy continued to strengthen in July and increased to 89 percent; this is the highest monthly occupancy rate in over five years. Our marketing and sales initiatives included new digital and print campaigns. We also continued with our targeted on-site marketing and sales initiatives and focused on community outreach at homes with lower occupancy levels. Our success in driving occupancy, coupled with great increases, added to the strength of our second quarter results. Moment of silence, please.

Mr. Jain: During the second quarter, we continued to make steady progress towards our goal of stabilized at a time and occupancy of 95%.

Nitin Jain: Same property occupancy grew to 88.6%, which is an improvement of 180 basis points year-over-year since last year. Occupancy continued to strengthen in July and increased to 89%; this the highest monthly occupancy rate in over five years. Our marketing and sales initiatives included new digital and print campaigns. We also continued with our targeted on-site marketing and sales initiatives and focused on community outreach at homes with lower occupancy levels. Our success in driving occupancy, coupled with great increases, added to the strength of our second quarter results.

Mr. Jain: Same property occupancy grew to 88, 6%, which is an improvement of 180 basis point year over year since last year.

Speaker Change: <unk> continued to strengthen in July and increased to 89%. This is the highest monthly occupancy rate in over five years.

Speaker Change: Our marketing and sales initiatives include a new digital and print campaigns. We also continued with our targeted onsite marketing and sales initiatives and focus on community outreach at homes with lower occupancy levels.

Speaker Change: Our success in driving occupancy coupled with great increases added to the strength of our second quarter results.

Nitin Jain: Momentous Slide 6. Further adding to our results are the demographic tailwinds in Canadian senior living. We are starting to see the first wave of baby boomers considering retirement living, a trend that will only intensify in the coming years as the number of seniors over the age of 85 is expected to reach approximately 1 million by 2026 and further grow by 65% over the falling 10 years. Weightless for long-term care beds continue to grow in Ontario alone; the current weightless for bed is approximately 43,000, and in British Columbia, the average weight time for a long-term care bed is over 100 days.

Speaker Change: Moving to slide six further adding to our results the demographic tailwind and Canadian senior living.

Nitin Jain: Further adding to our results are the demographic tailwinds in Canadian senior living. We are starting to see the first wave of baby boomers considering retirement living, a trend that will only intensify in the coming years as the number of seniors over the age of 85 is expected to reach approximately 1 million by 2026 and further grow by 65 percent over the following 10 years. Waitlists for long-term care beds continue to grow.

We are starting to see the first wave of baby boomers, considering retirement living a trend that will only intensify in the coming years as the number of seniors over the age of 85% is expected to reach approximately $1 million by 2026 and further grow by 65% over the following 10 years.

Speaker Change: Waitlist for long term care beds continued to grow in Ontario alone. The current waitlist for bad is approximately 43000.

Nitin Jain: In Ontario alone, the current waitlist for beds is approximately 43,000. And in British Columbia, the average wait time for a long-term care bed is over 100 days. At the same time, construction starts of new retirement residences remain at all-time lows.

Speaker Change: And in British Columbia, the average wait time for our long term care bed is over 100 days.

Nitin Jain: At the same time, construction starts of new retirement residences remain at all-time lows. These exceptional tailwinds are also starting to resonate with a growing investor base. At Sienna, we have seen a significant increase in investment interest both from first-time investors and those returning to senior living. Being at the intersection of healthcare, hospitality, and real estate makes our company attractive to a broad range of investors. We believe that maintaining a strategy of owning a diversified portfolio of long-term care communities and retirement residences contributed to a sector-leading stock market performance and investor interest this year. Diversification adds to the financial strength of our business as it allows us to capture higher operating margins in a retirement portfolio while benefiting from stable government-funded long-term care operations.

Speaker Change: At the same time construction starts of new retirement residences remain at all time lows.

Nitin Jain: These exceptional tailwinds are also starting to resonate with a growing investor base. At Sienna, we have seen a significant increase in invested interest, both from first-time investors and those returning to senior living. Being at the intersection of healthcare, hospitality, and real estate makes our company attractive to a broad range of investors. We believe that maintaining our strategy of owning a diversified portfolio of long-term care communities and retirement residences contributed to our sector-leading stock market performance and investor interest this year.

Speaker Change: These exceptional tail winds are also starting to resonate with a growing investor base.

<unk>: At <unk>, we have seen a significant increase in investment interest both from first time investors and those of the turning to senior living.

Speaker Change: Being at the intersection of Health care hospitality and real estate makes our company attractive to a broad range of investors.

Speaker Change: Yeah.

Speaker Change: We believe that maintaining our strategy of owning a diversified portfolio of long term care communities in retirement residences contributed to a sector, leading stock market performance and investor interested this year.

Nitin Jain: Diversification adds to the financial strength of our business as it allows us to capture higher operating margins in our retirement portfolio while benefiting from stable, government-funded long-term care operations. We're also increasingly leveraging the programs and insights gained at our retirement communities in our long-term care communities and vice versa, all with the goal of better serving our residents and meeting their evolving needs.

Speaker Change: Diversification adds to the financial strength of our business as it allows us to capture higher operating margins and at a time and portfolio, while benefiting from stable government funded long term care operations.

Nitin Jain: We are also increasing the leveraging the programs and insights gained at the time and operations in our long-term care communities and vice versa. All with the goals to better serve our residents and meet their evolving needs. For example, we are always looking for ways to add more hospitality elements to our long-term care operations while expanding care programs at our retirement residences to meet the changing demographics of our residents. We believe that this approach will further help us distinguish our company as a senior living provider of choice.

Speaker Change: It also increasingly leveraging the programs and insights gained at the time it operations.

Speaker Change: In our long term care communities and vice versa.

Speaker Change: All with the goal is to better serve our residents and meet their evolving needs.

Nitin Jain: For example, we are always looking for ways to add more hospitality elements to our long-term care operations while expanding care programs at our retirement residences to meet the changing demographics of our residents. We believe that this approach will further help us to distinguish our company as a senior living provider of choice. Moving to slide eight, we are pleased with the development progress we have made over the past year at our two projects under construction in North Bay and Brantford, which we expect to complete in the second half of 2025.

Speaker Change: For example, we are always looking for ways to add more hospitality elements to our long term care operations.

Speaker Change: We'll expanding care program said at a time and residences to meet the changing demographics of our residents.

Speaker Change: We believe that this approach will further help us to distinguish our company as a senior living provider of choice.

Nitin Jain: Moving to slide 8, we are pleased with the development progress we have made over the past year at our two projects in the construction in North Bay and Brandford, which we expect to complete in the second half of 2025. We respect to our most recent development redevelopment in Kesswick, work for the new long-term care community is out for tender, and we expect to start construction later this year. The expected development year for the 160-bed home, which will replace the current 60 beds and add 100 new long-term care beds, is approximately 8.5%. Combine these developments will support the government's important goal of rebuilding Ontario's older long-term care homes and benefit the fast growing seniors population.

Speaker Change: Moving to slide eight we are pleased with the development progress we have made over the past year at two projects under construction in North Bay and Brian.

Speaker Change: Which we expect to complete in the second half of 2025.

Nitin Jain: With respect to our most recent redevelopment in Keswick, work for the new long-term care community is out for tender, and we expect to start construction later this year. The expected development yield for the 160-bed home, which will replace the current 60 beds and add 100 new long-term care beds, is approximately 8.5 percent.

Speaker Change: With respect to our most recent development redevelopment in Keswick.

For the new long term care community is out for tender and we expect to start construction later this year.

Speaker Change: The expected development yield for the 160 bed home, which will replace the current 60 beds and add 100, new long term care beds is approximately eight 5%.

Nitin Jain: Combined, these developments will support the government's important goal of rebuilding Ontario's older long-term care homes and benefit the fast-growing senior population. Team member engagement and retention remains a core focus of our initiatives. Our share ownership program is one of many ways we drive alignment. It fosters a deeper sense of ownership and commitment to a shared purpose and values and creates alignment between our team members and our shareholders. During the second quarter, we issued shares to 1,400 of our new team members, bringing the total number of active participants to nearly 7,000.

Speaker Change: Combined these developments will support the government's important goal of rebuilding one tier as older long term care homes and benefit the fast growing CNS population.

Speaker Change: Yeah.

Nitin Jain: Team member engagement and retention remains a core focus of our initiatives. Our share ownership program is one of many ways we drive alignment. It fosters a deeper sense of ownership and commitment to a shared purpose and values, and creates alignment between our team members and our shareholders. During the second quarter, we issued shares to 1,400 of our new team members, bringing the total number of active participants to nearly 7,000. This is just one of many initiatives that we introduce at CNN in recent years to ensure we are aligned with our team members. Our signature program Spark, which is at Origin of Dragons, then also remain very successful.

Team member engagement and retention remains a core focus of our initiatives.

Speaker Change: Our share ownership program is one of many ways, we drive alignment it fosters a deeper sense of ownership and commitment to our shared purpose and values and creates alignment between our team members and our shareholders.

Speaker Change: During the second quarter, we issued shares to 4100 of our new team members, bringing the total number of active participants to nearly 7000.

Nitin Jain: This is just one of many initiatives that we introduced at CNN in recent years to ensure that we are aligned with our team members. Our signature program, SPARK, which is a version of Dragon's Den, has also remained very successful. During the quarter, we announced the winners of the second round of SPARC, which received 175 submissions. The winning idea came from two members of a Long-Term Care Home in Cremore, Ontario, who came up with a tool that supports team members in reducing resident falls.

Speaker Change: This is just one of many initiatives that we introduced at CN in recent years to ensure we are aligned with our team members.

Speaker Change: Our signature program spark, which is our origin of Dragon's den also remain very successful.

Nitin Jain: During the quarter, we announced the winners of the second round of Spark, which received 175 submissions. The winning idea came from two members in Longton Care Home in Kremor, Ontario, who came up with a tool that supports team members in reducing resident falls. In a pilot study using this tool, residents' falls were reduced by 68%. We are not planning the rollout of the Falls Prevention Tool across a Longton Care platform, and we could not be more proud of Martina, who is an Associate Director of Care, and Taylor, a PSW. And this idea earned them $15,000 in the first prize.

Speaker Change: During the quarter there'll be announced the winners of the second round of spark, which received 175 submissions.

Speaker Change: Winning idea came from two members in long term care home and cream or Ontario.

Speaker Change: Who came up with a tool that supports team members and reducing resident falls.

Nitin Jain: In a pilot study using this tool, residents' falls were reduced by 68%. We are now planning the rollout of the FALSE prevention tool across our long-term care platform, and we could not be more proud of Martina, who is an Associate Director of Care, and Taylor, a PSW. And this idea earned them $15,000 in its first prize.

Speaker Change: In a pilot study using this tool residents for also reduced by 68%.

Speaker Change: Were not planning the rollout of the false prevention tool across our long term care platform and we could not be more proud of Martina was an associate director of care and Taylor appears W.

Speaker Change: And this idea on <unk> $15000 in the first price.

David Hung: With that, I will turn it over to David for an update on our results. Thank you, Nitin, and good morning, everyone. I will start on slide 11 for financial results. In Q2 2024, total adjusted revenues increased by 10.7% over year to $219.5 million. This increase was largely due to rental rate and occupancy growth, as well as increased care revenue in our retirement segment, and a government funding increase, higher preferred accommodation revenue, and a WSIB refund, primarily in our Longton Care segment. Total same property net operating income increased by 18.5% in Q2 2024 to $46.1 million compared to $38.9 million in Q2 2023.

David Hung: With that, I will turn it over to David for an update on our results.

Speaker Change: With that I will turn it over to David for an update on our results.

David Hung: Thank you, Nitin, and good morning, everyone. I will start with slide 11 for the financial results. In Q2 2024, total adjusted revenues increased by 10.7% year-over-year to $219.5 million. This increase was largely due to rental rate and occupancy growth, as well as increased care revenue in our retirement segment and a government funding increase, higher preferred accommodation revenue, and a WSIB refund primarily in our long-term care segment. Total same property net operating income increased by 18.5% in Q2 2024 to $46.1 million compared to $38.9 million in Q2 2023.

David: Thank you Nick and good morning, everyone I will start on slide 11 for financial results. In Q2, 2024 total adjusted revenues increased by 10, 7% year over year to $219 $5 million. This increase was largely due to rental rate and occupancy growth as well as increased care revenue in our retirement segment.

David: And our government funding increase higher preferred accommodation revenue and at WSI refunds, primarily in our long term care segment.

David: Total same property net operating income increased by 18, 5% in Q2, 2024 to $46 1 million compared to $38 9 million in Q2 2023.

David Hung: NOI in our Longton Care segment increased by $5.5 million, largely due to higher revenues offset by inflationary expense increases. One area where we were able to consistently achieve cost reductions is in agency staffing. We were able to reduce cost by one-third from approximately $6 million in Q2 2023 to $4 million in Q2 2024. Minimizing agency staffing remains a key objective for Sienna. In our retirement segment, same property NOI increased by $1.6 million in Q2 2024 compared to the last year, primarily as a result of rate growth, as well as improved occupancy. Moving to slide 12, during Q2 2024, operating funds from operations increased by 21.6% to 26.1 million compared to last year, primarily due to higher NOI.

David Hung: NOI in our long-term care segment increased by $5.5 million, largely due to higher revenues offset by inflationary expense increases. One area where we were able to consistently achieve cost reductions was agency staffing. We were able to reduce costs by one-third from approximately $6 million in Q2 2023 to $4 million in Q2 2024. Minimizing agency staffing remains a key objective for CNF.

David: NOI in our long term care segment increased by $5 $5 million largely due to higher revenues offset by inflationary expense increases.

David: One area, where we were able to consistently achieve cost reductions is in agency staffing.

David: We were able to reduce costs by one third from approximately $6 million in Q2, 2000 $23 million to $4 million in Q2 2024.

David: Minimizing agency stopping remains a key objective for Sienna.

David Hung: In our retirement segment, same property NOI increased by $1.6 million in Q2 2024 compared to the last year, primarily as a result of rate growth as well as improved occupancy. Moving to slide 12, during Q2 2024, operating funds from operations increased by 21.6% to $26.1 million compared to the last year, primarily due to higher NOI. OFFO per share increased by 21.4% to $0.357 in Q2 2024. Adjusted funds from operations increased by 14.6% to $22.4 million compared to last year. The increase was due to higher OFFO, offset by a decrease in construction funding income and increased maintenance capital expenditures.

David: In our retirement segment same property NOI increased by $1 $6 million in Q2 2024 compared to the last year, primarily as a result of rate growth as well as improved occupancy move.

David: Moving to slide 12 during Q2 2020 for operating funds from operations increased by 21, 6% to $26 $1 million compared to last year, primarily due to higher NOI.

David Hung: OFFO per share increased by 21.4% to 35.7% in Q2 2024. Adjusted funds from operations increased by 14.6% to 22.4 million compared to last year. The increase was due to higher OFFO, offset by a decrease in construction funding income and increased maintenance capital expenditures. AFFO per share increased by 14.6% to 30.7% in Q2 2024. In line with our strong results, we continue to improve Sienna's AFFO payout ratio, lowering it to 76.2% in Q2 2024. This was an 11.1 percentage point decrease compared to the year prior.

David: <unk> per share increased by 21, 4% to $35 seven in Q2 2024.

David: Adjusted funds from operations increased by 14, 6% to 22.

David: $4 million compared to last year the.

David: The increase was due to higher <unk> offset by a decrease in construction funding income and increased maintenance capital expenditures.

David Hung: AFFO per share increased by 14.6% to $0.307 in Q2 2024. In line with our strong results, we continue to improve Sienna's AFFO payout ratio, lowering it to 76.2% in Q2 2024. This was an 11.1 percentage point decrease compared to the year prior.

David: <unk> per share increased by 14, 6% to 37 <unk> in Q2 2024.

David: In line with our strong results, we continue to improve sienna's <unk> payout ratio lowering it to 76, 2% in Q2 2024. This was an 11, one percentage point decrease compared to the year prior.

David Hung: With respect to our debt metrics, we have seen notable improvements and further strengthened our balance sheet. We maintained ample liquidity with $297 million at the end of Q2 2024. And we extended the weighted average term to maturity of our debt to 5.5 years from 5.1 years in Q2 2023. Our debt to adjusted EBITDA was 6.8 times at the end of Q2 2024 compared to 8 times at the end of Q2 2023. And our interest coverage ratio increased to 3.7 times in Q2 2024 compared to 3.5 times in Q2 2023. We ended Q2 2024 with debt-to-adjusted gross book value of 43.7% and $1 billion of unencumbered assets.

David Hung: With respect to our debt metrics, we have seen notable improvements and further strengthened our balance sheet. We maintained ample liquidity with $297 million at the end of Q2 2024, and we extended the weighted average term to maturity of our debt to 5.5 years from 5.1 years in Q2 2023. Our debt-to-adjusted EBITDA was 6.8 times at the end of Q2 2024 compared to 8 times at the end of Q2 2023, and our interest coverage ratio increased to 3.7 times in Q2 2024 compared to 3.5 times in Q2 2023.

David: With respect to our debt metrics, we have seen notable improvements and further strengthened our balance sheet, we maintained ample liquidity with $297 million at the end of Q2 2024, and we extended the weighted average term to maturity of our debt to five five years from five one years in Q2 2023 or <unk>.

David: Adjusted EBITDA was six eight times at the end of Q2 2024 compared to eight times at the end of Q2 2023, and our interest coverage ratio increased to three seven times in Q2 2024 compared to three five times in Q2 2023.

David Hung: We ended Q2 2024 with a debt-adjusted gross book value of 43.7% and $1 billion of unencumbered assets. This provides financial flexibility and supports our refinancing initiatives at attractive rates, in particular, as we actively explore opportunities to refinance our upcoming debt expiry in the fourth quarter of 2024. We have the ability to refinance a portion of our expiring debt with proceeds from a new financing or up-financing of assets with CMHC-insured mortgages at interest rates significantly below those of other financing options.

David: We ended Q2 2024 with debt to adjusted gross book value of 43, 7% and $1 billion of unencumbered assets. This provides financial flexibility and supports our refinancing initiatives at attractive rates in particular, as we actively explore opportunities to refinance our upcoming.

David Hung: This provides financial flexibility and supports our refinancing initiatives at attractive rates, in particular, as we actively explore opportunities to refinance our upcoming debt expiry in the fourth quarter of 2024. We have the ability to refinance a portion of our expiring debt with proceeds from a new financing or upfinancing of assets with CMHC-insured mortgages at interest rates significantly below those of other financing options. Our strong financial position will also support our growth initiatives, including the redevelopment of our older long-term care homes. We will continue to prudently manage our capital and staggered construction starts to ensure our debt ratios would remain strong, as we support the Ontario government in this important initiative.

David: <unk> debt expiring in the fourth quarter of 2024.

David: We have the ability to refinance a portion of our expiring debt with proceeds from a new financing or up financing of assets with CMA sea insured mortgages at interest rates significantly below those of other financing options.

David Hung: Our strong financial position will also support our growth initiatives, including the redevelopment of our older long-term care homes. We will continue to prudently manage our capital and staggered construction starts to ensure our debt ratios remain strong as we support the Ontario government in this important initiative. With that, I will turn the call back to Nitin for his closing remarks.

David: Our strong financial position will also support our growth initiatives, including the redevelopment of our older long term care homes, we will continue to prudently manage our capital and staggered construction starts to ensure our debt ratios remained strong as we support the Ontario government in this important initiative with that I will turn the call back to Nick.

Nitin Jain: With that, I will turn the call back to Nitin for his closing remarks. Thank you, David. As a company, we play an important role in bringing residents, team members, families, and our community partners together to make life better for one another. Some of our most impactful initiatives are highlighted on latest CSG report we published yesterday. The theme of the report is Create Community, which is one of Sianna's core values. Our report includes numerous inspiring examples of team members and residents who exemplify Sianna's purpose and values. Like our team members in British Columbia who have implemented sector-leading emergency preparedness strategies this year, based on their first-hand experience and outstanding efforts during last year's wildfire season.

Nick: <unk> for his closing remarks, thank you David as a company we play an important role in bringing residents team members families and our community partners together to make life better for one another.

Nitin Jain: Thank you, David. As a company, we play an important role in bringing residents, team members, families, and our community partners together to make life better for one another. Some of our most impactful initiatives are highlighted in the latest CSG report we published yesterday. The theme of the report is Create Community, which is one of Sienna's core values. Our report includes numerous inspiring examples of team members and residents who exemplify Sienna's purpose and values.

Nick: Some of our most impactful initiatives highlighted our latest ESG report, we published yesterday.

Speaker Change: The theme of the report is create community, which is one of Chinas core values.

Speaker Change: Ah report includes numerous inspiring examples of team members and residents, who exemplifies CNS purpose and values.

Nitin Jain: Like our team members in British Columbia, who have implemented sector-leading emergency preparedness strategies this year based on their first-hand experience and outstanding efforts during last year's wildfire season, or the recipient of the Sienna Sparkle Award, which recognizes residents who go above and beyond to cultivate happiness in their communities. One such recipient is Elaine Lebold, the 93-year-old resident council president at a North Bay Longton Care Home Elaine was the first to sign the legacy wall at a Northern Heights redevelopment site.

Speaker Change: Like our team members in British Columbia, who have implemented sector, leading emergency preparedness strategies. This year based on their first hand experience and outstanding efforts during last year's wildfire season.

Nitin Jain: Or the recipient of Sianna's Sparkle Award, which recognizes residents who go above and beyond to cultivate happiness at their communities. Once the recipient is Elaine Leibold, the 93-old resident council president at a north-way-long-come-care home. Elaine was the first to sign the legacy wall at a Northern Heights redevelopment site. Along with team members, she has been a champion of the new home by keeping her fellow residents informed and engaged with the project.

Speaker Change: Are the recipients of CNS Sparkle award, which recognizes residents who go above and beyond to cultivate happiness at their communities.

Once this the recipient is Elaine Leopold the 93 oil resident console, president and a not very long term care home.

Speaker Change: <unk> was the first to sign the legacy wall at a northern heightened redevelopment site along with team members. She has been a champion of the new home by keeping our fellow residents informed and engaged with the project.

Nitin Jain: Along with team members, she has been a champion of the new home by keeping her fellow residents informed and engaged with the project. As we look into the second half of 2024, we have never felt more confident about Sienna's ability to create value for our stakeholders. As a result of the numerous strategic initiatives we put in place alongside a generally improving macro environment, we expect the long-term care NOI for the full year of 2024 to grow in the low double-digit percentage range compared to last year.

Nitin Jain: As we look into the second half of 2024, we have never felt more confident upon Sianna's ability to create value for our stakeholders. As a result of the numerous strategic initiatives we put in place alongside a generally improving macro-environment, we expect the long-term care NOI for the full year of 2024 to grow in the low double-digit percentage range compared to last year. With respect to our retirement operations, we expect the same property NOI to benefit from continued occupancy and rental rate growth, as well as other initiatives to optimize revenue and grow in the high single-digit percentage range.

Speaker Change: As we look into the second half of 2024, we have never felt more confident about <unk> ability to create value for our stakeholders.

Speaker Change: As a result of the numerous strategic initiatives, we've put in place alongside a generally improving macro environment. We expect the long term care NOI for the full year of 2024 to grow in the low double digit percentage range compared to last year.

Nitin Jain: With respect to our retirement operations, we expect same property NOI to benefit from continued occupancy and rental rate growth as well as other initiatives to optimize revenue and grow in the high single-digit percentage range. Further adding to her optimistic outlook is the strength of a balance sheet and improving capital marks. Combined, they will continue to support our efforts to add value through capital improvements, free development, and select opportunities to grow our asset base.

Speaker Change: With respect to our retirement operations, we expect same property NOI to benefit from continued occupancy and rental rate growth as well as other initiatives to optimize revenue and grow in the high single digit percentage range.

Nitin Jain: Further adding to our optimistic outlook is the strength of a balance sheet and improving capital markets. Combined, they will continue to support our efforts to add value through capital improvements, redevelopment, and select opportunities to grow our asset base.

Speaker Change: Further adding to our optimistic outlook is the strength of our balance sheet and improving capital markets.

Speaker Change: Combined they will continue to support our efforts to add value through capital improvements redevelopment and select opportunities to grow our asset base.

Nitin Jain: But more than anything, our success depends on our team members and the strong alignment with Sianna's purpose, vision, and values. On behalf of our management team and our board of directors, I want to thank all of you for your continued support and commitment.

Nitin Jain: But more than anything, our success depends on our team members and the strong alignment with Sienna's purpose, vision, and values. On behalf of our management team and our board of directors, I want to thank all of you for your continued support and commitment. We are now pleased to answer any questions you may have.

Speaker Change: But more than anything our success depends on our team members and the strong alignment with CNS purpose vision and values.

Speaker Change: On behalf of our management team and our board of directors I want to thank all of you for your continued support and commitment and are pleased to answer any questions. You may have.

Operator: We now please answer any questions you may have.

Operator: We will now open the line for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand. and Join the Queue.

Operator: We will now open the line for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. To withdraw your question, simply press star 1 again. If you are dialed in and listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Our first question today comes from Lorne Kalmar with Desjardins. Please go ahead.

Speaker Change: We will now open the line for questions. If you have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the Q.

Operator: To withdraw your question, simply press star one again.

Speaker Change: To withdraw your question simply press Star one again.

Operator: If you are dialed in and listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: If you are dialed in and listening via loud speaker on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.

Lorne Kalmar: Our first question today comes from Lorne Kalmar with Disjardin. Please go ahead. Thanks, good morning, and congrats on another solid quarter. Maybe just on the retirement side, it looked like you guys were able to get the same property margins flat year over year, which is a nice improvement versus the prior quarter. Do you expect this trend to kind of continue, or do you think you can start pushing the same property margins even higher in the back half of the year?

Speaker Change: Our first question today comes from Lorne Kalmar with Desjardins. Please go ahead.

Lorne Kalmar: Thanks, good morning, and congrats on another solid quarter. Maybe just on the retirement side, it looked like you guys were able to get the same property margins flat year over year, which was a nice improvement versus the prior quarter. Do you expect this trend to kind of continue, or do you think you can start pushing the same property margins even higher in the back half of the year?

Lorne Kalmar: Thanks, Good morning, and congrats on another solid quarter.

Speaker Change: Maybe just on the retirement side. It looked like you guys were able to get the same property margins flat year over year, which is a nice improvement versus.

Speaker Change: The prior quarter.

We expect this trend to continue or do you think you can start pushing the same property margin even higher in the back half of the year.

Nitin Jain: Thank you, Lorne. In our view, we have been focused on same property NOI growth, so that's the outlook that we will provide, which we have provided. But frankly, it will come really only from two places, which is occupancy and margin growth. I think this is because we like the trend which we are in, but one quarter doesn't really constitute a trend for us. Our focus is to grow margin, and one of the things we're realizing is that providing more care obviously keeps residents in homes, but it also comes at no margin, in some cases no margin at all, and that's what we are resolving for at the moment. So we do expect our margin to grow over time, but we haven't just provided any outlook or timing for it.

Speaker Change: Okay.

Nitin Jain: Thank you, Lorne. You know, our view, we have been focused on same property NOI growth, so that's the outlook that we will provide, which we have provided. But frankly, it will come only from two places, which are occupancy and from margin growth.

Lauren: Thank you Lauren.

Speaker Change: In our view, we have been focused on same property NOI growth. So that's the outlook that we will provide at which we have provided but frankly it'll come really only from two places, which is occupancy and from margin growth.

Nitin Jain: I think we like the trend which we are in, but one quarter doesn't really constitute a trend for us. Our focus is to grow margin, and one of the things we are realizing is that providing more care, obviously keeps residents in homes, but also comes at no margin in some cases, no margin, and that's what we are resolving for at the moment. So we do expect margin to grow over time, but just we haven't provided any outlook or timing for it.

Speaker Change: I think this is we'd like to try and which which we are in but one quarter doesn't really constitute a trend for us our focus is to grow margin in one of the things. We are realizing is that providing more care. Obviously keep residents in homes, but also comes at no margin in some cases, no margin and Thats, what we are resolving for at the moment. So we do expect.

Speaker Change: Our margin to grow over time, but just we haven't provided any outlook or timing for it.

Lorne Kalmar: Okay, fair enough, and then maybe sticking with the same property theme on the LTC front.

Lorne Kalmar: Okay, fair enough. And then maybe sticking with the same property team on the LTC front. Obviously, you guys increased the guidance range. Was the WSIB payment a big factor there? Or was there something else that you weren't seeing at the beginning of the year that you're seeing now that drove the increase?

Speaker Change: Okay.

Speaker Change: Fair enough and then maybe sticking with the same properties seem on the LTC front.

Lorne Kalmar: Obviously, you guys increased the guidance range. Was the WSIB payment a big factor there? Or was there something else that you weren't seeing at the beginning of the year that you're seeing now that drove the increase?

Speaker Change: Obviously, you guys increased the guidance range was was the WSI D payment the big factor there or was there something else that you.

Speaker Change: Werent seeing you at the beginning of the year that Youre seeing now that drove the increase.

David Hung: Yeah, no, thanks for that question, Lorne. So, I mean, the WSIB refund was part of our increase in guidance, but also, what increased our guidance was really just the stability of our long-term care operations, and the increase in OA funding, which has given us the confidence to increase our guidance versus the last quarter.

Nitin Jain: Yeah, no, thanks for that question, Lauren. So I mean, the WSIB refund was part of our increase in guidance, but also what increased our guidance was really just the stability of our long-term care operations, the increase in the OA funding, which has given us the confidence to increase our guidance versus the last quarter. Okay, and then so with the OA funding like that, that was like it's already known last quarter, so is now that it's been implemented, you're seeing something different. I'm just trying to get a better idea here. No, I mean, we knew that we did know that last quarter.

Speaker Change: Yeah no. Thanks for that question Lauren So I mean the WSI.

Speaker Change: Refund was was part of our increase in guidance.

Speaker Change: But also increased our guidance was really just the stability of our long term care operations the increase in the OE funding.

Speaker Change: Which has given us the confidence to increase our guidance versus the last quarter.

Lorne Kalmar: Okay, and then so but with the OA funding like that, that was, I guess, already known last quarter. So now that it's been implemented, you're seeing something different. I'm just trying to get a better idea here.

Speaker Change: Okay.

Speaker Change: And so with the OE funding like that that was I guess already so last quarter. So is now that it's been implemented youre seeing something different I'm, just trying to get a better idea here.

David Hung: No, I mean, we knew that last quarter. I think, in addition to that, just the continued stability within our long-term care operations, the fact that we've also been able to keep our agency costs well under control, you know, has helped with the increase in our guidance.

Speaker Change: No I mean, we knew we knew that we did know that last quarter. I think in addition to that just the continued stability within our long term care operations. The fact that we are also being able to maintain our.

Nitin Jain: I think in addition to that, just the continued stability within our long-term care operations, the fact that we've also been able to maintain our agency costs while under control has helped with the increase in our guidance.

Speaker Change: Agency costs well under control.

Speaker Change: Has has helped with the increase in our guidance.

Lorne Kalmar: Okay, perfect. Thank you for that. And then, last quick one from me. Obviously, one of your peers was pretty active on the acquisition front. I was wondering if you're seeing anything out there that has sparked your interest?

Lorne Kalmar: Okay, perfect. Thanks for that. And then last quick one for me.

Speaker Change: Okay perfect. Thanks for that and then and then last quick one from me obviously one of your peers is pretty active on the acquisition front I was wondering if youre seeing anything out there that has sparked your interest.

Nitin Jain: Obviously, one of your peers is pretty active on the acquisition front. I was wondering if you're seeing anything out there that has sparked your interest. You know, we continue to look for opportunities. One of the things that is unique about us is that we can acquire both in long-term care and retirement, including campuses, so it puts us in an enviable position. I think we'll continue for opportunities, even though in the last two years, we have not made a big announcement. We have nearly $200 million; actually, $250 million in active construction and another one shortly. And our development projects are quite unique because the day they open, you know, you get a contract from government, which frankly reduces the cost on a balance sheet from $80 million project to $25.

Nitin Jain: You know, we continue to look for opportunities, and one of the things that is unique about us is that we can acquire both in long-term care and retirement, and including campuses, so it puts us in an enviable position. I think we'll continue to look for opportunities, even though in the last two years, we have not made a big announcement. We have nearly $200 million, actually $250 million, in active construction, and another one is shortly.

We continue to look for opportunities on one of the things that are unique about us is that we can acquire bolt in long term care under retirement and including campuses. So it puts us in an enviable position I think will continue look for opportunities even though in the last two years, we have not made a big announcement, we have nearly $200 million actually 250 million.

Speaker Change: And active construction and another one shortly and our development projects are quite unique because the day they open.

Nitin Jain: And our development projects are quite unique because the day they open, you know, you get a contract from the government, which frankly reduces the cost on the balance sheet from an $80 million project to $25 million. And specifically, on acquisitions, I think we'll continue to look for opportunities, and we do expect to grow in the next 12 to 18 months.

Speaker Change: You get a contract from government, which frankly reduces the cost on our balance sheet from $80 million project of 25.

Lorne Kalmar: And specifically to acquisitions, I think we'll continue to look for opportunities, and we do expect to grow in the next 12 to 18. Okay, great. Thank you so much for the call. I will turn it back.

Speaker Change: And specifically to acquisitions I think we'll continue to look for opportunities and we do expect to grow in the next 12 to 18 months.

Lorne Kalmar: Okay, great. Thank you so much for the call. I will turn it back. Thank you.

Speaker Change: Okay, great. Thank you so much for the color I'll turn it back.

Operator: Thank you.

Speaker Change: <unk>.

Jonathan Kelcher: Our next question comes from Jonathan Kelcher with TD Cowan. Please go ahead. Thanks. Good morning.

Jonathan Kelcher: Our next question comes from Jonathan Kelcher with TD Cowan. Please go ahead.

Speaker Change: Our next question comes from Jonathan <unk> with TD Cowen. Please go ahead.

Jonathan: Thanks, Good morning.

Jonathan Kelcher: Just going back to retirement, same property, same property expenses were up 10% year-over-year, and I think you maybe touched on this a little bit, Nitin, but could you maybe give us a little bit of color on what drove that? Was that simply just more care for in-place residents, or was there elevated marketing to drive occupancy?

Jonathan Kelcher: Just going back to retirement, the same property expenses were up 10% year over year, and I think you maybe touched on this a little bit, Nitin, but could you maybe give us a little bit of color on what growth that was that? Simply just more care for in place residents, or were there elevated marketing to drive occupancy? Yeah, I think both of those things exactly, Jonathan. It is more care expenses. It is also more marketing spend.

Jonathan: Just going back to retirement same property. The same property expenses were up 10% year over year and I think you maybe touched on this a little bit but could you maybe give us a little bit of color on what drove that was that simply just more care or in place residence or where they're elevated marketing.

Speaker Change: To drive occupancy.

David Hung: I think both of those things exactly, Jonathan. It is more care expenses. It is also more marketing spend. And when we look at just based on the previous question, our margin has been a bit all over the place in the last quarter. In Q1, we were at 35.6 last year, and we ended at 34.9 with an average of 36. We started lower this quarter.

Nitin Jain: Yeah, I-

Yeah, I think both of those tanks exactly Jonathan it is more.

Speaker Change: <unk> expenses. It is also more marketing spend and when we look at just based on the previous question.

Nitin Jain: And our, you know, when we look at just based, you know, even the previous question, a margin has been a bit all over the place in the last quarter. You know, we do know that we have an opportunity to increase margin, and that's the work our team is doing. We have a pretty good insight where the margin can be. We just not reached at a point where we can give that outlook, but you should expect our margin to continue to grow. Because we have to do two things. One is making sure we are spending marketing in the right place.

Speaker Change: Margin has been a bit all over the place in the last quarter. You know in Q1, we were $35 six last year and we ended at $34 nine an average of 36, we started lower this quarter.

Jonathan Kelcher: We do know that we have an opportunity to increase margin, and that's the work our team is doing. We have a pretty good idea of where the margin can be. We just have not reached a point where we can give that outlook, but you should expect our margin to continue to grow. Because we have to do two things. One is make sure we are spending marketing in the right place, and secondly, when we have the expenses for care, we are charging for it appropriately.

Speaker Change: We do know that we have an opportunity to increase margin and thats. The work. Our team is doing we have a pretty good insight where the margin can be we just bought reached at a point, where we can give that outlook, but you should expect our margin to continue to grow.

Speaker Change: Because.

Speaker Change: We have to do two things one is making sure we're spending marketing in the right place and secondly, when we have the expenses for care that we are charging for it appropriately.

Nitin Jain: And secondly, when we have the expenses for care that we are charging for it appropriately.

Jonathan Kelcher: Fair enough. If I look back pre-pandemic, and I know your portfolio's a lot different now, but you were in the low to mid 40s. Is that if you're sort of targeting towards 95% over time and not really, I'm not holding you to any time frame on that. But if you get to 95, should we be thinking low to mid 40s? Is that the right way to think about it?

Nitin Jain: Fair enough. If I look back pre-pandemic, and I know your portfolio is a lot different now, but you were in the low to mid 40s. Is that if you're sort of targeting 95% over time, and I'm not holding you to any timeframe on that, but if you get to 95, should we be thinking low to mid 40s? Is that the right way to think about it?

Speaker Change: Fair enough.

If I look back pre pandemic and I know your portfolio is a lot different now, but you were in the low to mid Forty's is that if if you're sort of <unk>.

Speaker Change: Targeting towards 95% over time and not really.

Speaker Change: Holding you to any time frame on that but if you get to 95 should we be thinking low to mid forties was that the.

Speaker Change: The right way to think about it.

Jonathan Kelcher: You know, it is quite a bit out there in terms of timing. What I would say is my portfolio has changed. So, for example, in 2019, we made it on a 45% margin. But at that time, the proportion of care was a bit lower, and care would never have that high a margin. So I don't think we'll get to 44, but you know, could it get closer to 40 and a little bit higher? Yeah, that is possible. But again, I'm just speculating at this time because we really haven't given out any guidance on its specificity.

Nitin Jain: You know, it is quite a bit out there in terms of timing. What I would say is portfolio has changed. So, for example, in 2019, we made it on a 45% margin. But at that time, the proportion of care was a bit lower, and care would never have that time margin. So I don't think we'll get to 44, but could it get closer to 40 and a little bit up? Yeah, that is possible.

Speaker Change: It is quite a bit out there in terms of timing what I would say as the portfolio has changed. So for example in 2019, we made around 45% margin.

Speaker Change: But at that time.

Speaker Change: Proportion of care was a bit lower and care would never have that higher margin. So I don't think we will get to 44, but could could it get closer to 40 and a little bit up yes that is possible, but again I'm just speculating at this time, because we really haven't given out any guidance on it specifically.

Jonathan Kelcher: But again, I'm just speculating at this time because we really haven't given out any guidance on it specifically. Okay.

Jonathan Kelcher: Okay, and then just on the GNA, is Q2 a good run rate, or was there some one time thing?

Speaker Change: Okay.

Jonathan Kelcher: And then just on the GNA, is Q2 a good run rate, or was there any one-time things in there? Yeah, no, I think that Q2 would be a relatively good run rate. We did see a little bit of a pick in our stock comp, but some, generally speaking, I think that would be a good run rate going forward for the rest of the year.

Speaker Change: And then just on the G&A is Q2, a good run rate or was there any one time things in there.

David Hung: Yeah, no; I think that Q2 would be a relatively good run rate. We did see a little bit of an uptick in our stock comp, but generally speaking, I think that would be a good run rate going forward for the rest of the year.

Speaker Change: Yeah, No I think that Q2 would be a relatively good run rate, we did see a little bit of uptick yet our stock comp, but generally speaking I think that would be a good run rate going forward for the rest of the year.

Operator: Ladies and gentlemen, welcome to Sienna Senior Living Inc's Q2 2020 Work Conference call. Today's call is hosted by Nitin Jain, President and Chief Executive Officer, and David Hung, Chief Financial Officer of Sienna Senior Living Inc. Please be aware that their improvements for information discussed today are forward-looking, and actual results could differ materially. The company does not undertake to update any forward-looking statement or information. Please refer to the forward-looking information and risk factors section of the company's public filings, including in its most recent MD&A and AIS for more information.

Jonathan Kelcher: Okay, thanks guys. I'll turn it back on.

Operator: Okay. Thanks, guys.

Speaker Change: Okay. Thanks, guys I'll turn it back thank.

Operator: I'll turn it back.

Himanshu Gupta: Thank you. Our next question comes from him, and you go with the go to bank. Please go ahead.

Speaker Change: Thank you.

Himanshu Gupta: Our next question comes from Himanshu Gupta with Gosha Bank. Please go ahead.

Speaker Change: Our next question comes from Himanshu Gupta with Scotiabank. Please go ahead.

Himanshu Gupta: Thank you and good morning. So just on LTC guidance, the increase to double digits, obviously it includes the benefit of the one-time WSIB refund. I mean, is it fair to say that your Q3 and Q4 NOI expectations are unchanged from last quarter?

Himanshu Gupta: Thank you and good morning. So just on LTC guidance, increased to double digits. Obviously, it includes the benefit of one time WSIB fund. Is it fair to say that your Q3 and Q4 NOI expectations are unchanged from last quarter? Yeah, I mean, generally speaking, they would be relatively unchanged; maybe a pick by a little bit. But our overall guidance, excluding the one-time funding and the retro, would be in the low double-digit range overall. I think there are a few things, Himanshu, that change from Q1, and again, Jonathan asked the same question at Lorne's, and last quarter when we released results, the oil funding just came out. We were just making sure that you're not missing any expenses that are released to it.

Himanshu Gupta: Thank you and good morning.

So just on LTC guidance increased to double digits. Obviously it includes the benefit of one buying Ws IV fund.

Speaker Change: I mean is it fair to say that your Q3 and Q4 NOI expectations are unchanged from last quarter.

Operator: You will also find a more fulsome discussion of the company's results in its MD&A and financial statements for the period which are posted on Cedar Plus and can be found on the company's website, TiennaLiving.ca. Today's call is being recorded, and a replay will be available. Instructions for accessing the call are posted on the company's website, and the details are provided in the company's news release. The company has posted slides which accompany the host remarks on the company's website under events and presentations.

Himanshu Gupta: Okay.

David Hung: Yeah, I mean, generally speaking, they would be relatively unchanged, maybe an uptick by a little bit, but our overall guidance, excluding the one-time funding and the retro, would be in the low double-digit range overall.

Speaker Change: Yes, I mean.

Speaker Change: And generally speaking they would be relatively unchanged, maybe uptick by a little bit.

But our overall guidance, excluding the one time.

Speaker Change: Funding in the retro would be in the in the low double digit range overall.

Nitin Jain: I think there are a few things, Himanshu, that changed from Q1, and again, you know, Jonathan asked the same question, or Lorne, sorry. And so, in the last quarter, when we released results, the OA funding just came out. We were just making sure that we were not missing any expenses that relate to it. We had a whole strategy for driving preferred accommodation, and the team did an exceptional job. So, you know, we did not factor in enough.

Speaker Change: Okay. I think there are a few things here much of that change from Q1 and again.

Speaker Change: Some of them.

Jonathan asked the same question a long story and so when the last quarter. When we will release results. The oil funding just came out we were just making sure that we're not missing any expenses that relates to it we had a whole strategy on driving preferred accommodation, which the team has done an exceptional job. So we did not factored in enough and the third one just on.

Operator: With that, I will now turn the call over to Mr. Jain. Please go ahead, Mr. Jain. Thank you, Brianna.

Nitin Jain: Good morning, everyone, and thank you for joining us on our call today. Our second quarter demonstrates the strength and tremendous potential of our company. The effectiveness of our strategic initiatives to improve and expand our operations, and the favorable demographics of an aging population is evident in our results. But most importantly, our strong performance is a reflection of the commitment of our 12,500 team members. They are the key reason behind our operational strength.

Nitin Jain: We had a whole strategy on driving preferred accommodation, which the team has done exceptional jobs, so we did not factor in enough. And the third one, just on the agency one, we made a lot of progress last year, and we just wanted to make sure that progress is sustainable, and the team has proven after four quarters that it is sustainable, so that gave us more comfort in upping our guidance.

Nitin Jain: And the third one, you know, just on the agency one, we made a lot of progress last year, and we just wanted to make sure that progress was sustainable. And the team has proven after four quarters that it is sustainable, so that gave us more comfort in upping our guidance.

Speaker Change: The agency when we made a lot of progress last year and we just wanted to make sure that progress is sustainable and the team has proven after a four quarters that it is sustainable so that gave us more comfort and upping our guidance.

Himanshu Gupta: Awesome. Okay, thank you.

Himanshu Gupta: Awesome. Okay. Thank you.

Speaker Change: Awesome, Okay. Thank you.

Himanshu Gupta: And then just moving to retirement homes, and thanks for providing the move-in and move-out issues. I mean, is there a team, any trend? You're seeing high movements, or lower moveouts, anything, anything to do with that with it? Yeah, so in the past, we have seen a pretty consistent number of move-outs, and really our occupancy has fluctuated because of moving this quarter. We saw a little bit lower number of move-outs, so we are cautiously optimistic that we headed in the right direction, and I guess no surprise there, the map here is more move-ins than move-outs with drive occupancy.

Nitin Jain: For the past six quarters, we have consistently achieved year-over-year growth in our operating results across both lines of our businesses. Supporting a long-term care results, this quarter are fully occupied homes with higher revenues from preferred accommodations, and the increased government funding in Ontario, which offsets high inflation in recent years. On the retirement side, growing demand and limited new supply combined with the targeting marketing and sales campaigns at homes with lower occupancy levels, were key drivers of improved occupancy and rate increases.

Speaker Change: And then just moving to retirement homes.

Himanshu Gupta: And then just moving to retirement homes, and you know, thanks for providing the move-ins and move-outs data in Q2. I mean, how does the number of move-ins and move-outs compare to the last year? I mean, is there a theme, any trend you're seeing high move-ins or lower move-outs or anything, anything to elaborate on there?

Speaker Change: Thanks for providing the move ins move outs data in Q2.

Speaker Change: How does the move in move outs compared to the last year I mean, they've got a team of any trend you're seeing higher move ins or lower move outs, so anything they need to do.

Speaker Change: Good luck with it.

Nitin Jain: Yeah, so, in the past, we have seen a pretty consistent number of move-outs, and really, our occupancy has fluctuated because of move-ins. This quarter, we saw a little bit lower number of move-outs, so we are cautiously optimistic that we are headed in the right direction. And, you know, I guess no surprise there, the math here is more move-ins than move-outs would drive occupancy. And we are now getting into the fall season, which is usually busier, so we are expecting that occupancy will grow as we move forward.

Speaker Change: Yes. So you know in the past, we have seen a pretty consistent number of <unk>.

Speaker Change: Move outs and really our occupancy has fluctuated because of moving this quarter, we saw a little bit lower number of move outs.

Nitin Jain: Further supporting our results are enhancement to our leadership team and ongoing improvements to our operations that are focused on our residents' experience including dining, engagement, and care. As a result, our total same property NOI increased by 7.2 million to 46.1 million year-over-year in the second quarter. This is an increase of 18.5%. Due to the second quarter, we continue to make steady progress towards the goal of stabilizing the time and occupancy of 95%.

Speaker Change: So we are.

Speaker Change: Actually optimistic that we are headed in the right direction and I guess no surprise there. The map here is more important than mobile, which would drive occupancy and we are now getting into the fall season, which is usually a stronger. So we are expecting that occupancy will grow as b as we move forward and the focus for US has been as we've talked about before.

Nitin Jain: And we are now getting into the fall season, which is usually stronger, so we are expecting that occupancy will grow as we move forward. The focus for us has been, as we talked about before, rather than just looking at move-in move-outs and total, is really looking at the homes with a lower occupancy, because since we are close to 89% occupancy, we have any homes in our portfolio, which are 95% plus; some of them are at 100%. So the ones which are 95% plus, they have good wait lists for kind of rooms that people are looking for.

Nitin Jain: And the focus for us has been, you know, as we talked about before, rather than just looking at move-ins and move-outs in total, is really looking at the homes with lower occupancy. Since we are close to 89% occupancy, we have many homes in our portfolio which are 95% plus, and some of them are at 100%. So the ones we are really at, and the ones which are 95% plus, they have good wait lists for the kind of rooms that people are looking for.

Speaker Change: Sure.

Speaker Change: Rather than just looking at move in move outs.

Total is really looking at the homes, which with a lower occupancy because.

Nitin Jain: Same property occupancy grew to 88.6%, which is an improvement of 180 basis point year-over-year since last year. Occupancy continued to strengthen in July and increased to 89% this the highest monthly occupancy rate in over five years. Our marketing and sales initiatives included new digital and print campaigns. We also continued with our targeted on-site marketing and sales initiatives and focused on community outreach at homes with lower occupancy levels. Our success in driving occupancy coupled with great increases added to the strength of our second quarter results.

Speaker Change: Since we have close to 89% occupancy we have many homes in our portfolio, which are 95% plus some of them out of a 100%. So once we are really the ones and the ones, which are 95% plus they have good waitlist for kind of rooms that people are looking for so the data we are focused on as per home and the homes with lower occupancy that's where the more.

Nitin Jain: So the data we are focused on is per home, and the homes with lower occupancy, that's where the move-in, move-out are bigger focus, including how many leads we get in a week, how many conversions we have, because that's eventually what will drive occupancy home, and 95% might go to 95.5 or 96, that would not really make such a difference, versus if something is at 70, we're going to 85, 90, because that's the focus for.

Nitin Jain: So the data we are focused on is for home, and the homes with lower occupancy, that's where the move-in move-out are bigger focus, including how many leads we get in a week, how many conversions we have, because that's eventually what will drive occupancy home, and 95% might go to 95 and a half or 96; that would not really make such a difference. If something is at 70, we are going to 85-90, because that's the focus for few homes. Yeah, okay, thank you, and are there homes which are like 80% less occupancy? Yeah, we have a handful of homes, which would be in that range, but I would say a very small handful.

Speaker Change: Move out our bigger focus including how many leads we get on a week how many conversions we have because thats eventually what will drive occupancy home at 95% might go to $95. Five a 96 that would not really make such a difference versus if something is at 71% to $85 90, because thats the focus for <unk> homes.

Nitin Jain: Momentous slide 6. Further adding to our results are the demographic tailwinds in Canadian senior living. We are starting to see the first wave of baby boomers considering retirement living a trend that will only intensify in the coming years as the number of seniors over the age of 85 is expected to reach approximately 1 million by 2026 and further grow by 65% over the falling 10 years. Weightless for long-term care beds continue to grow in Ontario alone, the current weightless for bed is approximately 43,000 and in British Columbia the average weight time for a long-term care bed is over 100 days.

Nitin Jain: At the same time construction starts of new retirement residences remain at all time lows. These exceptional tailwinds are also starting to resonate with a growing investor base. At Sienna we have seen a significant increase in investment interest both from first-time investors and those returning to senior living. Being at the intersection of healthcare, hospitality and real estate makes our company attractive to broad range of investors. We believe that maintaining a strategy of owning a diversified portfolio of long-term care communities and retirement residences contributed to a sector leading stock market performance and investor interest this year.

Himanshu Gupta: Okay, thank you. And are there homes which are like... 80% less occupancy?

Speaker Change: Yeah, Okay. Thank you and at their homes, which are like.

Eddie Wilson: Eddie Wilson less occupancy.

Nitin Jain: Yeah, we have a handful of homes which would be in that range, but I would say a very small handful.

Speaker Change: Yes, we have a handful of homes, which would be in that range, but I would say a very small handful.

Himanshu Gupta: Okay, okay, thank you, and then just taking to retirement home, same property, NOI, obviously, high single digit growth in 2024. I mean, given your commentary around occupancy gains and margins, do you think it is very repeatable in 2025 as well? We haven't really given any outlook for 2025, but good for you to try a bunch. So I think that's something you'll have to make against yourself. Okay, maybe I'll ask this question, a simpler one: is there a thumb rule here, you know, as for every 100 basis for the occupancy? As we head towards 95, is there an NOI margin that should go up?

Speaker Change: Okay. Okay. Okay.

Himanshu Gupta: Okay. Okay. Thank you. And then just sticking to retirement homes, same property, NOI, obviously, high single-digit growth in 2024. I mean, given your commentary around occupancy gains and margins, do you think it is very repeatable in 2025 as well?

Speaker Change: Okay. Thank you.

Then just sticking to it I'm going home same property NOI I mean, obviously high single digit royalties in 2024.

Speaker Change: And then given your commentary around occupancy gains in margins do you think it has very little table in 2025 as well.

Nitin Jain: We haven't really given any outlook for 2025, but good for you to try, Himanshu. So I think that's something you'll have to make a guess yourself.

Speaker Change: We haven't really given any outlook for 2025, but good for you to try it matches. So I think that's something you're allowed to make a guess yourself.

Himanshu Gupta: Okay. Maybe, you know, I'll ask this question, a simpler one. Is there a thumb rule here, as for every 100 basis points of occupancy increase, as we, you know, head towards 95, is there like an NOI margin that should go up, or is it a desirable NOI?

Speaker Change: Okay, maybe I'll ask this question a simpler one.

Speaker Change: Is it a tongue rule here.

Speaker Change: For every 100 basis point of occupancy increase.

Speaker Change: He will head towards signing flight.

Speaker Change: It.

Is there like an underlying margin.

Nitin Jain: Or is there a desirable NOI margin? Yeah, that's a good question, Himanshu. Broadly speaking, for every one percentage point we go up in occupancy, that would be about $2 million of revenue, and about 75 or 85% of that would be margin. The reason being, you know, it's pretty high margin because the only incremental cost would be some additional food, maybe some extra housekeeping, laundry staff, etc.

Speaker Change: It should go up or is it or does that have an NOI margin.

David Hung: Yeah, that's a good question, Himanshu. So, broadly speaking, for every one percentage point we go up in occupancy, that would be about two million dollars of revenue, and about 75 or 85 percent of that would be margin. The reason being, you know, it's pretty high margin because the only incremental cost would be some additional food, maybe some, you know, extra housekeeping, laundry staff, etc.

Speaker Change: Yes, that's a good question financially so broadly speaking for every one percentage point and we go up in occupancy that would be about $2 million of revenue and about 75 or 85% of that would be margin.

Nitin Jain: Diversification adds to the financial strength of our business as it allows us to capture higher operating margins in a retirement portfolio while benefiting from stable government funded long-term care operations. We are also increasing the leveraging the programs and insights gained at the time and operations in our long-term care communities and vice versa. All with the goals to better serve our residents and meet their evolving needs. For example, we are always looking for ways to add more hospitality elements to our long-term care operations while expanding care programs at our retirement residences to meet the changing demographics of our residents. We believe that this approach will further help us distinguish our company as a senior living provider of choice.

Speaker Change: The reason being.

Speaker Change: It's pretty high margin because the only incremental cost would be some additional food maybe some.

Speaker Change: Extra housekeeping laundry staff et cetera.

David Hung: That's great. Thank you, David. Thank you, Nathan. Thank you.

Speaker Change: That's great. Thank you David Thank you for that and put on the back.

Speaker Change: Thank you.

Juliano Thornhill: Our next question comes from Juliano Thornhill with National Bank Financial. Please go ahead. Hey, good morning, guys.

Juliano Thornhill: Our next question comes from Juliano Thornhill with National Bank Financial. Please go ahead.

Speaker Change: Our next question comes from Giuliano Thornhill with National Bank Financial. Please go ahead.

Nitin Jain: Hey, good morning guys. Maybe just on the marketing spend that you guys mentioned earlier, could you provide some color just on the geography or possibly on the suite type that requires this higher investment?

Giuliano Thornhill: Hey, good morning, guys.

Juliano Thornhill: Maybe just on the marketing spend that you guys mentioned earlier, could you provide some color just on the geography or positive, sweet type that requires this higher investment? Thank you. You know, there's really no, it's not focused on sweet type or geography, and we don't really do any national campaigns because our focus is very local. And of the day, retirement people make a choice very locally. So, you know, if no one is moving from Vancouver to Moscow, just because we will have a different brand.

Giuliano Thornhill: Maybe just on the marketing spend that you guys mentioned earlier could you provide some color just on the geography or possibly like sweet type that requires this higher investment.

Nitin Jain: Moving to slide 8, we are pleased with the development progress we have made over the past year at our two projects in the construction in North Bay and Brandford, which we expect to complete in the second half of 2025. We respect to our most recent development redevelopment in Kesswick, work for the new long-term care community is out for tender and we expect to start construction later this year. The expected development year for the 160-bed home, which will replace the current 60 beds and add 100 new long-term care beds is approximately 8.5%. Combine these developments will support the government's important goal of rebuilding Ontario's older long-term care homes and benefit the fast growing seniors population.

Juliano Thornhill: It's not focused on suite type or geography, and we don't really do any national campaigns because our focus is very local, end of the day, retirement. People make a choice very locally, and no one is moving from Vancouver to Muskoka just because we will have a different brand. So the focus is very, very specific, and the spend is more focused on driving occupancy at lower occupancy homes. The question was around homes which are around 80-85% lower, and that's where we are spending money to ensure we have the right focus and the right opportunity to drive that occupancy.

Speaker Change: Thank you you know there is really not it's not focused on sweet type or a geography, and we don't really do any national campaigns, because our focus is very local end of the day.

Speaker Change: Retirement people make a choice very locally so.

Speaker Change: Ma'am.

Speaker Change: And no one is moving from Vancouver to MS. Coco, just because we will have a different brand.

Nitin Jain: So the focus is very, very specific, and the spend is more focused on driving occupancy at the lower occupancy homes. The question was around homes which are around, you know, 80, 85% lower, and that's where we are spending money to ensure we have the right focus and the right opportunity to drive that occupancy. And then just do you think like the return to kind of pre-COVID activities may have like affected the man for some of your properties, or like even the occupancy trends that you've seen today? I'm not sure how far. Can you just maybe expand a bit more?

So the focus is very very specific.

Speaker Change: Spend is more focused on driving occupancy at the lower occupancy homes. The question was around homes, which are around 80, 85% lower and that's where we're spending money to ensure we have the right focus and the right opportunity to drive that occupancy.

Nitin Jain: And then just do you think that the return to kind of pre-COVID activities may have affected the market for some of your properties or even the occupancy trends that you've seen?

Speaker Change: And then just do you think like the return to kind of pre COVID-19 activities may have affected demand for some of your properties or even the occupancy trends that you've seen to date.

Nitin Jain: Team member engagement and retention remains a core focus of our initiatives. Our share ownership program is one of many ways we drive alignment. It fosteres a deeper sense of ownership and commitment to a shared purpose and values and creates alignment between our team members and our shareholders. During the second quarter we issued shares to 1400 of our new team members bring the total number of active participants to nearly 7,000. This is just one of many initiatives that we introduce at CNN recent years to ensure we are aligned with our team members.

Juliano Thornhill: I'm not sure I understand. Can you maybe expand a bit more? Like the more secondary markets that your sites are located within, I feel like more people are looking to move to the cities versus away. And have you noticed that within your retirement occupancy? Actually, not at all, but many of our sites which are in smaller markets continue to do very well, and the reverse is also true. So I don't think it is specific to specific areas because, at a macro level, what remains true is that, demand is higher than supply of retirement homes, and only in a couple of markets is the supply higher, but that will only get absorbed shortly.

Speaker Change: I'm not sure I follow up can you just maybe expand a bit more what are the like the more secondary markets that your sites are located within.

Nitin Jain: Yeah, the more secondary markets that your sites are located within, just I feel like more people are looking to move towards the cities versus away, and have you noticed that within your retirement occupancy? Actually, not at all. You know, many of our sites which are in smaller markets continue very well, and the reverse is also true. So I don't think it is specific to, you know, specific areas, because if, you know, in a macro level, what remains true is that the demand is higher than supply of retirement homes, and only in a couple of markets the supply is higher, but that will only get absorbed shortly.

Speaker Change: Like more people are looking to work with towards the cities.

Speaker Change: As a way and have you noticed that within your retirement occupancy.

Speaker Change: Not at all but many of our sites which are in <unk>.

Nitin Jain: Our signature program Spark which is at Origin of Dragons then also remain very successful. During the quarter we announced the winners of the second round of Spark which received 175 submissions. The winning idea came from two members in Longton Care Home in Kremor, Ontario, who came up with a tool that supports team members in reducing resident falls. In a pilot study using this tool, residents' falls were reduced by 68%. We are not planning the rollout of the Falls Prevention Tool across a Longton Care platform, and we could not be more proud of Martina, who is an Associate Director of Care and Taylor, a PSW. And this idea earned them $15,000 in the first price.

Speaker Change: Mahler markets continue very well and the reverse is also true.

Speaker Change: So I don't think at this specific too.

Speaker Change: Specific areas because if.

Speaker Change: The.

Speaker Change: At a macro level what remains true is that the demand is.

Is higher than supply of retirement homes and only in a couple of markets. The supply is higher but that will only get absorbed shortly so I don't think its an issue of.

Nitin Jain: So I don't think it's an issue of demand and supply, because we think demand is higher. It will be more an issue of if there are three retirement homes, they all will be full eventually.

Juliano Thornhill: So I don't think it is an issue of demand and supply because we think demand is higher. It is more an issue of if there are three retirement homes, they will all be full eventually. The idea is who will get full first.

Speaker Change: Of demand and supply because we think demand is higher it was more an issue of if there could be at a time in homes. They all will be full eventually the ideas of who will get full force.

Nitin Jain: The idea is who will get full first.

David Hung: Okay, and then just last one on this series, a maturing. Have your plans or intentions maybe change just now that spreads have come down and the rate path outlooks a little more certain than before? Yeah, so I mean we continue to look at all options right now, you know, because of, you know, our conservative balance sheet. You know, we continue to actively pursue CMHC financing, because that continues to be the lowest rates available, you know, out of our options. But, you know, we would also have other options as well, including, you know, drawing on our unsecured revolver, conventional mortgages, as well as, you know, possibly another issuance of unsecured bonds.

David Hung: Okay, and then just last one on Series A maturing: have your plans or intentions maybe changed now that spreads have come down and the rate path out looks a little more certain than before?

Speaker Change: Okay, and then just last one on the series a maturing of your.

David Hung: With that, I will turn it over to David for an update on our results.

David Hung: Thank you, Nitin, and good morning, everyone. I will start on slide 11 for financial results. In Q2 2024, total adjusted revenues increased by 10.7% over year to $219.5 million. This increase was largely due to rental rate and occupancy growth, as well as increased care revenue in our retirement segment, and a government funding increase higher preferred accommodation revenue and a WSIB refund primarily in our Longton Care segment. Total same property net operating income increased by 18.5% in Q2 2024 to $46.1 million compared to $38.9 million in Q2 2023.

Plans or intentions, maybe change is that now that spreads have come down in the right path that looks a little more certain.

Speaker Change: Then before.

Juliano Thornhill: We continue to look at all options right now. Because of our conservative balance sheet, we continue to actively pursue CMHC financing because that continues to be the lowest rate available out of our options. But we would also have other options as well, including drawing on our unsecured revolver, conventional mortgages, as well as possibly another issuance of unsecured bonds.

Speaker Change: Yeah. So I mean, we continue to look at all options right now.

Speaker Change: Because of.

Speaker Change: Our conservative balance sheet.

Speaker Change: Continue to actively pursue CMA sea financing.

Speaker Change: Because that continues to be the lowest.

Speaker Change: Rates available.

Speaker Change: Our options, but we would also have other options as well, including drawing on our unsecured revolver conventional mortgages as well as possibly another issuance of.

Speaker Change: Our unsecured bonds.

Operator: All right.

Juliano Thornhill: All right. Okay. Thank you, guys.

Speaker Change: Alright, Okay. Thank you guys.

Operator: Okay.

Operator: Thank you, guys.

David Hung: NOI in our Longton Care segment increased by $5.5 million, largely due to higher revenues offset by inflationary expense increases. One area where we were able to consistently achieve cost reductions is in agency staffing. We were able to reduce cost by one-third from approximately $6 million in Q2 2023 to $4 million in Q2 2024. Minimizing agency staffing remains a key objective for Sienna. In our retirement segment, same property NOI increased by $1.6 million in Q2 2024 compared to the last year, primarily as a result of rate growth, as well as improved occupancy.

Dean Wilkinson: Our next question comes from Dean Wilkinson with CIBC. Please go ahead. Thanks, morning, guys. Most of my questions have been answered.

Dean Wilkinson: Our next question comes from Dean Wilkinson with CIBC. Please go ahead.

Speaker Change: Our next question comes from Dean Wilkinson with CIBC. Please go ahead.

Dean Wilkinson: Thanks, morning guys. Most of my questions have been answered. Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host.

Dean Wilkinson: Thanks, Good morning, guys.

Dean Wilkinson: Most of my questions have been answered.

Dean Wilkinson: Just as it comes down to sort of these retroactive adjustments and things like that, do you guys have any expectations of more stuff coming in future quarterly? Do you have any line of sight in terms of, you know, perhaps appeals or things around different payments that may still yet come in? I think that WSIB1, that's a bit unique. But, you know, from a government perspective, they're becoming more common. And different provinces have a different view where the funding would reflect one thing, but they understand their cost always higher. And I think one of you talked about that in the past because the funding was not there, we were punitive.

Speaker Change: I think as it comes down to sort of these these retroactive adjustments and things like that.

Dean Wilkinson: Have any expectations of more stuff coming in future quarters or do you have any line of sight in terms of you know, perhaps appeals are things around different payments that may still yet to come in.

Speaker Change: Okay.

Nitin Jain: I think the WSIB1 is a bit unique, but from a government perspective, they are becoming more common. And different provinces have a different view of where the funding would reflect one thing, but they understand their cost is always higher. And I think one of you, you know, talked about that in the past, that because the funding was not there, we were punitive. So the fact that the funding has come up, we should not be punitive again.

Speaker Change: I think the <unk>, that's a bit unique but from a from a government perspective, they are becoming more common.

David Hung: Moving to slide 12, during Q2 2024, operating funds from operations increased by 21.6% to 26.1 million compared to last year, primarily due to higher NOI. OFFO per share increased by 21.4% to 35.7% in Q2 2024. Adjusted funds from operations increased by 14.6% to 22.4 million compared to last year. The increase was due to higher OFFO offset by a decrease in construction funding income and increased maintenance capital expenditures. AFFO per share increased by 14.6% to 30.7% in Q2 2024.

Speaker Change: And different provinces have a different view, where the funding would reflect one thing, but they understand there.

Speaker Change #100: First of all was higher and I think one of you talked about that in the past.

Speaker Change #101: Because the funding was not there we were punitive so the fact that the funding has come up we should not be punitive again. So I do think time to time, you would we would see these retroactive adjustments because.

Nitin Jain: So the fact that the funding has come out, we should not be punitive again. So I do think time to time, we would see these retroactive adjustments, because you know, the last four or five years were very challenging. And I think different governments took a different approach in how to fix that. So I don't think it will be that unusual for us to, you know, once a year, get some funding correction in one of the provinces. So it's kind of like it was sort of before we even knew what a COVID was. You're kind of going back to that situation, I suppose.

Nitin Jain: So I do think time to time we will see these retroactive adjustments because, you know, the last four or five years were very challenging, and I think different governments took a different approach to how to fix that. So I don't think it will be that unusual for us to, you know, once a year get some funding correction in one of the provinces.

Speaker Change #101: The last four or five years were very challenging and I think different governments took a different approach and how to fix that so.

Speaker Change #101: So I don't think it'll be that unusual for us to once a year and get some funding collection in one of the provinces.

Dean Wilkinson: So it's kind of like it was sort of before we even knew what a COVID was. You're kind of going back to that situation, I suppose.

So it's kind of like it was sort of the.

Speaker Change #101: Before we even knew what a COVID-19 was you're kind of going back to that situation I suppose.

Nitin Jain: Yeah, I just think not only that, but things have changed in the last four years where the government is focused on ensuring the sector remains viable. We need to build more homes, and that only happens with the appropriate

Nitin Jain: Yeah, I just think not only that, things have changed in the last four years, where, you know, government is focused on ensuring the sector's environment is viable. We need to build more homes, and that only happens with the appropriate funding. Got it.

David Hung: In line with our strong results, we continue to improve Sienna's AFFO payout ratio lowering it to 76.2% in Q2 2024. This was an 11.1 percentage point decrease compared to the year prior. With respect to our debt metrics, we have seen notable improvements and further strengthened our balance sheet. We maintained ample liquidity with $297 million at the end of Q2 2024. And we extended the weighted average term to maturity of our debt to 5.5 years from 5.1 years in Q2 2023.

Speaker Change #101: I, just think not only that but things have changed in the last four years, where.

Speaker Change #102: Government is focused on ensuring the sector element is why will we need to build more homes in that that only happens with the appropriate funding.

Dean Wilkinson: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. He is a licensed financial professional in both the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts held by National Financial Services, LLC. Member NYSE & SIPC, a Fidelity Investments company. His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered at www.profile-financial.com on that side of the project.

Speaker Change #103: Got it.

David Hung: And then maybe David, I mean, you're obviously out talking to calendars and syndicates. What do you think pricing would come in right now if you were to say go to the unsecured market, which there's a tremendous amount of demand on that side for product? Yeah, no, so you're absolutely right. There has been, you know, a tremendous amount. We've seen a lot of demands; you know, we stay very close to the market right now. You know, rates right now might range, you know, in the five and a quarter percent yield. And they have, you know, come down significantly.

David Hung: Our debt to adjusted EBITDA was 6.8 times at the end of Q2 2024 compared to 8 times at the end of Q2 2023. And our interest coverage ratio increased to 3.7 times in Q2 2024 compared to 3.5 times in Q2 2023. We ended Q2 2024 with debt-to-adjusted gross book value of 43.7% and $1 billion of unencumbered assets. This provides financial flexibility and supports our refinancing initiatives at attractive rates, in particular, as we actively explore opportunities to refinance our upcoming debt expiry in the fourth quarter of 2024.

David: And then maybe David I mean, you're obviously talking to lenders and syndicates, where where do you think pricing would come in right. Now if you were to say go to the to the unsecured market, which there's a tremendous amount.

David: The amount of demand.

David: On that type of product.

David Hung: Yeah, no, so you're absolutely right. There has been a tremendous amount. We've seen a lot of demand. We stay very close to the market right now. Rates right now might range in the 5.25% yield, and they have come down significantly. A year ago, we might have been looking closer to 7%. So both GOC rates and spreads have come down quite significantly, and right now, they might be around 5.25%. Yeah

Speaker Change #104: Yes, so youre absolutely right there has been.

Speaker Change #104: Tremendous amount that we've seen a lot of demands.

Speaker Change #105: We stay very close to the market right now.

Speaker Change #105: Rates right now might range.

Speaker Change #105: In the 5.25% yield.

Speaker Change #105: And they have come.

Come down significantly at year ago, we might've been looking closer to 7% so.

David Hung: A year ago, we might have been looking closer to seven percent. So both GOC rates and spreads have come down quite significantly. And right now, it might be around five and a quarter percent. Yeah, that probably gets lower by the time we get to the back half of the year. That's it for me. Thanks, guys. Thank you.

Both GLC rates and spreads have come down quite significantly and right now it might be around 5.25%.

Dean Wilkinson: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered at www.profile-investment.com.

Speaker Change #105: Yeah that probably gets lower by the time, we get to the back half of the year.

Speaker Change #106: That's it for me. Thanks, guys. Thank you. Thank you.

Pemmy Beer: Our next question comes from Pemmy Beer with our BC Capital Market. Please go ahead. Thanks. Good morning. I just want to come back to the comment on the lower occupied assets. Do you have an estimate that maybe what portion of the portfolio that they currently represent? And, you know, if you had estimate on average, where is the occupancy in that segment versus say the rest of the retirement portfolio? I don't have to guess. I have the numbers. We just haven't gone into that level of detail time before. But just to maybe build a bit of context, I would say, you know, more than half of our portfolio would be, you know, what we call stabilized, which is 95 percent plus or right in that range.

Pammi Bir: Our next question comes from Pammi Bir, with RBC Capital Markets. Please go ahead.

Amit <unk>: Our next question comes from Amit <unk> with RBC capital markets. Please go ahead.

David Hung: We have the ability to refinance a portion of our expiring debt with proceeds from a new financing or upfinancing of assets with CMHC-insured mortgages at interest rates significantly below those of other financing options. Our strong financial position will also support our growth initiatives, including the redevelopment of our older long-term care homes. We will continue to prunently manage our capital and staggered construction starts to ensure our debt ratios would remain strong, as we support the Ontario Government in this important initiative.

Pammi Bir: Thanks. Good morning.

Thanks.

Amit <unk>: Morning, I, just wanted to come back to the comment on the lower occupied assets.

Pammi Bir: I just want to come back to the comment on the lower occupied assets. Do you have an estimate of maybe what portion of the portfolio that they currently represent? And if you had to estimate on average, where is the occupancy in that segment versus, say, the rest of the retirement portfolio?

Maybe what portion of the portfolio that they currently represent and if your destiny on average, whereas the occupancy in that in that segment versus the rest of the retirement portfolio.

Nitin Jain: I don't have to guess. I have the numbers. We just haven't got into that level of detail before, Pammi.

Amit <unk>: Yes.

Speaker Change #108: I have to guess I have the numbers, we just haven't got into that level of detail timing before but just to maybe build a bit of context I would say.

Pammi Bir: But just to maybe build a bit of context, I would say, you know, more than half of our portfolio would be, you know, what we call stabilized, which is 95% plus or right in that range. And then, you know, if you broke the portfolio further, the other 25, 30% of it would be getting very close to it, or we have a line of sight to get to that. And then probably, you know, 8 or 10 sites, which could be anywhere from some could be as low as 75 all the way up to 85. So that would be the quantum of it.

Nitin Jain: With that, I will turn the call back to Nitin for his closing remarks. Thank you, David. As a company, we play an important role in bringing residents, team members, families, and our community partners together to make life better for one another.

Speaker Change #109: More than half of our portfolio would be what we call. It stabilized which is 95% plus so right in that range and then if you break the portfolio further.

Nitin Jain: And then, you know, if you break the portfolio further, you know, the other 25-30 percent of it would be getting very close to it, or we have line of sight to get to that. And then probably, you know, 8 or 10 sites, which will be anywhere from some could be as low as 75, as way all the way up to 85. So that would be the quantum of it. In some cases, it is external. So, you know, if you're on the offshore market, your occupancy is lower because there is more supply in that market. In other cases, you know, we had a home which was not performing well, and with the right leadership structure change and occupancy and the right sales and marketing.

Nitin Jain: Some of our most impactful initiatives are highlighted on latest CSG report we published yesterday. The theme of the report is Create Community, which is one of Sianna's core values. Our report includes numerous inspiring examples of team members and residents who exemplify Sianna's purpose and values. Like our team members in British Columbia who have implemented sector-leading emergency preparedness strategies this year, based on their first-hand experience and outstanding efforts during last year's wildfire season.

Speaker Change #109: The other 25% 30% of it would be getting very close to it where we have line of sight to get to that and then probably eight or 10 sites, which will be anywhere from.

Speaker Change #109: Some could be as low as 75 as way all the way up to 85, so that would be the.

Nitin Jain: In some cases, it is external. So, you know, if you're in the Oshawa market, your occupancy is lower because there is more supply in that market. In other cases, you know, we had a home that was not performing well, and with the right leadership structure change, occupancy, and the right sales and marketing, we saw occupancy change by nearly 1,000 basis points in the last eight months. So I just think there are out of those seven or eight homes, a couple would be market driven. The other five or six are, frankly, we have to do things differently to drive occupancy, and the team is all over that to deliver on it.

Speaker Change #109: Some of it in some cases it is external so if you're on the offshore market. Your occupancy is lower because there is more.

Speaker Change #109: Supply in that market and in other cases, we had a home which was not performing well.

Nitin Jain: Or the recipient of Sianna's Sparkle Award, which recognizes residents who go above and beyond to cultivate happiness at their communities. Once the recipient is Elaine Leibold, the 93-old resident council president at a north-way-long-come-care home. Elaine was the first to sign the legacy wall at a Northern Heights redevelopment site. Along with team members, she has been a champion of the new home by keeping her fellow residents informed and engaged with the project.

kopinski: And with the right leadership structure change and occupancy and the right sales and marketing we saw soft kopinski change by nearly 1000 basis points in the last eight months. So I just think there's out of those seven or eight homes couple of would be market driven the other five or six is frankly, we have to do things differently to drive occupancy and the team is all over that.

Nitin Jain: We saw occupancy change by nearly a thousand basis points in the last eight months. So I just think there is, out of those seven or eight homes, a couple of would be market driven. The other five or six is frankly, we have to do things differently, drive occupancy. And the team is all over that to deliver on.

kopinski: To deliver on it.

Pammi Bir: Okay, that's very helpful, Nitin. Thanks.

Pemmy Beer: Okay, that's very helpful. Thank you, thanks.

kopinski: Okay.

Very helpful. Thanks.

Pemmy Beer: Maybe just coming back to the comment on retirement margins, and it kind of ties into what you just said on maybe more focus strategies on some of these lower off by asset. But maybe can you comment on the use of incentives? Are you offered really much at this point? I've just given out where we're in a background system. If there are, do you see that maybe burning off? And maybe helping margins in the year ahead? You know, our incentive strategy has not really changed. You know, so the common incentive in usual markets is around the month free rent.

Nitin Jain: Maybe just coming back to the comment on retirement margins, and it's kind of tied into what you just said about maybe more. Can you comment on the use of incentives? Are you offering really much at this point, given where the backdrop sits, and if so, do you see that maybe burning off and maybe helping margins in the year ahead?

Nitin Jain: As we look into the second half of 2024, we have never felt more confident upon Sianna's ability to create value for our stakeholders. As a result of the numerous strategic initiatives we put in place alongside a generally improving macro-environment, we expect the long-term care NOI for the full year of 2024 to grow in the low double-digit percentage range compared to last year. With respect to our retirement operations, we expect the same property NOI to benefit from continued occupancy and rental rate growth, as well as other initiatives to optimize revenue and grow in the high single-digit percentage range.

Speaker Change #111: Maybe just coming back to the comment on retirement margins.

Speaker Change #112: Its kind of ties into what you just said on maybe more.

Speaker Change #112: Yeah.

Pammi Bir: You know, our incentive strategy has not really changed, you know, so the common incentive in usual markets is around a month free rent. And I think that incentive is pretty common. We are seeing some development projects offering significant incentives, and those eventually come back to Hauntu in later years. So, and since we are not a developer or trying to flip our assets, we have no intention of doing that. So, for example, we are leasing up our asset in Niagara Falls, and giving significant incentives would be a good way to drive occupancy, but again, we are not after an occupancy view of margin dollars. So, we have not taken any aggressive approach.

Speaker Change #113: Focus strategy to dawn.

Speaker Change #114: That asset, but maybe can you comment on the use of incentives.

Speaker Change #115: Are you offering really much at this point just given out.

Speaker Change #116: We're in a backdrop system. If there are do you see that may be burning off and maybe healthy margins in the year ahead.

Nitin Jain: That's great. Thanks very much. I will turn it back.

Speaker Change #117: Our incentive strategy has not really changed.

Speaker Change #117: <unk> incentive.

Speaker Change #119: And unusual market is around a month free rent and I think that incentive is pretty common.

Nitin Jain: Further adding to our optimistic outlook is the strength of a balance sheet and improving capital markets. Combined, they will continue to support our efforts to add value through capital improvements, redevelopment, and select opportunities to grow our asset base. But more than anything, our success depends on our team members and the strong alignment with Sianna's purpose, vision, and values.

Nitin Jain: And I think that incentive is pretty common. We are seeing some, you know, some development projects offering significant incentives, and those eventually come back to haunt you in later years. So, and since we are not a developer or trying to flip our assets, we have no intention of doing that. So, for example, we are leasing up our asset in the Agra Falls and giving significant incentives would be a good way to drive occupancy, but again, we are not after occupancy; we are about margin dollars. So, we have not taken any aggressive approach in that. That's great.

Speaker Change #119: We are seeing some.

Speaker Change #119: <unk>.

Speaker Change #119: Development projects offering significant incentives and those eventually come back to <unk> in later years, so and since we're not a developer or trying to flip our assets. We have no intention of doing that so for example, we are leasing up our asset in the agro falls and.

Nitin Jain: On behalf of our management team and our board of directors, I want to thank all of you for your continued support and commitment.

Speaker Change #119: Giving significant incentives would be a good way to drive occupancy, but again, we are not after occupancy we owe about margin dollars. So we have not taken any aggressive approach in that.

Operator: We now please answer any questions you may have. We will now open the line for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand, and Join the Queue. To withdraw your question, simply press star one again. If you are dialed in and listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Pemmy Beer: Thanks very much.

Speaker Change #120: That's great. Thanks, very much I'll turn it back.

Operator: I will turn it back.

Operator: We have no further questions at this time.

Operator: We have no further questions at this time. With that, this will conclude today's conference call. Thank you all for your participation. You may now disconnect.

Speaker Change #121: We have no further questions at this time with that this will conclude today's conference call. Thank you all for your participation you may now disconnect.

Operator: With that, this will conclude today's conference call. Thank you all for your participation.

Operator: You may now disconnect.

Speaker Change #121: [music].

Lorne Kalmar: Our first question today comes from Lorne Kalmar with Disjardin. Please go ahead. Thanks good morning and congrats on another solid quarter. Maybe just on the retirement side, it looked like you guys were able to get the same property margins flat year over year, which is a nice improvement versus the prior quarter. Do you expect this trend to kind of continue or do you think you can start pushing the same property margins even higher in the back half of the year?

Speaker Change #121: Okay.

Lorne Kalmar: Thank you, Lorne. You know, our view, we have been focused on same property NOI growth, so that's the outlook that we will provide, which we have provided. But frankly, it will come only from two places, which is occupancy and from margin growth. I think we like the trend which we are in, but one quarter doesn't really constitute a trend for us. Our focus is to grow margin, and one of the things we are realizing is that providing more care, obviously keep residents in homes, but also comes at no margin in some cases, no margin, and that's what we are resolving for at the moment.

Speaker Change #121: [music].

Nitin Jain: So we do expect margin to grow over time, but just we haven't provided any outlook or timing for it. Okay, fair enough, and then maybe sticking with the same property theme on the LTC front. Obviously, you guys increased the guidance range. Was the WSIB payment a big factor there? Or was there something else that you weren't seeing at the beginning of the year that you're seeing now that drove the increase? Yeah, no, thanks for that question, Lauren.

Nitin Jain: So I mean, the WSIB refund was part of our increase in guidance, but also what increased our guidance was really just the stability of our long-term care operations, the increase in the OA funding, which has given us the confidence to increase our guidance versus the last quarter. Okay, and then so with the OA funding like that, that was like it's already known last quarter, so is now that it's been implemented, you're seeing something different, I'm just trying to get a better idea here.

Nitin Jain: No, I mean, we knew that we did know that last quarter. I think in addition to that, just the continued stability within our long-term care operations, the fact that we've also been able to maintain our agency costs while under control has helped with the increase in our guidance.

Nitin Jain: Okay, perfect, thanks for that. And then last quick one for me. Obviously, one of your peers is pretty active on the acquisition front. I was wondering if you're seeing anything out there that has sparked your interest. You know, we continue to look for opportunities on one of the things that is unique about us is that we can acquire both in long-term care and retirement and including campuses, so it puts us in an enviable position.

Nitin Jain: I think we'll continue for opportunities, even though in the last two years, we have not made a big announcement. We have nearly $200 million, actually $250 million in active construction and another one shortly. And our development projects are quite unique because the day they open, you know, you get a contract from government which frankly reduces the cost on a balance sheet from $80 million project to $25. And specifically to acquisitions, I think we'll continue to look for opportunities and we do expect to grow in the next 12 to 18.

Lorne Kalmar: Okay, great. Thank you so much for the call. I will turn it back.

Operator: Thank you.

Jonathan Kelcher: Our next question comes from Jonathan Kelcher with TD Cowan.

Nitin Jain: Please go ahead. Thanks. Good morning. Just going back to retirement, the same property expenses were up 10% year over year, and I think you maybe touched on this a little bit, Nitin, but could you maybe give us a little bit of color on what growth that was that? Simply just more care for in place residents, or were there elevated marketing to drive occupancy? Yeah, I think both of those things exactly Jonathan, it is more care expenses.

Nitin Jain: It is also more marketing spend. And our, you know, when we look at just based, you know, even the previous question, a margin has been a bit all over the place in the last quarter. You know, we do know that we have an opportunity to increase margin, and that's the work our team is doing. We have a pretty good insight where the margin can be. We just not reached at a point where we can give that outlook, but you should expect our margin to continue to grow.

Nitin Jain: Because we have to do two things. One is making sure we are spending marketing in the right place. And secondly, when we have the expenses for care that we are charging for it appropriately. Fair enough. If I look back pre pandemic, and I know your portfolios a lot different now, but you were in the low to mid 40s. Is that if you're sort of targeting towards 95% over time and not really I'm not holding you to any time frame on that.

Nitin Jain: But if you get to 95, should we be thinking low to mid 40s? Is that the right way to think about it? You know, it is quite a bit out there in terms of timing, what I would say is portfolio has changed. So for example, in 2019, we made it on 45% margin. But at that time, the proportion of care was a bit lower, and care would never have that time margin.

Nitin Jain: So I don't think we'll get to 44, but could it get closer to 40 and a little bit up? Yeah, that is possible. But again, I'm just speculating at this time because we really haven't given out any guidance on it specifically.

David Hung: Okay. And then just on the GNA is Q2 a good run rate or was there any one time things in there? Yeah, no, I think that Q2 would be a relatively good run rate. We did see a little bit of a pick in our stock comp, but some generally speaking, I think that would be a good run rate going forward for the rest of the year. Okay. Thanks guys.

Lorne Kalmar: I'll turn it back. Thank you.

Himanshu Gupta: Our next question comes from him and you go with the go to bank. Please go ahead.

Himanshu Gupta: Thank you and good morning. So just on LTC guidance, increased to double digits, obviously it includes the benefit of one time WSIB fund. Is it fair to say that your Q3 and Q4 NOI expectations are unchanged from last quarter? Yeah, I mean, generally speaking, they would be relatively unchanged, maybe a pick by a little bit. But our overall guidance, excluding the one time funding and the retro would be in the low double digit range overall.

Himanshu Gupta: I think there are a few things, Himanshu, that change from Q1, and again, Jonathan asked the same question at Lorne's, and last quarter when we released results, the oil funding just came out, we were just making sure that you're not missing any expenses that are released to it. We had a whole strategy on driving preferred accommodation, which the team has done exceptional jobs, so we did not factor in enough. And the third one, just on the agency one, we made a lot of progress last year, and we just wanted to make sure that progress is sustainable, and the team has proven after a four quarters that it is sustainable, so that gave us more comfort in upping our guidance.

Himanshu Gupta: Awesome. Okay. Thank you.

Himanshu Gupta: And then just moving to retirement homes, and thanks for providing the move-in and move-out issues. I mean, is there a team, any trend? You're seeing high-movements, or lower-moveouts, anything, anything to do with that with it? Yeah, so in the past, we have seen a pretty consistent number of move-outs, and really our occupancy is fluctuated because of moving this quarter. We saw a little bit lower number of move-outs, so we are cautiously optimistic that we headed in the right direction, and I guess no surprise there, the map here is more move-ins than move-outs with drive occupancy.

Himanshu Gupta: And we are now getting into the fall season, which is usually stronger, so we are expecting that occupancy will grow as we move forward, and the focus for us has been, as we talked about before, rather than just looking at move-in move-outs and total is really looking at the homes with a lower occupancy, because since we are close to 89% occupancy, we have any homes in our portfolio, which are 95% plus some of them are at 100%. So the ones which are 95% plus, they have good wait lists for kind of rooms that people are looking for.

Himanshu Gupta: So the data we are focused on is for home, and the homes with lower occupancy, that's where the move-in move-out are bigger focus, including how many leads we get in a week, how many conversions we have, because that's eventually what will drive occupancy home, and 95% might go to 95 and a half or 96, that would not really make such a difference, if something is at 70, we are going to 85-90, because that's the focus for few homes. Yeah, okay, thank you, and are there homes which are like 80% less occupancy?

David Hung: That's great, Gaurav. Thank you, David. Thank you, Jonathan. Pardon me, back. Thanks.

Himanshu Gupta: Yeah, we have a handful of homes, which would be in that range, but I would say very small handful. Okay, okay, thank you, and then just taking to retirement home, same property, NOI, obviously, high single digit growth in 2024, I mean, given your commentary around occupancy gains and margins, do you think it is very repeatable in 2025 as well? We haven't really given any outlook for 2025, but good for you to try a bunch, so I think that's something you'll have to make against yourself.

Himanshu Gupta: Okay, maybe I'll ask this question, a simpler one, is there a thumb rule here, you know, as for every 100 basis for the occupancy? As we head towards 95, is there an NOI margin that should go up? Or is there a desirable NOI margin? Yeah, that's a good question, Himanshu. Broadly speaking, for every one percentage point we go up in occupancy, that would be about $2 million of revenue, and about 75 or 85% of that would be margin. The reason being, you know, it's pretty high margin because the only incremental cost would be some additional food, maybe some extra housekeeping laundry staff, etc. That's great. Thank you, David. Thank you, Nathan. Thank you.

Juliano Thornhill: Our next question comes from Juliano Thornhill with National Bank Financial. Please go ahead. Hey, good morning, guys.

Nitin Jain: Maybe just on the marketing spend that you guys mentioned earlier, could you provide some color just on the geography or positive, like, sweet type that requires this higher investment? Thank you. You know, there's really no, it's not focused on sweet type or geography, and we don't really do any national campaigns because our focus is very local. And of the day, retirement people make a choice very locally. So, you know, if no one is moving from Vancouver to Moscow, just because we will have a different brand.

Nitin Jain: So the focus is very, very specific, and the spend is more focused on driving occupancy at the lower occupancy homes, the question was around homes which around, you know, 80, 85% lower, and that's where we are spending money to ensure we have the right focus and the right opportunity to drive that occupancy.

Nitin Jain: And then just do you think like the return to kind of pre-COVID activities may have like affected the man for some of your properties, or like even the occupancy trends that you've seen today? I'm not sure how far. Can you just maybe expand a bit more? Yeah, the more secondary markets that your sites are located within, just I feel like more people are looking to move towards the cities versus away, and have you noticed that within your retirement occupancy?

Nitin Jain: Actually, not at all. You know, many of our sites which are in smaller markets continue very well, and the reverse is also true. So I don't think it is specific to, you know, specific areas, because if, you know, in a macro level, what remains true is that the demand is higher than supply of retirement homes, and only in a couple of markets the supply is higher, but that will only get absorbed shortly.

Nitin Jain: So I don't think it's an issue of demand and supply, because we think demand is higher. It will be more an issue of if there are three retirement homes, they all will be full eventually. The idea is who will get full first.

David Hung: Okay, and then just last one on this series, a maturing. Have your plans or intentions maybe change just now that spreads have come down and the rate path outlooks a little more certain than before? Yeah, so I mean we continue to look at all options right now, you know, because of, you know, our conservative balance sheet, you know, we continue to actively pursue CMHC financing, because that continues to be the lowest rates available, you know, out of our options. But, you know, we would also have other options as well, including, you know, drawing on our unsecured revolver conventional mortgages, as well as, you know, possibly another issuance of unsecured bonds. All right. Okay.

Juliano Thornhill: Thank you guys.

Dean Wilkinson: Our next question comes from Dean Wilkinson with CIBC. Please go ahead. Thanks, morning, guys. Most of my questions have been answered. Just as it comes down to sort of these retroactive adjustments and things like that, do you guys have any expectations of more stuff coming in future quarterly? Do you have any line of sight in terms of, you know, perhaps appeals or things around different payments that may still yet come in?

Dean Wilkinson: I think that WSIB1, that's a bit unique. But, you know, from a government perspective, they're becoming more common. And different provinces have a different view where the funding would reflect one thing, but they understand their cost always higher. And I think one of you talked about that in the past, because the funding was not there, we were punitive. So the fact that the funding has come out, we should not be punitive again.

Dean Wilkinson: So I do think time to time, we would see these retroactive adjustments, because you know, the last four or five years were very challenging. And I think different governments took a different approach in how to fix that. So I don't think it will be that unusual for us to, you know, once a year get some funding correction in one of the provinces. So it's kind of like it was sort of before we even knew what a COVID was.

Dean Wilkinson: You're kind of going back to that situation, I suppose. Yeah, I just think not only that, things have changed in the last four years, where, you know, government is focused on ensuring the sector's environment is viable. We need to build more homes, and that only happens with the appropriate funding.

Nitin Jain: Got it.

David Hung: And then maybe David, I mean, you're obviously out talking to calendars and syndicates. What do you think pricing would come in right now if you were to say go to the unsecured market, which there's a tremendous amount of demand on that side for product? Yeah, no, so you're absolutely right. There has been, you know, a tremendous amount. We've seen a lot of demands, you know, we stay very close to the market right now.

David Hung: You know, rates right now might range, you know, in the five and a quarter percent yield. And they have, you know, come down significantly. A year ago, we might have been looking closer to seven percent. So both GOC rates and spreads have come down quite significantly. And right now, it might be around five and a quarter percent. Yeah, that probably gets lower by the time we get to the back half of the year.

Dean Wilkinson: That's it for me. Thanks, guys. Thank you.

Pammi Bir: Our next question comes from Pemmy Beer with our BC capital market. Please go ahead. Thanks.

Pammi Bir: Good morning. I just want to come back to the comment on the lower occupied assets. Do you have an estimate that maybe what portion of the portfolio that they currently represent? And, you know, if you had estimate on average, where is the occupancy in that segment versus say the rest of the retirement portfolio? I don't have to guess. I have the numbers. We just haven't gone into that level of detail time before.

Pammi Bir: But just to maybe build a bit of context, I would say, you know, more than half of our portfolio would be, you know, what we call stabilized, which is 95 percent plus or right in that range. And then, you know, if you break the portfolio further, you know, the other 25-30 percent of it would be getting very close to it or we have line of sight to get to that. And then probably, you know, 8 or 10 sites which will be anywhere from some could be as low as 75 as way all the way up to 85.

Pammi Bir: So that would be the quantum of it. In some cases, it is external. So, you know, if you're on the offshore market, your occupancy is lower because there is more supply in that market. In other cases, you know, we had a home which was not performing well and with the right leadership structure change and occupancy and the right sales and marketing. We saw occupancy change by nearly a thousand basis point in the last eight months.

Pammi Bir: So I just think there is out of those seven or eight homes, a couple of would be market driven. The other five or six is frankly, we have to do things differently, drive occupancy. And the team is all over that to deliver on.

Pammi Bir: Okay, that's very helpful. Thank you, thanks. Maybe just coming back to the comment on retirement margins, and it kind of ties into what you just said on maybe more focus strategies on some of these lower off by asset. But maybe can you comment on the use of incentives? Are you offered really much at this point? I've just given out where we're in a background system. If there are, do you see that maybe burning off?

Pammi Bir: And maybe helping margins in the year ahead? You know, our incentive strategy has not really changed, you know, so the common incentive in usual markets is around the month free rent. And I think that incentive is pretty common. We are seeing some, you know, some development projects offering significant incentives, and those eventually come back to haunt you in later years. So, and since we are not a developer or trying to flip our assets, we have no intention of doing that.

Pammi Bir: So, for example, we are leasing up our asset in the Agra Falls and giving significant incentives would be a good way to drive occupancy, but again, we are not after occupancy, we are about margin dollars. So, we have not taken any aggressive approach in that. That's great. Thanks very much.

Operator: I will turn it back. We have no further questions at this time.

Operator: With that, this will conclude today's conference call.

Operator: Thank you all for your participation.

Operator: You may now disconnect.