Sienna Senior Living : 2022 Q3 Financial Results link to 2022 Q3 Financial Results

Report to Shareholders

Q3 2022 Sienna Senior Living Inc.

LETTER TO SHAREHOLDERS

Dear Fellow Shareholders,

Being a purpose-driven Company guides us as we adjust our business to navigate a more challenging business climate, including labour shortages, inflationary pressures and rising interest rates.

Generating strong occupancy gains to offset higher operating expenses

Amid continuing cost pressures, we achieved occupancy improvements across both of our business lines during the third quarter. In our retirement segment, solid demand in our key markets, coupled with our successful leasing strategy and the new Aspira brand, generated same-property occupancy gains for the fifth consecutive quarter. Average occupancy reached 88.4% in the third quarter and further increased to 88.6% in October 2022. We have also been able to successfully increase average rental rates in line with market rates, which helps to offset higher operating expenses.

In addition, we achieved a 490 basis point occupancy increase in our acquisition portfolio during the third quarter, excluding one property in lease up. This was our first full quarter of owning the 12 retirement residences we acquired in Ontario and Saskatchewan during Q2.

While occupancy gains and rental rate increases contributed to revenue growth, we are continuing to deal with significant cost increases as a result of labour shortages and high inflation, both of which have put pressure on operating margins.

Impact of rising costs on operations and development program

In our long-term care portfolio, resident admissions continued to progress steadily during Q3 2022 at most care communities and occupancy reached 96.7% in the third quarter. However, we expect cost pressures to remain for some time due to labour shortages and high overall inflation. We are actively working with other participants in the seniors' living sector and the government to receive funding that is aligned with the significant inflationary pressures experienced in recent quarters. Adequate funding will ensure that we can continue to provide service excellence and quality clinical care, which are key to a positive resident experience, and is crucial for the long- term economic viability of the sector.

Current supply chain issues and high inflation are also key considerations as we move forward with our redevelopment plans of our older long-term care communities in Ontario. We are closely monitoring cost escalations and the economic feasibility of current and future projects. While rising development costs have impacted the timing of construction starts, we remain optimistic about the sector's ability to redevelop Class C homes in Ontario.

Prioritizing a corporate culture that is aligned with Sienna's purpose and vision

At a time of staffing shortages in the health care sector and fierce competition for talent, we are making significant investments in attracting and retaining employees who are passionate about working with seniors. Creating the best workplace for our 12,000 team members is a key priority and it is inspiring to see how team members across our Company have been leaning into our new purpose of "Cultivating Happiness in Daily Life".

A range of recruitment and staffing strategies are currently under way, including a new centralized scheduling system which has been implemented at most of our long-term care communities to date and will be rolled out across our retirement platform in the coming year. In addition, we are offering extra shifts to part-time team members to reduce our reliance on agency staff and launched a pilot program that supports the placement of Ukrainian refugees.

Aligned with our new purpose and vision, we have been actively listening and responding to our team members' insights. This is reflected in a number of initiatives including SPARK, Sienna's very own version of "Dragon's Den". SPARK gives employees a platform to be heard and share their ideas on how to improve the lives of our residents and team members. During the first round of submissions in October, we received over 170 ideas, of which a number will be piloted, with the goal to permanently implement the best ideas at our Company.

Our purpose and our belief that happiness drives wellness are also key aspects of our new long-term care platform. The implementation of the new platform is well under way and current areas of focus are enhancements to our residents' move-in experience and the transformation of the dining experience.

These and other initiatives will support our efforts to attract and retain a highly engaged workforce, build a talent pipeline for our growing company and distinguish Sienna as an employer and operator of choice in seniors' living.

Capitalizing on long-term demographic fundamentals and financial flexibility despite headwinds

Despite some headwinds, we intend to capitalize on the outstanding long-term demographic fundamentals in Canadian seniors' living. Our sector's resiliency is driven by the growing needs of seniors, who make up the fastest-growing demographic in Canada. At the same time, we prepare for some economic headwinds in the coming year and expect continued pressure on our operating margins.

Amid rising interest rates, we have maintained a strong balance sheet and increased Sienna's liquidity. On October 26, we upsized the Company's unsecured revolving credit facility by $100 million to $300 million and extended its maturity term by two years to March 2027. This latest financing is a vote of confidence in the future of our Company and our sector and underscores the resiliency of our business. It also provides financial flexibility as we set our long-term strategic goals for the coming years and work towards our vision to become Canada's most trusted and most loved seniors' living provider.

On behalf of our management team and our Board of Directors, I want to thank all of you for your continued support and commitment.

Sincerely,

Nitin Jain

President and Chief Executive Officer

Sienna Senior Living

Management's

Discussion and Analysis

Q3 2022 Report to Shareholders

MANAGEMENT'S DISCUSSION AND ANALYSIS

BASIS OF PRESENTATION .................................	1
ADDITIONAL INFORMATION............................	1
REVIEW AND APPROVAL BY THE BOARD OF
DIRECTORS........................................................	1
COMPANY PROFILE ..........................................	2
NON-IFRS PERFORMANCE MEASURES ............	2
KEY PERFORMANCE INDICATORS ...................	7
THIRD QUARTER 2022 SUMMARY ..................	9
BUSINESS UPDATE............................................	11
OUTLOOK..........................................................	18
SIGNIFICANT EVENTS........................................	19
OUR PURPOSE AND VISION .............................	20
COMPANY STRATEGY AND OBJECTIVES ..........	20
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG) RESPONSIBILITY..............	22
INDUSTRY UPDATE ...........................................	24
BUSINESS OF THE COMPANY ...........................	24
QUARTERLY FINANCIAL INFORMATION ..........	25
OPERATING RESULTS........................................	26
JOINT ARRANGEMENT ....................................	27
NET OPERATING INCOME CONSOLIDATED.....	28
NET OPERATING INCOME BY SEGMENT .........	30
RETIREMENT..............................................	30
LONG-TERMCARE .....................................	32
DEPRECIATION AND AMORTIZATION .............	33
IMPAIRMENT LOSS..........................................	33
ADMINISTRATIVE EXPENSES ...........................	34
SHARE OF NET LOSS IN JOINT VENTURE.........	34
NET FINANCE CHARGES ..................................	35
TRANSACTION COSTS......................................	35
INCOME TAXES................................................	36

BUSINESS PERFORMANCE................................	36
ADJUSTED FUNDS FROM OPERATIONS ..........	37
SECOND QUARTER 2022 PERFORMANCE .......	38
CONSTRUCTION FUNDING..............................	38
MAINTENANCE CAPITAL EXPENDITURES........	39
RECONCILIATION OF CASH FLOW FROM
OPERATIONS TO ADJUSTED FUNDS FROM
OPERATIONS ...................................................	40
RECONCILIATION OF NET INCOME TO NET
	41
OPERATING INCOME.......................................
FINANCIAL POSITION ANALYSIS.......................	41
LIQUIDITY AND CAPITAL RESOURCES ..............	43
LIQUIDITY ........................................................	43
DEBT................................................................	43
CREDIT RATINGS .............................................	48
FINANCIAL COVENANTS..................................	48
EQUITY ............................................................	52
CAPITAL DISCLOSURE......................................	53
CONTRACTUAL OBLIGATIONS AND OTHER
COMMITMENTS................................................	53
CRITICAL ACCOUNTING ESTIMATES AND
ACCOUNTING POLICIES ....................................	53
SIGNIFICANT JUDGEMENTS AND ESTIMATES .	54
RISK FACTORS ...................................................	54
CONTROLS AND PROCEDURES.........................	54
FORWARD-LOOKING STATEMENTS .................	55