DREAM Unlimited Corp.

Good afternoon, ladies and gentlemen. Welcome to the Dream Unlimited Court fourth quarter conference call for Tuesday, February 21st, 2023. During this call, management of Dream Unlimited Court may make statements containing forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties. many of which are beyond Dream Unlimited Corps control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information about these assumptions and risks and uncertainties is contained in Dream Unlimited Corps filings with securities regulators, including its latest annual information form and MDNA. These filings are also available on Dream Unlimited Corps' website at www.dream.ca. Later in the presentation, we will have a question and answer session. To queue up with your question, please press star one one on your telephone keypad. Your host for today will be Mr. Michael Cooper, CRO of Dream Unlimited Corp. Mr. Cooper, please go ahead.

Thank you very much and welcome everybody to Dream's year-end conference call. We released our results earlier. Today I'm with our CFO, Deb, and she'll present the financials. After that, I will discuss some of the particulars about the company. But I would just start with more of a macro point of view. You know, last night or this morning, I read one of the reports on Dream Industrial that said that European rents are up 20% and cap rates have expanded 75%. 75 basis points. And I thought, like, 20% increase in rent is huge. It's kind of remarkable that cap rates would be up so much. So that kind of defines everything we're seeing. This morning, Canadian CPI came out. It looked actually great that... Core inflation is down at a reasonable number. We're making progress. And then you see a jobs number that's off the charts. You're hearing people talking about how the market's going to crash. Other people saying we're past the bottom. Interest rates are going to come down. Like, it's just such a hard environment to manage through. At Dream, you know, we report quarterly, but we really do have a longer-term outlook. I mean, currently the equity in the company is – quite a reasonable number now. And I think it's even higher than our trading value. But the amazing thing about our equity is it's almost 100% retained earnings. And we made that money starting on a very small equity base, and we keep growing it. And a lot of the work we're doing is long-term in nature. But I think if you look at the progress we've made in the last year, the last three years, the last five years, the company's changed a lot. It's gotten higher quality. I think we're showing a lot better best-in-class management We've got innovative products all over the place, and I think the company's in really great shape. So while the macro environment is fluctuating, I do think that we're building a great platform for the long term. I think that the undercurrent is we're going through 25 years of declining interest rates, which have been a boost, and now interest rates are back to where they were in 2006, which doesn't seem shocking on its face. But we are looking at a different sort of environment, one that might be different from the last 25 years. And what I would say is from a year ago, we're incredibly – the whole economy is adjusting way better than I would have ever thought and, quite honestly, way better than anything I've ever read. So I think we've gotten through a lot of it. I'm actually quite bullish going forward subject to the geopolitical events, but – I do think it's been an amazing recovery in the last 12 months to adapt to a very different environment. And I think Dream set up very well to perform in this environment. But at this point, Deb, do you want to provide some information on the financials?

Thank you, Michael, and good afternoon. For the three-month end of December 31st, earnings before income taxes after adjusting for fair value gains and losses on income trust units Impact Trust units held by other union holders with a loss of $56 million and earnings of $117 million, respectively, compared to earnings of $99 million and $151 million in 2021. The change from 2021 is primarily due to lower fair value adjustments on our investment properties, including those held in equity account investments, and fair value loss on Impact Trust investment in Virgin Hotels in Las Vegas. This was partially offset by condominium occupancies at Canary Commons during the first half of the year and a gain on land settlement recognized in the third quarter. We maintained strong liquidity and managed risk with $286 million in liquidity and a conservative leverage ratio of 41%. I'll now go through a brief overview of the results by operating segment. In the fourth quarter, our recurring income segment generated revenue and net operating income of $43 million and $14 million, respectively, up from $36 million and $10 million in 2021. For the year end of December 31, 2022, our recurring income segment generated revenue and net operating income of $168 million and $64 million, respectively, an increase of $51 million and $23 million over 2021. The increase was primarily driven by strong results at A-Basin, earnings from our growing multifamily portfolio, and improved performance at the distillery district and our boutique hotels in Toronto. Included in revenue for the year ended December 31st is $48 million relating to the asset management and development contracts with Dream Industrial REIT, Dream Office REIT, Dream Residential REIT, and our partnerships, up from $43 million in 2021. We expect these revenues to grow. over time as we actively pursued new asset management opportunities. In the fourth quarter, our development segment generated revenue and net margin of $125 million and $33 million, respectively, compared to $114 and $27 million in the prior year. Fourth quarter results were largely driven by our sales mess in Western Canada. Revenue and net margin for the development segment was down from the prior year, as 2021 results included occupancies at phase one at Riverside Square. In 2022, we achieved 858 lot sales and 39 acre sales, compared to 959 lots and 10 acres in 2021. To date, we have secured commitments for 420 lots and 23 acres that we expect to contribute to our earnings in 2023. We hold interest in Dream Office REIT, Dream Impact Trust, and Dream Residential REIT at 38%, 32%, and 12%. inclusive of senior management's holdings. During the year, we received $28 million in cash distributions from the trust. As of February 17th, the market value of our interest in the trust is $420 million, or approximately 34% of Dream's current market cap. We remain committed to maintaining a conservative debt position and may use excess liquidity to fund potential new investment opportunities as they arise, as well as purchase additional units of Dream Office REIT and Dream Impact Trust. And now I'll turn it back over to Michael.