Thank you very much. Good morning and thank and welcome to the Dream Unlimited second quarter conference call.

On today’s I am with Pauline Alimchandani who is going to make a presentation and when she is done, Pauline and I will be happy to answer questions. Pauline?

Thank you, Michael. And good morning.

Overall the first six months of 2019 have been a productive period for the company. At June 30th Dream’s total equity on a standalone basis increased to $9.56 per share, up from $9.33 at December 31 2018.

A notable start this quarter is that our reoccurring income business comprises stabilized income generating assets and asset management increased to 50% of our book equity per share. Our urban development segment which includes our Toronto and Ottawa development assets has increased to 10% from 8% since the beginning of the year and our Western Canada community development segment declined to 40% from 45%, a trend that is expected to continue as we continue to repatriate capital from the division to reinvest in our assets in Toronto and within our reoccurring income segment.

In the six months ended June 30th earnings before income taxes on a Dream standalone basis decreased to $38.3 million from $49.8 million in the prior year due to lower fair value adjustments on financial instruments of $2.1 million, a gain on disposition of an assets sold in Toronto in the prior period of $9.4 million, higher interest expense of $2.5 million, in addition to a onetime net gain of $12.6 million on the acquisition of Dream Alternative in the prior year period. These were partially offset by $3 million of increased earnings from our investments in Dream Office REIT and $8.1 million higher net margins generated from our operating segment.

In the six months ended June 30th, on a consolidated basis the company recognized a loss before income taxes of $48.2 million compared to earnings before income taxes of $120.1 million in the prior year due to adjustments relating to the Dream Alternative’s trust unit, partially offset by higher margin earned from our operating segments and increased equity earnings from Dream Office REIT. Within our reported consolidated results, Dream Alternative’s trust units held by other unit holders are treated as a liability on the statement of financial position of Dream and accordingly our fair valued each period under IFRS generating losses as the trust unit price increases.

Fair losses on the Dream Alternative trust units were $85.9 million in the current period due to the unit price increasing from $6.24 at December 31, 2018 to $7.68 at June 30th, 2019. This compared to losses of $34.4 million in the prior year due to the unit price increasing from 633 to 689 in the prior year six months period.

Results in the comparative prior period also included a onetime net gain on acquisition of control of Dream Alternative of $130 million. One of our primary objectives over the last few years has been - has been to build a safer and more valuable company.

In doing so, we have grown our pre-tax reoccurring income to almost $50 million year-to-date, which is up 14% over the prior year. Over the last few years our asset management business has become more valuable through increased and diversified fee streams.

We have increased the quality of our land by owning significantly more in the best locations in Toronto, which is the driver of the Canadian economy. Arapahoe Basin has benefited financially from our capital investment and its income is growing and non-correlated to any other of our development business line.

Finally, we have received many approvals in western Canada, which improves the value of our land, while we wait for market conditions to once again support increased volumes. Our urban development investments in Toronto and Ottawa offer incredible opportunities.

As of June 30th, we had approximately 12,000 residential units and 3.6 million square feet of retail and commercial space in various stages of planning, redevelopment and construction. This included nearly 1700 residential units and 0.5 million square feet of commercial space under development or having achieved a sales launch with the remainder held in our future development pipeline.

Other condominium projects in our inventory which have achieved market launches to date approximately 99% of these units have been pre-sold, including Riverside Square and Canary Block condominiums. In addition, there are 750 purpose built multi residential units at Block 8 within the West Don Lands development which we expect to construct beginning in the fourth quarter of 2019.

Our pipeline includes feature phases of the West Don Lands to be the Distillery District, Block 13 in the Canary district and our recently approved and renamed Brightwater Development in Port Credit to name a few. We are committed to building the best communities which will translate into increased value for shareholders over the long-term.

As we build rental and commercial properties within our communities that we intend to hold for the long term, our reoccurring income sources will continue to increase. As June 30, Dream owned $536 million in the Dream publicly listed funds, inclusive of our units and Dream Office REIT, Dream Alternative and Dream Global which accounted for over 65% of our market cap and generated over $11 million of distributions year-to-date.

Although the environments in which our land and housing divisions operate experienced tougher market conditions through 2018, which has continued through 2019, we have continued to generate solid earnings in Dream due to the strength of our other business lines. Given the diversification of our business we expect income driven by Western Canada to represent a smaller proportion of our earnings and book value per share relative to our historical results.

We expect 2019 will be the lowest level of earnings contribution to date for Western Canada within our financial results. We would expect this will once again increase when Providence comes online which is currently expected to be 2021, although it's subject to a number of different factors.

In the near term, we have reduced our overhead costs and have minimal other caring costs on our lands in Western Canada so that we are ready and able to act opportunistically as market conditions improve. On the vertical building side, we started our first 120 unit, multifamily apartment building in Brighton this quarter and we are seeing good value from building rental and commercial properties on our western Canadian land.

Since going public in 2013, our book equity per share has increased by a compound annual growth rate of 17% which is quite positive considering the decline of activity in Western Canada and the growth in our other segment. I will now briefly review key results highlights by operating segment for the first six months ended.

In the six months ended June 30th our stabilized income generating assets reported NOI of $19 million, up $2.5 million from the prior year, driven by an increase in contribution from the recently expanded A Basin, and partially offset from lost income from our Obico Property which was expropriated last year. A Basin has continued to grow in popularity over the last 15 years.

Last year marked the first year we had over 500,000 skier visits. This year we surpassed 590,000 skier days, driven by your newly opened Ski Area expansion and a favorable snow year.

Our net operating income for the first half of the year was $13.5 million, which was a $3.5 million increase from last year. At June 30th, A Basin had a book value of $29.4 million at depreciated cost on our balance sheet, although we believe the fair value of this asset is significantly higher.

In the six months [Technical Difficulty ] ended June 30th, our asset management - asset management division generated net margin of $60 million, up from $14.1 million in the prior year. The increase in net margin was driven by growth in fee earning assets under management and transactional activity.

In the six months ended our share of equity income from our 24% investments in Dream Office REIT was $15.2 million, up from $12.2 million in the prior year. Dream Office REIT’s net income was generated from rental income, it shares it income from its investments in Dream Industrial REIT rates and fair value increases to investment properties in Toronto which was partially offset by interest expense and fair value losses on financial instruments.

Year-to-date, the company's investment in Dream Office REIT generated cash distributions of $7.3 million. Within urban development, we had several notable accomplishments during and subsequent to the quarter.

Year-to-date, we have incurred net losses of $1.2 million from our urban development division, which is really as a result of our fixed and operating costs which [indiscernible] only by a limited number of activity in the period, with only 49 condominium unit occupancies, which related primarily to Riverside Square. By the fourth quarter of ’19, we expect 300 units that our share to occupy primarily relating to Riverside Square and Canary Block.

While we do not generate much income from our urban development business year-to-date, the projects we have in our pipeline are advancing well and will generate meaningful profits and development management fees over the next few years. Our specific milestones this quarter included, securing our first commercial tenant at Zibi, our 34 acre waterfront development across along the Ottawa River in Gatineau, Quebec and Ottawa, Ontario, with the Federal Government of Canada.

The 15-year lease is for approximately 155,000 square feet office space located in the heart of the site, with unparalleled views to Parliament Hill. In addition to this building, we have over 450,000 square feet of retail and commercial space in various planning and development stages at Zibi.

We also reached an important financing milestone on the first block of our purpose-built rental community in the West Don Lands neighbourhood in Toronto. Through CMHC’s Rental Construction Financing initiative, the Federal Government announced the investment of $357 million at 100% for the first block slated for development, which will comprise over 750 rental units, including 30% affordable.

We also reached an agreement with the City of Mississauga to facilitate the advancement of municipal approvals for our newly named Brightwater development, formerly referred to as Port Credit, which is a significant milestone for the project. In Western Canada community development we incurred negative net margin of $4.3 million with 87 lost sales and 52 housing occupancies year-to-date.

This compared to negative net margin of $6.7 million in the prior year with 98 lot sales and 104 housing occupancies year-to-date. The decrease in negative net margin relative to the comparative period was really the result of lower overhead costs and higher cost recoveries achieved in 2019.

In terms of our balance sheet we had up to $127.7 million of undrawn credit availability on Dreams operating line and margin facilities. At the end of the quarter, our debt to growth - our debt the total asset ratio on a Dream standalone basis was 36.2%, up from 34.9% at the beginning of the year.

In the first six months of 2019, our debt ratio increased slightly due to $32 million of combined purchases of units and Dream Office REIT and Dream Alternative and borrowings on our developments on a cost to complete basis. We anticipate through recycling capital with the sale of non-core assets, that we will lower our debt ratios as debt is repaid with net proceeds.

We are focused on maintaining a conservative debt position and have ample excess liquidity even before considering unencumbered or under-levered assets. In and subsequent to the six months ended June 30th, $1.5 million subordinate voting shares were purchased for cancellation for a $11.6 million under our normal course issuer bid.

Dividends of $5.3 million were declared and paid on our shares in the six month period. On the overall it has been a productive first half of the year for Dream.

Our book equity per share continues to increase. We have strong financial flexibility, which we expect to increase further - further once we execute the non-core asset sales and we have increased our reoccurring income sources.

Despite lower earnings from Western Canada, our business and balance sheet are in great shape. With that, I will now turn the call back over to Michael.

Thank you, Pauline. At this time, we'd be very happy to answer any of your questions.

Thanks. And good morning, everyone.

Good morning.

Michael, one thing you've spoken out for a while, is that even though the shares might be below than asset value there's more important or other uses for cash flow - free cash flow that you would have, whether it be the balance sheet or other investment. What do you feel that the company is right now in regards to your goals and in regards to the balance sheet as far as the consideration of being more active and buying back share?

Mark, that's a great question. I don't think I ever said what was important, not important, I think the issue has always been that we've got to put our money where it's most significant over the longer term.

And my view has been buying back stock is a significant part of our long term plans. But we can do more or less at different times.

So I think if you take a look at how we've gone from 2% ownership to Dream Office to 27% or how we've built up a business in downtown Toronto or what we've got in asset management with that and other things, I think now we're invested primarily where we want to be. And I think as we get cash buying back stocks to be much more significant.

Going forward, the only thing I would say is we're also very focused on making sure the company is very well capitalized. So I think at this point buying back stock is becoming a more significant use of capital provided we've got the safety that we want.

Okay. Great.

Any update on the Obico settlement, I know you said it may take a while?

It's Obico, and it will take a while. We think that the luckiest we could be is to have some type of progress by 2021.

So it's going to be a long time from now.

Okay, great. Thanks.

And just one last question, in regards to Providence. Are you still optimistic that you can have lot sales next year?

And to what extent can that grow in 2021?

Oh, I appreciate that question. Right now what's been happening is that in order to start that development there needs to be some water servicing provided by the City of Calgary.

It looks like that's a few months delayed, so we'll probably be into 2021, rather than the end of 2020 to start Providence. We don't view that as meaningful, it's just one of the obstacles along the way, but everything else is on track.

Okay. Great.

Thank you.

Thank you.

Thanks. Good morning.

Just over to A Basin. So just to be clear from what’s in the MD&A, do you see NOI on this asset being up year-over-year or the next ski season with the Icon pass despite the budgeted decline in traffic?

Oh, that's - okay. Let me try to walk through this.

We did a deal with Vail Resorts in 1997 where they basically received a commission for generating skiers for A Basin. In 2000 and this current - in this current year about 60% of skiers came from Vail passes or lift tickets and generally those are very low yielding for us.

So they're low yielding and they stress out the ski area on important days. And we've been trying to figure out how to manage this.

What we've done is, we've ended the relationship with Vail, so no longer, I mean, I think there's some like 25,000 free skier days for Vail employees, I guess the mass of - that they're so huge that they've overwhelmed their ski area. So what we've done is we no longer have unlimited passes of any kind from Vail, they're all gone and instead we're going to be promoting our own ski passes.

And with Icon we've agreed to have up to seven days of skiing for the expensive pass and five days with the basic pass that are restricted. And what I was trying to say in the press release, I mean have been clear is, we're projecting 25% less skiers, but with the increase in yield we expect a significant increase in profit.

Okay. That's clear.

It was clear from the press release, it was just fiscal 2019. So half of the last season, half of the new season go forward, okay.

That's a good point, because ski people measure it from like August 30th to August 30th. So we do go back and forth.

But the fourth quarter is pretty small, the contribution. So even though on a fiscal basis it will be - actually much improved next year.

Okay, fantastic. On that asset, I mean, I don't know when the last time you got an appraisal on it or you know for some reason had to put some debt on it or whatever, is there any indication, third-party indication of value of it?

And also what is un-depreciated cost if that's something you'd be willing to disclose?

Now the book value is something like $27 million, $28 million I think. What do you mean by un-depreciated cost?

You're using what the total cost is?

Yeah. If you book depreciation over the years, what’s your gross cost?

You know, we buy snow cat every year, we buy one a year and they get depreciated over four years, I am sure that how meaningful a number it is, not really like a building. I'm not sure - we probably depreciated $20 million of value over that time.

And has there been an appraisal or would you consider getting an appraisal, just so you might go in…

Oh no, we're pretty confident we know the value. We don't need an appraiser to tell you.

I think that what you're seeing now with where the industry is, actually Vail despite a ski group, I think it's called [indiscernible] like that, and it was announced in the last 60 days. I think that was nine or 10 times EBITDA, but if you take a look that there's some issues there.

Generally the low end is nine or 10 times and about 15 is rare, so is sometime between - you know probably between 10 and 15 is reasonable for a ski area.

And what was the last 12 months for EBIT [ph]

Pauline?

And we had – so we had $13.5 million year-to-date. I suspect that we - third quarter is always a loss for us.

And then with the fourth quarter on the new path, it's a little hard to forecast. But I would say probably by the end of the year we'll be up slightly from where we are year-to-date.

If that helps?

That's very helpful. Thank you.

Just moving over to Toronto. What would be the next condo project that will be launched in terms of sales and when do you think that would take place?

We launched most of them. Right now we're looking at doing apartments.

We've got 31A Parliament that we want to do, an apartment that could start next year, Block 13, we haven’t decided it's a condo apartment, but most of the apartment - mostly condos that are ready to go we've already sold. I can't think of which one is upcoming.

Mirvish we're still working on, but that's – I am not sure of the date on that. Mirvish is probably the next most likely one.

Mirvish. Would you say a year or two vote [ph]?

Yeah.

Just switching over to the management contracts, you've enhanced the disclosure a little bit clarified or whatever on the incentive fee for global and industrial. I'm just wondering if you – I guess, give us an indication as to what the rationale for that enhance disclosure was, you know, should we take it as sort of an indication of a desire to potentially terminate the contracts at expiry?

No I mean, to be totally honest in global it was a bit confusing, I wasn't - I didn't realize that management income paid from properties that are co-owned with Poebo [ph] went through the related party note and it made it harder than I thought to identify what the original cost was of the assets. Its no an issue, industrial is an issue in global.

So that came up late last year. We've been talking about it since.

So it wasn't actually easy to calculate it. So we thought we would put it in.

I actually assumed that it was easier to calculate, but that was an error.

Okay. My last question...

Sam, I'm not sure if I'm clear with you. When Poebo pays Dream any fees, it's in the related party disclosure under Dream Global and I hadn't realized that the related party disclosure included amounts from a separate third-party.

As a result of that, it made it hard to use that as the metric to determine what the asset cost was. So we realized that and then we started looking for you know what we should just come out and say precisely what it is.

So it was easier for people to understand.

Cleared. So last question just on Western Canada, you know, the lot sales were basically flat year-over-year, is that the new up, are you a little bit more constructive about the outlook for Western Canada for current sales volumes?

There's a lot of different moving parts out there. I think that the economies have been pretty stubbornly difficult.

I think we're seeing a little bit decline in standing inventories, which is positive. The stress tests are hurting.

So we're not quite confident as to exactly what normal is right now. Overall, they're doing okay.

The provinces housing's been hurt bad and our expectation is it will pick up. We just aren't expecting to pick up in 2019 or 2020.

Okay…

So that maybe yes, it might be yes for your question, if is this a new up.

Okay, exactly. And is the cost structure you know, within the company, West is that changing at all or have you done – you finished making changes to the cost structure on the long side of west?

Pauline, do you want to address that?

So yes, I think that you know, we went through some changes earlier this year. The full impact of that won't be seen until 2020.

But the overall overhead costs on an annual basis declined by about $10 million.

Thank you.

Hi, Michael. Hi, Pauline.

Hi, Brett.

Morning.

Yeah. It's basically almost a follow up from Sam.

Do you have any employment growth metrics over the next five years in the western cities where you have the bulk of your permitted housing lots?

You mean anybody's forecast on what growth is expected to be?

Right, right. Because of growth you know, employment goes up, the people have to live somewhere.

I guess, the next two years it doesn't look too good. But you know, is there any visibility beyond two year?

Look I mean, [indiscernible] their numbers and they generally revert to the mean. This has been a pretty protracted period of low economic activity in Western Canada.

Personally I use all five of the banks put out provincial forecasts and they're available to anybody who goes onto their website. In addition to that you may see some forecasts.

They generally only go two or three years, but even if you look at those you'll see that generally they're positive, although there's a couple of outliers who are quite negative. But net, net, the consensus is that it is improving out west.

Okay. Now…

But the consensus has been wrong for five of the last six years.

Okay. With respect to the pre-sold condo units in Toronto, is it similar in the state people you know, will put down a down payment and it's sort of like what percent of the purchase price is it?

The down payment ranges from 15% to 25%. It's not like the States.

In Canada the person who signed it is liable to close, in the US, like in Colorado and California they could just walk from it, but generally in United States if people don't pay anything more than their deposit they can walk, in Canada they're responsible, we have very, very low levels of people that aren't able to close or won’t close.

Okay. But you know, just in case winter comes you know, to the Toronto condo market, is it because of what you just described.

If some - if a buyer does walk you've got about a 15% to 25% cushion on a markdown of the price because you keep the down payment?

Number one, that's true. Number two, it would be more than that.

Because generally condos are worth more than when we sold them. So I think that there's quite a good cushion.

The thing that we really look at is what the value as a rental property, whether that's individual property that someone's renting out at $4.50 a square foot or a whole building. And the rental property values are another way of confirming that the underlying value is pretty good even if somebody doesn't close.

When you look at the rental value versus the market value of your 12,000 units, how does that look?

We think that rentals are very, very competitive with condos, with a condo you might make a little bit more money in the - during the construction period. But with the apartments it looks very desirable for the increasing returns over time, as rents go up by 2% or 3% and you've got decent financing on it, you get decent growth and you're building to a number that is higher than the interest rate, so you get a decent cash return, plus growth and they look pretty attractive.

Right. If things continue to heat up between the United States and China on the trade war, is the pricing of Toronto condos dependent on Chinese capital flowing into that market?

No. The Chinese capital's reduced almost zero, number one.

Number two, and this is – I just want to read the news, prior to 1997 when Hong Kong became under Chinese rule prices in Vancouver went up a lot. I think that we could see, even though with a 15% tax in Ontario and B.C.

for foreigners buying places, I think we could see some significant new demand out of Hong Kong over the next few years. I would say China's volume net positive for Toronto real estate.

I think it's a big concern more for agriculture and other industries, but I think you'll see people live in China coming to Toronto.

Great. Michael and Pauline, thanks for answering my question.

Appreciate it.

Thank you.

Yes, I do. I'd like to thank everybody for their continued support of the company or at least continued interest.

We're quite excited about the changes that we're making and quite excited about the future. So please follow up with Pauline and I if you have any further questions and we look forward to speaking with you all soon.

Thank you very much.