Thank you very much, Operator. Good afternoon.

This is the Dream Unlimited Q4 Conference Call. I'm here with Pauline Alimchandani, CFO, she has got prior prepared remarks and then I have a couple of comments and then we'll be happy to answer questions.

Pauline?

Thank you, Michael. In the three months ended December 31, 2019 the sale of Dream Global generated pre-tax earnings of $421 million within our financial results.

And cash proceeds to Dream of approximately $500 million in respect of our asset management agreement and units directly owned in the REIT. Proceeds were immediately used to pay down $225 million on our corporate debt facilities, in addition to funding the redemption of all outstanding preference shares for aggregate proceeds of $29.1 million and other working capital amounts.

On our balance sheet as of December 31, 2019, we had corporate level cash of $233.4 million of which most was used to fund a substantial issuer bid and corporate taxes due subsequent to year end. As of December 31, our debt-to-total asset ratio on a standalone basis was 24.6% down from 36.4% last quarter and we had $322.8 million of undrawn credit availability on our corporate facilities, the most excess liquidity we have ever had in our history since going public.

We remain committed to maintaining a conservative debt position and may use excess liquidity to purchase additional units in Dream Office REIT and Dream Alternatives as opportunities arrive fund potential new investments and ongoing share repurchases as part of our normal course issuer bid. In the year ended December 31, 2019, on a consolidated basis, the company recognized earnings before income taxes of $440.4 million compared to $213.5 million in the prior year due to the Dream Global transaction, as previously mentioned, increased earnings from equity accounted investments of $56.3 million, as a result of higher condominium occupancies and increased fair value gains on projects under development and income properties.

This was partially offset by reduced margin contribution from our Western Canadian land and housing business of $18 million, a $23.2 million write-down on land held for development in Regina and losses relating to the unit appreciation of Dream Alternatives of $93.8 million. Fair value losses on the Dream Alternative trust units were $113.5 million in 2019 as a result of the impact of the unit price increasing to $7.75 at December 31, 2019 up from $6.24 in 2018, which compared to a lower amount of losses in the prior year.

Across our financials, the aforementioned pre-tax earnings amount of $421 million in the fourth quarter relating to Dream Global transaction was split as follows, $280 million is presented with an asset management net margin comprised of a $275 million incentive fee and a $5 million disposition fee; $135 million is presented within the net gain on disposition of Dream Global, comprise of $120 million gain on sale of our asset management agreement, $13 million of other amounts received and a $2 million gain on disposition of properties that were co-owned with the REIT. In addition, $5.9 million is presented with any fair value changes in financial instruments due to the appreciation in the unit price in the fourth quarter.

Across the Dream group platform, which includes assets held directly through the company, Dream Alternatives and Dream Office REIT, we have approximately 5.4 million square feet of GLA in retail and commercial assets which are fully stabilized and 3.7 million of GLA and nearly 14,000 condominium or purpose-built rental units at the project level in our development pipeline across Toronto and Ottawa. We have disclosed a new table in our MD&A on Page 9, detailing our portfolio and relevant asset details.

We are extremely pleased with our advancements and accomplishments achieved across our development portfolio in 2019. We secured the first major tenant, the Federal Government of Canada for Block 211, our first commercial building at Zibi, a 34 acre waterfront community in the nation's Capital.

After extensive collaboration with the city of Mississauga and the community of Port Credit, we reached an agreement with the city to advance municipal approvals to Brightwater. We also closed on the acquisition of Block 10 in the Canary district and we secured landmark financing for our first purposeful affordable rental building in downtown Toronto, referred to with West Don Lands Block 8, through CMHC’s is Rental Construction Financing initiative for 357 million and thereafter we commenced construction.

Each of these further advances the value of our business for the long-term. In 2019 we acquired 64 million of units of Dream Office REIT and 27 million of units of Dream Alternatives and we have received $17 million and $6.3 million in cash distributions on these investments respectively.

As of February 24, we currently own 17 million units over $612 million at fair value in Dream Office REIT or a 28% interest and 16.1 million units or 127 million at fair value in Dream Alternatives, a 23% interest which in aggregate represented over 60% of our total market cap. I will now go through a brief overview of results by operating segment.

Total asset management fees in the 12 months ended December 31, was $319.7 million up from the prior year primarily due to the incentive fee earned on the Dream Global REIT transactions. The asset management segment generated net margin of $306.4 million in a 12 month period, up from the prior year with the incentive fee, also partially offset by higher platform costs as we are investing in additional resources to support growth opportunities within Dream Industrial and through other asset classes.

In the year ended December 31, 2019, NOI from our stabilized income generating assets was $23.3 million relatively consistent year-over-year with higher earnings from our skier A-Basin, partially offset by less income from assets either expropriated or sold in 2018. In the fourth quarter of 2019, we recorded fair value gains on our investment properties of $28.7 million, an increase of $21.1 million relative to the comparative period, primarily driven by cap rate compression and increases in the net operating income at the Distillery District as supported by a third-party appraisal.

The Distillery District, which is 50% owned by Dream, comprises a 395,000 square feet of commercial and retail GLA and is 99% occupied as of December 31 2019 and is carried at $144.5 million at the company's balance sheet at year end. Dream initially purchased Distillery District in 2004 for $7.75 million for a 50% share.

In the year ended December 31, our urban development segment generated net margin and earnings from equity accounted investments of 0.3 million and 4.3 million respectively In the three months ended we commenced first occupancies at Canary Block, our first substantially complete building in Stage 2 of the Canary District. We achieved 54 condominium unit occupancies in 2019 or 27 units at our share.

In addition in the year ended, our results included 395 occupancies, primarily at Phase 1 of Riverside Square or 136 units at our share. We expect more meaningful results in the first half of 2020 is approximately 200 condo units at our share are expected to occupy across the remainder of Riverside Square, Canary Block 16, [indiscernible] towns and Kanaal to be generating $10 million to $11 million of margin.

Our Western Canada community development division incurred negative net margin of $20.4 million and the 12 months ended December 31, 2019 results included a $23.2 million write down on land held for development in Regina, recorded in the fourth quarter based on revise exceptions and later start dates for development. At the end of the year, Western Canada represented approximately 39% of the company's total book equity, a decrease in 44% from the prior year and 67% from 2013 when we went public.

Despite expected growth in our Western Canada earnings in future years, we believe that this segment will continue to decline as a percentage of our overall earnings and assets as we repatriate capital from operations in Western Canada and continued to grow our other segments. In 2019 we generated $25 million of cash flow from the division and anticipate repatriating an additional $200 million to $250 million of cash flow over the next four years from both land sales and profits, thereby reducing our overall investment to a more reasonable exposure in Western Canada.

We have recently partnered with a private developer Qualico, to develop Glacier Ridge, our 480-acre residential community in Calgary. Under the partnership, we have agreed to sell 73% of our interest in the lands to Qualico at a value of $175,000 per acre relative to the book value of $82,000 per acre as of December 31, 2019.

In addition to the income generated by the acre sale, we will continue to earn our share of profits over the development period of the community on its retained interest. At closing, which is expected in the spring of 2020, we expect to receive $24.5 million of cash and the balance in a vendor take back mortgage to be repaid over four years.

Overall, it was an exceptional year for the company with their balance sheet and financial flexibility now in the best position and has been over the course of our history. Effective Q1, 2020 we intend to further simplify our segmented disclosure within our MD&A.

Our results will be split between two segments, development assets and reoccurring income assets. Our reoccurring income assets will continue to grow as we build out our development pipeline and holds more exceptional real estate income properties on our sites over the long-term.

We believe this will simplify our discussion of our business with external stakeholders. With that, I will now turn the call back over to Michael to conclude.

Thank you, Pauline. I don't have much to say other than just some – want to provide a little bit of insight onto our liquidity as we said in the press release and other materials.

With the cash we got from the Dream Global transaction, we paid off a tremendous amount of debt. We have to pay tax and we bought back some stock that basically gets us more or less to where we want to be.

We intend on buying a little bit of stock back this year probably by a little bit more Dream Office and a small amount of investments, but we want to be as liquid as possible. It's a uncertain world and we're very happy with what we own.

I think in the MD&A we showed a chart with everything that we own and our view is all we do is do a great job developing what we own, taking care of the segments, the operating segments, take care of Dream Office, grow our asset management business. We're going to continue to have a great company.

Hopefully we'll come up with some other good ideas and we'll get extraordinary returns from that. But I think we're really looking at reducing financial leverage.

We're looking at creating liquidity from a few other assets this year. We've talked about renewable power before Glacier Ridge and that we might sell a couple of retail assets.

All together hopefully I'll get us $130 million or $140 million and we will be able to do the things I mentioned earlier in terms of buying back some stock, buying some more Dream Office and maybe makes a few investments and still have more liquidity than we have now. So that's very much on our mind.

With regards to Glacier Ridge, the valuation of $84 million is quite good. It's about 220% of our book value and even selling 73% of it, that alone is about 50% of our entire land holdings.

So we're going to sell a 75% interest, 73% interest in 460 acres and we're going to end up getting repatriating 15% of the capital we have in land. So we think that's great and we're going to have 9,300 acres leftover.

So we think we've got a great business. We're getting lots of cash out of it and we'll continue to take cash out from working capital as well as, as we sell land.

This year is a first year since we bought A-Basin in 1997 that avail pass isn't accepted. It was a very big deal for us.

We had 590,000 skier last year and we were way over capacity and we were uncomfortable with the experience that we were able to offer our customers. We eliminated that pass and we entered into an agreement with Ikon to have a restricted pass that gives their holders either five or seven days A-Basin.

Our team was extremely excited about it. It's a huge change for us.

We had hope to reduce our skiers by about 25% and grow our income by increasing the yield per skier. We opened a very early opened in October 13th.

Our guys were aggressive. They made sure we to a full staff and almost nobody came to ski there.

So October, November, and the first half of December was very slow. We were down about 50% on skiers and had about 75% of last year's revenue.

However, since then we're seeing a lot more traffic for February. I believe we're right on the same numbers for last year.

We expect to have 10% savings and costs, so it'll turn out that will been more profitable than we were last year. On Saturday we had something like $360,000 of revenue, which is the highest amount we've ever had and we're hoping that as the winter turns into spring, which is the season that people know A-Basin for will see more improvement.

Overall, I'm not sure where we're going to end up on EBITDA because we had such high expenses at the beginning of the year and our yields are much higher than they were, but I think there'll be higher next year. But our view is that by adjusting to the changes, we should be able to make more money under the new arrangement than we did under the old arrangement.

And I think that we're able to provide our skiers with a great experience. And I'm not sure if we're going be at $6 million or $8 million this year, but I think next year we'll be above that and EBITDA in U.S.

so we’re excited about it. One other point I want to mention was that wanted to mention was that last year we had 107.5 million shares outstanding.

We had a $0.10 dividend, which cost us $10.75 million. This year we have 95.5 million shares outstanding.

I have a Board today agreed to increase the distribution from $0.10 to $0.12 because we have less shares outstanding. It increases the total cost of the company by about $700,000.

So what we're really doing is increasing the dividend by a little bit more than the number of shares reduced and the burden on the company will still be very small. So we think that's great for shareholders and we're pleased with how this stock responded over last year.

We're pleased that this year started good. As Pauline mentioned, we've got tremendous value in our stocks.

Our asset management contracts, our land in Western Canada, our land in downtown Toronto, the ski yield distillery Zibi, and we're pretty pleased with the company. And we hope you guys are too.

I’ll be happy to answer any questions if anybody has any and so we'll Pauline.

Thanks. Thanks, good afternoon.

Maybe in regards to Glacier Ridge can you just talk a little bit about how close is that land as far as ready for development? How long would it be, and then also how would you compare that land as far as value to maybe what you have in Providence and thoroughly on the same point.

Is there an opportunity to do transactions like this with your land in Saskatchewan?

Okay. I hate to report three-part questions.

So I have to remind me, I think that the land just on January 30th, I think it was the city said that they're prepared to look at what's necessary to develop it. I know that's not clear, but we'd probably think it’s two years to three years away.

So we think that's pretty good. The way this land works is there's 320 acres that could be developed in the relatively near-term.

And then land about, I think it's about another the 320 acres, two quarter sections that if we get approval, they would have been approved then there's another, 140 acres that would not be approved for a longer time. It's not in the growth plan.

So I think this one is about 175,000 per acre. It's in Northern Calgary Providence in Southern Calgary and it's zoned, so obviously worth a lot more.

And it's Saskatchewan, I don't know if there'd be a chance to do deals like this. We haven't looked at it, but obviously we're looking to get as much cash out of land and maintain a strong presence as we can.

Okay, thanks. And in regards to the balance sheet clearly reducing debt has been a focus.

I just, one thing that wasn't clear to me, I mean the debt went down from Q3, Q4. When you talked about paying down debt, was that already all done in Q4 and also on that from the debt you have now currently, is there quite a bit more or any more that could be paid down?

I realize much of it as in construction loans related to specific projects?

Yes. So we paid down debt when the transaction closes on December 10th, and we would have repaid all of our all margin line and all of our operating line.

So at this point there really isn't much debt to be paid down further?

Right. So there would be construction debt, there would be first mortgages, and there would be the term loan, which is a fixed three-year term loan.

And the current cash balance would be primarily the year end, less the SIB?

Yes. And we also pay taxes as well.

So we remit our tax and settlements in February. So most of the cash on the balance sheet as of December 31 has now been used to fund the seven tax and some other working capital amounts.

This – there was almost $400 million at the year end, so how much tax was paid down?

So we had corporate level cash at $233.4 million at December 31. That was after we paid down debt.

And then we funded the SIB for $117.5 million and we had taxes to fund 105 million. Okay, fine.

I got it. Thank you.

Okay. Fine.

I got it. Thank you.

Thank you. Good afternoon.

Just wanted to start-off maybe on the urban land development business what status on Brightwater in terms of bringing that product to market for presales?

It's coming this spring.

And how do you see phasing that project?

Oh my gosh! it's 3,000 market units.

I think it's about 200 affordable units and 400,000 square feet of commercial. It'll be phased over the next seven or eight years.

And is there any of that, could it be kept for rental or is that all going to be for sale?

Based on the partnership, I think it's very likely that great majority or all of it will be for sale, not for rental.

Okay. Maybe just give us a sense of what your plans are over in Europe.

Obviously, you've redeployed existing resources to support Dream Industrial’s expansion there, but what else are you looking at doing and in what asset classes?

We're looking at a couple of things. So firstly, you're absolutely right.

We've reallocated some of the Dream Global people to Dream Industrial and Dream Industrial started to grow in Europe. And we were building a team out in Europe and that'll be great to support the industrial.

In addition to the industrial, we are looking at opportunities to do value-add office and mostly value-added office or value-add mixed use.

And would those be with funds with third-party capital?

Primarily, yes. We're looking at it as an asset management business in Europe.

Okay, great. And what – I guess what prompted the write-up on the Distillery, was there– was there – I don't think there was a refinancing, but what was the sort of reason for getting the new appraisal on it?

So we get appraisals fairly frequently on our assets. So I think we do every two to three years.

And we are currently looking at financing the Distillery. Although that has not been concluded.

Great. Thank you.

You’re welcome.

Thanks, good afternoon everyone. Michael, I know that you're more than 60% outside of Western Canada, you faced a bit of, I'll call it an issue that everyone else who's got land sort of in Toronto, does that.

Permitted buildable air rights are now pushing up towards $200 a foot or a square or higher. What needs to happen for you to start to realize some of that in your book value and how are you guys approaching that?

Well, it's an interesting question. Like the first one is Dream Office at $250 asset approved in the first quarter.

I think it was January 29. So it'll take a – it'll get a valuation for the first quarter and then Dream will pick that up.

So that's one way. When we're building condos, you don't realize it until they're sold and closed.

And to the extent we're building commercial, you would realize them from the time that were approved and then you continue to get gains as we build out building so. As an example, West Don Lands should have some increases over time as we get more and more complete.

So you'll start to see it, but I think it'll be later this year and into next year.

Right. And I guess it just – it really just comes down to two construction milestones and then just sort of triggering revaluation of the assets.

Yes.

Yes, okay. Pauline, just an accounting question for you on the Glacier Ridge, will you be booking a – call it $31.5 million pretax gain on the vend-in of that property to that joint venture or will you be able to hold your historical cost basis on that?

No, we'll be booking again.

You will be booking again, okay.

On the 73% sold. Yes.

On the 70%, so it's effectively, it's like 350 acres at the difference between the 175 and the 82, right?

Yes.

Yes. Okay, perfect.

That's it for me. Thanks

Thank you.

Thank you very much for following the company. And we look forward to keeping you informed and please feel free to ask, do call Pauline and I, if you have any questions.

Thank you very much.