Dream Unlimited Corp.
Annual Report 2024
Dream Unlimited Crop
Title
Maple House
Toronto, ON
Dream is an award-winning real estate company
with $27 billion of assets under management(1) in
North America and Europe.
Cover image: Alpine Park, Calgary, Alberta.
(1) Represents a specified financial measure. Refer to the “Non-GAAP Measures and Other Disclosures”
section of this Annual Report for further details.
Dream Unlimited Corp.
Letter to Shareholders
2024 was a significant year for Dream across
many of our business lines. We continue to focus
on our Western Canada land business, which
delivered its highest profits since we went public in
2013. Our asset management business is growing,
and our stabilized income properties portfolio is
expanding through both completed developments
and new acquisitions. While we are benefitting
from lower inflation and interest rates in Canada,
there are broader macro challenges that we never
anticipated facing at the outset of the year.
Our Western Canada business is doing very well,
supported by a strong economy, high per capita
income and low housing costs. As of today, we
have secured $109 million in presales for 2025
and 2026, the majority of which will be recognized
this year. Included in this figure is the sale of 13
acres to the City of Saskatoon for a high school
site in our Holmwood community, which will drive
builder, residential rental and retail interest over
the coming years. We expect the Western Canada
development business to generate strong results
and free cash flow for the Company over the next
several years.
Over the past two years, we have increased
our assets under management by 55%, with
residential rentals and industrial assets now
comprising 75% of our portfolio. Base fees
generated from our platform have increased
by $17 million over the same period, providing
significant recurring income for the business that
we expect to increase in the coming years. This
division continues to grow, with the December
acquisition of a $1 billion portfolio of multi-
family rentals in the Netherlands, in addition to
the recently announced an up to $2 billion joint
venture focused on Canadian apartments.
Our income property portfolio includes nearly
3,300 completed multi-family rental units in
the GTA, National Capital Region and Western
Canada, our retail properties including the
Distillery District in Toronto and our GTA hotel
portfolio. In the last two years, we completed
nearly 2,000 purpose-built rentals in our
development pipeline, including Maple and
Birch House at Canary Landing, Aalto II at Zibi
and nearly 300 units in Saskatoon. We expect
to commence construction on an additional
500 rental units in Western Canada in 2025,
including our first purpose-built rental in Alpine
Park in Calgary. We continue to focus on building
purpose-built rentals that can turn land we
already own into sources of recurring income with
strong returns, while addressing the critical need
for housing across the country.
Our team is executing on our exceptional
development pipeline in the GTA, National
Capital Region and Western Canada, including
Zibi, Odenak, Canary Landing and Brightwater,
with nearly 25,000 units and 3.7 million sf in
commercial/retail GLA in our pipeline.
We ended the year with $367 million in available
liquidity while returning $67 million to shareholders
in 2024 through dividends. We have also
increased our annual dividend to $0.65/share
effective with our March 31, 2025 payment.
Thank you for your interest in our business.
Sincerely,
“Michael J. Cooper”
Michael J. Cooper
President & Chief Responsible Officer
February 25, 2025
Odenak
Ottawa, ON
Dream Unlimited Corp.
At a Glance*
Dream has an established and successful asset management business, inclusive of $27 billion
of assets under management(1) as at December 31, 2024 across four Toronto Stock Exchange
(“TSX”) listed trusts, our private asset management business and numerous partnerships. We are a
leading developer of exceptional real estate assets across Canada and Europe, including income
properties that will be held for the long term as they are completed. We also develop land for sale
in Western Canada. Dream has a proven track record for being innovative and for our ability to
source, structure and execute on compelling investment opportunities.
$20 billion(1)
of fee-earning assets under
management
34,000
condominium and purpose-built rental
units in the Dream group portfolio,
inclusive of our development pipeline
550
residential rental units have been
completed or are under construction
in our Holmwood community to date
$27 billion(1)
of assets under management
$7.8 billion
of properties in the U.S. and Europe
83 million
square feet of commercial/retail
gross leasable area (GLA) across the
Dream group portfolio, inclusive of our
development pipeline
* All figures as at December 31, 2024 unless otherwise stated.
(1) Represents a specified financial measure. Refer to the “Non-GAAP Measures and Other Disclosures” section of this Annual Report for further details.
Zibi
Ottawa, ON / Gatineau, QC
Dream Unlimited Crop
2024 Highlights
$157.4 million
pre-tax profit from the sale of Arapahoe Basin
$367 million
available liquidity as of December 31, 2024
209%
increase in standalone FFO per share year-over-year
55%
increase in assets under management since 2022
Brighton Village Rentals
Saskatoon, SK
8,000
stabilized apartment units across the Dream
group platform
1,344
multi-family units in lease up at year-end
1,980
multi-family units under construction
97%
occupancy rate across our stabilized residential
rental portfolio
Aalto II
Gatineau, QC
Table of Contents
Management’s Discussion
and Analysis
1
Independent Auditor’s Report
35
Consolidated Financial Statements
41
Notes to the Consolidated
Financial Statements
46
Directors and Management Team
IBC
Corporate Information
IBC
Distillery District
Toronto, ON
Management's Discussion and Analysis
The Management's Discussion and Analysis ("MD&A") is intended to assist readers in understanding Dream Unlimited Corp. (the "Company" or "Dream"),
its business environment, strategies, performance and risk factors. This MD&A should be read in conjunction with the audited consolidated financial
statements ("consolidated financial statements") of Dream, including the notes thereto, as at and for the years ended December 31, 2024 and
December 31, 2023, which can be found under the Company's profile on the System for Electronic Document Analysis and Retrieval+ ("SEDAR+")
(www.sedarplus.com). Such financial statements underlying this MD&A have been prepared in accordance with IFRS Accounting Standards as issued by the
International Accounting Standards Board ("IFRS Accounting Standards"). Certain disclosures included herein are specified financial measures, including
non-GAAP financial measures and supplementary and other financial measures. Refer to the "Non-GAAP Measures and Other Disclosures" section of this
MD&A for further details. Certain comparative results have been reclassified to conform to the presentation adopted in the current period.
All dollar amounts in tables within this MD&A are in thousands of Canadian dollars, unless otherwise specified. For simplicity, throughout this discussion,
we may make reference to the following:
•
“Subordinate Voting Shares”, meaning subordinate voting shares in the capital of Dream;
•
“Class B Shares”, meaning Class B common shares in the capital of Dream;
•
"Dream Impact Fund units” meaning units of Dream Impact Fund LP;
•
“Dream Impact Trust units”, meaning units of Dream Impact Trust; and
•
“Dream Office REIT units” meaning REIT units, Series A of Dream Office REIT.
Unless otherwise specified, all references to "we", "us", "our" or similar terms refer to Dream and its subsidiaries. All references to the "Dream group of
companies" represent Dream and the four publicly traded trusts that Dream provides asset management or development management services to and
includes Dream, Dream Office Real Estate Investment Trust ("Dream Office REIT"), Dream Impact Trust, Dream Industrial Real Estate Investment Trust
("Dream Industrial REIT"), and Dream Residential Real Estate Investment Trust ("Dream Residential REIT"), collectively "the Dream Entities". This MD&A is
dated as of, and reflects all material events up to, February 25, 2025.
The "Forward-Looking Information" section of this MD&A includes important information concerning certain information found in this MD&A that contains
or incorporates statements that constitute forward-looking information within the meaning of applicable securities laws. Readers are encouraged to read
the "Forward-Looking Information" and "Risk Factors" sections of this MD&A for a discussion of the risks and uncertainties regarding this forward-looking
information as there are a number of factors that could cause actual results to differ materially from those disclosed or implied by such forward-looking
information.
Business Overview
Dream has an established and successful asset management business, inclusive of $27 billion of assets under management* as at December 31, 2024
across four Toronto Stock Exchange ("TSX") listed trusts, our private asset management business and numerous partnerships. We are a leading developer
of exceptional real estate assets across Canada and Europe, including income properties that will be held for the long term as they are completed. We also
develop land for sale in Western Canada. Dream has a proven track record for being innovative and for our ability to source, structure and execute on
compelling investment opportunities. A comprehensive overview of our holdings is included in the "Summary of Dream's Assets and Holdings" section of
this MD&A.
As at February 25, 2025, the Company had a 12% interest in Dream Residential REIT, a 37% interest in Dream Impact Trust and a 31% interest in Dream
Office REIT.
Summary of Results – Fourth Quarter and Year Ended 2024
Overview of Results
Earnings before income taxes for the three months ended December 31, 2024 was $170.7 million, an increase of $248.3 million from the comparative
period. The most notable item in earnings relates to a $157.4 million gain on sale of Arapahoe Basin, our previously held ski area in Colorado which closed
in November 2024. In addition, current period earnings were driven by higher lot and acre sales in Western Canada in the fourth quarter compared to prior
year and lower losses attributable to fair value losses taken by Dream Office REIT.
Earnings before income taxes for the year ended December 31, 2024 was $225.4 million, an increase of $345.2 million from the comparative period. The
comparative period included accounting losses on the sale of 7.0 million Dream Office REIT units with no similar activity in the current period. The increase
is also attributable to the aforementioned sale of Arapahoe Basin and higher lot and are sales, including two parcels of land sold in Edmonton in the first
half of 2024, compared to limited activity in 2023. Furthermore, lower fair value losses were recognized on both our commercial retail and multi-family
residential rental properties in the Greater Toronto Area and Western Canada. Higher pre-tax earnings were partially offset by lower fair value gains on the
liability for Dream Impact Trust units.
Dream closed on the sale of Arapahoe Basin to Alterra Mountain Company on November 19, 2024. In accordance with the terms of the transaction,
income from the ski hill was no longer picked up in Dream’s financial results after August 31, 2024. Pre-tax profit from the sale was $157.4 million and
proceeds from the closing of this transaction were used to reduce debt and fund a special dividend payment to shareholders on December 31, 2024.
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 1
Dream standalone funds from operations* (“FFO”) for the three months ended December 31, 2024 was $1.22 per share, on a pre-tax basis, up from $0.56
per share in the comparative period due to higher lot and acre sales in Western Canada.
Dream standalone FFO* for the year ended December 31, 2024 was $2.86 per share, on a pre-tax basis, up from $1.37 per share in the comparative period.
The increase is primarily attributable to the aforementioned factors, carried interest earned related to the Dream US Industrial Fund and stronger results
at Arapahoe Basin up to August 31, 2024.
In the three and twelve months ended December 31, 2024, the fair value gain on the liability for Dream Impact Trust units was $3.7 million and
$26.9 million, respectively (as a result of Dream Impact Trust's unit price decreasing, partially offset by cash distributions to Dream Impact Trust
unitholders), compared to a fair value gain of $16.3 million and $107.4 million, respectively, in the comparative period (as a result of Dream Impact Trust's
unit price decreasing, partially offset by cash distributions to Dream Impact Trust unitholders).
Our Operating Segments and Strategy
As an asset manager, owner and developer of real estate, our objectives are to:
•
Develop best-in-class properties and communities that attract exceptional businesses, residents and visitors;
•
Own our newly developed income producing assets for the long term;
•
Grow our assets under management* through both our public and private platforms;
•
Maintain a conservative balance sheet and liquidity position;
•
Work with exceptional partners and stakeholders to maximize the value of our assets and developments; and
•
Manage our asset mix and profile to generate solid returns for our shareholders over the long-term.
We have achieved our goals in the past as a result of our expertise and high-quality asset base, combined with a track record in our ability to source,
structure and execute on compelling investment opportunities while maintaining conservative debt levels. Over the last few years, we have actively
focused on differentiating our asset base by growing assets that contribute to recurring income and investing in development assets and real estate in
Toronto, with the goal of improving the safety, value and earnings quality of our business. Inclusive of assets held by Dream Impact Fund LP ("Dream
Impact Fund"), Dream Impact Trust, Dream Office REIT and Dream Residential REIT, our portfolio totals 34,134 residential units and 10.7 million square
feet ("sf") of commercial/retail gross leasable area ("GLA") as at December 31, 2024 (at 100% project level).
Recurring income is important to our business as it provides stable cash flows in order to fund our ongoing interest expense, fixed operating costs and
dividends. This provides enhanced stability and financial flexibility as we continue to execute on our development pipeline. Assets held as at December 31,
2024 that contribute to recurring income include our asset and development management contracts, management fees from our private asset
management business, our stabilized income generating assets, such as the Distillery District in Toronto and our purpose-built multi-family rentals
including those shared with Dream Impact Trust, our 31% equity ownership in Dream Office REIT, and our 12% equity ownership in Dream Residential REIT.
Our development assets, comprised of residential, commercial and retail buildings, and raw land, are located across the Greater Toronto Area ("GTA"),
Ottawa/Gatineau and our master planned communities in Western Canada. We believe our development pipeline includes exceptional assets that will
contribute to income and cash flow over time as they are developed and completed. Income and cash flow generated from these assets can vary from
period to period, due to a variety of factors including the timing of construction, availability of inventory, achievement of project milestones, timing of
completion and end customer occupancy. As we execute on completing our development properties, we anticipate our recurring income assets will
increase over time.
While not considered an individual reportable segment, Corporate and other includes: corporate-level cash and other working capital, consolidated tax
balances and expense, our term facility and related interest expense, general and administrative expenses not allocated to a particular segment and the
liability and fair value adjustments to Dream Impact Trust and Dream Impact Fund units held by other unitholders. Refer to the "Additional Information -
Consolidated Dream" section of this MD&A for segmented assets and liabilities and the segmented statement of earnings.
Timing of Income Recognition and Impact of Seasonality
The Company's housing and condominium operations recognize revenue at the time of occupancy and, as a result, revenue and direct costs vary
depending on the number of units occupied in a particular reporting period. The Company's land operations revenue relating to sales of land is recognized
when control over the property has been transferred to the customer - typically when the customer can begin construction on the property. Until this
criterion is met, any proceeds received are accounted for as customer deposits. Revenue is measured based on the transaction price agreed to under the
contract and is typically recognized upon receipt of 15% of the transaction price. Revenue from land is deferred until occupancy by a third-party customer,
when the land is sold as part of a home constructed by our housing division. Certain marketing expenses for condominiums and homes are incurred prior
to the occupancy of these units and accordingly are not tied to the number of units occupied in a particular period as they are expensed as incurred.
Commissions are capitalized as contract assets, and expensed when condominium and housing revenue is recognized.
Based on our geographic location, most of our development activity in Western Canada takes place between April and October due to weather constraints,
while sales orders vary depending on the rate at which builders work through inventory, which is affected by weather, supply chain constraints and market
conditions. Traditionally, our highest sales volume for our land and housing divisions has been in the second half of the year.
Our recurring income segment, which includes our purpose-built multi-family rentals, retail and office properties and boutique hotels, is relatively flat
throughout the year with the exception of recently completed properties undergoing lease-up as the proportion of rental income to operating expense
reaches stabilization or completed acquisitions. As a result, the Company's results can vary significantly from quarter to quarter.
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 2
Key Financial Information and Performance Indicators
Selected Financial Information
For the three months ended December 31,
For the year ended December 31,
(in thousands of dollars, except per share and outstanding share
amounts)
2024
2023
2024
2023
Revenue
$
192,259
$
107,858
$
624,506
$
386,947
Net margin
$
63,102
$
26,380
$
158,213
$
85,870
Net margin (%)*
32.8 %
24.5 %
25.3 %
22.2 %
Earnings (loss) before income taxes
$
170,731
$
(77,557)
$
225,373
$
(119,790)
Adjusted earnings (loss) before income taxes*
$
49,715
$
(4,622)
$
97,076
$
61,625
Earnings (loss) for the period
$
129,088
$
(81,352)
$
187,858
$
(117,079)
Basic earnings (loss) per share(1)
$
3.07
$
(1.91)
$
4.46
$
(2.74)
Diluted earnings (loss) per share(1)
$
2.95
$
(1.91)
$
4.30
$
(2.74)
Dream standalone FFO per share*
$
1.22
$
0.56
$
2.86
$
1.37
Dream consolidated FFO per share*
$
1.44
$
0.43
$
2.63
$
0.91
Weighted average number of shares outstanding, basic
42,034,893
42,437,858
42,088,662
42,667,235
December 31, 2024
December 31, 2023
Total assets
$
3,921,052
$
3,875,522
Total liabilities
$
2,419,523
$
2,471,463
Total equity
$
1,501,529
$
1,404,059
Total issued and outstanding shares
42,056,218
42,240,010
(1) See Note 30 of the Company’s consolidated financial statements for the year ended December 31, 2024 for further details on the calculation of basic and diluted earnings per share.
Funds from Operations*
Dream standalone FFO and Dream consolidated FFO are non-GAAP financial measures that we consider key measures of our financial performance on a
pre-tax basis. Dream standalone FFO and Dream consolidated FFO are further defined in the “Non-GAAP Measures and Other Disclosures” section of the
MD&A. We use Dream standalone FFO and Dream consolidated FFO to assess operating results and the performance of our businesses on a divisional
basis.
Dream standalone FFO per share and Dream consolidated FFO per share are non-GAAP ratios. Refer to the "Non-GAAP Measures and Other Disclosures"
section of this MD&A for further details.The following table defines and illustrates how Dream standalone FFO is calculated by division:
FFO by division:
For the three months ended December 31,
For the year ended December 31,
(in thousands of dollars, except per share and outstanding share amounts)
2024
2023
2024
2023
Asset management(1)
$
9,451
$
15,459
$
38,337
$
39,047
Dream group unit holdings(2)
5,108
6,248
21,191
26,145
Stabilized assets - GTA/Ottawa
1,164
2,706
2,712
2,628
Stabilized assets - Western Canada
(546)
4
2,198
3,258
Arapahoe Basin
—
(2,258)
15,792
7,284
Development - GTA/Ottawa
3,826
6,620
3,642
3,049
Development - Western Canada
39,876
3,945
73,551
15,664
Corporate & other
(7,393)
(8,871)
(37,171)
(38,678)
Dream standalone FFO
$
51,486
$
23,853
$
120,252
$
58,397
Dream Impact Trust & consolidation adjustments(3) & other adjustments
9,236
(5,507)
(9,695)
(19,370)
Dream consolidated FFO
$
60,722
$
18,346
$
110,557
$
39,027
Shares outstanding, weighted average
42,034,893
42,437,858
42,088,662
42,667,235
Dream standalone FFO per share
$
1.22
$
0.56
$
2.86
$
1.37
Dream consolidated FFO per share
$
1.44
$
0.43
$
2.63
$
0.91
(1) Asset management includes our asset and development management contracts with the Dream group of companies and management fees from our private asset management business, along with
associated costs. Included in asset management for the three and twelve months ended December 31, 2024 are asset management fees from Dream Impact Trust received in the form of units of
$444 and $1,685, respectively (three and twelve months ended December 31, 2023 - $472 and $3,454, respectively). These fees have been received in the form of units (in lieu of cash) since April
1, 2019. Had the asset management fees been paid in cash, rather than in units, the fees earned for the three and twelve months ended December 31, 2024 would be $3,761 and $15,243,
respectively (three and twelve months ended December 31, 2023 - $3,618 and $13,980).
(2) Dream group unit holdings includes our proportionate share of funds from operations from our 31.3% effective interest in Dream Office REIT and 11.9% effective interest in Dream Residential REIT,
along with distributions from our 36.8% interest in Dream Impact Trust. Included in Dream group unit holdings for the three and twelve months ended December 31, 2024 are distributions from
Dream Impact Trust received in the form of units of $nil and $653, respectively (three and twelve months ended December 31, 2023 - $947 and $4,386, respectively).
(3) Included within consolidation adjustments in the three and twelve months ended December 31, 2024 are losses of $664 and income of $4,294, respectively, attributable to non-controlling interest
(three and twelve months ended December 31, 2023 - $116 and $495 in losses, respectively).
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 3
The following table reconciles Dream consolidated FFO and Dream consolidated FFO to net income (loss):
For the three months ended December 31,
For the year ended December 31,
(in thousands of dollars)
2024
2023
2024
2023
Dream consolidated net income (loss)
$
129,088 $
(81,352) $
187,858 $
(117,079)
Add/(deduct) financial statement components not included in FFO:
Fair value changes in investment properties
9,308
29,450
24,398
57,279
Fair value changes in financial instruments
(3,688)
1,138
(1,950)
691
Gain on sale of Arapahoe Basin
(157,362)
—
(157,362)
—
Share of loss from Dream Office REIT and Dream
Residential REIT
36,254
74,824
28,044
183,098
Fair value changes in equity accounted investments
2,297
(6,090)
4,861
(8,261)
Adjustments related to Dream Impact Trust units
(3,691)
(16,312)
(26,891)
(107,427)
Adjustments related to Impact Fund units
939
5,925
(9,828)
3,561
Depreciation and amortization
826
2,034
3,374
8,117
Income tax (recovery) expense
41,643
3,795
37,515
(2,711)
Share of Dream Office REIT FFO
4,414
4,424
18,172
19,568
Share of Dream Residential REIT FFO
694
510
2,366
2,191
Dream consolidated FFO
$
60,722 $
18,346
$
110,557 $
39,027
An overview of the composition of each operating division and a description of the changes in Dream standalone FFO for the three and twelve months
ended December 31, 2024 and December 31, 2023 is included below:
Asset Management
Asset management includes our asset and development management contracts with the Dream group of companies and management fees from our
private asset management business, along with associated costs.
Dream standalone FFO for the division for the three months ended December 31, 2024 decreased by $6.0 million from the comparative period, which is
primarily attributable to timing of development activity and meeting certain development milestones in the current year, partially offset by acquisition fees
on the closing of a 2,948-unit Dutch residential rental portfolio. The year-to-date FFO change was minimal as carried interest earned in 2024 which related
to the Dream US Industrial Fund was offset by the aforementioned decrease in development activity and milestones in 2024.
Dream Group Unit Holdings
Dream group unit holdings includes our proportionate share of funds from operations from our 31.3% effective interest in Dream Office REIT and 11.9%
effective interest in Dream Residential REIT, along with distributions from our 36.8% interest in Dream Impact Trust, when applicable.
Dream standalone FFO for the division in the three and twelve months ended December 31, 2024 decreased by $1.1 million and $5.0 million, respectively,
from 2023 due to a reduction in ownership interest of Dream Office REIT in 2023 and changes to distribution policies by Dream Office REIT and Dream
Impact Trust over the past 12 months.
Stabilized Assets - GTA/Ottawa
Stabilized assets - GTA/Ottawa is comprised of our retail, commercial, hotel and multi-family properties in the GTA and National Capital Region, including
the Distillery District and completed buildings at Zibi at our proportionate ownership.
Dream standalone FFO for the division in the three and twelve months ended December 31, 2024 decreased by $1.5 million and increased by $0.1 million,
respectively, from the comparative periods primarily due to higher operating costs related to the recent opening of Postmark Hotel. FFO from this division
is expected to increase as the Postmark Hotel approaches stabilization. Year-to-date FFO for the division increased from higher occupancy and base rent at
the Distillery District and was partially offset by the aforementioned loss at Postmark Hotel.
Stabilized Assets - Western Canada
Stabilized assets - Western Canada is comprised of our retail, commercial, recreational and multi-family properties in Alberta and Saskatchewan.
Dream standalone FFO for the division in the three and twelve months ended December 31, 2024 decreased by $0.6 million and $1.1 million, respectively,
from the comparative periods, primarily from higher interest expense on our stabilized retail and rental portfolio, partially offset by higher net operating
income from the stabilization of three rental properties in 2024.
Arapahoe Basin
Arapahoe Basin is a 1,428 acre ski hill located in Dillon, Colorado, which was sold to Alterra Mountain Company in November 2024.
Development - GTA/Ottawa
Development - GTA/Ottawa is comprised of our development projects in various planning and construction phases across Toronto and the National Capital
Region, including condominium, purpose-built rental and mixed-use developments.
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 4
Dream standalone FFO for the division in the three months ended December 31, 2024 decreased by $2.8 million from 2023 primarily driven by
condominium occupancies at Canary Commons and Phase 2 of Riverside Square in the fourth quarter of 2023.
Dream standalone FFO for the division in the twelve months ended December 31, 2024 increased by $0.6 million from 2023 primarily driven by
condominium occupancies at Phase 2 of Riverside Square and Canary Commons with fewer total occupancies in 2023.
Development - Western Canada
Development - Western Canada is comprised of our land, housing, multi-family and retail/commercial assets under development within our master-
planned communities in Saskatchewan and Alberta.
Dream standalone FFO for the division in the three and twelve months ended December 31, 2024 increased by $35.9 million and $57.9 million,
respectively, from 2023. The increase is primarily attributable to higher lot and acre sales in 2024 in comparison to 2023. Refer to the Development section
of this MD&A for further details.
Corporate & Other
Corporate & other is not considered a separate division and includes general and administrative expenses and interest on our term facility.
Dream standalone FFO for the division in the three and twelve months ended December 31, 2024 increased by $1.5 million and $1.5 million, respectively
from 2023 due to lower one-time costs incurred and a decrease in cash compensation which was partially offset by higher interest on our corporate term
facility.
Recurring Income
The recurring income segment is comprised of our asset management and our stabilized retail, rental and hospitality assets, as described in the "Funds
From Operations" section of this MD&A. In addition, this segment includes results from Dream Impact Trust's recurring income business, net of
consolidation and fair value adjustments.
Asset management fees, development management services and equity interests in Dream Impact Trust and Dream Impact Fund are eliminated on
consolidation. It is important to note that fees earned on transactional and performance related activities in a period will fluctuate and accordingly will
impact related margins. Similarly, fees related to development activities and partnerships included within this segment may fluctuate depending on the
number of active projects and on Dream achieving certain milestones as the development manager. We expect that development and other management
fees will continue to increase in future years as our existing developments progress through construction milestones.
Dream's assets under management* as of December 31, 2024 was $27 billion (December 31, 2023 – $24 billion), including fee earning assets under
management* of approximately $20 billion (December 31, 2023 - $17 billion).
As of December 31, 2024, we held approximately 14.6 million sf of gross floor area ("GFA") in residential and GLA in office and retail, and mixed-use
properties across the Dream platform and we expect assets in this segment to grow over time, as we intend to hold stabilized investment properties that
are developed by Dream in the core markets in which we operate in addition to sourced transactions in those markets. We may dispose of assets when it is
opportunistic to do so with the intent to increase liquidity or pursue investments with higher future returns.
Selected Segment Key Operating Metrics
For the three months ended December 31,
For the year ended December 31,
(in thousands of dollars, unless otherwise noted)
2024
2023
2024
2023
Revenue
$
46,609
$
57,982
$
221,240
$
213,343
Net operating income*
21,568
25,628
98,160
84,802
Net margin
20,335
23,299
93,995
75,732
Net margin (%)*
43.6%
40.2%
42.5%
35.5%
Fair value changes in investment properties
$
5,647
$
(27,218)
$
(19,194)
$
(52,619)
Share of earnings (loss) from equity accounted investments
(37,996)
(64,290)
(30,824)
(170,627)
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 5
Results of Operations
Revenue and net operating income for the three months ended December 31, 2024 was $46.6 million and $21.6 million, respectively, a decrease of
$13.4 million and $4.1 million, respectively, from 2023. The decrease in revenue and net operating income is attributable to the timing of development
activity across our asset management platform and the sale of Arapahoe Basin in the fourth quarter of 2024. In accordance with the terms of the
transaction, income from Arapahoe Basin was no longer picked up in Dream’s financial results after August 31, 2024. The decrease in revenue and net
operating income was partially offset by acquisition fees on the closing of a 2,948-unit Dutch residential rental portfolio and incentive fees earned from
Dream Industrial REIT.
Revenue and net operating income for the year ended December 31, 2024 was $221.2 million and $98.2 million, respectively, an increase of $7.9 million
and $13.4 million, respectively, from the comparative period. The increase is primarily attributable to $17.9 million in carried interest earned in 2024
related to the Dream US Industrial Fund, higher occupancy and base rent at the Distillery District and improved yields at Arapahoe Basin up to August 31,
2024. This was partially offset by timing of development activity across our asset management platform.
In the three months ended December 31, 2024, the Company recognized a fair value gain on investment properties of $5.6 million, in comparison to a fair
value losses of $27.2 million in 2023, primarily driven by growth in net operating income in our retail portfolio in the GTA and lower cap rates in our
residential rental portfolio in Western Canada, in line with external appraisals.
In the year ended December 31, 2024, the Company recognized a fair value loss on investment property of $19.2 million, in comparison to a fair value
losses of $52.6 million in 2023, driven by the disposal of a leasehold interest in 100 Steeles and an expansion of cap rates on certain asset classes in line
with external appraisals.
Throughout the next three years, an additional 2,635 apartment units comprising 2.2 million sf of residential GFA are expected to be added to our
recurring income portfolio (at project level) primarily relating to Canary Landing, Zibi, Odenak (formerly Dream Lebreton) and Western Canada. We
continue to focus on increasing development fees and our recurring income through growing our asset management business and completing purpose-
built rentals within our development pipeline.
Development
The development segment is comprised of our development divisions in the GTA, the National Capital Region, Saskatchewan and Alberta. In addition, this
segment includes results of Dream Impact Trust's development business, net of consolidation and fair value adjustments.
A large proportion of assets carried within this segment are being developed for sale and are held at cost. These are expected to contribute meaningfully
to the Company's earnings in future periods as properties and land are developed and sold or transferred to our recurring income segment. In addition,
through our equity ownership in Dream Impact Trust, we have indirect investments in high-quality assets located in the GTA with significant
redevelopment potential.
The developments that we hold today do not require a significant amount of equity and are financed primarily through project-specific debt including land
loans, construction financing and our Western Canada operating line, providing us with additional financial flexibility. In cases where we are developing
investment properties to hold, fair value gains are recognized as key milestones are achieved through the development period over the time frame to
stabilization and/or completion.
As at December 31, 2024, our GTA and National Capital Region pipeline across the Dream portfolio is comprised of over 24,700 residential units and
approximately 3.7 million sf of commercial/retail GLA.
We currently own approximately 8,700 acres of land in Western Canada, of which 8,300 acres are in nine large master-planned communities at various
stages of approval. With our land bank, market share, liquidity position and extensive experience as a developer, we are able to closely monitor and have
the flexibility to increase or decrease our inventory levels to adjust to market conditions in any year.
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 6
Selected Segment Key Operating Metrics
For the three months ended December 31,
For the year ended December 31,
(in thousands of dollars, except lot, acre, house and average selling price
per lot, house and acre amounts)
2024
2023
2024
2023
DIRECTLY OWNED
Revenue
$
145,650
$
49,876
$
403,266
$
173,604
Gross margin
51,871
10,916
103,497
40,393
Gross margin (%)*
35.6%
21.9%
25.7%
23.3%
Net margin
$
42,767
$
3,081
$
64,218
$
10,138
Net margin (%)*
29.4%
6.2%
15.9%
5.8%
Fair value change on investment properties
$
(14,955)
$
(2,232)
$
(5,204)
$
(4,660)
Condominium occupancy units (project level) - Toronto & Ottawa
—
64
272
199
Condominium occupancy units (Dream's share) - Toronto & Ottawa
—
21
253
65
Lots sold - Western Canada
399
102
622
554
Average selling price per lot - Western Canada
$
152,000
$
142,000
$
168,000
$
153,000
Acres sold - Western Canada
72
5
236
7
Average selling price per acre - Western Canada
$
765,000
$
1,065,000
$
431,000
$
982,000
Housing units sold
53
26
126
101
Average selling price per housing unit
$
529,000
$
577,000
$
562,000
$
502,000
EQUITY ACCOUNTED INVESTMENTS
Share of earnings (loss) from equity accounted investments
$
10,697
$
(2,505)
$
11,693
$
5,321
Condominium occupancy units (project level) - Toronto
173
39
452
85
Condominium occupancy units (Dream's share) - Toronto
77
3
173
11
Results of Operations
In the three months ended December 31, 2024, our development business generated revenue and net margin of $145.7 million and $42.8 million,
respectively, an increase of $95.8 million and $39.7 million, respectively, from the comparative period. The increase is primarily attributable to the timing
of lot and acre sales in Western Canada as the fourth quarter in 2024 had record levels sales primarily in our Holmwood, Saskatoon and Alpine Park,
Calgary developments. Revenue and net margin had minimal contributions from higher occupancies in Western Canada's multi-family residential rental
properties which welcomed its first tenants in several newly constructed units, as they were offset by lower condominium occupancies as the fourth
quarter of 2023 included occupancies at Phase 2 of Riverside Square, with no activity in the current period.
In the year ended December 31, 2024, our development business generated revenue and net margin of $403.3 million and $64.2 million, respectively, an
increase of $229.7 million and $54.1 million, respectively, from the comparative period. The increase is primarily attributable to 622 lots and 236 acre sales
in 2024, which includes 146 acres of land sold in Edmonton in the first half of 2024, and improved housing margins in Western Canada. Revenue and net
margins were partially offset by lower condominium occupancies at Phase 2 of Riverside Square in comparison to 2023 and minimal margin recognized on
IVY Condos.
Fair value changes on investment properties in the three and twelve months ended December 31, 2024 were fair value losses of $15.0 million and
$5.2 million, respectively, compared to fair value losses of $2.2 million and $4.7 million, respectively, in 2023. Fair value losses in 2024 were primarily
related to a recently completed commercial block at Zibi, driven by an extended lease-up timeline. The writedown was supported by an external appraisal.
This was partially offset by fair value gains in our Western Canada investment properties under development due to decreases to cap rates, in line with
external appraisals.
Earnings from equity accounted investments in the three months ended December 31, 2024 was $10.7 million compared to losses of $2.5 million in the
comparative period due to condominium occupancy income from Canary House at Canary Landing (Block 10) in Toronto and Brightwater Towns in Port
Credit in the current period, with minimal occupancy activity in the fourth quarter of 2023.
Earnings from equity accounted investments in the twelve months ended December 31, 2024 was $11.7 million, an increase of $6.4 million from the
comparative period due to condominium occupancies at our Brightwater development in Port Credit, Canary Commons and Canary House at Canary
Landing in 2024.
Our development team remains focused on building out our exceptional development pipeline, including The Mason at Brightwater, Cherry House at
Canary Landing, Forma, Odenak, and Zibi as well as a number of rental developments in Western Canada, which are expected to occupy between 2025 and
2028.
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 7
Active Projects
Alpine Park
Alpine Park is a 646 acre next-generation greenfield development located along the recently completed Southwest Ring Road in Calgary between
downtown and the mountains. With over two decades of anticipation, Alpine Park broke ground in 2020. The master-planned community is expected to
take 15 years for full build out. The community will be home to about 10,000 residents with a variety of home styles. A Village Centre is also planned for
Alpine Park which will include a grocery anchor and other curated retailers. Alpine Park will include multi-family residences and apartments, urban plaza
spaces and parkland. Residential occupancies commenced for Alpine Park phase 1 in 2023 and phase 2 in 2024 while construction continues on Alpine Park
phase 3. We expects to commence construction on the first purpose-built rentals at Alpine Park in 2025.
Brightwater
Brightwater, a 72 acre waterfront development in Mississauga's Port Credit area, is expected to transform the site to a complete, vibrant and diverse
community, which will include an elementary school, YMCA and 18 acres of parks and outdoor space. The development won the Building Industry and
Land Development Association Pinnacle Award in 2020 for Best New Community. Occupancy at Brightwater Towns commenced this quarter with 50 of 106
units occupied to date. Construction on the retail and commercial component of Brightwater Phase I (CDH) LP is complete and 65% of the space is leased.
Canary Landing (comprised of Maple House, Cherry House, Birch House and Canary House)
Maple House at Canary Landing, the first building in our purpose-built rental community in the West Don Lands neighbourhood, is 79% leased to date.
Maple House is comprised of 770 rental units, of which 30% are affordable. Construction on Cherry House is progressing well and will comprise of an
additional 855 rental units (30% affordable), with initial occupancies planned for 2025. Condominium occupancies at Canary House began in the fourth
quarter of 2024 with 158 of the total 206 units occupied. Birch House's 238 purpose-built rentals welcomed their first tenants in the fourth quarter with 32
committed leases signed prior to the end of the year. Construction continues on the 26,000 sf of heritage retail and an Indigenous Hub, with initial
occupancies in 2025. This area is a significant development hub for Dream, as it includes the 35 acre Canary District, the adjacent Canary Landing and
Distillery District development assets.
Forma
Designed by visionary architect and Toronto native, Frank Gehry, Forma will consist of two towers and comprise over 2,000 units in Toronto's downtown
core. Upon completion, the two towers will stand at 73 and 84 storeys tall and will include seven levels of office space, three levels of retail including a
mezzanine, and two levels for the Ontario College of Art and Design University. Construction commenced in the fourth quarter of 2022. We have presold
87% of released units to date in the East Tower.
Odenak (formerly "Dream LeBreton")
Odenak will have a total of 608 multi-family units, of which approximately 40% will be affordable, and of which 31% will be accessible. The units will be
integrated alongside market units, creating an inclusive, equitable, and richly diverse community. The affordable units are to be earmarked for five target
populations as defined by the national housing strategy: Indigenous communities; veterans; women and children; immigrants and newcomers; and adults
with cognitive disabilities. During the second quarter of 2024, the Company broke ground on construction for Odenak.
Holmwood
Holmwood is an 867 acre master planned community transforming the east end of Saskatoon, with an innovative community form, thriving retail
marketplace, future school site and inclusive public spaces. Holmwood has seen the community grow every year since initial construction, resulting in a
thriving neighbourhood. Anticipated to be home to nearly 15,000 people by 2030, Holmwood is a community building on one of the largest scales ever
seen in Saskatchewan, combining over 6,400 mixed-use homes with 82 acres of parkland and an intricate network of ponds, wetlands and sports facilities.
The Teal, Brighton Towns on Delainey, Block 166 Detached Home Rentals and Block JK Townhome Rentals welcomed their first tenants in 2024.
Construction is well underway with the remaining rental units and are expected to occupy over the next two years.
Zibi
The Zibi project is a multi-phase development that includes over 4 million sf of density consisting of approximately 1,900 residential units (inclusive of
purpose-built rental units), over 2 million sf of commercial space and 8 acres of riverfront parks and plazas. In partnership with Hydro Ottawa, we
developed the District Energy System, Ottawa and Gatineau's first post-industrial waste heat recovery system, which has been developed to provide zero
carbon energy heating and cooling for all tenants, residents and visitors at Zibi in accordance with the One Planet Living® sustainability framework.
Other Items
Interest Expense
In the three and twelve months ended December 31, 2024, interest expense was $21.6 million and $78.4 million, respectively, compared to $14.9 million
and $68.3 million, respectively, in the prior period. The increase is primarily due to the maturity of a $100 million interest rate swap on our non-revolving
term facility, and higher borrowings on our operating line which was partially offset by lower average interest rates on variable debt. The operating line
was paid in full in the fourth quarter of 2024.
General and Administrative Expenses
In the three and twelve months ended December 31, 2024, general and administrative expenses were $3.7 million and $22.9 million, respectively,
compared to $10.2 million and $31.2 million, respectively, in the comparative period. The decrease in general and administrative expenses is primarily due
to lower one-time legal costs and the composition of variable compensation.
Dream Unlimited Corp. – December 31, 2024 | 8
Income Tax Expense
The Company's effective income tax rate was 24.4% and 16.6%, respectively, for the three and twelve months ended December 31, 2024 (three and twelve
months ended December 31, 2023 – 4.9% and 2.3%, respectively). The effective income tax rate for the year ended December 31, 2024 is different than
the statutory combined federal and provincial tax rate of 25.7% mainly due to the non-taxable portion of capital gains, partially offset by a combination of
non-deductible expenses and other items.
We are subject to income taxes in Canada, both federally and provincially, and in the United States. Significant judgments and estimates are required in the
determination of the Company's tax balances. Our income tax expense and deferred tax liabilities reflect management's best estimate of current and
future taxes to be paid. The Company is subject to tax audits from various government and regulatory agencies on an ongoing basis. As a result, from time
to time, taxing authorities may disagree with the interpretation and application of tax laws taken by the Company in its tax filings.
Liquidity and Capital Resources
Our capital consists of debt facilities and shareholders' equity. Our objectives in managing our capital are to ensure adequate operating funds are available
to fund development costs, to cover leasing costs, overhead and capital expenditures for income generating assets, to provide for resources needed to
fund capital calls for existing developments, to generate a target rate of return on investments and to cover dividend payments. There have been no
material changes in future contractual obligations since December 31, 2024.
A summary of our working capital, recurring assets and liabilities, and financial assets and liabilities as at December 31, 2024 and December 31, 2023 is
presented below. Project-specific inventory and debt balances in our development segment are excluded from the table below as the proceeds from the
sale of inventory fund the repayment of project-specific construction facilities. Please refer to Note 36 of the consolidated financial statements for the
Company's full classification of items in the consolidated statements of financial position.
December 31, 2024
December 31, 2023
(in thousands of Canadian dollars)
Less than 12
months
Greater than
12 months
Non-
determinable
Total
Less than 12
months
Greater than
12 months
Non-
determinable
Total
Cash and cash equivalents
$
83,881 $
— $
— $
83,881 $
60,203 $
— $
— $
60,203
Accounts receivable
205,526
79,218
—
284,744
188,761
85,280
—
274,041
Other financial assets(1)
30,810
27,810
—
58,620
46,886
13,280
—
60,166
Investment properties within recurring
income
—
1,663,833
—
1,663,833
—
1,522,148
—
1,522,148
Recreational properties
—
84,707
—
84,707
—
82,898
—
82,898
Investment in Dream Office REIT(2)
—
—
352,739
352,739
—
—
379,368
379,368
Investment in Dream Residential REIT(2)
—
—
44,872
44,872
—
—
41,371
41,371
Subtotal assets
320,217
1,855,568
397,611
2,573,396
295,850
1,703,606
420,739
2,420,195
Accounts payable and accrued liabilities
171,878
2,041
37,180
211,099
150,123
12,360
70,893
233,376
Income and other taxes payable
19,322
—
—
19,322
79,964
—
—
79,964
Provision for real estate development costs
75,825
—
—
75,825
61,069
—
—
61,069
Project-specific debt within recurring
income
239,502
995,003
—
1,234,505
138,758
956,292
—
1,095,050
Corporate debt facilities
224,411
68,235
—
292,646
—
291,306
—
291,306
Dream Impact Trust units
—
—
43,711
43,711
—
—
70,779
70,779
Dream Impact Fund units
—
—
126,375
126,375
—
—
113,405
113,405
Subtotal liabilities
730,938
1,065,279
207,266
2,003,483
429,914
1,259,958
255,077
1,944,949
Net excess (deficiency)
$
(410,721) $
790,289 $
190,345 $
569,913 $
(134,064) $
443,648 $
165,662 $
475,246
(1) Other financial assets as at December 31, 2024 excludes $nil million in project-specific investment holdings (December 31, 2023 – $39.7 million).
(2) The Company's holdings of Dream Office REIT and Dream Residential REIT have been measured at book equity per share as of December 31, 2024 and December 31, 2023. Dream Office REIT and
Dream Residential REIT are included in our equity accounted investments. See Note 12 of the Company’s consolidated financial statements for the year ended December 31, 2024 and 2023 for
further details.
As at December 31, 2024, there were adequate resources to address the Company's short-term liquidity requirements. Certain financial instruments that
are callable or due on demand are presented as due within 12 months. Due to the nature of our development business, in addition to the above
resources, the Company expects to fund a portion of our current liabilities through sales of housing, condominium and land inventories, which cannot be
classified and accordingly are not presented above. The Company may receive pre-sale orders on land and condominium inventory; however, these are
not reflected above as there is uncertainty regarding timing and market conditions on occupancy. Management continuously reviews the timing of
expected debt repayments and actively pursues refinancing opportunities as they arise. We expect to finalize the refinancing of our $225 million term
facility and $320 million Western Canada operating line by the end of the first quarter of 2025, extending the maturity to 2028.
The Company uses a combination of existing cash, cash generated from operations and unit distributions, corporate debt facilities and project-specific
debt to finance its activities. As at December 31, 2024, the Company had $366.9 million in available liquidity*, up from $325.1 million as at December 31,
2023. Available liquidity is comprised of $39.5 million in cash at a standalone corporate level and within wholly-owned projects and $327.4 million
available under our revolving credit facilities (December 31, 2023 - $22.4 million and $300.2 million, respectively).
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 9
The Company has $692.1 million of debt maturities in 2025, comprising of $448.0 million we expect to be able to refinance or extend and $244.1 million
in construction facilities we expect to repay with proceeds from sales. Generally, we expect to increase our available liquidity over the next several years
to fund our fixed operating costs and our dividends, to participate in discretionary investments as they arise, and to withstand sudden adverse changes in
economic conditions.
Cash Requirements
The nature of the real estate business is such that we require capital to fund non-discretionary expenditures with respect to existing assets, as well as to
fund growth through acquisitions and developments. As at December 31, 2024, on a consolidated basis, we had $83.9 million in cash and cash equivalents
(December 31, 2023 – $60.2 million). Our intention is to meet short-term liquidity requirements through cash on hand, cash from operating activities,
working capital reserves and operating debt facilities. We anticipate that cash from operations and recurring income will continue to provide the cash
necessary to fund operating expenses and debt service requirements for our stabilized income assets.
Consolidated Statements of Cash Flows
The Company's consolidated statement of cash flows is as follows:
For the three months ended December 31,
For the year ended December 31,
(in thousands of Canadian dollars)
2024
2023
2024
2023
Net cash flows provided by (used in) operating activities
$
(32,469) $
18,054 $
(39,933) $
(82,003)
Net cash flows provided by (used in) investing activities
199,281
(43,392)
132,371
(66,821)
Net cash flows provided by (used in) financing activities
(155,626)
21,227
(68,760)
161,394
Change in cash and cash equivalents
11,186
(4,111)
23,678
12,570
Cash and cash equivalents, beginning of period
72,695
64,314
60,203
47,633
Cash and cash equivalents, end of period
$
83,881 $
60,203 $
83,881 $
60,203
Operating Activities
Cash flows from operating activities in the three and twelve months ended December 31, 2024 decreased by $50.5 million and increased by $42.1 million,
respectively, from the prior period. Changes in cash flows from operating activities are primarily driven by timing of cash collections of working capital,
land acquisition activity and development spend on condominium, housing and land inventory. Included in the year-to-date cash flows is $125.0 million in
cash taxes paid of which nearly half was deemed non-recurring, in addition to taxes related to the sale of Arapahoe Basin.
Investing Activities
Cash flows from investing activities in the three and twelve months ended December 31, 2024 increased by $242.7 million and $199.2 million, respectively,
from 2023. The increase is primarily attributable to the sale of Arapahoe Basin for total proceeds of $214.0 million which closed in the fourth quarter of
2024. Year-to-date cash movement includes development spend on investment property primarily in the National Capital Region and Western Canada.
Financing Activities
Cash flows from financing activities in the three and twelve months ended December 31, 2024 decreased by $176.9 million and $230.2 million, respectively
from 2023. The cash outflow is primarily attributable to repayment of project level debt using proceeds from condominium closings and the payment of a
special dividend in the fourth quarter of 2024.
Debt
As at December 31, 2024, debt was $1,870.4 million (December 31, 2023 – $1,810.5 million). A breakdown of project-specific and corporate debt facilities
is detailed in the table below.
Weighted average effective interest rates
Debt amount
(in thousands of Canadian dollars)
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Project-specific debt
Operating line - Dream Impact Fund
n/a
7.20% $
— $
10,500
Construction loans
4.70%
6.18%
462,613
449,540
Mortgages and term debt
4.17%
4.23%
1,115,107
1,059,203
Total project-specific debt
4.32%
4.89%
1,577,720
1,519,243
Corporate debt facilities
Non-revolving term facility
6.94%
5.51%
224,411
223,769
Convertible debentures (host instruments) - Dream Impact Trust
6.10%
6.10%
68,235
67,530
Convertible debentures (conversion features) - Dream Impact Trust
n/a
n/a
—
7
Total corporate debt facilities
6.63%
5.65%
292,646
291,306
Total debt
4.69%
5.02% $
1,870,366 $
1,810,549
As at December 31, 2024, $1,311.1 million (December 31, 2023 – $1,370.6 million) of aggregate development loans and term debt were subject to a fixed,
weighted average interest rate of 4.09% (December 31, 2023 – 4.15%) and will mature between 2025 and 2052. A further $559.3 million (December 31,
2023 – $440.0 million) of real estate debt was subject to a weighted average variable interest rate of 6.10% (December 31, 2023 – 7.71%) and will mature
between 2025 and 2027. Included within total debt is $406.5 million (December 31, 2023 – $465.2 million) of variable debt that the Company has hedged
through fixed interest rate swaps. All of the Company's interest rate swaps are being used to mitigate the risk of rising interest rates. Effective interest rate
swaps have been accounted for using hedge accounting.
*Represents a specified financial measure. Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for further details.
Dream Unlimited Corp. – December 31, 2024 | 10
Contractual Obligations
Our liquidity is impacted by contractual debt commitments as follows:
2025
2026
2027
2028
2029 and
thereafter
Total
Project-specific debt(1)
$
474,764
$
140,148
$
478,571
$
71,808
$
412,429
$ 1,577,720
Corporate debt facilities(1)
224,411
29,616
38,619
—
—
292,646
$
699,175
$
169,764
$
517,190
$
71,808
$
412,429
$ 1,870,366
(1) The amounts presented are shown consistent with the contractual terms of repayment, which may be due on demand.
In addition to the commitments above, we may be required to fund capital to our development projects as part of the Company's normal course of
operations.
Shareholders' Equity
Dream is authorized to issue an unlimited number of Subordinate Voting Shares and an unlimited number of Class B Shares. As at December 31, 2024,
there were 40,498,896 Subordinate Voting Shares and 1,557,322 Class B Shares outstanding (December 31, 2023 - 40,682,688 Subordinate Voting Shares
and 1,557,322 Class B Shares).
As at February 24, 2025, there were 40,484,939 Subordinate Voting Shares, 1,557,270 Class B Shares, 83,345 stock options, 1,030,206 performance share
units, 432,811 restricted share units and 372,637 deferred share units outstanding.
Including the Subordinate Voting Shares of Dream and Class B Shares held or controlled directly or indirectly, the Company's President and Chief
Responsible Officer ("CRO") owned an approximate 44% economic interest and 87% voting interest in the Company as at December 31, 2024.
Share Repurchases
The Company renewed its normal course issuer bid ("NCIB"), which commenced on September 23, 2024, under which the Company has the ability to
purchase for cancellation up to a maximum number of 2,375,743 Subordinate Voting Shares through the facilities of the TSX at prevailing market prices
and in accordance with the rules and policies of the TSX. The actual number of Subordinate Voting Shares that may be purchased, and the timing of any
such purchases as determined by the Company, are subject to a maximum daily purchase limitation of 7,009 shares, except where purchases are made in
accordance with block purchase exemptions under applicable TSX rules.
In connection with the renewal of the NCIB, the Company has established an automatic securities purchase plan (the “Plan”) with its designated broker to
facilitate the purchase of Subordinate Voting Shares under the NCIB at times when the Company would ordinarily not be permitted to purchase its
Subordinate Voting Shares due to regulatory restrictions or self-imposed blackout periods. Purchases will be made by the Company's broker based on the
parameters prescribed by the TSX and the terms of the parties’ written agreement. Outside of such restricted or blackout periods, the Subordinate Voting
Shares may also be purchased in accordance with management’s discretion. The Plan was pre-cleared by the TSX and will terminate on September 22,
2025.
In the year ended December 31, 2024, 0.4 million Subordinate Voting Shares were purchased for cancellation by the Company under its NCIB at an average
price of $21.20 (year ended December 31, 2023 – 0.6 million Subordinate Voting Shares at an average price of $19.28).
Off-Balance Sheet Arrangements, Commitments and Contingencies
Capital Commitments
The Company is obligated, under certain contract terms, to construct and develop investment properties, condominium and housing inventory. The
Company has entered into contracts with various suppliers and is committed to future payments of approximately $495.0 million (December 31, 2023 -
$170.0 million).
Letters of Credit and Surety Bonds
The Company is contingently liable for letters of credit and surety bonds that have been provided to support land developments, equity accounted
investments and other activities in the amount of $120.0 million (December 31, 2023 – $109.0 million). The Company is also contingently liable for bonds
that have been provided to support certain urban development condominium partnerships that expire at the end of a specified warranty period.
The Company is committed to pay levies in the future of up to $29.8 million (December 31, 2023 – $11.5 million) relating to signed municipal agreements
on commencement of development of certain real estate assets. Additional development costs may also be required to satisfy the requirements of these
municipal agreements.
Joint Operations, Co-ownerships, Joint Ventures and Associates
The Company may conduct its real estate activities from time to time through joint operations and joint ventures with third-party partners. The Company
was contingently liable for the obligations of the other owners of the unincorporated joint operations and joint ventures in the amount of $170.5 million as
at December 31, 2024 (December 31, 2023 – $343.6 million). These guarantees include contingent liabilities for certain obligations of our joint venture
partners, which are exclusive of our share of those guarantees that are included in our equity accounted investments on the consolidated statements of
financial position. However, the Company would have available to it the other co-venturers’ share of assets to satisfy any obligations that may arise. From
time to time, the Company may be required to fund capital contributions to its various investments.
Dream Unlimited Corp. – December 31, 2024 | 11
Legal and Other Contingencies
The Company and its operating subsidiaries may become liable under guarantees that are issued in the normal course of business and with respect to
litigation and claims that arise from time to time. In the opinion of management, any liability that may arise from such contingencies would not have a
material adverse effect on the consolidated financial statements of the Company.
Transactions with Related Parties
The Company has agreements for services and transactions with related parties, which are discussed and outlined in Note 33 of our financial statements
for the year ended December 31, 2024, which is incorporated by reference into this MD&A.
Dream Industrial REIT
In the year ended December 31, 2024 and 2023, the Company earned/recovered the following amounts pursuant to the asset management and shared
services agreements with Dream Industrial REIT:
For the three months ended December 31,
For the year ended December 31,
2024
2023
2024
2023
Asset management fees charged by Dream(1)
$
6,275
$
6,076
$
21,968
$
25,930
Cost recoveries charged by Dream
556
412
1,972
1,767
(1) Included in asset management fees charged to Dream Industrial REIT for the three and twelve months ended December 31, 2024 were incentive fees of $592 (for the three and twelve months
ended December 31, 2023 – $nil).
Included in accounts receivable are balances due from Dream Industrial REIT related to asset management agreements and cost sharing agreements of
$6,789 (December 31, 2023 - $6,505).
Dream Office REIT
Amounts earned/recovered under the shared services and property management agreements with Dream Office REIT during the year ended December 31,
2024 and 2023 are as follows:
For the three months ended December 31,
For the year ended December 31,
2024
2023
2024
2023
Cost recoveries charged by Dream to Dream Office REIT
$
555
$
539
$
2,232
$
1,867
Cost recoveries charged by Dream Office REIT to Dream
3,699
3,265
13,082
12,055
Cost recoveries charged by Dream Office REIT to Dream Impact Trust
536
633
2,427
2,551
Fees charged by Dream to Dream Office REIT
370
359
704
1,795
Fees charged by Dream Office REIT to Dream
179
135
547
426
Fees charged by Dream Office REIT to Dream Impact Trust
267
231
1,027
939
The net amount owing to Dream Office REIT as of December 31, 2024 was $632 (December 31, 2023 – $416).
Dream Residential REIT
In the year ended December 31, 2024 and 2023, the Company earned/recovered the following amounts pursuant to the asset management and shared
services agreements with Dream Residential REIT:
For the three months ended December 31,
For the year ended December 31,
2024
2023
2024
2023
Asset management fees charged by Dream(1)
$
274
$
288
$
941
$
1,071
Cost recoveries charged by Dream
156
48
400
281
(1) Included in asset management fees charged to Dream Residential REIT for the three and twelve months ended December 31, 2024 and 2023 were incentive fees of $nil.
Included in accounts receivable are balances due from Dream Residential REIT related to asset management agreements and cost sharing agreements of
$430 (December 31, 2023 - $332).
Critical Accounting Estimates
The preparation of the consolidated financial statements in accordance with IFRS Accounting Standards requires the Company to make judgments in
applying its accounting policies, estimates and assumptions about the future. These judgments, estimates and assumptions affect the reported amounts of
assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities included in the Company's consolidated financial
statements. The Company evaluates its estimates on an ongoing basis. Such estimates are based on historical experience and on various other
assumptions that we believe are reasonable under the circumstances, and these estimates form the basis for making judgments about the carrying value
of assets and liabilities and the reported amount of revenues and expenses that are not readily apparent from other sources. Actual results may differ from
those estimates under different assumptions or conditions. A detailed summary of the most significant accounting judgments, estimates and assumptions
made by management in the preparation and analysis of our financial results is included in our Annual Report for the year ended December 31, 2024.
Dream Unlimited Corp. – December 31, 2024 | 12
Changes in Accounting Policies and Disclosures and Future Accounting Policy Changes
A detailed summary of the most significant accounting policies and disclosures made by management in the preparation and analysis of our financial
results is included in Note 3 of our consolidated financial statements for the year ended December 31, 2024, which is incorporated by reference into this
MD&A.
Internal Control over Financial Reporting
As at December 31, 2024, the President and CRO and the Chief Financial Officer (the "Certifying Officers"), with the assistance of senior management, have
designed disclosure controls and procedures to provide reasonable assurance that material information relating to Dream is made known to the Certifying
Officers in a timely manner and information required to be disclosed by Dream is recorded, processed, summarized and reported within the time periods
specified in securities legislation, and have designed internal controls over financial reporting to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the condensed consolidated financial statements in accordance with IFRS Accounting Standards.
There were no changes in the Company’s internal control over financial reporting in the year ended December 31, 2024 that have materially affected, or
are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
Future Accounting Policy Changes
Standards issued but not yet effective up to the date of issuance of the Company's consolidated financial statements that are likely to have an impact on
the Company are noted below, and represent the standards and interpretations the Company reasonably expects to be applicable at a future date. The
Company intends to adopt these standards when they become effective.
IFRS 18 "Presentation and disclosure in financial statements" ("IFRS 18")
In April 2024, IFRS 18, “Presentation and Disclosure in Financial Statements” was issued to achieve comparability of the financial performance of similar
entities. The standard, which replaces IAS 1 “Presentation of Financial Statements”, impacts the presentation of primary financial statements and notes,
including the statement of comprehensive income where entities will be required to present separate categories of income and expense for operating,
investing, and financing activities with prescribed subtotals for each new category. The standard will also require management-defined performance
measures to be explained and included in a separate note within the consolidated financial statements. The standard is effective for annual reporting
periods beginning on or after January 1, 2027, including interim financial statements, and requires retrospective application. The Company is in the process
of assessing the impact of this new standard.
IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures"
In May 2024, amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" were issued. The amendments clarify the
timing of recognition and derecognition for a financial asset or financial liability, including clarifying that a financial liability is derecognized on the
settlement date. Further, the amendments introduce an accounting policy choice to derecognize financial liabilities settled using an electronic payment
system before the settlement date, if specific condition are met. The amendments also require additional disclosures for financial instruments with
contingent features and investments in equity instruments classified at fair value through other comprehensive income. These amendments are effective
for annual reporting periods beginning on or after January 1, 2026. Early adoption is permitted, with an option to early adopt only the amendments related
to the classification of financial assets. The Company is in the process of assessing the impact of these new standards.
Risk Factors
We are exposed to various risks and uncertainties, many of which are beyond our control and could have an impact on our business, financial condition,
operating results and prospects. Shareholders should consider those risks and uncertainties when assessing our outlook in terms of investment potential.
In addition to the risks and uncertainties described below, please also refer to our Annual Report for the year ended December 31, 2024 and our most
recent Annual Information Form filed on SEDAR+ (www.sedarplus.com) under the Company's profile for a discussion on risks and uncertainties applicable
to the Company. For a discussion of the risks and uncertainties identified specific to Dream Impact Trust, please refer to the Annual Report for the year
ended December 31, 2024 and the most recent Annual Information Form filed by Dream Impact Trust on SEDAR+ under Dream Impact Trust's profile.
Ownership of Real Estate
Development Risk
The development industry is cyclical in nature and is significantly affected by changes in general and local economic and industry conditions, such as
employment levels, availability of financing for homebuyers, government regulations, interest rates, consumer confidence, levels of new and existing
homes for sale, demographic trends, housing demand and competition from other real estate companies.
An oversupply of alternatives to new homes and condominium units, such as resale properties, including properties held for sale by investors and
speculators, foreclosed homes and rental properties, may reduce the Company's ability to sell new homes and condominium units and may depress prices
and reduce margins from the sale of new homes and condominium units. Depending on market conditions, the Company may not be able, or may not
wish, to develop its land holdings. Development of land holdings and properties that are to be constructed are subject to a variety of risks, not all of which
are within the Company's control. Such risks include lack of funding, variability in development costs, construction delays, potential delays in occupancy
and/or rent commencement and other unforeseeable delays.
Dream Unlimited Corp. – December 31, 2024 | 13
Real estate assets, particularly raw land, are relatively illiquid in down markets. Such illiquidity tends to limit the Company's ability to vary its real estate
portfolio promptly in response to changing economic or investment conditions. If there are significant adverse changes in economic or real estate market
conditions, the Company may have to sell properties at a loss or hold undeveloped land or developed properties in inventory longer than planned.
Inventory carrying costs can be significant and may result in losses in a poorly performing project or market.
The Company's and the other Dream Entities’ assets may include interests in real estate under construction or held for development. We may commit to
making further investments in respect of our interest in these types of properties, including through the provision of construction and completion
guarantees by the co-owners to project lenders or otherwise. Our involvement in such development activity is subject to related risks that include: (i)
construction or other unforeseen delays including municipal approvals; (ii) the potential insolvency of a developer; (iii) the developer’s failure to use
advanced funds in payment of construction costs; (iv) construction or unanticipated delays; (v) incurring construction costs before ensuring rental
revenues will be earned from a project; (vi) cost overruns on a project; and (vii) the failure of purchasers to close on purchase transactions or the failure of
tenants to occupy and pay rent in accordance with lease arrangements. Such risks are minimized, but not avoided, by generally not commencing
construction until satisfactory levels of preleasing or sales, as applicable, are achieved. Dream also seeks to undertake such projects with other established
developers. In addition, Dream uses a staggered approach in its development program to avoid unnecessary concentration of development projects in a
single period of time so as to manage our development risk exposure and properly allocate our capital and personnel resources.
Delays and Cost Over-Runs
Delays and cost over-runs may occur in completing the construction of development projects, prospective projects and future projects that may be
undertaken. A number of factors that could cause such delays or cost over-runs include, but are not limited to, permitting delays, changing engineering
and design requirements, the performance of contractors, labour disruptions, adverse weather conditions and the availability of financing.
Permitting
Our development of real estate projects is subject to various regulations requiring us to obtain building permits and other authorizations. We may be
unable to obtain or face significant delays in obtaining such permits or authorizations, which could result in increased development costs or the
cancellation of parts or entire projects.
Supply of Materials and Services
The construction industry has from time to time experienced significant difficulties in the supply of materials and services, including with respect to
shortages of skilled and experienced contractors and tradespeople, labour disputes, shortages of building materials, unforeseen environmental and
engineering problems, and increases in the cost of certain materials. If any of these difficulties should occur, we may experience delays and increased costs
in the construction of homes and condominiums.
Competition
The residential home and condominium and rental building industry is highly competitive. Residential home and condominium and rental builders
compete for buyers, desirable properties, building materials, labour and capital. We compete with other local, regional and national builders. Any
improvement in the cost structure or service of these competitors will increase the competition we face. We also compete with sellers of existing homes,
housing speculators and investors in rental housing. Competitive conditions in the residential home and condominium and rental building industries could
result in: difficulty in acquiring desirable land at acceptable prices, increased selling incentives, lower sales volumes and prices, lower profit margins,
impairments in the value of our inventory and other assets, increased construction costs and delays in construction.
Our ability to successfully expand asset management activities in the future is dependent on our reputation with clients. We believe that our track record,
the expertise of our asset management team and the performance of the assets currently under management will enable us to continue to develop
productive relationships with these companies and to grow the assets under management. However, if we are not successful in doing so, our business and
results of operations may be adversely affected.
Joint Venture Risks
Real estate investments are often made as joint ventures or partnerships with other Dream Entities or third parties. These structures involve certain
additional risks, including the possibility that the co-venturers/partners may, at any time, have economic or business interests inconsistent with ours, the
risk that such co-venturers/ partners could experience financial difficulties that could result in additional financial demands on us to maintain and operate
such properties, that such co-venturers/partners could wish to cease operating within a joint venture or partnership structure, and the need to obtain the
co-venturers'/partners' consent with respect to certain major decisions in respect of such properties. Under most of our joint venture arrangements the
Company has the discretion to elect to continue or discontinue funding of such joint venture activities at various points in time, under certain of the
Company’s joint venture arrangements, a decision to discontinue funding may result in penalties against non-funding investors, such as dilution or above
market interest rates. Should the Company determine to discontinue the funding of any such joint venture, the value of the Company’s investment may be
adversely affected.
Our co-venturers/partners may, at any time, have economic or business interests inconsistent with ours and we may be required to take actions that are in
the interest of the partners collectively, but not in the Company's sole best interests. Accordingly, we may not be able to favourably resolve issues with
respect to such decisions or we could become engaged in a dispute with any of them that might affect our ability to develop or operate the business or
assets in question efficiently. Any failure of the Company or our co-venturers and partners to meet their obligations, or disagreements with respect to
strategic decision making, could have an adverse effect on the joint ventures or partnerships, which may have an adverse effect on the Company. In
addition, we face the risk that any interests that we directly or indirectly hold in any joint venture may be diluted in the event that additional capital is
required from the partners of the joint venture and we are, or the entity holding such interests is, unable to participate in such capital raise. We cannot
guarantee that we nor any entity in which we hold an interest will be able to access sufficient capital to perform any obligations in connection with any
joint venture commitments.
Dream Unlimited Corp. – December 31, 2024 | 14
We attempt to mitigate these risks by performing due diligence procedures on potential partners and contractual arrangements, and by closely monitoring
and supervising the joint ventures or partnerships.
Expropriation Risk
We are subject to laws and regulations governing the ownership and leasing of real property and are subject to the possibility that our assets may be
expropriated. Should any assets that we hold for development or other assets be expropriated, there is a risk that we may not realize the profit that we
expected upon planning the development, sale or lease of such asset. Expropriation of our assets may also affect the value of any assets that we have in
physical proximity to the expropriated asset, including as a result of disruption of our community planning initiatives. These factors may have adverse
effects on our business and may negatively impact our expected development project and other returns.
Geographic Concentration
Our land development and housing operations are concentrated in Saskatchewan and Alberta. Some or both of these regions could be affected by severe
weather; natural disasters; shortages in the availability or increased costs of obtaining land, equipment, labour or building supplies; changes to the
population growth rates and therefore the demand for homes in these regions; and changes in the regulatory and fiscal environment. Due to the
concentrated nature of our expected land development and housing operations, negative factors affecting one or a number of these geographic regions at
the same time could result in a greater impact on our financial condition or results of operations than they might have on other companies that have a
more diversified portfolio of operations.
Given the prominence of the oil and gas industry in Alberta and Saskatchewan, the economies of these provinces can be significantly impacted by the price
of oil. Similarly, because of our substantial land and housing development operations in Alberta and Saskatchewan, any substantial decline in the price of
oil could also adversely affect the Company's operating results. We continuously evaluate the economic health of the markets in which we operate
through various means to ensure that we have identified and, where possible, mitigated risks to the Company, including the potential impacts of changes
in the price of oil. Additionally, the land development process is longer term in nature, which, to some extent, mitigates the impacts of short-term
fluctuations in the health of the economies in which we operate. As of December 31, 2024, the Company had not identified any material adverse effect on
our business as a result of oil prices.
Our Saskatchewan and Alberta operations have historically focused on the Company's land and housing businesses, as well as a golf course reported under
our recreational properties. The Company has also recognized the potential of our substantial land holdings in these markets for retail and multi-family
residential development opportunities, and we expect to continue to increase the activity for these types of developments in the future. Our retail
developments utilize the Company's existing land inventory to develop assets that will derive cash flows over a longer term.
In addition to our holdings in Saskatchewan and Alberta, a substantial portion of the projects in our Development segment are located in and around the
GTA and we have invested significantly in this region through both our Development segment and our investment in Dream Office REIT and Dream Impact
Trust, whose portfolios are concentrated in Toronto. Accordingly, any negative fluctuation in Toronto market fundamentals could result in a greater impact
on our financial condition or results of operations than they might have on other companies that have a more diversified portfolio of operations.
Risks Related to Acquisitions
Our external growth prospects depend in large part on our ability to identify suitable investment opportunities, pursue such opportunities and
consummate acquisitions, including direct or indirect acquisitions of real estate. Achieving the benefits of acquisitions depends in part on successfully
consolidating functions and integrating operations and procedures in a timely and efficient manner, as well as our ability to realize our anticipated growth
opportunities and synergies from our newly acquired investments. Integrating acquired investments and businesses also involves a number of risks that
could materially and adversely affect our business, including: (i) failure of the acquired investment or businesses to achieve expected results; (ii) risks
relating to the integration of the acquired investment or businesses and the retention and integration of key personnel relating to the acquired investment
or businesses; and (iii) the risk that major tenants or clients of the acquired investment or businesses may not be retained.
Notwithstanding pre-acquisition due diligence, it is not possible to fully understand a property before it is owned and operated for an extended period of
time and there may be undisclosed or unknown liabilities concerning the acquired properties. The Company may not be indemnified for some or all of
these liabilities. To mitigate this risk, we conduct an appropriate level of due diligence and investigation in connection with acquisition of properties and
seek, through contractual arrangements, to ensure that risks lie with the appropriate party. For example, we could directly or indirectly acquire a property
that contains undisclosed environmental contamination. Accordingly, in the course of acquiring a property, specific risks might not be or might not have
been recognized or correctly evaluated. Thus, we could have overlooked or misjudged legal and/or economic liabilities. These circumstances could lead to
additional costs and could have a material adverse effect on our proceeds from sales and development or rental income of the relevant properties, for
which we may not be entitled to any recourse against the vendor, and any contractual, legal, insurance or other remedies may be insufficient. In addition,
after the acquisition of a property by us, the market in which the acquired property is located may experience unexpected changes that materially
adversely affect the property’s value. For these reasons, among others, our property acquisitions may cause us to experience significant losses. The
occupancy of rental properties that we acquire may decline during our ownership, and rents that are in effect at the time a rental property is acquired may
decline thereafter. For these reasons, among others, our property acquisitions may cause us to experience significant losses. If we are unable to manage
our growth and integrate our acquisitions effectively, our investments, operating results and financial condition could be materially adversely affected.
Risks Related to Master-Planned Communities
Before a master-planned community generates any revenues, material expenditures are incurred to acquire land, obtain development approvals and
construct significant portions of project infrastructure, amenities, model homes and sales facilities. It generally takes several years for a master-planned
community development to achieve cumulative positive cash flow. If we are unable to develop and market our master-planned communities successfully
and generate positive cash flows from these operations in a timely manner, this may have a material adverse effect on our business and results of
operations.
Dream Unlimited Corp. – December 31, 2024 | 15
Real Estate Ownership
An investment in real estate is relatively illiquid. Such illiquidity tends to limit our ability to vary our commercial property portfolio promptly in response to
changing economic or investment conditions. In recessionary times, it may be difficult to dispose of certain types of real estate. The costs of holding real
estate are considerable and during an economic recession we may be faced with ongoing expenditures with a declining prospect of incoming receipts. In
such circumstances, it may be necessary to dispose of properties at lower prices in order to generate sufficient cash for operations.
Certain significant expenditures (e.g., property taxes, maintenance costs, mortgage payments, insurance costs and related charges) must be made
regardless of whether or not a property is producing sufficient income to pay such expenses. In order to retain desirable rentable space and to generate
adequate revenue over the long term, properties must be maintained or, in some cases, improved to meet market demand. Maintaining a rental property
in accordance with market standards can entail significant costs, which may not be able to be passed on to tenants. Numerous factors, including the age of
the relevant building structure, the material and substances used at the time of construction, or currently unknown building code violations, could result in
substantial unbudgeted costs for refurbishment or modernization. Any failure by us to ensure appropriate maintenance and refurbishment work is
undertaken could materially adversely affect the rental income that we earn from such properties; for example, such a failure could entitle tenants to
withhold or reduce rental payments or even terminate existing leases. Any such event could have an adverse effect on our cash flows, financial condition
and results of operations.
Returns on real estate and real estate related assets and investments are generally subject to a number of factors and risks, including changes in general
economic conditions (which could affect the availability, terms and cost of mortgage financings and other types of credit), changes in local economic
conditions (such as an oversupply of properties or a reduction in demand for real estate in a particular area), changes in government policy, the
attractiveness of properties to potential tenants or purchasers, competition with other landlords with similar available space, and the ability of the owner
to provide adequate maintenance at competitive costs. These factors and risks could cause fluctuations in the value of the real estate and real estate
related assets and investments owned by us, or in the value of the real estate securing mortgages and other loans our subsidiaries may issue. These
fluctuations could materially adversely affect us.
The revenue properties in the various Dream Entities' investment portfolios generate income through rent received from tenants. Upon the expiry of any
lease, there can be no assurance that the lease will be renewed or the tenant replaced for a number of reasons. Furthermore, the terms of any subsequent
lease may be less favourable than those of the existing lease. The Dream Entities’ income and cash flows could be adversely affected if tenants were to
become unable to meet their obligations under their leases or if a significant amount of available space in any particular property could not be leased on
economically favourable lease terms. In the event of default by a tenant, they may experience delays or limitations in enforcing their rights as lessor and
incur substantial costs in protecting their investments. Furthermore, at any time, a tenant may seek the protection of bankruptcy, insolvency or similar
laws, which could result in the rejection and termination of the lease of the tenant and, thereby, cause a reduction in the cash flows available to the other
Dream Entities that may adversely affect the asset management revenue or distributions we receive from the other Dream Entities.
Rollover of Leases
Revenue properties generate income through rent received from tenants. Upon the expiry of any lease, there can be no assurance that the lease will be
renewed or the tenant replaced for a number of reasons. Furthermore, the terms of any subsequent lease may be less favourable than those of the
existing lease. Our cash flows and financial position could be adversely affected if tenants were to become unable to meet their obligations under their
leases or if a significant amount of available space in our revenue properties could not be leased on economically favourable lease terms. In the event of
default by a tenant, we may experience delays or limitations in enforcing our rights as lessor and incur substantial costs in protecting our investment. In
addition, at any time, a tenant may seek the protection of bankruptcy, insolvency or similar laws, which could result in the rejection and termination of the
lease of the tenant and, thereby, cause a reduction in the cash flows available to us.
Market Conditions
Revenue properties are subject to economic and other factors affecting the real estate markets in the geographic areas where we own and manage
properties. These factors include government policies, demographics and employment patterns, the affordability of rental properties, competitive leasing
rates and long-term interest and inflation rates. These factors may differ from those affecting the real estate markets in other regions. If real estate
conditions in areas where these properties are located decline relative to real estate conditions in other regions, our cash flows and financial condition
may be more adversely affected than those of companies that have more geographically diversified portfolios of properties.
Residential Rental Business Risk
Purchaser demand for residential rentals is cyclical and is affected by changes in general market and economic conditions, such as consumer confidence,
employment levels, availability of financing for home buyers, interest rates, demographic trends, housing supply and housing demand. As a landlord in its
properties that include rental apartments, the Company is subject to the risks inherent in the multi-unit residential rental business, including, but not
limited to, fluctuations in occupancy levels, individual credit risk, heightened reputation risk, tenant privacy concerns, potential changes to rent control
regulations, increases in operating costs including the costs of utilities and the imposition of new taxes or increased property taxes. In addition, multi-
family rental properties are subject to rent control legislation in Ontario. The legislation in various degrees imposes restrictions on the ability of a landlord
to increase rents above an annually prescribed guideline or requires the landlord to give tenants sufficient notice prior to an increase in rent, or restricts
the frequency of rent increases permitted during the year. The lack of availability of affordable housing and related housing policy and regulations is
continuing to increase in prominence as a topic of concern at the various levels of government. The Company may be exposed to the risk of the
implementation of, or amendments to, existing legislative rent controls in the markets in which it operates, which may have an adverse impact on our
operations and we may incur costs that will not be fully recoverable from rents charged to tenants. Multi-family rental business risk may result in a
significant loss of earnings to the Company; however, to mitigate these risks, the Company portfolio includes well located and professionally managed
properties.
Dream Unlimited Corp. – December 31, 2024 | 16
Sales Risks
Home and condominium buyers typically finance their home or condominium acquisitions through lenders providing mortgage financing. Increases in
mortgage rates or decreases in the availability of mortgage financing could depress the market for new condominiums because of the increased monthly
mortgage costs to potential buyers. In addition, increases in mortgage rates and other economic factors may negatively impact the capacity of prospective
buyers to close on the acquisition of our units, resulting in buyers defaulting on their purchase agreements and providing us with a gain limited to the
purchase agreement deposit. In such cases, we face the risk that we may need to sell the units at lower prices than expected, and that the deposit that we
withheld from any defaulting buyers will not cover the loss in sales price of such units. Even if potential customers do not need financing, changes in
mortgage interest rates and mortgage availability could make it harder for them to sell their existing homes to potential buyers who need financing, which
would result in reduced demand for new homes. As a result, rising mortgage rates and reduced mortgage availability could adversely affect the Company’s
ability to sell new condominiums and the price at which it can sell them. Regulatory Risks
The real estate development process is subject to a variety of laws and regulations. In particular, governmental authorities regulate such matters as zoning
and permitted land uses, levels of density and building standards. We will have to continue to obtain approvals from various governmental authorities and
comply with local, provincial and federal laws, including laws and regulations concerning the protection of the environment in connection with such
development projects. Obtaining such approvals and complying with such laws and regulations may result in delays which, may cause us to incur additional
costs that impact the profitability of a development project, or may restrict development activity altogether with respect to a particular project.
In addition, certain private funds that operate in the United States in which we hold interests are registered with the Securities and Exchange Commission
(“SEC”), and are therefore subject to the regulations of the SEC. Any failure of such private funds to adhere to or abide by such applicable securities
regulations may result in fines or other enforcement action by the SEC, which could result in significant financial and reputational costs for such funds and
adversely affect the value of our investment in such funds.
Environmental and Climate Change Risks
As an owner of real property, we are subject to various federal, provincial or state, and municipal laws relating to environmental matters. Such laws
provide a range of potential liability, including potentially significant penalties, and potential liability for the costs of removal or remediation of certain
hazardous substances. The presence of such substances, if any, could adversely affect our ability to sell or redevelop such real estate or to borrow using
such real estate as collateral and, potentially, could also result in civil claims against us. In order to obtain financing for the purchase of a new property
through traditional channels, we may be requested to arrange for an environmental audit to be conducted. Although such an audit provides us and our
lenders with some assurance, we may become subject to liability for undetected pollution or other environmental hazards on our properties against which
we cannot insure, or against which we may elect not to insure where premium costs are disproportionate to our perception of relative risk.
We have formal policies and procedures to review and monitor environmental exposure. In 2021, we became an official supporter of the Task Force on
Climate-related Financial Disclosures ("TCFD"), and will develop a plan to systematically assess climate change-related risk around the four TCFD core
reporting areas, being governance, strategy, risk management, and metrics and targets.
Climate change continues to attract the focus of governments, investors and the general public as an important threat, given that the emission of
greenhouse gases and other activities continue to negatively impact the planet. We face the risk that our properties or tenants will be subject to
government initiatives aimed at countering climate change, such as reduction of greenhouse gas emissions, which could impose constraints on our
operational flexibility or cause us or our tenants to incur financial costs to comply with various reforms. Any failure to adhere and adapt to climate change
reform could result in fines or adversely affect our reputation, operations, or financial performance. Furthermore, our properties or tenants may be
exposed to the impact of events caused by climate change, such as natural disasters and increasingly frequent and severe weather conditions. Such events
could interrupt our operations and activities, damage our properties, and potentially decrease our property values or require us to incur additional
expenses including an increase in insurance costs to insure our properties against natural disasters and severe weather.
On June 20, 2024, the Canadian federal government enacted Bill C-59, which contains anti-greenwashing amendments to the Competition Act to regulate
misleading environmental claims. In addition, Bill C-59 provides third parties with a private right of action, with leave from the Competition Tribunal, as of
June 20, 2025, for environmental claims that are alleged to have violated the misleading advertising provisions of the Act. Significant administrative
monetary penalties may be imposed if a representation made in the Company’s marketing or promotional materials regarding the environmental impact
of the Company’s business activities is challenged for not having adequate and proper substantiation in accordance with internationally recognized
methodologies.
Home Warranty and Construction Defect Claims
As a homebuilder, we are subject to construction defect and home warranty claims arising in the ordinary course of our business. These claims are
common in the homebuilding industry and can be costly. Where we act as the general contractor, we will be responsible for the performance of the entire
contract, including work assigned to subcontractors. Claims may be asserted against us for construction defects, personal injury or property damage
caused by the subcontractors, and if successful these claims give rise to liability. Where we hire a general contractor, if there are unforeseen events such as
the bankruptcy of, or an uninsured or under-insured loss claimed against our general contractor, we will sometimes become responsible for the losses or
other obligations of the general contractor. The costs of insuring against construction defect and product liability claims are high, and the amount of
coverage offered by insurance companies may be limited. There can be no assurance that this coverage will not be further restricted and become more
costly. If we are not able to obtain adequate insurance against these claims in the future, our business and results of operations may be adversely affected.
Dream Unlimited Corp. – December 31, 2024 | 17
Seasonality
The nature of our land development and housing business is inherently seasonal as it depends on sales of specific projects dictated by the marketplace and
the availability of buyers as well as weather-related delays. We have historically experienced, and we expect that we will continue to experience, variability
in our results on a quarterly basis. We generally have more homes under construction, close more home sales and have greater revenues and operating
income from our housing business in the fourth quarter of our fiscal year. Therefore, although new home contracts are obtained throughout the period, a
significant portion of our home closings occur in the second fiscal quarter. Our revenues from our land and housing development business therefore may
fluctuate significantly on a quarterly basis, and we must maintain sufficient liquidity to meet short-term operating requirements.
Asset Management Risks
Our ability to successfully expand our asset management activities is dependent on a number of factors, including certain factors that are outside our
control. In the event that the asset base of our funds were to decline, our management fees could decline as well. In addition, we could experience losses
on our investments of our own capital in our funds as a result of poor performance by our funds. Termination of an asset management agreement in
accordance with its terms by any of our funds would also result in a decline in our management fees.
Our ability to successfully expand asset management activities is dependent on our reputation with clients. We believe that our track record, the expertise
of our asset management team and the performance of the assets currently under management will enable us to continue to develop productive
relationships with these companies and to grow the assets under management. However, if we are not successful in doing so, our business and results of
operations may be adversely affected.
Our revenues from the asset management segment are dependent on agreements with a few key clients. Although we have long-term, stable
management contracts with clients that may only be terminated in limited circumstances, any such termination could have a material adverse effect on
our revenue from management fees.
Loans Receivable and Investment Holdings
Default Risk
If a borrower under a loan or partner guaranteeing a loan defaults under any applicable terms of the loan, we may have the ability to exercise our
enforcement remedies in respect of the loan. Exercising enforcement remedies is a process that requires a significant amount of time to complete, which
could adversely impact our cash flow. In addition, as a result of potential declines in real estate values, there is no assurance that we will be able to recover
all or substantially all of the outstanding principal and interest owed to us in respect of such loans by exercising our enforcement remedies. Our inability to
recover the amounts owed to us in respect of such loans could materially adversely affect us.
There can be no assurance that any of the loans comprising our borrowers' portfolio can or will be renewed at the same interest rates and terms, or in the
same amounts as are currently in effect. The lenders, the borrowers or both may elect to not renew any loan. If loans are renewed, the principal balance,
the interest rates and the other terms and conditions will be subject to negotiation between the lenders and the borrowers at the time of renewal.
In addition, the composition of our loans receivable may vary widely from time to time and may be concentrated by type of security, industry or
geography, resulting in it being less diversified during certain periods. A lack of diversification may result in exposure to economic downturns or other
events that have an adverse and disproportionate effect on particular types of securities, industries or geographies.
Credit Risk and Concentration Risk
There is a risk that a borrower or issuer of an investment security will not make a payment on debt or that an originating lender will not make its payment
on a loan participation interest purchased by us or that an issuer or an investment security or an originating lender retaining the original loan in which it
grants participation may suffer adverse changes in financial condition, lowering the credit quality of its security or participation and increasing the volatility
of the security or participation price. Such changes in the credit quality of a security or participation can affect its liquidity and make it more difficult to sell
if we wish to do so. In addition, with respect to loans made, held or guaranteed by us, a change in the financial condition of a borrower, co-owner or
guarantor could have a negative financial impact on us. Further, credit risk related to financial guarantees provided by Dream arises from the possibility
that a partner or counterparty guarantor defaults on its financial obligations, which could trigger acceleration of indebtedness, including under other
agreements that contain cross-default or cross-acceleration provisions. While our guarantees generally include contingent liabilities on our joint venture
partners’ obligations for certain investments, there is no assurance that the joint venture partners’ and/or our share of assets would be sufficient to satisfy
Dream’s obligations.
While we intend to diversify our investments to ensure that we do not have excessive concentration in any single borrower or counterparty, or related
group of borrowers or counterparties, the Company currently holds various lending instruments and investments with the same counterparty or related
counterparties within its lending portfolio and development and investment holdings portfolio. A change in the financial condition of a single borrower,
guarantor or counterparty or related group of borrowers, guarantor or counterparties to which the Company has concentrated exposure could significantly
and adversely affect the overall performance of the Company.
Financial and Liquidity Risk
Interest Rate Risk
When negotiating or amending and extending financing agreements and instruments, we depend on our ability to agree on terms, including in respect of
interest payments and amortization. In addition, we have entered into, and we may continue to enter into, financing agreements with variable interest
rates. There is a risk that interest rates will increase. To the extent the Company utilizes variable rate debt, this will result in fluctuations in our cost of
borrowing and further increases in interest rates could result in a significant increase in the amount paid by us to service debt that could materially
adversely affect our cash flows.
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We have entered into certain interest rate hedging arrangements to mitigate the impact of interest rates on our business, including project-level debt in
our equity accounted investments, which under IFRS Accounting Standards, is not explicitly consolidated on our balance sheet. Hedging transactions
involve the risk that counterparties, which are generally financial institutions, may be unable to satisfy their obligations. If any counterparties default on
their obligations under the hedging contracts or seek bankruptcy protection, it could have an adverse effect on the Company’s cost of borrowing on
variable rate loans. Our obligations under hedging arrangements may be secured by all or a portion of our assets or cash, the value of which generally must
cover the fair value of the transactions outstanding under the facility by some multiple. If we are unable to provide adequate security to support hedging
arrangements, the Company will remain exposed to interest rate fluctuations. We may from time to time implement other hedging programs in order to
offset the risk of revenue losses and to provide more certainty in our cash flows, should current variable interest rates increase. However, to the extent
that we fail to adequately manage these risks, our financial results and our ability to make interest payments under future financings may be adversely
affected. Increases in interest rates generally cause a decrease in demand for properties. Higher interest rates and more stringent borrowing
requirements, whether mandated by law or required by financial institutions, could have a material adverse effect on our ability to sell any of our
investments.
Financing Risk
Ownership of certain of our assets and the industries in which we operate are capital intensive. We will require access to capital to ensure properties are
maintained, as well as to fund our growth strategy and significant capital expenditures from time to time. There is no assurance that capital will be
available when needed or on favourable terms. Our access to third-party financing will be subject to a number of factors, including general market
conditions, government policies, the market’s perception of our growth potential, our current and expected future earnings and our cash flows and
dividends and cash interest payments, and the market price of our shares. Upon the expiry of the term of the financing of any particular property,
refinancing may not be available or may not be available on reasonable terms. Our failure to access required capital and access such capital on favourable
terms could materially adversely impact our investments, cash flows, operating results or financial condition, our ability to make distributions on the
shares and our ability to implement our growth strategy.
Many of our mortgages are insured under the National Housing Act and administered by the Canada Mortgage and Housing Corporation (“CMHC”). The
use of CMHC insured mortgages allows us to gain access to stable financing at lower interest rates than would be available with conventional mortgage
financing or other forms of debt and manage renewal risk on mortgage due dates. There can be no guarantee that the provisions of the mortgage
insurance program will not be changed in the future so as to make the costs of obtaining mortgage insurance prohibitive or restrict access to the insurance
program. If CMHC financing is not available in the future, we could be required to finance new or renewal mortgages on less favourable terms than our
existing CMHC insured mortgages.
The degree to which we are leveraged could have important consequences to our operations. A high level of debt will reduce the amount of funds
available for the payment of dividends to shareholders; limit our flexibility in planning for and reacting to changes in the economy and in the industry, and
increase our vulnerability to general adverse economic and industry conditions; limit our ability to borrow additional funds, dispose of assets, encumber
our assets and make potential investments; place us at a competitive disadvantage compared to other owners of similar assets that are less leveraged and,
therefore, may be able to take advantage of opportunities that our indebtedness would prevent us from pursuing; make it more likely that a reduction in
our borrowing base following a periodic valuation (or redetermination) could require us to repay a portion of then outstanding borrowings; and impair our
ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other purposes.
Liquidity Risk
Our ability to meet our financial obligations as they become due represents our exposure to liquidity risk. Our principal liquidity needs are to ensure
adequate operating funds are available to fund development costs, to cover leasing costs, overhead and capital expenditures for income generating assets,
to cover costs of debt principal, interest and/or refinancing costs, to provide for resources needed to fund capital calls for existing developments, to
generate a target rate of return on investments and to cover dividend payments. As at December 31, 2024, there were adequate resources to address the
Company's short-term liquidity requirements.
Our ability to meet our future obligations may be impacted by the liquidity risk associated with receiving repayments of our loans, distributions from
equity accounted investments, amounts receivable and other deposits, and cash equivalents on time and in full and the realization of fair value on any
disposition of our non-core properties and investments. If we are unable to meet our obligations as they come due or otherwise renegotiate such
obligations, including amendments to covenants and extension of maturities of our outstanding indebtedness, our ability to continue as a going concern
may be adversely affected.
Real property investments tend to be relatively illiquid, with the degree of liquidity generally fluctuating in relation to demand for and the perceived
desirability of such investments. In recent years, the level of transaction activity and general liquidity in the Company’s primary markets has decreased
considerably. Such illiquidity may limit our ability to vary our portfolio promptly in response to changing economic or investment conditions and may
impact our ability to successfully execute on our business strategies. If we were required to liquidate our real property investments, the proceeds to us
might be significantly less than the aggregate carrying value of our properties.
Management manages liquidity risk by monitoring actual and projected cash flows and liquidity requirements of the Company. Management seeks to
ensure that it has sufficient cash to meet operational needs by maintaining sufficient cash, ensuring availability under its credit facilities and its ability to
lease out vacant properties. The Company mitigates liquidity risk by staggering the maturity date of its borrowing, maintaining borrowing relationships
with different lenders and maintaining sufficient availability on its credit facilities. The failure of the Company to adequately manage its liquidity risk could
have an adverse effect on our financial condition and results of operation and decrease the amount of cash available for distribution to shareholders and
cause the price of our Subordinate Voting Shares to decrease.
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Ability to Obtain Performance, Payment, Completion and Surety Bonds and Letters of Credit
We may often be required to provide performance, payment, completion and surety bonds or letters of credit to secure the completion of our
construction contracts, development agreements and other arrangements. We have obtained facilities to provide the required volume of performance,
payment, completion and surety bonds and letters of credit for our expected growth in the medium term; however, unexpected growth may require
additional facilities. Our ability to obtain further performance, payment, completion and surety bonds and letters of credit primarily depends on our
perceived creditworthiness, capitalization, working capital, past performance and claims record, management expertise and certain external factors,
including the capacity of the performance bond markets. If our future claims record or our providers' requirements or policies are different, if we cannot
obtain the necessary consent from lenders to renew or amend our existing facilities, or if the market's capacity to provide performance and completion
bonds is not sufficient, we could be unable to obtain further performance, payment, completion and surety bonds or letters of credit when required, which
could have a material adverse effect on our business, financial condition and results of operations.
Financial Covenants
Our credit facilities and other financial instruments contain customary covenants and conditions, including, among others, compliance with various
financial ratios and restrictions upon the incurrence of additional indebtedness and liens on our properties. These covenants may limit our flexibility in
conducting our operations. Furthermore, the terms of some of this indebtedness may adversely affect our ability to consummate transactions that result in
a change of control. Existing mortgages may also contain customary negative covenants such as those that limit our, our partners' or our affiliates’ ability,
without the prior consent of the lender, to further mortgage the applicable property. If we, our partners or our affiliates were to breach covenants in these
debt agreements, the lender could declare a default and require us to repay the debt immediately. If we fail to make such repayment in a timely manner,
the lender may be entitled to take possession of any property securing the loan. If the lenders declared a default under our credit facilities, all amounts
outstanding thereunder would become due and payable and our ability to borrow in future periods could be restricted. In addition, any such default on
indebtedness in excess of a stipulated amount, unless waived, could constitute a default under other facilities or financial instruments, giving rise to the
acceleration of such indebtedness.
Other Applicable Risks
Economic Environment
Uncertainty over whether the economy will be adversely affected by inflation or stagflation, and the systemic impact of volatile energy costs and
geopolitical issues, may contribute to increased market volatility. Such economic uncertainties and market challenges, which may result from a continued
or exacerbated general economic slowdown, including as a result of the imposition of duties, tariffs and other trade protection measures and their effects
could materially and adversely affect the Company’s ability to generate revenues, thereby increasing operating costs and reducing its earnings. A difficult
operating environment could also have a material adverse effect on the ability of the Company to maintain occupancy rates at its properties, which could
harm the Company’s financial condition. Under such economic conditions, the Company’s tenants may be unable to meet their rental payments and other
obligations due to the Company, which could have a material adverse effect on the Company’s financial position.
Increased inflation could have a more pronounced negative impact on any variable rate debt the Company is subject to or incurs in the future and on its
results of operations. Similarly, during periods of high inflation, annual rent increases may be less than the rate of inflation on a continual basis. Substantial
inflationary pressures and increased costs may have an adverse impact on the Company’s tenants if increases in their operating expenses exceed increases
in revenue. This may adversely affect the tenants’ ability to pay rent, which could negatively affect the Company’s financial condition.
The imposition of duties, tariffs, quotas, embargoes, and other trade restrictions (including any retaliation to such measures) could result in slow economic
growth and could materially disrupt the supply chain and negatively impact the economy. This, in turn, could adversely affect the rental market generally
including tenants' ability to pay rent, and increase the cost or reduce the supply of goods, leading to higher construction costs and potential cost overruns
for projects currently under construction or development. Trade barriers could also increase the likelihood and intensity of other risks discussed in this
MD&A, and our Annual Report and Annual Information Form. The eventuality, timing, rates and details of any tariffs or non-tariff actions are uncertain and
the ultimate effects of any retaliatory tariffs or other actions are difficult to assess at this time. We cannot predict whether we will be able to avoid or
mitigate the impact of these changes. Even if temporary, these risks, along with any other taxes or other trade barriers, could have an adverse effect on
our business, results of operations and financial condition.
The Company is also subject to the risk that if the real estate market ceases to attract the same level of capital investment in the future that it attracts at
the time of its real estate purchases, or the number of investors seeking to acquire properties decreases, the value of the Company’s investments may not
appreciate or may depreciate. Accordingly, the Company’s operations and financial condition could be materially and adversely affected to the extent that
an economic slowdown or downturn occurs, is prolonged or becomes more severe.
Public Health Risk
Public health crises, pandemics and epidemics, could adversely impact our and our customers’ businesses, and thereby our and our customers’ ability to
meet payment obligations, by disrupting supply chains and transactional activities, causing reduced traffic at our properties, leading to mobility restrictions
and other quarantine measures, precipitating increased government regulation and negatively impacting local, national or global economies. Public health
crises, pandemics and epidemics may also increase the volatility in financial markets and impact debt and equity markets, which could affect our ability to
access capital. All of these factors may have a material adverse effect on our business, results of operations and our ability to make cash distributions to
unitholders.
Cyber Security Risk
Cyber security has become an increasing area of focus for issuers and businesses in Canada and globally, as reliance on digital technologies to conduct
business operations has grown significantly. As we continue to increase our dependence on information technologies to conduct our operations, the risks
associated with cyber security also increase. We rely on management information systems and computer control systems. Business disruptions, utility
outages and information technology system and network disruptions due to cyber-attacks could seriously harm our operations and materially adversely
affect our operating results. Cyber-attacks against organizations are increasing in sophistication and can include but are not limited to intrusions into
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operating systems, theft of personal or other sensitive data and/or cause disruptions to business operations. Such cyber-attacks could compromise the
Company's confidential information as well as that of the Company's employees, customers and third parties with whom the Company interacts and may
result in negative consequences, including remediation costs, loss of revenue, additional regulatory scrutiny, litigation and reputational damage.
Our exposure to cyber security risks includes exposure through third parties on whose systems we place significant reliance for the conduct of our
business. We have implemented security procedures and measures in order to protect our systems and information from being vulnerable to cyber
attacks. However, we may not have the resources or technical sophistication to anticipate, prevent, or recover from rapidly evolving types of cyber-attacks.
Compromises to our information and control systems could have severe financial and other business implications.
Tax Risk
We are subject to income taxes both federally and provincially in Canada and the United States. Significant judgments and estimates are required in the
determination of our tax balances. Our income tax expense and deferred tax liabilities reflect management’s best estimate of current and future taxes to
be paid. We are subject to tax audits from various government and regulatory agencies on an ongoing basis. As a result, from time to time, taxing
authorities may disagree with the interpretation and application of tax laws taken by us in our tax filings. These reassessments could have a material
impact on us in future periods.
The determination of our income and other tax liabilities requires interpretation of complex laws and regulations, often involving multiple jurisdictions.
Judgment is required in determining whether deferred income tax assets should be recognized on the consolidated statements of financial position.
Deferred income tax assets are recognized to the extent that we believe it is probable that the assets can be recovered. Furthermore, deferred income tax
balances are recorded using enacted or substantively enacted future income tax rates. Changes in enacted income tax rates are not within the control of
management. However, any such changes in income tax rates may result in actual income tax amounts that may differ significantly from estimates
recorded in deferred tax balances.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation
and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Certain proposed amendments to the Tax Act would have the effect of denying the deductibility of net interest expense and financing expenses in certain
circumstances, including the computation of taxable income by a corporation, partnership or a trust. If these proposed amendments are enacted as
proposed, the amount of interest and finance expenses deductible by the Company and subsidiaries owned by the Company may be reduced and/or the
Company and subsidiaries owned by the Company may be required to include in its income its share of denied net interest and financing expenses of its
subsidiary partnerships.
Adverse Weather Conditions and Natural Disasters
Adverse weather conditions and natural disasters such as hurricanes, tornadoes, earthquakes, droughts, floods, fires, extreme cold, snow and other
natural occurrences could have a significant effect on our ability to develop land. These adverse weather conditions and natural disasters could cause
delays and increase costs in the construction of new homes and the development of new communities. If insurance is unavailable to us or is unavailable on
acceptable terms, or if the insurance is not adequate to cover business interruption or losses resulting from adverse weather or natural disasters, our
business and results of operations could be adversely affected. In addition, damage to new homes caused by adverse weather or a natural disaster could
cause our insurance costs to increase.
Adverse weather conditions and natural disasters could also limit the ability to generate or sell power. In certain cases, some events may not excuse us
from performing obligations pursuant to agreements with third parties, and we may be liable for damages or suffer further losses as a result. In addition,
many of our power generation assets are located in remote areas, which makes access for repair of damage difficult.
Uninsured Losses
The Company carries comprehensive general liability, environmental, fire, flood, extended coverage and rental loss insurance with policy specifications,
limits and deductibles customarily carried for similar properties. There are, however, certain types of risks (including, but not limited to, environmental
contamination or catastrophic events such as war or acts of terrorism), which are either uninsurable, in whole or in part, or not insurable on an
economically viable basis. Should an uninsured or underinsured loss occur, the Company could lose its investment in, and anticipated profits and cash
flows from, one or more of its properties, and the Company would continue to be obliged to repay any recourse mortgage indebtedness on such
properties.
Key Personnel
The Company's executive and other senior officers have a significant role in our success and oversee the execution of our strategy. Our ability to retain our
management team or attract suitable replacements should any members of the management group leave is dependent on, among other things, the
competitive nature of the employment market. The Company has experienced departures of key professionals in the past and may do so in the future, and
we cannot predict the impact that any such departures will have on its ability to achieve its objectives. The loss of services from key members of the
management team or a limitation in their availability could adversely impact our financial condition and cash flow. We rely on the services of key personnel
on our executive team, including our President and CRO, Chief Financial Officer, President of Asset Management, and the Company's directors. The loss of
their services could have an adverse effect on the Company. We mitigate key personnel risk through succession planning, but do not maintain key
personnel insurance.
Changes in Law
We are subject to laws and regulations governing the ownership and leasing of real property (including the expropriation thereof), employment standards,
environmental matters, taxes and other matters. It is possible that future changes in such laws or regulations or changes in their application, enforcement
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or regulatory interpretation could result in changes in the legal requirements affecting commercial properties (including with retroactive effect). Any
changes in the laws to which we are subject or in the political environment in the jurisdictions where the commercial properties in which we have an
interest are operated could adversely affect us and the revenues we are able to generate from our investments.
Impact Investment Strategy Risk
Dream Impact Trust has deployed its capital into impact investment opportunities that are aligned with Dream Impact Trust’s three impact verticals.
Dream Impact Trust's ability to achieve its impact investment objectives will be dependent on its ability to successfully identify and realize investment
opportunities that align with its investment framework. There can be no assurance that Dream Impact Trust will achieve these objectives or that its impact
investments or developments will generate positive returns in a timely manner. In addition, Dream Impact Trust has implemented its own impact investing
framework, which it believes is aligned with existing frameworks in this field. However, these may or may not be interpreted differently from other issuers
or other participants in the impact investing space. While Dream Impact Trust intends to responsibly create positive social and environmental change in its
communities, the success of its impact investment strategy and its ability to generate market returns will be based on various and unpredictable factors,
including investor perceptions and reactions and future economic or investment conditions.
Adverse Global Market, Economic and Political Conditions
Adverse Canadian, U.S., European and global market, economic and political conditions, including dislocations and volatility in credit markets and general
global economic uncertainty, unexpected geopolitical events, including disputes between nations, war, terrorism or other acts of violence, and
international sanctions, could have a material adverse effect on our business, results of operations and financial condition with the potential to impact,
among others: (i) the value of our properties; (ii) the availability or the terms of financing that we have or may anticipate utilizing; (iii) our ability to make
principal and interest payments on, or refinance any outstanding debt when due; (iv) the occupancy rates in our properties; and (v) the ability of our
tenants to enter into new leasing transactions or to satisfy rental payments under existing leases.
Continued concerns about the uncertainty over whether the economy will be adversely affected by geopolitical events may contribute to increased
market volatility and weakened business and consumer confidence. The occurrence of war or hostilities between countries, including the conflict between
Russia and Ukraine, or threat of terrorist activities and the responses to and results of these activities, could adversely impact the Company, its facilities,
the financial markets and general economic conditions. In response to the conflict between Russia and Ukraine, countries in which we operate have
implemented economic sanctions against Russia and may impose further sanctions or other restrictive actions against governmental or other entities in
Russia or elsewhere. Any of the above factors, including sanctions and other governmental actions, could affect the financial condition of our tenants and
may have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our
Subordinate Voting Shares to decline.
Competition for Investment Opportunities
Our performance depends on our ability to source or acquire assets, including real estate and development assets, real estate, renewable power projects,
mortgage and other loans and other investment opportunities at favourable yields or potential rates of return. We will compete with other investors,
managers, corporations, institutions, developers and owners of real estate for investment opportunities in the financing and/or acquisition of assets,
including real estate development, real estate and other lending. Certain competitors may have a higher risk tolerance, greater financial and other
resources and greater operating flexibility than us, allowing these competitors to more aggressively pursue investment opportunities. Accordingly, we may
be unable to acquire sufficient real property, real property lending assets, renewable power projects or other assets or investment opportunities at
favourable yields or terms or at all.
Ability to Source Suitable Investments
Our strategy involves investing in, and sourcing for our asset management clients, suitable investment opportunities, pursuing such opportunities,
consummating investments and, in the case of real estate property and renewable power projects, effectively operating and leasing such properties and
assets. There can be no assurance as to the pace of growth through investments and/or acquisitions or that we or the other Dream Entities will be able to
acquire assets on an accretive basis, which could adversely impact our financial performance. There can be no assurance that we will be able to find
attractive opportunities toward which to deploy capital or the proceeds of dispositions, or that we will be able to replace the revenue from disposed
investments with revenue from newly acquired investments on satisfactory terms.
Acquisitions are subject to commercial risks and satisfaction of closing conditions. Such acquisitions may not be completed or, if completed, may not be on
terms that are as favourable as initially negotiated. In the event that we do not complete an announced acquisition, it may have an adverse effect on our
operating results.
Market Price of Shares
The trading price of our Subordinate Voting Shares in the open market is subject to volatility and cannot be predicted. Our shareholders may not be able to
resell their Subordinate Voting Shares at or above the price at which they purchased their Subordinate Voting Shares due to such trading price fluctuations.
The trading price could fluctuate significantly in response to factors both related and unrelated to our operating performance and/or future prospects,
including, but not limited to: (i) variations in our quarterly or annual operating results and financial condition; (ii) changes in government laws, rules or
regulations affecting our businesses; (iii) material announcements by our competitors; (iv) market conditions and events specific to the industries in which
we operate; (v) changes in general economic conditions; (vi) differences between our actual financial and operating results and those expected by
investors and analysts; (vii) changes in analysts’ recommendations or earnings projections; (viii) changes in the extent of analysts’ interest in covering the
Company; (ix) the depth and liquidity of the market for our shares; (x) dilution from the issuance of additional equity; (xi) investor perception of our
businesses and industries; (xii) investment restrictions; (xiii) our dividend policy; (xiv) the departure of key executives; (xv) sales of Subordinate Voting
Shares by senior management or significant shareholders; and (xvi) the materialization of other risks described in this section.
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Dividends
The payment of dividends is dependent on cash flows of the business and subject to change. Whether Dream will pay dividends on its shares, and the
timing and amount of those dividends, will be subject to approval and declaration by the Board, and will depend on a variety of factors, including the
projected earnings and cash flow, cash requirements and financial condition of Dream and other factors deemed relevant by the Board. Although we
intend to make and pay dividends in accordance with our policies, there can be no assurance that Dream will be in position to pay dividends in the future.
Forward-Looking Information
Certain information herein contains or incorporates statements that constitute forward-looking information within the meaning of applicable securities
legislation, including, but not limited to, statements regarding our objectives and strategies to achieve those objectives; our beliefs, plans, estimates,
projections and intentions, and similar statements concerning anticipated future events, future growth, expected net proceeds from sales or transactions,
results of operations, performance, business prospects and opportunities, acquisitions or divestitures, tenant base, future maintenance and development
plans and costs, capital investments, financing, the availability of financing sources, income taxes, vacancy and leasing assumptions, litigation and the real
estate industry in general; as well as specific statements in respect of: anticipated levels and fluctuation of development, asset management and other
management fees in future periods, including our expectation that such fees will increase as our existing developments progress through construction
milestones; our development and redevelopment plans and proposals for current and future projects, including the quality of our assets, projected sizes,
density, timelines, uses and tenants; the redevelopment potential of our assets and the assets held by Dream Impact Trust; anticipated current and future
unit sales and occupancies of our condominium and mixed-use projects, including anticipated timing of closings of condominium unit sales, and resulting
revenue; the contribution of our development segment to our earnings and income in future periods; our expectation that recurring income will increase
in the future, including as development properties are completed and held for the long term, and the future composition of our recurring income portfolio,
including the growth of certain segments; expected benefits from recurring income and developments, including stability and financial flexibility; our
expectation that FFO from stabilized assets will increase as the Postmark Hotel approaches stabilization; the supplementary information in relation to the
development and redevelopment projects in our portfolio, including the projects that we expect to be completed and added to our recurring income
segment, total units at completion, square footage, residential GFA, rental, commercial and retail GLA, occupancy/stabilization dates, sustainability
features, and future GLA under development and other project features; our expectation that we will add 2,635 apartment units comprising 2.2 million
million square feet of residential GFA to our recurring income portfolio over the next three years; expectations regarding our development plans (including
occupancy status) for Alpine Park, Zibi, Canary Landing, Odenak (formerly Dream LeBreton), Holmwood, Brightwater, and Forma projects, as well as other
projects; the approval of our master-planned communities; our acquisition and development pipeline, including in respect of the Dream group of
companies; our ability to monitor and adjust our inventory levels and development projects based on market conditions; our capital management
objectives; our ability to mitigate certain risks; Dream’s intention to hold stabilized income properties in core markets and expectations that such assets
will grow over time; Dream's ability to source, structure and execute investment opportunities; the goal of improving Dream's business' safety, value and
earnings quality; expectations regarding affordable units; the attainment of zero carbon energy heating and cooling at Zibi in accordance with the One
Planet Living® sustainability framework; expectations regarding the sale of assets, including assets being developed for sale and timing thereof; our
expected sources of funding of current liabilities, including the sale of assets, and of short-term liquidity requirements, including through cash on hand,
cash from operating activities, working capital reserves and operating debt facilities; Dream's ability to maintain a conservative debt level; planned debt
refinancing and repayments, expected sources of funding for maturing debt and timing of maturities; our expectations and ability to finalize the
refinancing of our indebtedness including our $225 million term facility and $320 million Western Canada operating line, including timing and extension
terms; our expectation that cash from operations and recurring income will provide cash needed to fund operating expenses and debt service
requirements; our expectation that we will increase our available liquidity over the next several years and the uses thereof; and our overall financial
performance, profitability and liquidity for future periods and years. Forward-looking statements generally can be identified by words such as "objective",
"may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "could", "likely", "plan", "forecast", "project", "continue", "target",
"outlook" or similar expressions suggesting future outcomes or events.
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 the
Company’s control, which could cause actual results to differ materially from those disclosed in or implied by such forward-looking information. There can
be no assurance that actual results will be consistent with these forward-looking statements. The assumptions, which may prove to be incorrect, include,
but are not limited to, the various assumptions set forth herein as well as assumptions relating to: that no unforeseen changes in the legislative and
operating framework for the respective businesses will occur; that there will be no material change to environmental regulations that may adversely
impact our business; that we will meet our future objectives, priorities and growth targets; that we will receive the licenses, permits or approvals necessary
in connection with our projects; that duties, tariffs and other trade restrictions, if any, will not materially impact our business;; that we will have access to
adequate capital to fund our future projects, plans and any potential future acquisitions; that our future projects and plans will proceed as anticipated;
that we are able to identify high-quality investment opportunities; that we will find suitable partners with which to enter into joint ventures or
partnerships; that we do not incur any material environmental liabilities and that future market, demographic and economic conditions will develop as
expected; and the nature of development lands held and the development potential of such lands, including our ability to bring new developments to
market, general economic and business conditions remaining in line with expectations, including low unemployment, interest rates and inflation remaining
in line with management expectations, positive net migration, oil and gas commodity prices, our business strategy, including geographic focus, anticipated
sales volumes, performance of our underlying business segments and conditions in the GTA and Western Canada land, commercial and housing markets.
All the forward-looking statements contained in this MD&A are based on what we believe are reasonable assumptions; there can be no assurance that
actual results will be consistent with these forward-looking statements. Factors or risks that could cause actual results to differ materially from those set
forth in the forward-looking statements and information include, but are not limited to, adverse changes in general and local economic and business
conditions; inflation or stagflation; the impact of public health crises and epidemics; risks associated with unexpected or ongoing geopolitical events,
including disputes between nations, terrorism or other acts of violence, international sanctions and the disruption of movement of goods and services
across jurisdictions; risks related to the imposition of duties, tariffs and other trade restrictions and their impacts; risks related to a potential economic
slowdown in certain of the jurisdictions in which we operate and the effect inflation and any such economic slowdown may have on market conditions and
Dream Unlimited Corp. – December 31, 2024 | 23
lease rates; employment levels; regulatory risks, mortgage and interest rates and regulations; environmental risks; consumer confidence; seasonality;
adverse weather conditions; reliance on key clients and personnel and competition; and other risks and factors referenced under "Risk Factors" in this
MD&A and described from time to time in the documents filed by the Company with the securities regulators.
All forward-looking information is as of February 25, 2025. Dream does not undertake to update any such forward-looking information, whether as a result
of new information, future events or otherwise, except as required by applicable law. Additional information about these assumptions and risks and
uncertainties is contained in our filings with securities regulators. Certain filings are also available on our website at www.dream.ca.
Dream Unlimited Corp. – December 31, 2024 | 24
Additional Information - Consolidated Dream
Segmented Assets and Liabilities
December 31, 2024
Recurring
income
Development
Corporate and
other
Consolidated
Dream
Less: Dream
Impact Trust(1)
Less:
Consolidation
and fair value
adjustments(1)
and Dream
standalone
adjustments(1)
Dream
standalone(1)
Assets
Cash and cash equivalents
$
28,490 $
23,250 $
32,141 $
83,881 $
16,217 $
(3,217) $
70,881
Accounts receivable
60,333
219,162
5,249
284,744
2,699
(36,012)
318,057
Other financial assets
15,142
25,021
18,457
58,620
12,161
2,706
43,753
Housing inventory
—
53,763
—
53,763
—
—
53,763
Condominium inventory
—
300,950
—
300,950
—
(66,543)
367,493
Land inventory
—
469,458
—
469,458
—
(7,975)
477,433
Investment properties
1,663,833
178,680
—
1,842,513
249,534
759,033
833,946
Recreational properties
84,707
—
—
84,707
—
—
84,707
Equity accounted investments
379,136
278,772
—
657,908
382,489
233,216
42,203
Capital and other operating assets
41,402
35,963
7,143
84,508
525
35,459
48,524
Intangible asset
—
—
—
—
—
(43,000)
43,000
Dream Group Holdings(2)
—
—
—
—
—
(404,666)
404,666
Total assets
$
2,273,043 $
1,585,019 $
62,990 $
3,921,052 $
663,625 $
469,001 $
2,788,426
Liabilities
Accounts payable and other liabilities
$
51,664 $
135,415 $
24,020 $
211,099 $
10,516 $
(74,243) $
274,826
Income and other taxes payable(3)
—
—
19,322
19,322
—
—
19,322
Provision for real estate development costs
—
75,825
—
75,825
—
676
75,149
Debt
1,234,505
343,215
292,646
1,870,366
272,664
551,272
1,046,430
Dream Impact Trust units(3)
—
—
43,711
43,711
—
43,711
—
Dream Impact Fund units(3)
—
—
126,375
126,375
—
126,375
—
Deferred income taxes(3)
—
—
72,825
72,825
(20,796)
29,729
63,892
Total liabilities
$
1,286,169 $
554,455 $
578,899 $
2,419,523 $
262,384 $
677,520 $
1,479,619
Total equity
$
986,874 $
1,030,564 $
(515,909) $
1,501,529 $
401,241 $
(208,519) $
1,308,807
(1) Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for the definition of Dream Impact Trust and consolidation and fair value adjustments, Dream standalone
adjustments and Dream standalone, which are non-GAAP financial measures.
(2) Dream Group Holdings contains investments in Dream Impact Trust, Dream Office REIT, Dream Residential REIT and Dream Impact Fund. The earnings (loss) is presented under share of earnings
(loss) from equity accounted investments on the consolidated statement of earnings.
(3) Certain liabilities are included in Corporate and other as balances are reviewed on a consolidated basis.
Dream Unlimited Corp. – December 31, 2024 | 25
December 31, 2023
Recurring
income
Development
Corporate and
other
Consolidated
Dream
Less: Dream
Impact Trust(1)
Less:
Consolidation
and fair value
adjustments(1)
and Dream
standalone
adjustments(1)
Dream
standalone(1)
Assets
Cash and cash equivalents
$
33,506 $
20,214 $
6,483 $
60,203 $
6,176 $
4,043 $
49,984
Accounts receivable
46,168
221,227
6,646
274,041
3,710
(33,606)
303,937
Other financial assets
60,033
37,550
2,239
99,822
18,250
43,791
37,781
Housing inventory
—
52,747
—
52,747
—
—
52,747
Condominium inventory
—
383,829
—
383,829
—
33,439
350,390
Land inventory
221
458,330
—
458,551
—
—
458,551
Investment properties
1,522,148
197,024
—
1,719,172
278,980
726,840
713,352
Recreational properties
82,898
—
—
82,898
—
—
82,898
Equity accounted investments
395,295
275,735
—
671,030
387,027
241,325
42,678
Capital and other operating assets
9,608
51,663
11,958
73,229
3,717
9,748
59,764
Intangible asset
—
—
—
—
—
(43,000)
43,000
Dream Group Holdings(2)
—
—
—
—
—
(432,538)
432,538
Total assets
$
2,149,877 $
1,698,319 $
27,326 $
3,875,522 $
697,860 $
550,042 $
2,627,620
Liabilities
Accounts payable and other liabilities
$
63,144 $
159,071 $
11,161 $
233,376 $
8,713 $
(449)
225,112
Income and other taxes payable(3)
—
—
79,964
79,964
—
—
79,964
Provision for real estate development costs
17
61,052
—
61,069
—
(946)
62,015
Debt
1,097,068
422,175
291,306
1,810,549
270,114
581,535
958,900
Dream Impact Trust units(3)
—
—
70,779
70,779
—
70,779
—
Dream Impact Fund units(3)
—
—
113,405
113,405
—
113,405
—
Deferred income taxes(3)
—
—
102,321
102,321
(9,624)
30,961
80,984
Total liabilities
$
1,160,229 $
642,298 $
668,936 $
2,471,463 $
269,203 $
795,285 $
1,406,975
Total equity
$
989,648 $
1,056,021 $
(641,610) $
1,404,059 $
428,657 $
(245,243) $
1,220,645
(1) Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for the definition of Dream Impact Trust and consolidation and fair value adjustments, Dream standalone
adjustments and Dream standalone, which are non-GAAP financial measures.
(2) Dream Group Holdings contains investments in Dream Impact Trust, Dream Office REIT, Dream Residential REIT and Dream Impact Fund. The earnings (loss) is presented under share of earnings
(loss) from equity accounted investments on the consolidated statement of earnings.
(3) Certain liabilities are included in Corporate and other as balances are reviewed on a consolidated basis.
Dream Unlimited Corp. – December 31, 2024 | 26
Segmented Statement of Earnings
For the three months ended December 31, 2024
Recurring
income
Development
Corporate and
other
Consolidated
Dream
Less: Dream
Impact Trust(1)
Less:
Consolidation
and fair value
adjustments(1)
and Dream
standalone
adjustments(1)
Dream
standalone(1)
Revenue
$
46,609 $
145,650 $
— $
192,259 $
3,404 $
1,628 $
187,227
Direct operating costs
(25,041)
(93,779)
—
(118,820)
(1,999)
1,028
(117,849)
Gross margin
21,568
51,871
—
73,439
1,405
2,656
69,378
Selling, marketing, depreciation and other
operating costs
(1,233)
(9,104)
—
(10,337)
(920)
1,054
(10,471)
Net margin
20,335
42,767
—
63,102
485
3,710
58,907
Fair value changes in investment properties
5,647
(14,955)
—
(9,308)
(537)
(6,225)
(2,546)
Investment and other income
(79)
4,742
4,746
9,409
316
112
8,981
Interest expense
(11,121)
(4,773)
(5,692)
(21,586)
(4,207)
(3,652)
(13,727)
Gain on disposition of Arapahoe Basin
157,362
—
—
157,362
—
—
157,362
Share of earnings from equity accounted
investments
(37,996)
10,697
—
(27,299)
(6,422)
16,023
(36,900)
Net segment earnings (loss)
134,148
38,478
(946)
171,680
(10,365)
9,968
172,077
General and administrative expenses(2)
—
—
(3,701)
(3,701)
(787)
974
(3,888)
Adjustments related to Dream Impact Trust
units(2)
—
—
3,691
3,691
—
3,691
—
Adjustments related to Dream Impact Fund
units(2)
—
—
(939)
(939)
—
(939)
—
Income tax (expense) recovery(2)
—
—
(41,643)
(41,643)
2,847
80
(44,570)
Net earnings (loss)
$
134,148 $
38,478 $
(43,538) $
129,088 $
(8,305) $
13,774 $
123,619
For the three months ended December 31, 2023
Recurring
income
Development
Corporate and
other
Consolidated
Dream
Less: Dream
Impact Trust(1)
Less:
Consolidation
and fair value
adjustments(1)
and Dream
standalone
adjustments(1)
Dream
standalone(1)
Revenue
$
57,982 $
49,876 $
— $
107,858 $
5,026 $
4,359 $
98,473
Direct operating costs
(32,354)
(38,960)
—
(71,314)
(2,635)
(2,615)
(66,064)
Gross margin
25,628
10,916
—
36,544
2,391
1,744
32,409
Selling, marketing, depreciation and other
operating costs
(2,329)
(7,835)
—
(10,164)
—
259
(10,423)
Net margin
23,299
3,081
—
26,380
2,391
2,003
21,986
Fair value changes in investment properties
(27,218)
(2,232)
—
(29,450)
(11,015)
(15,645)
(2,790)
Investment and other income
393
7,228
(532)
7,089
(1,004)
1,443
6,650
Interest expense
(9,934)
(607)
(4,379)
(14,920)
(4,150)
(3,391)
(7,379)
Share of earnings (loss) from equity accounted
investments
(64,290)
(2,505)
—
(66,795)
(10,432)
23,796
(80,159)
Net segment earnings (loss)
(77,750)
4,965
(4,911)
(77,696)
(24,210)
8,206
(61,692)
General and administrative expenses(2)
—
—
(10,248)
(10,248)
(1,249)
973
(9,972)
Adjustments related to Dream Impact Trust
units(2)
—
—
16,312
16,312
—
16,312
—
Adjustments related to Dream Impact Fund
units(2)
—
—
(5,925)
(5,925)
—
(5,925)
—
Income tax (expense) recovery(2)
—
—
(3,795)
(3,795)
5,753
(12,295)
2,747
Net earnings (loss)
$
(77,750) $
4,965 $
(8,567) $
(81,352) $
(19,706) $
8,206 $
(68,917)
(1) Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for the definition of Dream Impact Trust and consolidation and fair value adjustments, Dream standalone
adjustments and Dream standalone, which are non-GAAP financial measures.
(2) Certain line items are included in Corporate and other as balances are reviewed on a consolidated basis.
Dream Unlimited Corp. – December 31, 2024 | 27
For the year ended December 31, 2024
Recurring
income
Development
Corporate and
other
Consolidated
Dream
Less: Dream
Impact Trust(1)
Less:
Consolidation
and fair value
adjustments(1)
and Dream
standalone
adjustments(1)
Dream
standalone(1)
Revenue
$
221,240 $
403,266 $
— $
624,506 $
17,973 $
91,259 $
515,274
Direct operating costs
(123,080)
(299,769)
—
(422,849)
(9,205)
(87,450)
(326,194)
Gross margin
98,160
103,497
—
201,657
8,768
3,809
189,080
Selling, marketing, depreciation and other
operating costs
(4,165)
(39,279)
—
(43,444)
(920)
(3,237)
(39,287)
Net margin
93,995
64,218
—
158,213
7,848
572
149,793
Fair value changes in investment properties
(19,194)
(5,204)
—
(24,398)
(4,403)
(23,888)
3,893
Investment and other income
620
11,327
5,969
17,916
6,162
(3,919)
15,673
Interest expense
(42,807)
(12,781)
(22,804)
(78,392)
(16,757)
(15,561)
(46,074)
Gain on disposition of Arapahoe Basin
157,362
—
—
157,362
—
—
157,362
Share of earnings from equity accounted
investments
(30,824)
11,693
—
(19,131)
(22,424)
35,327
(32,034)
Net segment earnings (loss)
159,152
69,253
(16,835)
211,570
(29,574)
(7,469)
248,613
General and administrative expenses(2)
—
—
(22,916)
(22,916)
(6,382)
4,205
(20,739)
Adjustments related to Dream Impact Trust
units(2)
—
—
26,891
26,891
—
26,891
—
Adjustments related to Dream Impact Fund
units(2)
—
—
9,828
9,828
—
9,828
—
Income tax (expense) recovery(2)
—
—
(37,515)
(37,515)
9,923
1,246
(48,684)
Net earnings (loss)
$
159,152 $
69,253 $
(40,547) $
187,858 $
(26,033) $
34,701 $
179,190
For the year ended December 31, 2023
Recurring
income
Development
Corporate and
other
Consolidated
Dream
Less: Dream
Impact Trust(1)
Less:
Consolidation
and fair value
adjustments(1)
and Dream
standalone
adjustments(1)
Dream
standalone(1)
Revenue
$
213,343 $
173,604 $
— $
386,947 $
19,484 $
15,346 $
352,117
Direct operating costs
(128,541)
(133,211)
—
(261,752)
(9,707)
(10,773)
(241,272)
Gross margin
84,802
40,393
—
125,195
9,777
4,573
110,845
Selling, marketing, depreciation and other
operating costs
(9,070)
(30,255)
—
(39,325)
—
(1,289)
(38,036)
Net margin
75,732
10,138
—
85,870
9,777
3,284
72,809
Fair value changes in investment properties
(52,619)
(4,660)
—
(57,279)
(31,388)
(21,397)
(4,494)
Investment and other income
(57)
11,542
1,030
12,515
38
411
12,066
Interest expense
(40,036)
(10,280)
(17,985)
(68,301)
(16,324)
(15,904)
(36,073)
Share of earnings from equity accounted
investments
(170,627)
5,321
—
(165,306)
(13,997)
32,964
(184,273)
Net segment earnings (loss)
(187,607)
12,061
(16,955)
(192,501)
(51,894)
(642)
(139,965)
General and administrative expenses(2)
—
—
(31,155)
(31,155)
(6,785)
5,559
(29,929)
Adjustments related to Dream Impact Trust
units(2)
—
—
107,427
107,427
—
107,427
—
Adjustments related to Dream Impact Fund
units(2)
—
—
(3,561)
(3,561)
—
(3,561)
—
Income tax (expense) recovery(2)
—
—
2,711
2,711
14,535
(20,612)
8,788
Net earnings (loss)
$
(187,607) $
12,061 $
58,467 $
(117,079) $
(44,144) $
88,171 $
(161,106)
(1) Refer to the "Non-GAAP Measures and Other Disclosures" section of this MD&A for the definition of Dream Impact Trust, consolidation and fair value adjustments and Dream standalone.
(2) Certain line items are included in Corporate and other as balances are reviewed on a consolidated basis.
Dream Unlimited Corp. – December 31, 2024 | 28
Quarterly Business Trends
A summary of consolidated revenue, earnings (loss), and basic and diluted earnings (loss) per share for the previous eight quarters is presented below.
(in thousands of dollars,
except per share amounts)
Dec 31, 2024
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Revenue
$
192,259
$
95,724
$
178,272
$
158,251
$
107,858
$
132,512
$
74,381
$
72,196
Earnings (loss) for the period
129,088
(14,959)
64,195
9,534
(81,352)
3,925
(74,253)
34,601
Basic earnings (loss) per share
3.07
(0.36)
1.52
0.23
(1.91)
0.09
(1.73)
0.81
Diluted earnings (loss) per share
2.95
(0.36)
1.47
0.22
(1.91)
0.09
(1.73)
0.78
Dividends declared
48,365
6,302
6,317
6,323
5,285
5,336
5,350
5,349
Selected Annual Information - Consolidated
Year ended December 31,
(in thousands of dollars, except per share amounts)
2024
2023
2022
Revenue
$
624,506 $
386,947 $
343,768
Earnings before income taxes
225,373
(119,790)
197,291
Earnings for the year
187,858
(117,079)
164,445
Basic earnings per share
4.46
(2.74)
3.86
Diluted earnings per share
4.30
(2.74)
3.74
Dividends declared
67,307
21,320
38,328
Total assets
3,921,052
3,875,522
3,956,494
Total liabilities
2,419,523
2,471,463
2,402,802
Total equity
1,501,529
1,404,059
1,553,692
Non-GAAP Measures and Other Disclosures
In addition to using financial measures determined in accordance with IFRS Accounting Standards, we believe that important measures of operating
performance include certain financial measures that are not defined under IFRS Accounting Standards. Throughout this MD&A, there are references to
certain non-GAAP measures and other specified financial measures, including those described below, which management believes are relevant in assessing
the economics of the business of Dream. These performance and other measures are not standardized financial measures under IFRS Accounting
Standards and may not be comparable to similar measures disclosed by other issuers. However, we believe that they are informative and provide further
insight as supplementary measures of financial performance, financial position or cash flow, or our objectives and policies, as applicable.
Non-GAAP Ratios and Financial Measures
“Adjusted earnings before income taxes” represents pre-tax earnings excluding earnings (loss) from equity accounted investments attributable to Dream
Office REIT per Note 12 and gain on disposition of Arapahoe Basin per Note 14 of the consolidated financial statements. The most directly comparable
measure to adjusted earnings before income taxes is earnings (loss) before income taxes. This non-GAAP financial measure is an important measure used
to assess the Company’s pre-tax earnings excluding certain non-cash amounts and a one-time gain on disposition of Arapahoe Basin. Adjusted earnings
before income taxes for the three months and years ended December 31, 2024 and 2023 is reconciled to earnings (loss) before income taxes calculated as
follows:
For the three months ended December 31,
For the year ended December 31,
2024
2023
2024
2023
Earnings (loss) before income taxes
$
170,731
$
(77,557)
$
225,373
$
(119,790)
Less: Share of earnings (loss) from Dream Office REIT
(36,346)
(72,935)
(29,065)
(181,415)
Less: Gain on disposition of Arapahoe Basin
157,362
—
157,362
—
Adjusted earnings before income taxes
$
49,715
$
(4,622)
$
97,076
$
61,625
"Dream Impact Trust & Consolidation and fair value adjustments" represent certain IFRS Accounting Standards adjustments required to reconcile Dream
standalone and Dream Impact Trust results to the consolidated results as at December 31, 2024 and December 31, 2023 and for the years December 31,
2024 and 2023. Management believes Dream Impact Trust & Consolidation and fair value adjustments provides investors useful information in order to
reconcile it to the Dream Impact Trust financial statements.
Consolidation and fair value adjustments relate to business combination adjustments on acquisition of Dream Impact Trust on January 1, 2018 and related
amortization, elimination of intercompany balances including the investment in Dream Impact Trust units, adjustments for co-owned projects, fair value
adjustments to the Dream Impact Trust units held by other unitholders, and deferred income taxes.
"Dream standalone" represents the results of Dream, excluding the impact of Dream Impact Trust's consolidated results and adjustments to reflect
Dream’s direct ownership of our partnerships. Refer to the "Segmented Assets and Liabilities" and "Segmented Statement of Earnings" sections of this
MD&A for a reconciliation of Dream standalone to the results in the condensed consolidated financial statements. The most direct comparable financial
measure to Dream standalone is consolidated Dream. This non-GAAP measure is an important measure used by the Company to evaluate earnings against
historical periods, including results prior to the acquisition of control of Dream Impact Trust.
Dream Unlimited Corp. – December 31, 2024 | 29
"Dream standalone adjustments" represents certain adjustments required to reflect the Company’s direct interest in net assets and earnings of our
partnerships. Management believes Dream standalone adjustments provides investors useful information in order to view Dream's statement of financial
position and statement of earnings in a presentation that reflects the Company's interest in net assets and earnings from our direct interest in those
partnerships. The adjustments included in the calculation of Dream standalone adjustments have been listed below.
1.
Proportionately consolidates all material equity accounted investments held directly by Dream with the exception of our ownership in Dream
Impact Trust, Dream Office REIT and Dream Residential REIT;
2.
Adjusts for the full consolidation of our interest in Dream Impact Fund to equity accounted investments; and
3.
Adjusts for the defeased portion of Distillery District mortgage debt and eliminates the associated bond portfolio/restricted cash.
"Dream standalone FFO" and "Dream consolidated FFO" are non-GAAP financial measures that we consider key measures of our financial performance
on a pre-tax basis. Dream standalone FFO is calculated as the sum of FFO for all of our divisions, excluding Dream Impact Trust and consolidation
adjustments, and Dream consolidated FFO is calculated as Dream standalone FFO (a non-GAAP financial measure) plus Dream Impact Trust and
consolidation adjustments. We use Dream standalone FFO and Dream consolidated FFO to assess operating results and the performance of our businesses
on a divisional basis. Dream standalone FFO is a component of Dream standalone FFO per share, a non-GAAP ratio, and Dream consolidated FFO is a
component of Dream consolidated FFO per share, a non-GAAP ratio.
We use FFO to assess our performance as an asset manager and separately as an investor in our divisions on a pre-tax basis. FFO includes the fees that we
earn from managing capital as well as our share of revenues earned and costs incurred within our operations, which include interest expense and other
costs. Specifically, FFO includes the impact of contracts that we enter into to generate revenue, including asset management agreements, contracts that
our operating businesses enter into such as leases, operational results at our recreational properties and sales of inventory. FFO also includes the impact of
changes in borrowings or the cost of borrowings as well as other costs incurred to operate our business.
We exclude depreciation and amortization from FFO as we believe that the value of most of our assets typically increases over time, provided we make the
necessary maintenance expenditures, the timing and magnitude of which may differ from the amount of depreciation recorded in any given period. In
addition, the depreciated cost base of our assets is reflected in the ultimate realized disposition gain or loss on disposal. As noted above, unrealized fair
value changes are excluded from FFO until the period in which the asset is sold. We also exclude income tax expense from FFO as management reviews
divisional performance on a pre-tax basis given the diversified nature of our business.
FFO is a commonly used measure of performance of real estate operations; however, it does not represent net income or cash flows generated from
operating activities, as defined by IFRS Accounting Standards, and it is not necessarily indicative of cash available for the Company's needs. Our definition
of FFO differs from the definition used by other organizations, as well as the definition of FFO used by the Real Property Association of Canada
(“REALPAC”). We do not use FFO as a measure of cash generated from our operations.
Dream standalone FFO and Dream consolidated FFO are not financial measures under IFRS Accounting Standards and may not be comparable to similar
measures disclosed by other issuers. Refer to the "Funds From Operations" section of this MD&A for a reconciliation of these non-GAAP measures to net
income, in each case the most directly comparable financial measure and for further details on the components of Dream standalone FFO and Dream
consolidated FFO.
“Dream standalone FFO per share” and “Dream consolidated FFO per share” are non-GAAP ratios. Dream standalone FFO per share is calculated as
Dream standalone FFO divided by the weighted average number of Dream shares outstanding. Dream consolidated FFO per share is calculated as Dream
consolidated FFO divided by the weighted average number of Dream shares outstanding. We use these ratios to assess operating results and the pre-tax
performance of our businesses on a per share basis.
Dream standalone FFO per share and Dream consolidated FFO per share are not financial measures under IFRS Accounting Standards and may not be
comparable to similar measures disclosed by other issuers. Dream standalone FFO per share and Dream consolidated FFO per share for the year ended
December 31, 2024 and 2023 are shown in the table included under the "Funds From Operations" section of this MD&A.
“Net operating income" represents revenue, less (i) direct operating costs and (ii) selling, marketing, depreciation and other indirect costs, but including
(iii) depreciation and (iv) general and administrative expenses. The most directly comparable financial measure to net operating revenue is net margin. This
non-GAAP measure is an important measure used by management to assess the profitability of the Company's recurring income segment. Net operating
income for the recurring income segment for the years ended December 31, 2024 and 2023 is calculated and reconciled to net margin as follows:
For the three months ended December 31,
For the year ended December 31,
2024
2023
2024
2023
Net margin
$
20,335
$
23,299
$
93,995
$
75,732
Add: Depreciation
491
1,361
2,107
5,895
Add: General and administrative expenses
742
968
2,058
3,175
Net operating income
$
21,568
$
25,628
$
98,160
$
84,802
Supplementary and Other Financial Measures
"Assets under management ("AUM")" is the respective carrying value of gross assets managed by the Company on behalf of its clients, investors or
partners under asset management agreements, development management agreements, advisory, administrative and/or management services
agreements at 100% of the client's total assets. All other investments are reflected at the Company's proportionate share of the investment's total assets
without duplication. Assets under management is a measure of success against the competition and consists of growth or decline due to asset
appreciation, changes in fair market value, acquisitions and dispositions, operations gains and losses, and inflows and outflows of capital.
Dream Unlimited Corp. – December 31, 2024 | 30
"Available liquidity" represents Dream's standalone corporate and wholly-owned project-level cash and revolving debt facilities, including the operating
line – Western Canada and margin loan, to cover the Company's capital requirements including acquisitions and working capital. This financial measure is
used by the Company to forecast and plan to hold adequate amounts of available liquidity to allow for the Company to settle obligations as they come due.
"Fee earning assets under management" represents assets under management that are managed under contractual arrangements that entitle the
Company to earn asset management revenue calculated as the total of: (i) 100% of the purchase price of client properties, assets and/or indirect
investments subject to asset management agreements; (ii) 100% of the carrying value of gross assets of the underlying development project subject to
development management agreements; and (iii) 100% of the carrying value of specific Dream Office REIT redevelopment properties subject to a
development management addendum under the shared services agreement with Dream Office REIT, without duplication.
"Gross margin %" is an important measure of operating earnings in each business segment of Dream and represents gross margin as a percentage of
revenue. Gross margin represents revenue, less direct operating costs, excluding selling, marketing, depreciation and other operating costs.
"Net margin %" is an important measure of operating earnings in each business segment of Dream and represents net margin as a percentage of revenue.
Additional Information
Additional information relating to Dream, including the Company's Annual Information Form and consolidated financial statements and accompanying
notes, is available on SEDAR+ at www.sedarplus.com. The Subordinate Voting Shares trade on the TSX under the symbol “DRM”.
Dream Unlimited Corp. – December 31, 2024 | 31
Summary of Dream Group of Companies' Assets and Holdings
Project/property
Entity(3)
Dream
effective
ownership(1)
Status/type
Total
residential/
hotel units at
completion(2)
Residential
GFA(2)
(at 100%)
Total
commercial
and retail
GLA(2)
In-place/
committed
occupancy(4)
Occupancy/
stabilization
date
RECURRING INCOME SEGMENT
Downtown Toronto & GTA
Commercial:
Adelaide Place
D.UN
31.3%
Income property
—
—
666,000
85.3%
Sussex Centre
D.UN/MPCT
34.1%
Income property
—
—
655,000
69.5%
2200-2206 Eglinton Avenue East & 1020 Birchmount Road
D.UN
31.3%
Income property
—
—
442,000
69.2%
State Street Financial Centre
D.UN
31.3%
Income property
—
—
416,000
99.9%
Distillery District
DRM
62.5%
Income property
—
—
395,000
88.9%
438 University Avenue
D.UN
31.3%
Income property
—
—
323,000
92.1%
655 Bay Street
D.UN
31.3%
Income property
—
—
308,000
98.7%
74 Victoria Street/137 Yonge Street
D.UN
31.3%
Income property
—
—
266,000
46.4%
36 Toronto Street
D.UN
31.3%
Income property
—
—
214,000
70.7%
330 Bay Street
D.UN
31.3%
Income property
—
—
168,000
77.6%
20 Toronto Street/33 Victoria Street
D.UN
31.3%
Income property
—
—
159,000
97.9%
250 Dundas Street West
D.UN
31.3%
Income property
—
—
121,000
77.7%
Victory Building
D.UN
31.3%
Income property
—
—
102,000
65.7%
Brightwater Retail
DRM/MPCT
16.3%
Income property
—
—
105,000
65.4%
49 Ontario Street
MPCT
36.8%
Redevelopment
TBD
TBD
88,000
87.7%
425 Bloor Street East
D.UN
31.3%
Income property
—
—
83,000
96.2%
212 King Street West
D.UN
31.3%
Income property
—
—
73,000
91.5%
357 Bay Street
D.UN
31.3%
Income property
—
—
65,000
100.0%
360 Bay Street
D.UN
31.3%
Income property
—
—
59,000
65.0%
Plaza Bathurst and Imperial
MPCT
14.7%
Income property
—
—
59,000
74.3%
6 Adelaide Street East
D.UN
31.3%
Income property
—
—
55,000
90.3%
350 Bay Street
D.UN
31.3%
Income property
—
—
53,000
58.6%
366 Bay Street
D.UN
31.3%
Income property
—
—
40,000
100.0%
56 Temperance Street
D.UN
31.3%
Income property
—
—
33,000
100.0%
Canary District
DRM
50.0%
Income property
—
—
32,000
90.0%
68-70 Claremont Street
MPCT
36.8%
Income property
—
—
30,000
100.0%
76 Stafford Street
MPCT
36.8%
Income property
—
—
25,000
—%
220 King Street West
D.UN
15.7%
Income property
—
—
11,000
100.0%
Berkeley Properties
MPCT
36.8%
Income property
—
—
14,000
39.8%
Other GTA retail
DRM
30.0%-100.0% Income property
—
—
151,000
36.5%
Residential Rentals:
Weston Common
DRM/DIF/MPCT
56.9%
Income property
841
692,000
52,000
98.5%
Maple House at Canary Landing
DIF/MPCT
12.0%
Income property
770
624,000
4,000
76.8%
70 Park
DIF/MPCT
35.5%
Income property
210
257,000
—
97.6%
Robinwood Portfolio
DRM/DIF/MPCT
56.9%
Income property
286
156,000
—
94.5%
262 Jarvis
DRM/DIF/MPCT
56.9%
Income property
71
35,000
—
95.8%
111 Cosburn
DIF/MPCT
35.5%
Income property
23
14,000
—
95.7%
786 Southwood
DIF/MPCT
35.5%
Income property
24
37,000
—
95.8%
IVY Rentals
DRM/MPCT
52.6%
Income property
12
10,000
—
66.7%
Other:
Broadview Hotel
DRM
100%
Hospitality
58
—
—
Gladstone House
DRM
100%
Hospitality
55
—
—
Postmark Hotel
DRM
100%
Hospitality
55
—
—
Total Downtown Toronto & GTA
2,405 1,825,000 5,267,000
82.4%
Zibi (Ottawa/Gatineau)
Commercial:
Natural Sciences Building (Zibi Block 211)
DRM/DIF/MPCT
38.7%
Income property
—
—
186,000
93.4%
15 Rue Jos-Montferrand (Zibi Block 2/3)
DRM/MPCT
68.4%
Income property
—
—
53,000
81.2%
310 Miwate Private (Zibi Block 208)
DRM/MPCT
68.4%
Income property
—
—
33,000
100.0%
Residential Rentals:
Aalto Suites (Zibi Block 10)
DIF/MPCT
35.5%
Income property
162
135,000
1,000
91.0%
Aalto II (Zibi Block 11)
DIF/MPCT
35.5%
Income property
148
127,000
4,000
78.0%
Zibi Block 206
DRM/MPCT
68.4%
Income property
188
192,000
11,000
53.3%
Other:
Zibi Community Utility
DIF/MPCT
14.2%
Energy utility
Total Zibi (Ottawa/Gatineau)
498
454,000
288,000
78.7%
Dream Unlimited Corp. – December 31, 2024 | 32
Project/property
Entity(3)
Dream
effective
ownership(1)
Status/type
Total
residential/
hotel units at
completion(2)
Residential
GFA(2)
(at 100%)
Total
commercial
and retail
GLA(2)
In-place/
committed
occupancy(4)
Occupancy/
stabilization
date
U.S.
Commercial:
12800 Foster Street, Overland Park, Kansas
D.UN
31.3%
Income property
—
—
185,000
100.0%
Residential Rentals:
U.S. Multi-Family Private Fund
DRM
5.0%
Income property
2,844 2,288,000
92.3%
Dream Residential REIT Portfolio
DRR
11.9%
Income property
3,300 2,823,000
93.4%
Total U.S.
6,144 5,111,000
185,000
93.0%
Western Canada
Commercial:
444 - 7th Building, Calgary
D.UN
31.3%
Income property
—
—
261,000
84.9%
Vendasta Square, Saskatoon
D.UN
31.3%
Income property
—
—
229,000
62.7%
Brighton Marketplace, Saskatoon
DRM
50.0%
Income property
—
—
217,000
100.0%
Co-operators Place, 1900 Sherwood Place, Regina
D.UN
31.3%
Income property
—
—
206,000
83.0%
606 - 4th Building & Barclay Parkade, Calgary
D.UN
31.3%
Income property
—
—
126,000
83.2%
Kensington House, Calgary
D.UN
31.3%
Income property
—
—
77,000
87.6%
Shops of South Kensington, Saskatoon
DRM
100.0%
Income property
—
—
72,000
100.0%
Harbour Landing Commercial Campus, Regina
DRM
100.0%
Income property
—
—
41,000
90.8%
Montrose Plaza High River, Calgary
DRM
100.0%
Income property
—
—
24,000
93.2%
Hampton Heights, Saskatoon
DRM
100.0%
Income property
—
—
22,000
91.0%
Brighton Recreation, Saskatoon
DRM
100.0%
Income property
—
—
7,000
100.0%
Residential Rentals:
The Wren (Brighton Village Rentals I), Saskatoon
DRM
100.0%
Income property
136
117,000
—
100.0%
The Teal (Brighton Village Rentals II), Saskatoon
DRM
100.0%
Income property
120
75,000
9,000
100.0%
Underhill Road (Block 135 Single Family Rentals),
Saskatoon
DRM
100.0%
Income property
21
25,000
—
100.0%
Other:
The Willows Club, Saskatoon
DRM
100.0%
Recreational
—
—
Total Western Canada
277
217,000 1,291,000
84.6%
Total Recurring Income Segment
9,324 7,607,000 7,031,000
86.3%
Project/property
Type
Entity(3)
Dream
effective
ownership(1)
Status/type
Total
residential/
hotel units at
completion(2)
Residential
GFA(2)
(at 100%)
Total
commercial
and retail
GLA(2)
In-place/
committed
occupancy(4)
Occupancy/
stabilization
date
DEVELOPMENT SEGMENT
Downtown Toronto & GTA
Residential and Mixed-Use:
Brightwater Towns
Sell
DRM/MPCT
16.3%
In occupancy
106
237,000
—
Q4 2024
Birch House at Canary Landing (Block 10 Rental)
Hold
DIF/MPCT
12.0%
In occupancy
238
182,000
—
Q4 2024
The Mason, Brightwater
Sell
DRM/MPCT
16.3%
Construction
158
128,000
5,000
2025
Queen & Mutual
Sell
DRM
9.0%
Construction
369
243,000
7,000
2025
Cherry House at Canary Landing (WDL Block
3/4/7)
Hold
DIF/MPCT
12.0%
Construction
855
811,000
32,000
2025
Bridge House, Brightwater
Sell
DRM/MPCT
16.3%
Planning
484
392,000
—
2028
Forma - East Tower
Sell
DRM/MPCT
17.5%
Construction
864
590,000
1,000
2028
Brightwater future blocks
Various DRM/MPCT
16.3%
Planning
1,952 2,441,000
257,000
2025-2032
Quayside
Various DIF/MPCT
17.4%
Planning
4,600 3,220,000
240,000
2031-2035
Forma - West Tower
Sell
DRM/MPCT
17.5%
Planning
1,170
885,000
223,000
2035
Main Street Townhomes
Sell
DRM
100.0%
Planning
68
81,000
—
TBD
Canary Block 13
Hold
DRM
50.0%
Planning
1,084
686,400
10,700
TBD
Scarborough Junction
Sell
MPCT
16.6%
Planning
6,619 5,270,000
165,000
TBD
Victory Silos
TBD
DRM/MPCT
26.3%
Planning
1,500 1,200,000
100,000
TBD
WDL Block 20
Hold
DRM/MPCT
17.5%
Planning
653
571,000
255,000
TBD
Distillery District - 31A Parliament
Hold
DRM
62.5%
Planning
515
389,000
342,000
TBD
Seaton
Sell
MPCT
2.6%
Planning
TBD
TBD
TBD
TBD
Blacktusk Partnership (673 Warden)
Sell
DIF/MPCT
1.8%
Planning
TBD
TBD
TBD
TBD
Other
Various Various
Various
Various
882 1,053,000
10,000
TBD
Commercial:
67 Richmond Street West
D.UN
31.3%
Redevelopment
—
—
51,000
36.5%
Q4 2024
Total Downtown Toronto & GTA
22,117 18,379,400 1,698,700
36.5%
Project/property
Type
Entity(3)
Dream
effective
ownership(1)
Status/type
Total
residential/
hotel units at
completion(2)
Residential
GFA(2)
(at 100%)
Total
commercial
and retail
GLA(2)
In-place/
committed
occupancy(4)
Occupancy/
stabilization
date
Ottawa/Gatineau
Residential and Mixed-Use:
Zibi Block 207
Hold
DRM/MPCT
68.4%
Completed
—
—
76,000
2025
Zibi Block 204
Hold
DRM/MPCT
68.4%
Construction
244
190,000
13,000
2026
Zibi Block 1
Hold
DRM/MPCT
68.4%
Planning
227
170,000
2,500
2027
Odenak (formerly "Dream Lebreton")
Hold
DRM/DIF/MPCT
56.9%
Construction
608
410,000
26,000
2027
Zibi future blocks
Various DRM/MPCT
68.4%
Planning
1,507
932,000 1,875,500
TBD
Total Ottawa/Gatineau
2,586 1,702,000 1,993,000
—%
Dream Unlimited Corp. – December 31, 2024 | 33
Western Canada
Residential and Mixed-Use:
Brighton Towns on Delainey (Block 124
Townhome Rentals), Saskatoon
Hold
DRM
100.0%
Construction
95
115,000
—
84.0%
2025
Block 166 Detached Home Rentals, Saskatoon
Hold
DRM
100.0%
Construction
40
46,000
—
80.0%
2025
Block JK Townhome Rentals, Saskatoon
Hold
DRM
100.0%
Construction
15
22,000
—
2025
Brighton Village Rentals III, Saskatoon
Hold
DRM
100.0%
Construction
125
82,000
—
2026
Total Western Canada
275
265,000
—
84.0%
Total Development Segment
24,978 20,346,400 3,691,700
71.3%
Total Dream Platform
34,302 27,953,400 10,722,700
86.1%
Western Canada Land Holdings
City
Acre equivalents
Calgary
1,731
Edmonton
699
Saskatoon
3,032
Regina
3,224
Total
8,686
Summary by Geography
Location
Current GLA
Future GLA
under
development
(2)
In-place and
committed
occupancy(4)
Residential/
hotel units at
completion(2)
Residential
GFA(2)
Downtown Toronto & GTA
5,267,000
1,698,700
82.1%
24,522 20,204,400
Ottawa/Gatineau
288,000
1,993,000
78.7%
3,084 2,156,000
U.S.
185,000
—
93.0%
6,144 5,111,000
Western Canada
1,291,000
—
84.6%
552
482,000
Total
7,031,000
3,691,700
86.1%
34,302 27,953,400
(1) Dream holdings at fully consolidated ownership. Dream Impact Fund at 34.0% ownership, Dream Impact Trust at 36.8% ownership, Dream Office at 31.3% ownership and Dream Residential REIT at 11.9% ownership, respectively,
a as of December 31, 2024.
(2) Residential units, GFA and GLA are at 100% project level and include planned units, GFA and GLA, which are subject to change pending various development approvals. Planned residential units may be developed as condominium
units or purpose-built rentals as supported by market demand, targeted studies and return objectives. For projects currently in occupancy, residential units reflect remaining units in inventory to be occupied in future periods.
(3) DRM refers to Dream Standalone. DIF refers to Dream Impact Fund. MPCT refers to Dream Impact Trust. D.UN refers to Dream Office REIT. DRR refers to Dream Residential REIT.
(4) The in-place/committed occupancy percentage displayed represents only units that are available for lease. Units currently under construction have been excluded from this calculation.
Dream Unlimited Corp. – December 31, 2024 | 34
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2500, Toronto, Ontario, Canada M5J 0B2
T.: +1 416 863 1133, F.: +1 416 365 8215, Fax to mail: ca_toronto_18_york_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Independent auditor’s report
To the Shareholders of Dream Unlimited Corp.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Dream Unlimited Corp. and its subsidiaries (together, the Company) as at
December 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in
accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS Accounting Standards).
What we have audited
The Company’s consolidated financial statements comprise:
the consolidated statements of financial position as at December 31, 2024 and 2023;
the consolidated statements of earnings (loss) for the years then ended;
the consolidated statements of comprehensive income (loss) for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, comprising material accounting policy information
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2024. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Valuation of investment properties
Refer to note 3 – Summary of material accounting
policies, note 4 – Critical accounting estimates,
judgments and assumptions and note 10 –
Investment properties to the consolidated financial
statements.
The Company measures its investment properties
at fair value, and as at December 31, 2024, these
assets were valued at $1,843 million. Fair values
of investment properties are determined using
valuations prepared by management. Two
investment properties were valued using the
direct comparison approach. The direct
comparison approach considered recent activity
for similar development/redevelopment sites.
Fair values of the remaining investment
properties were calculated using a discounted
cash flow method or the direct capitalization
method. Significant assumptions used in the
discounted cash flow method included the
discount rates, terminal capitalization rates and
market rents. Significant assumptions used in
the direct capitalization method included the
capitalization rates. Critical judgments were made
in respect of determining the fair values of
investment properties by management.
We considered this a key audit matter due to i)
significant audit effort required to assess the fair
values of investment properties; ii) critical
judgments made by management when
determining the fair values, including the
development of the significant assumptions; and iii)
a high degree of complexity in assessing audit
Our approach to addressing the matter included the
following procedures, among others:
For a sample of investment properties, tested
how management determined the fair values,
which included the following:
‒
Evaluated the appropriateness of the
valuation methodology used (the direct
comparison approach, the discounted cash
flow method or the direct capitalization
method).
‒
Tested the underlying data used in the
discounted cash flow method and the direct
capitalization method by comparing
components of the cash flows, such as
contractual rents, to the underlying
accounting records.
‒
Evaluated the reasonableness of the
discount rates and terminal capitalization
rates for the discounted cash flow method,
and capitalization rates for the direct
capitalization method by comparing to
external market and industry data.
‒
Professionals with specialized skill and
knowledge in the field of real estate
valuations further assisted us:
o
For the investment properties valued
using the direct comparison approach,
in assessing the transactions used by
management and by comparing to
recent market transactions.
Key audit matter
How our audit addressed the key audit matter
evidence to support the significant assumptions
made by management. In addition, the audit effort
involved the use of professionals with specialized
skill and knowledge in the field of real estate
valuations.
o
For the investment properties valued
using the discounted cash flow method,
in evaluating the reasonableness of the
market rents, discount rates and
terminal capitalization rates by
comparing to externally available
market data.
o
For the investment properties valued
using the direct capitalization method,
in evaluating the reasonableness of the
capitalization rates by comparing to
externally available market data.
‒
Assessed the sufficiency of the disclosures
in the consolidated financial statements.
Impairment assessment of investment in Dream
Office Real Estate Investment Trust
Refer to note 3 – Summary of material accounting
policies, note 4 – Critical accounting estimates,
judgments and assumptions and note 12 – Equity
accounted investments to the consolidated
financial statements.
The Company’s 31% interest in Dream Office Real
Estate Investment Trust (Dream Office REIT) has
a carrying value of $191.0 million as at December 31,
2024. The Company is deemed to exercise significant
influence over the investee and, therefore, the
investment has been recorded as an equity
accounted investment. The Company assesses,
at each reporting date, whether there is objective
evidence that its interest in an equity accounted
investment is impaired. If impaired, the carrying value
of the Company’s share of the underlying assets of
the equity accounted investment is written down to
its estimated recoverable amount, with any difference
charged to earnings.
In the year ended December 31, 2024, the Company
identified objective evidence of impairment due to
Dream Office REIT’s sustained lower unit price. The
Our approach to addressing the matter included
the following procedures, among others:
Tested how management determined the
recoverable amount of the interest in Dream
Office REIT, which included the following:
‒
Evaluated the appropriateness of the
discounted cash flow model used.
‒
Tested the underlying data used in the
discounted cash flow model.
‒
Tested the reasonableness of Dream
Office REIT’s AFFO by considering the
current and past performance of Dream
Office REIT and relevant external market
data.
‒
Professionals with specialized skill and
knowledge in the field of real estate
valuations further assisted in evaluating
the reasonableness of the portfolio
capitalization rate and the discount rate
by comparing to externally available
market data.
Key audit matter
How our audit addressed the key audit matter
Company performed an impairment assessment of its
investment. An impairment loss is calculated as the
difference between its value-in-use and the carrying
value. No impairment loss was recorded for the year
ended December 31, 2024.
The value-in-use was determined through preparation
of a discounted cash flow model, which included a
scenario weighted approach. The significant key
assumptions used in the discounted cash flow model
are the portfolio capitalization rate, discount rate and
Dream Office REIT’s adjusted funds from operations
(AFFO). Significant judgment was made in respect of
determining the recoverable amount by management.
We considered this a key audit matter due to i)
significant audit effort required to assess the
recoverable amount; ii) significant judgment made by
management when determining the recoverable
amount, including the development of the significant
key assumptions; and iii) a high degree of complexity
in assessing audit evidence to support the significant
key assumptions made by management. In addition,
the audit effort involved the use of professionals with
specialized skill and knowledge in the field of real
estate valuations.
‒
Assessed the sufficiency of the
disclosures in the consolidated financial
statements.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis and the information, other than the consolidated financial statements and our
auditor’s report thereon, included in the Annual Report.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Company as a basis for forming an opinion on
the consolidated financial statements. We are responsible for the direction, supervision and review of
the audit work performed for purposes of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Alaina Tennison.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Ontario
February 25, 2025
Consolidated Statements of Financial Position
As at December 31, 2024 and 2023
(in thousands of Canadian dollars)
Note
2024
2023
Assets
Cash and cash equivalents
34
$
83,881
$
60,203
Accounts receivable
5
284,744
274,041
Other financial assets
6
58,620
99,822
Housing inventory
7
53,763
52,747
Condominium inventory
8
300,950
383,829
Land inventory
9
469,458
458,551
Investment properties
10
1,842,513
1,719,172
Recreational properties
11
84,707
82,898
Equity accounted investments
12
657,908
671,030
Capital and other operating assets
13
84,508
73,229
Total assets
$
3,921,052
$
3,875,522
Liabilities
Accounts payable and other liabilities
15
$
211,099
$
233,376
Income and other taxes payable
20
19,322
79,964
Provision for real estate development costs
16
75,825
61,069
Debt
17
1,870,366
1,810,549
Dream Impact Trust units
18
43,711
70,779
Dream Impact Fund units
19
126,375
113,405
Deferred income taxes
20
72,825
102,321
Total liabilities
2,419,523
2,471,463
Shareholders’ equity
Share capital
21
957,333
962,027
Reorganization adjustment
(944,577)
(944,577)
Contributed surplus
29
11,070
20,984
Retained earnings
1,465,342
1,346,678
Accumulated other comprehensive income
22
12,361
18,947
Total equity
1,501,529
1,404,059
Total liabilities and equity
$
3,921,052
$
3,875,522
See accompanying notes to the consolidated financial statements.
Commitments and contingencies (Note 32)
On behalf of the Board of Directors of Dream Unlimited Corp.:
"Michael J. Cooper"
"Joanne Ferstman"
Michael J. Cooper
Joanne Ferstman
Director
Chair
Dream Unlimited Corp. – December 31, 2024 | 41
Consolidated Statements of Earnings (Loss)
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except for per share amounts)
Note
2024
2023
Revenue
23 $
624,506
$
386,947
Direct operating costs
24
(422,849)
(261,752)
Gross margin
201,657
125,195
Selling, marketing, depreciation and other operating costs
25
(43,444)
(39,325)
Net margin
158,213
85,870
Other income (expenses):
General and administrative expenses
26
(22,916)
(31,155)
Fair value changes in investment properties
10
(24,398)
(57,279)
Share of earnings (loss) from equity accounted investments
12
(19,131)
(165,306)
Investment and other income
17,916
12,515
Interest expense
27
(78,392)
(68,301)
Gain on disposition of Arapahoe Basin
14
157,362
—
Adjustments related to Dream Impact Trust units
18
26,891
107,427
Adjustments related to Dream Impact Fund units
19
9,828
(3,561)
Earnings (loss) before income taxes
225,373
(119,790)
Income tax (expense) recovery
20
(37,515)
2,711
Earnings (loss) for the year
$
187,858
$
(117,079)
Basic earnings (loss) per share
30 $
4.46
$
(2.74)
Diluted earnings (loss) per share
30 $
4.30
$
(2.74)
See accompanying notes to the consolidated financial statements.
Dream Unlimited Corp. – December 31, 2024 | 42
Consolidated Statements of Comprehensive Income (Loss)
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars)
2024
2023
Earnings (loss) for the year
$
187,858
$
(117,079)
Other comprehensive income (loss)
Items that will be reclassified subsequently to net income:
Unrealized loss on interest rate hedge, net of tax
22
(7,634)
(4,140)
Unrealized gain (loss) from foreign currency translation (will be reclassified to earnings on
partial or full disposal of foreign operation)
22
616
(623)
Share of other comprehensive loss from equity accounted investments
22
432
(2,765)
Total other comprehensive loss
(6,586)
(7,528)
Total comprehensive income (loss)
$
181,272
$
(124,607)
See accompanying notes to the consolidated financial statements.
Dream Unlimited Corp. – December 31, 2024 | 43
Consolidated Statements of Changes in Equity
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars)
Dream share capital
(Note 21)
Contributed
surplus
Reorganization
adjustment
Retained
earnings
Accumulated other
comprehensive
income (Note 22)
Total equity
Balance, January 1, 2024
$
962,027 $
20,984 $
(944,577) $
1,346,678 $
18,947 $
1,404,059
Earnings for the year
—
—
—
187,858
—
187,858
Other comprehensive loss for the year
—
—
—
—
(6,586)
(6,586)
Shares repurchased (Note 21)
(8,200)
—
—
—
—
(8,200)
Dividends paid (Note 21)
—
—
—
(67,307)
—
(67,307)
Share-based compensation (Note 29)
3,506
(9,914)
—
(1,887)
—
(8,295)
Balance, December 31, 2024
$
957,333 $
11,070 $
(944,577) $
1,465,342 $
12,361 $
1,501,529
(in thousands of Canadian dollars)
Dream share capital
Contributed surplus
Reorganization
adjustment
Retained earnings
Accumulated other
comprehensive
income
Total equity
Balance, January 1, 2023
$
968,076 $
18,082 $
(944,577) $
1,485,636 $
26,475 $
1,553,692
Loss for the year
—
—
—
(117,079)
—
(117,079)
Other comprehensive loss for the year
—
—
—
—
(7,528)
(7,528)
Shares repurchased
(10,827)
—
—
—
—
(10,827)
Dividends paid
—
—
—
(21,320)
—
(21,320)
Share-based compensation
4,778
2,902
—
(559)
—
7,121
Balance, December 31, 2023
$
962,027 $
20,984 $
(944,577) $
1,346,678 $
18,947 $
1,404,059
See accompanying notes to the consolidated financial statements.
Dream Unlimited Corp. – December 31, 2024 | 44
Consolidated Statements of Cash Flows
For the years ended December 31, 2024 and 2023
For the year ended December 31,
(in thousands of Canadian dollars)
Note
2024
2023
Operating activities
Earnings (loss) for the year
$
187,858
$
(117,079)
Adjustments for non-cash items:
Depreciation and amortization
3,375
8,117
Fair value changes in investment properties
10
24,398
57,279
Share of (earnings) loss from equity accounted investments
12
19,131
165,306
Deferred income tax recovery
20
(27,247)
(28,528)
Fair value adjustment on Dream Impact Trust units
18
(27,182)
(115,402)
Fair value adjustment on Dream Impact Fund units
19
(9,828)
3,561
Net gain on disposition of Arapahoe Basin
14
(157,362)
—
Other adjustments
34
5,966
6,601
Changes in non-cash working capital
34
(7,049)
(13,541)
Acquisition of condominium inventory
8
—
(4,241)
Income taxes paid
20
(125,010)
(3,175)
Development of housing inventory, net of cost of sales
7
11,035
11,279
Cost of sales of condominium inventory, net of development
8
93,507
(36,939)
Acquisition of land inventory
9
(12,879)
(4,485)
Development of land inventory, net of cost of sales
9
(18,646)
(10,756)
Net cash flows used in operating activities
(39,933)
(82,003)
Investing activities
Acquisitions and additions to investment properties
10
(126,758)
(168,515)
Acquisitions and additions to recreational properties
11
(6,475)
(11,387)
Investments in equity accounted investments
(3,999)
(510)
Contributions to equity accounted investments
(13,641)
(43,651)
Distributions from and disposals of equity accounted investments
23,422
135,547
Acquisitions and additions of financial assets and other assets
(13,720)
(8,373)
Distributions from financial assets and other assets
48,645
1,133
Proceeds on disposition of investment properties
10
43,022
9,500
Proceeds on disposition of Arapahoe Basin
14
197,804
—
Loans receivable advances, net of repayments and lender fees
(15,929)
19,435
Net cash provided by (used in) investing activities
132,371
(66,821)
Financing activities
Borrowings from mortgages and term debt facilities
17
42,147
207,188
Repayments of mortgages and term debt facilities
17
(50,420)
(97,454)
Advances of operating lines and revolving credit facilities, net of repayments
17
(10,500)
(115,100)
Advances on construction loans
17
190,547
240,382
Repayments of construction loans
17
(187,595)
(118,794)
Advances from equity accounted investments
—
40,600
Dream Impact Trust units repurchased from other unitholders
18
—
(2,590)
Dream Impact Fund contributions from other unitholders
19
22,798
39,925
Dividends paid
21
(67,307)
(21,320)
Repayments of lease obligations
(230)
(616)
Shares repurchased
21
(8,200)
(10,827)
Net cash flows provided by (used in) financing activities
(68,760)
161,394
Change in cash and cash equivalents
23,678
12,570
Cash and cash equivalents, beginning of year
60,203
47,633
Cash and cash equivalents, end of year
34
$
83,881
$
60,203
See accompanying notes to the consolidated financial statements.
Dream Unlimited Corp. – December 31, 2024 | 45
1. Business and structure
Dream Unlimited Corp. ("Dream" or "the Company"), through its wholly owned subsidiary, Dream Asset Management Corporation ("DAM"), is a leading
developer of office and residential assets in Toronto, owns stabilized income generating assets in both Canada and the U.S., and has an established asset
management business, inclusive of assets under management across four Toronto Stock Exchange ("TSX") listed trusts, our private asset management
business and numerous partnerships. The Company also develops land, residential and income generating assets in Western Canada.
The principal office and centre of administration of the Company is 30 Adelaide Street East, Suite 301, State Street Financial Centre, Toronto, Ontario,
M5C 3H1. The Company is listed on the TSX and is domiciled in Canada. The ultimate controlling party of Dream is Michael Cooper, President and Chief
Responsible Officer of Dream.
2. Basis of preparation
The consolidated financial statements are prepared in compliance with IFRS Accounting Standards as issued by the International Accounting Standards
Board ("IASB").
All dollar amounts discussed herein are in thousands of Canadian dollars, unless otherwise stated.
The consolidated financial statements for the year ended December 31, 2024 were approved by the Board of Directors for issuance on February 25, 2025,
after which date they may be amended only with the Board of Directors’ approval.
3. Summary of material accounting policies
The material accounting policies adopted by the Company in the preparation of its consolidated financial statements are set out below. The Company has
consistently applied these accounting policies throughout all years presented in the consolidated financial statements.
Basis of Measurement
The consolidated financial statements have been prepared under the historical cost convention, except for investment properties, other financial assets
and financial instruments classified as fair value through profit or loss, which are measured at fair value as determined at each reporting date.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions have been eliminated in the
consolidated financial statements.
Subsidiaries are those entities the Company controls through the power to govern the financial and operating policies of the entity and by having exposure
or rights to variable returns from its involvement with the entity. The existence and effect of potential voting rights that are currently exercisable are
considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is obtained by
the Company and are subsequently unconsolidated on the date control ceases.
Dream Impact Trust and Dream Impact Fund are considered subsidiaries of the Company based on the Company's exposure to variable returns from
ownership through Dream Impact Trust and Dream Impact Fund units held, real estate joint ventures, and management agreements.
Segmented Reporting
Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision-maker. The chief operating
decision-maker has been identified as the President and Chief Responsible Officer of the Company.
Joint Arrangements and Associates
Investments in Joint Arrangements
A joint arrangement is a contractual arrangement, pursuant to which the Company and other parties undertake an economic activity that is subject to joint
control, whereby the strategic financial and operating policy decisions relating to the activities of the joint arrangement require the unanimous consent of
the parties sharing control. Joint arrangements are of two types: joint ventures and joint operations.
Investments in Joint Ventures
Joint ventures involve the establishment of a separate entity in which each co-venturer has an interest in the net assets of the arrangement and are
accounted for using the equity method of accounting, whereby the Company recognizes its share of earnings or losses and of other comprehensive income
("OCI") of the equity accounted investment in its own earnings or OCI, as applicable. If the Company's investment is reduced to zero, additional losses are
not provided for, and a liability is not recognized, unless the Company has incurred legal or constructive obligations or made payments on behalf of the
equity accounted investment.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 46
The Company's investments in joint ventures are as follows:
Ownership interest
Name of joint venture and location
Nature of business
2024
2023
Corktown Commercial Inc., Toronto
Investment properties
n/a
50%
Distillery Restaurants LP, Toronto
Restaurant
62.5%
62.5%
Dream CMCC Funds I and II, Toronto
Mixed-use development
9% - 40%
9% - 40%
Dundee Kilmer Developments Limited, Toronto
Condominiums
50%
50%
Dundee Kilmer Developments LP, Toronto
Condominiums
50%
50%
S/D Commercial Corporation, Toronto
Investment properties
n/a
50%
Westland Properties Ltd., Western Canada
Land
78%
78%
Dream VHP Limited Partnership, Toronto
Mixed-use development
25%
25%
Dream Wilson Brighton Development LP, Western Canada
Mixed-use development
50%
50%
GulfDream LP, Toronto
Mixed-use development
50%
50%
Port Credit West Village Partners LP, Mississauga
Mixed-use development
31%
31%
GG Duncan LP, Toronto
Mixed-use development
33%
33%
Dream WDL LP, Toronto
Residential rental
33%
33%
Zibi Community Utility LP, Ottawa
Utilities
40%
40%
DK B10 LP, Toronto
Condominiums
50%
50%
DKT B10 LP, Toronto
Residential rental
33%
33%
Dream/Pauls Castle LLC, Texas & Arizona
Residential rental
5%(1)
5%(1)
Harlo Scarborough Junction LP, Toronto
Mixed-use development
45%
45%
34 Madison LP, Toronto
Investment property
80%
80%
673 Warden LP, Toronto
Mixed-use development
40%
40%
Dream YD LP "Yorkdowns", Markham
Mixed-use development
5%
5%
Tamarack Developments LP, Edmonton
Land
20%
n/a
Millwoods Robertson Developments LP, Edmonton
Land
20%
n/a
Parallax QM LP, Toronto
Condominiums
9%
9%
Quayside Impact LP, Toronto
Mixed-use development
50%
50%
(1) The Company's ownership interest in Dream/Pauls Castle LLC is 50% with an effective economic interest of 5%.
Investments in Joint Operations
Where the Company undertakes its activities as a joint operation through a direct interest in the joint operation's assets and a direct obligation for the
joint operation's liabilities, rather than through the establishment of a separate entity, the Company's proportionate share of the joint operation's assets,
liabilities, revenues, expenses and cash flow is recognized in the consolidated financial statements and classified according to its nature.
Ownership interest
Name of joint operation and location
Nature of business
2024
2023
Distillery District, Toronto
Historical heritage district
62.5%
62.5%
Millwoods Robertson, Edmonton
Land
n/a
70%
Streetcar, Toronto
Condominiums and hotels
n/a
25% - 50%
Thornhill Woods, Toronto
Land and housing
30% - 32%
30% - 32%
100 Steeles Avenue West, Toronto
Mixed-use development
n/a
50%
Investments in Associates
Investments in associates comprise those investments over which the Company has significant influence but not control. Generally, the Company is
considered to exert significant influence when it holds more than a 20% interest in an entity. However, determining significant influence is a matter of
judgment and specific circumstances and, from time to time, the Company may hold an interest of more than 20% in an entity without exerting significant
influence.
Conversely, the Company may hold an interest of less than 20% and exert significant influence through representation on the Board of Directors, through
direction of management or through contractual agreements. The Company accounts for its investments in associates using the equity method of
accounting.
The Company's interest in Dream Office Real Estate Investment Trust ("Dream Office REIT") as at December 31, 2024 was 31% (December 31, 2023 - 30%)
and the Company is deemed to be able to exercise significant influence over the investee. The carrying amount and earnings from the Company's
investment in Dream Office REIT has been recorded in equity accounted investments in the consolidated statements of financial position and share of
earnings from equity accounted investments in the consolidated statement of earnings, respectively.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 47
Impairment of Equity Accounted Investments
The Company assesses, at each reporting date, whether there is objective evidence that its interest in an equity accounted investment is impaired. If
impaired, the carrying value of the Company's share of the underlying assets of the equity accounted investment is written down to its estimated
recoverable amount, with any difference charged to earnings.
Business Combinations
The Company uses the acquisition method to account for business combinations. The consideration transferred for the acquisition is measured as the
aggregate of the fair values of assets transferred, liabilities incurred or assumed, and any equity instruments of the Company issued in exchange for control
of the acquiree. Acquisition costs are recorded as an expense in earnings as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS 3, “Business Combinations” (“IFRS 3”), are recognized at their fair values at the acquisition date.
At the time of an acquisition of a property, the Company evaluates whether the acquisition is a business combination or an asset acquisition. IFRS 3 is only
applicable if it is considered that a business has been acquired. A business, according to IFRS 3, is defined as an integrated set of activities and assets
conducted and managed for the purpose of providing goods or services to customers, generating investment income (such as dividends or interest) or
generating other income from ordinary activities. In determining whether an acquired property meets the definition of a business, the Company assesses
whether substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If such a concentration
exists, the transaction is not viewed as an acquisition of a business and no further assessment of the business combination guidance is required. This is
relevant where the value of the acquired entity is concentrated in one property, or a group of similar properties. When an acquisition does not represent a
business as defined under IFRS 3, the Company classifies these properties as an asset acquisition.
The interest of non-controlling shareholders in the acquiree, if any, is initially measured at the non-controlling shareholders’ share of the net assets of the
acquiree, or the fair value of the non-controlling interest, as applicable. To the extent the fair value of consideration paid exceeds the fair value of the net
identifiable tangible and intangible assets acquired, the excess is recorded as goodwill. If the consideration transferred is less than the fair value of net
identifiable tangible and intangible assets, the excess is recognized in earnings.
Where a business combination is achieved in stages, previously held interests in the acquired entity are remeasured to fair value at the acquisition date,
which is the date control is obtained, and the resulting gain or loss, if any, is recognized in earnings. Amounts arising from interests in the acquiree prior to
the date of acquisition of control that have previously been recognized in OCI are reclassified to earnings. Changes in the Company’s ownership interest of
a subsidiary that do not result in a loss of control are accounted for as equity transactions and are recorded as a component of equity.
Foreign Currency Translation
Functional and Presentation Currency
The consolidated financial statements are presented in Canadian dollars, which is also the Company’s functional currency.
Functional Currency of Subsidiaries and Equity Accounted Investments
The monetary assets and liabilities on the financial statements of consolidated subsidiaries and equity accounted investments that have a functional
currency that is different from that of the Company are translated into Canadian dollars using the exchange rate at year-end for items included in the
consolidated statements of earnings and OCI, and the rates in effect at the dates of the consolidated statements of financial position for assets and
liabilities. All resulting changes are recognized in OCI as foreign currency translation adjustments.
If the Company’s interest in the foreign operations of a subsidiary or an equity accounted investment is diluted, but the foreign operations remain a
subsidiary or an equity accounted investment, a pro rata portion of the cumulative translation adjustment related to those foreign operations is
reallocated between controlling and non-controlling interests, in the case of a subsidiary, or is recognized as a dilution gain or loss, in the case of an equity
accounted investment. When the Company disposes of its entire interest in the foreign operations, or when it loses control, joint control or significant
influence, the cumulative translation adjustment included in accumulated other comprehensive income (“AOCI”) related to the foreign operations is
recognized in the consolidated statements of earnings on a pro rata basis.
Foreign Currency Transactions
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Generally,
foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities
denominated in currencies other than an entity’s functional currency at each year-end date are recognized in the consolidated statements of earnings,
except when deferred in OCI as qualifying cash flow hedges and qualifying net investment hedges.
Financial Instruments
The Company’s financial instruments include cash and cash equivalents, accounts receivable, other financial assets, financial instruments within accounts
payable and other liabilities, debt, Dream Impact Trust units, Dream Impact Fund units, and deposits and restricted cash that have been included in the
consolidated financial statements within capital and other operating assets.
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are no
longer recognized when the rights to receive cash flows from the assets have expired or are assigned and the Company has transferred substantially all
risks and rewards of ownership in respect of an asset to a third party. Financial assets are recognized at settlement date less any related transaction costs.
Financial liabilities are no longer recognized when the related obligation expires, or is discharged or cancelled.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 48
Classification of financial instruments in the Company’s consolidated financial statements depends on the purpose for which the financial instruments
were acquired or incurred. Management determines the classification of financial instruments at initial recognition.
Fair Value Through Profit or Loss ("FVTPL")
Financial instruments in this category are initially and subsequently recognized at fair value. Gains and losses arising from changes in fair value are
presented within earnings in the consolidated statements of earnings in the period in which they arise, unless they are derivative instruments that have
been designated as hedges.
Financial Liabilities at Amortized Cost
Financial liabilities classified at amortized cost are initially measured at the amount required to be paid, less, when material, a discount to reduce the
liabilities to fair value. Subsequently, these financial liabilities are measured at amortized cost using the effective interest method.
Financial Liabilities at Fair Value Through Profit or Loss
Certain financial liabilities are designated as FVTPL as they are managed and evaluated on a fair value basis. These financial liabilities are initially and
subsequently measured at fair value. Gains and losses arising from changes in fair value are recorded within earnings in the consolidated statements of
earnings in the period in which they arise, with the exception of changes in the liability's credit risk, which are recorded in OCI in the period in which they
arise.
Hedging Instruments and Activities
At the inception of a hedging transaction, the Company documents the relationship between hedging instruments and hedged items, as well as its risk
management objectives and strategy for undertaking various hedging transactions. The Company also documents its assessment, both at hedge inception
and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash
flows of hedged items.
The effective portion of changes in the fair value of derivatives that are hedges of a particular risk associated with a recognized asset or liability or a highly
probable forecasted transaction is recognized in OCI. The gain or loss relating to the ineffective portion, if any, is recognized immediately in the
consolidated statements of earnings.
The realized gain or loss recognized on settlement of a hedging instrument designated as a cash flow hedge will be reclassified to earnings over the same
basis as the cash flows received from the hedged item. When a hedging instrument no longer meets the criteria for hedge accounting, any cumulative
gains or losses existing in OCI at that time are recognized in earnings immediately.
Impairment of Financial Assets
The Company applies an appropriate impairment model approach for financial assets depending on the category of financial assets or liabilities. The three
impairment models applicable under IFRS 9, "Financial Instruments" ("IFRS 9"), include the general approach, the simplified approach and the credit-
adjusted approach. The Company uses the simplified approach, which recognizes expected credit losses (“ECL”) based on lifetime ECL for accounts
receivable and the general approach for loans receivable. The general approach uses the ECL estimated at the 12-month ECL unless the credit risk has
increased significantly relative to the credit risk at the date of initial recognition.
Real Estate Inventory
Housing and Condominiums
Housing and condominium inventory, which may, from time to time, include commercial property, is acquired or constructed for sale in the ordinary
course of business and is held as inventory and measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in
the ordinary course of business, based on prevailing market prices at each reporting date and discounted for the time value of money, if material, less
estimated costs of completion and estimated selling costs.
Land
Land inventory includes land held for development and land under development and is measured at the lower of cost and net realizable value.
Capitalized Costs
Capitalized costs include all expenditures incurred in connection with the acquisition of property, direct development and construction costs, certain
borrowing costs and property taxes.
Provision for Real Estate Development Costs
The provision for real estate development costs reflects management’s estimate of costs to complete for land, housing and condominium projects for
which revenue has been recognized. These amounts have not been discounted, as the majority of the costs are expected to be expended within
approximately one year.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 49
Investment Properties
Investment properties include properties held to earn rental income or for capital appreciation, or both. Investment properties are measured initially at
cost, which includes all expenditures incurred in connection with the acquisition of property, direct development and construction costs, borrowing costs
and property taxes. Subsequent to initial recognition, investment properties are measured at their fair value at each reporting date. Gains or losses arising
from changes in fair value are recorded in earnings in the period in which they arise.
Development Investment Properties
Once appropriate evidence of a change in use of land held or under development is established, the land is transferred from inventory to investment
properties. At that time, the land is recognized at fair value in accordance with the Company's accounting policy for investment properties if fair value is
reliably measurable, and any gain or loss is reflected in fair value changes in investment properties within the consolidated statements of earnings, in the
period the transfer occurs. The gain or loss recorded represents the difference between the fair value of the transferred property and the accumulated
costs of development.
The fair value of development investment properties is determined by management on a property-by-property basis using a discounted cash flow ("DCF")
valuation methodology or the direct comparison approach. Within the discounted cash flows, the significant unobservable inputs include: terminal
capitalization rates, discount rates and market rents. Other assumptions include forecasted net operating income based on the location, type and quality
of the property, supported by the terms of actual or anticipated future leasing; estimated costs to complete based on internal budgets, terms of
construction contracts and market conditions; expected completion dates; development and leasing risks specific to the property; and the status of
approvals and/or permits. Within the direct comparison approach, the significant unobservable inputs include recent transaction activity for similar
development/redevelopment sites.
Stabilized Investment Properties
Stabilized investment properties are measured at their fair value at each reporting date. Gains or losses arising from changes in fair value are recorded in
earnings in the period in which they arise. The fair value of stabilized investment properties is determined by management on a property-by-property basis
using a DCF valuation methodology or the direct capitalization approach. Within the discounted cash flows, the significant unobservable inputs include:
terminal capitalization rates, discount rates and market rents. The DCF model incorporates, among other things, expected rental income from current
leases, assumptions about rental income from future leases and implied vacancy rates, general inflation and projections of required cash outflows with
respect to such leases. Within the direct capitalization method, the significant unobservable input for the fair value calculation is capitalization rates.
Recreational Properties
Recreational properties are properties used in the production or supply of goods or services. Recreational properties are stated at cost less accumulated
depreciation and accumulated impairment losses, if any. Costs of recreational properties include all expenditures incurred in connection with the
acquisition of the property, direct development and construction costs, borrowing costs and property taxes. The Company uses the straight-line method of
depreciation for recreational properties, including major expansions and renovations. The estimated useful life of the properties is between two and forty
years.
Real Estate Borrowing Costs
Real estate borrowing costs include interest and other costs incurred in connection with the borrowing of funds for operations. Borrowing costs directly
attributable to the acquisition, development or construction of qualifying real estate assets that necessarily take a substantial period of time to prepare for
their intended use or sale are capitalized as part of the cost of the respective real estate asset. For real estate construction and development projects, the
Company considers a substantial period of time to be a period longer than one year to complete. All other borrowing costs are expensed in the period in
which they occur.
Borrowing costs that are directly attributable to investment properties under development or to the development of condominiums, commercial and
recreational properties are capitalized. Borrowing costs related to land or housing developments are recognized in earnings as incurred. Where borrowing
costs are specific to a qualifying asset, the amount is directly capitalized to that asset. Otherwise, borrowing costs are aggregated and pro-rated to
qualifying assets using the Company’s weighted average cost of borrowing. Borrowing costs are capitalized during periods of active development and
construction, starting from the commencement of the development work until the date on which all of the activities necessary to prepare the real estate
asset for its intended use or sale are substantially complete. Thereafter, borrowing costs are charged to earnings.
Impairment of Non-Financial Assets
Non-financial assets are assessed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be
recoverable. An impairment loss, if any, is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable
amount of an asset is the greater of an asset’s fair value, less costs to sell, and its value in use. For the purposes of assessing impairment, assets are
grouped at the cash generating unit ("CGU") level. If their carrying value is assessed as not recoverable, an impairment loss is recognized.
An assessment is made, at each reporting date, as to whether there is any indication that previously recognized impairment losses may no longer exist or
may have decreased. If such indication exists, the Company makes an estimate of the recoverable amount and, if appropriate, reverses all or part of the
impairment. If the impairment is reversed, the carrying amount of the asset is increased to the newly estimated recoverable amount. This increased
carrying amount may not exceed the carrying amount that would have resulted after taking into account depreciation if no impairment loss had been
recognized in prior years. The amount of any impairment reversal is recorded immediately in earnings for the year.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 50
Dream Impact Fund Units
The Company holds an effective 34% interest in Dream Impact Fund as at December 31, 2024 through the ownership of 5,764,847 units (December 31,
2023 - 38% interest through ownership of 5,764,847 units). The residual non-controlling interest is held by third-party investors and is reflected as a
financial liability as the units are redeemable by unitholders after a three-year lockup period and, therefore, are considered a puttable instrument in
accordance with IAS 32, "Financial Instruments - Presentation" ("IAS 32"), and must be presented as a financial liability.
The Company manages the Dream Impact Fund units on a fair value basis. As a financial liability measured at fair value through profit or loss, the Company
recorded the Dream Impact Fund units at fair value on acquisition of control. Subsequent to initial recognition, the liability is remeasured to fair value each
period based on the Dream Impact Fund unit's closing net asset value. Fair value changes are recorded within adjustments related to Dream Impact Fund
units in the consolidated statements of earnings in the period in which they arise. Distributions on Dream Impact Fund units not held by the Company are
recognized in the period in which they are approved and are recorded as an expense within adjustments related to Dream Impact Fund units in the
consolidated statements of earnings. Refer to Note 19 for additional details.
Dream Impact Trust Units
On June 16, 2023, Dream Impact Trust completed a unit consolidation of all issued and outstanding units of Dream Impact Trust on the basis of one (1)
post-consolidation unit for every four (4) pre-consolidation units. All unit amounts disclosed herein reflect the post-unit consolidation shares for all periods
presented, unless otherwise specified.
The Company holds an effective 37% interest in Dream Impact Trust as at December 31, 2024 through the ownership of 6,715,180 trust units (December
31, 2023 - 35% interest through ownership of 6,063,115 trust units). The remaining 11,533,260 trust units outstanding are held by other unitholders and
have been recognized on the consolidated statements of financial position to reflect the residual 63% interest held by other parties as at December 31,
2024. The units are redeemable at the option of the holder and, therefore, are considered a puttable instrument in accordance with IAS 32, and must be
presented as a financial liability. The holder has the option to redeem units, generally at any time, at a redemption price per unit equal to the lesser of 90%
of the 20-day weighted average closing price prior to the redemption date or 100% of the closing market price on the redemption date.
The Company manages the Dream Impact Trust units on a fair value basis. As a financial liability measured at fair value through profit or loss, the Company
recorded the Dream Impact Trust units at fair value on acquisition of control. Subsequent to initial recognition, the liability is remeasured to fair value each
period based on the Dream Impact Trust unit's closing trading price. Fair value changes are recorded within adjustments related to Dream Impact Trust
units in the consolidated statements of earnings in the period in which they arise. Distributions on Dream Impact Trust units not held by the Company are
recognized in the period in which they are approved and are recorded as an expense within adjustments related to Dream Impact Trust units in the
consolidated statements of earnings. Refer to Note 18 for additional details.
Convertible Debentures - Dream Impact Trust
The convertible debentures are financial instruments that can be converted to units of Dream Impact Trust at the option of the holder. As Dream Impact
Trust’s units are puttable instruments in accordance with IAS 32, the convertible debentures are recognized as financial liabilities with embedded
derivatives. The convertible debentures are financial liabilities that consist of the host instruments and the conversion features. At initial recognition, each
host instrument is measured at fair value net of related transaction costs. At each subsequent reporting period, the host instruments are measured at
amortized cost using the effective interest rate method. Each conversion feature, classified as a financial derivative, is initially and subsequently measured
at FVTPL. Interest expense, accretion expense and any fair value adjustments required on the conversion features are recognized in the consolidated
statement of earnings.
Revenue Recognition
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The
Company recognizes revenue when it transfers control over a product or service to a customer. The Company capitalizes all commissions paid to an
intermediary as a cost to obtain a contract when they are expected to be recovered. These costs are amortized consistently with the pattern of recognition
for the related revenue. The following is a description of principal activities from which the Company generates its revenues, including the nature of
revenues, timing of satisfaction of performance obligations and significant payment terms.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 51
Product and services
Nature and timing of satisfaction of performance obligations
Land
Revenue relating to sales of land is recognized when control over the property has been transferred to the customer - typically when the customer
can begin construction on the property. Until this criterion is met, any proceeds received are accounted for as customer deposits. Revenue is
measured based on the transaction price agreed to under the contract and is typically recognized upon receipt of 15% of the transaction price.
Condominiums and
housing projects
Revenue relating to sales of condominiums and housing projects is recognized when control of the property has been transferred to the customer -
typically when the customer occupies the property. Until this criterion is met, any proceeds received are accounted for as customer deposits.
Revenue is measured based on the transaction price agreed to under the contract.
Other revenue from
investment
properties (excluding
base rent)
Other revenue from investment properties includes recoveries of operating expenses including percentage participation rents, lease cancellation
fees, parking income and other incidental income. The Company recognizes revenue as the related services are performed. The unsatisfied
performance obligation resulting from other investment property revenue has a variable consideration that is constrained by the underlying
performance of the property.
Recreational
properties
Amounts received for the sale of annual season passes to recreational properties are deferred and amortized on a straight-line basis over the term of
the season. Other amounts received from the use of recreational properties are recognized as revenue when earned.
Real estate asset
management and
advisory services
Revenue from real estate asset management and advisory services is calculated based on a fee that is a formula specific to each advisory client and
may include fee revenue calculated as a percentage of the capital managed, capital expenditures incurred, the purchase price of properties acquired
and the value of financing transactions completed. These fees are recognized on an accrual basis over the period during which the related service is
rendered. Asset management and advisory services fee arrangements may also provide the Company with an incentive fee when the investment
performance of the underlying assets exceeds established benchmarks. Incentive fees, carried interest and other revenues are recognized in earnings
when it is highly probable there will not be a significant reversal of revenue.
Rental income
The Company uses the straight-line method of rental revenue recognition on investment properties whereby any contractual free-rent periods and
rent increases over the term of a lease are recognized in earnings evenly over the lease term. Initial direct leasing costs incurred in negotiating and
arranging tenant leases are added to the carrying amount of the investment properties and are amortized over the term of the lease. Lease
incentives, which include costs incurred to make leasehold improvements to tenants’ space and cash allowances provided to tenants, are added to
the carrying amount of investment properties and are amortized on a straight-line basis over the term of the lease as a reduction in revenue from
investment properties.
Direct Operating Costs
Inventory costs associated with land held for development or land under development, including the estimated costs to complete the development of the
asset, are allocated to direct operating costs on a per lot basis, pro-rated based on the revenue sold for each lot. Inventory costs associated with the
development of condominiums are allocated to direct operating costs on a per unit basis, pro-rated based on the sales value of the unit relative to the
sales value of all units in a condominium project. Direct operating costs associated with the construction of housing inventory and commercial property are
specific to each project.
Direct operating costs related to specific investment or recreational properties include property management costs and operating expenses, as well as
management and administrative expenses, and are recorded on an accrual basis.
Income Taxes
The Company follows the balance sheet liability method to provide for income taxes on all transactions recorded in its consolidated financial statements.
The balance sheet liability method requires that income taxes reflect the expected future tax consequences of temporary differences between the carrying
amounts of assets and liabilities and their tax bases. Deferred income tax assets and liabilities are determined for each temporary difference and for
unused tax losses and unused tax credits, as applicable, at rates expected to be in effect when the asset is realized or the liability is settled. The effect on
deferred income tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the substantive enactment date.
Deferred tax assets are recognized to the extent that it is probable that the assets can be recovered.
Due to uncertainties in the estimation process, particularly with respect to changes in facts and circumstances in future reporting periods (carry forward
period assumptions), it is reasonably possible that actual results could differ from the estimates used in the Company’s historical analysis. If the Company’s
results of operations are less than projected and there is insufficient objectively verifiable evidence to support the likely realization of its deferred tax
assets, adjustments would be required to reduce or eliminate its deferred tax assets.
Earnings per Share
Basic earnings per share is computed by dividing Dream’s earnings by the weighted average number of Subordinate Voting Shares and Dream Class B
common shares ("Class B Shares") outstanding during the year. Diluted earnings per share, where applicable, is calculated by adjusting the weighted
average number of shares outstanding for dilutive instruments by applying the treasury stock method.
Share-Based Compensation
Stock Option Plan
Management previously issued share-based compensation to certain employees in the form of stock options that vested evenly over a five-year period.
The fair value of the options on the grant date was determined using an option pricing model. The estimated fair value of options on the grant date was
recognized as compensation expense on a graded vesting basis over the period in which the employee services were rendered. In 2024, participants in the
stock option plan were granted the option for a cash settlement. The Company remeasured its liability under the stock option plan using a fair value based
on the listed market price on the TSX and reclassified its liability from equity to accounts payable and other liabilities.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 52
Performance Share Unit Plan
Management issues share-based compensation to certain employees in the form of performance share units (“PSUs”) that are subject to either time
vesting only, or time and performance vesting. PSUs subject to performance vesting provide the holder with a minimum of 0 and a maximum of 1.5
Subordinate Voting Shares based on the achievement of predetermined Company performance goals. In lieu of receiving Subordinate Voting Shares on
vesting, PSU holders may request a cash payment equal to the five-day trailing weighted average share price of the Company’s Subordinate Voting Shares
on the vesting date or settlement date, when applicable; however, the form of payment on vesting is ultimately the decision of the Company. During the
holding period, which is between the grant date and the vesting date, PSUs earn dividends declared by the Company in the form of additional fractional
PSUs. The fair value of the PSUs on the grant date is determined using an option pricing model. The estimated fair value of the PSUs on the grant date is
recognized as compensation expense on a straight-line basis over the period in which the employee services are rendered.
Deferred Share Incentive Plan
The Company has a deferred share incentive plan that provides for the grant of deferred share units ("DSUs") and income deferred share units to eligible
directors, senior management and their service providers. Grants to directors, officers and employees are recognized as compensation expense and are
included in general and administrative expenses in the period in which they are granted. During the holding period, which is between the grant date and
the vesting date, DSUs earn dividends declared by the Company in the form of additional fractional DSUs. On settlement of DSUs and earned fractional
DSUs, the amount recognized in contributed surplus for the grant is reclassified to share capital.
Restricted Share Unit Plan
The Company has a Restricted Share & Restricted Share Unit Plan (the “RS & RSU Plan”) that provides for the grant of an amount of cash (a “Restricted
Share Award”) to be used exclusively to subscribe for Subordinate Voting Shares (“Restricted Shares”) in accordance with the terms of the RS & RSU Plan.
Restricted Shares are issued at a subscription price that is calculated to be equal to the fair market value of a Restricted Share as of the applicable issuance
date, being the fair market value of a Subordinate Voting Share taking into account the terms of vesting and forfeiture set out in the RS & RSU Plan and the
applicable Restricted Share Award agreement. Restricted Shares issued under the RS & RSU Plan are held in escrow by a third-party escrow agent prior to
vesting and are delivered to the participant on the tenth anniversary of the issuance date upon vesting, provided that certain forfeiture events have not
occurred prior to such vesting date and subject to the terms of the RS & RSU Plan. Upon vesting, RS holders have the right to receive a cash payment equal
to the five-day trailing weighted average share price of the Company's Subordinate Voting Shares; however, the form of payment on vesting is ultimately
the decision of the Company.
Future Accounting Standards
Standards issued but not yet effective up to the date of issuance of the Company's consolidated financial statements that are likely to have an impact on
the Company are noted below, and represent the standards and interpretations the Company reasonably expects to be applicable at a future date. The
Company intends to adopt these standards when they become effective.
IFRS 18 "Presentation and disclosure in financial statements" ("IFRS 18")
In April 2024, IFRS 18, “Presentation and Disclosure in Financial Statements” was issued to achieve comparability of the financial performance of similar
entities. The standard, which replaces IAS 1 “Presentation of Financial Statements”, impacts the presentation of primary financial statements and notes,
including the statement of comprehensive income where entities will be required to present separate categories of income and expense for operating,
investing, and financing activities with prescribed subtotals for each new category. The standard will also require management-defined performance
measures to be explained and included in a separate note within the consolidated financial statements. The standard is effective for annual reporting
periods beginning on or after January 1, 2027, including interim financial statements, and requires retrospective application. The Company is in the process
of assessing the impact of this new standard.
IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures"
In May 2024, amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" were issued. The amendments clarify the
timing of recognition and derecognition for a financial asset or financial liability, including clarifying that a financial liability is derecognized on the
settlement date. Further, the amendments introduce an accounting policy choice to derecognize financial liabilities settled using an electronic payment
system before the settlement date, if specific condition are met. The amendments also require additional disclosures for financial instruments with
contingent features and investments in equity instruments classified at fair value through other comprehensive income. These amendments are effective
for annual reporting periods beginning on or after January 1, 2026. Early adoption is permitted, with an option to early adopt only the amendments related
to the classification of financial assets. The Company is in the process of assessing the impact of these new standards.
4. Critical accounting estimates, judgments and assumptions
The preparation of these consolidated financial statements in accordance with IFRS Accounting Standards requires the Company to make judgments in
applying its accounting policies, estimates and assumptions about the future. These judgments, estimates and assumptions affect the reported amounts of
assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities included in the Company’s consolidated financial
statements. The Company evaluates its estimates on an ongoing basis. Such estimates are based on historical experience and on various other
assumptions the Company believes are reasonable under the circumstances, and these estimates form the basis for making judgments about the carrying
value of assets and liabilities and the reported amount of revenues and expenses that are not readily apparent from other sources. Actual results may
differ from those estimates under different assumptions or conditions. The following discusses the most significant accounting judgments, estimates and
assumptions the Company has made in the preparation of its consolidated financial statements.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 53
Joint Arrangements and Associates
The Company holds investments in various assets, and its ownership interest in these investments is established through diverse structures. Significant
judgment is applied in assessing whether the investment structure results in control, joint control or significant influence over the operations of the
investment, or whether the Company’s investment is passive in nature. The assessment of whether the Company exerts control, joint control or significant
influence over an investment will determine the accounting treatment for the investment. In making this assessment, the Company considers its
ownership interest in the investment as well as its decision-making authority with regard to the operating, financing and investing activities of the
investment as specified in the contractual terms of the arrangement. The Company also considers any agreements with the investee that expose the
Company to variable returns from its involvement with the investee. Joint arrangements that involve the establishment of a separate entity in which each
venture has an interest are set up as joint ventures, whereas investments in associates are those investments over which the Company has significant
influence but no control.
Business Combinations and Goodwill
Accounting for business combinations under IFRS 3 only applies if it is considered that a business has been acquired. Under IFRS 3, a business is defined as
an integrated set of activities and assets conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other
economic benefits to investors. A business generally consists of inputs, processes applied to those inputs and resulting outputs that are, or will be, used to
generate revenues. In the absence of such criteria, a group of assets is deemed to have been acquired. If goodwill is present in a transferred set of
activities and assets, the transferred set is presumed to be a business. Judgment is used by the Company in determining whether an acquisition qualifies as
a business combination in accordance with IFRS 3 or as an asset acquisition.
When determining whether an acquisition is a business combination or an asset acquisition, the Company applies judgment when considering whether the
acquisition is capable of producing outputs and whether the market participant could produce outputs if missing elements exist. In particular, the
Company considers whether employees were assumed in the acquisition and whether an operating platform has been acquired.
Significant judgment is required in applying the acquisition method of accounting for business combinations and, specifically, in identifying and
determining the fair value of assets and liabilities acquired, including intangible assets and residual goodwill, if any. The Company’s goodwill balance is
allocated to the particular CGU to which it relates (herein referred to as the “goodwill CGU”). The recoverable amount of the Company’s goodwill CGU is
determined based on the fair value less costs of disposal approach. Refer to Note 13 for further details.
Consolidation
In determining if an entity is a subsidiary of the Company, the Company makes significant judgments about whether it has power and control over such an
entity. In addition to voting rights, the Company considers the contractual rights and obligations arising from other arrangements, and other relevant
factors relating to an entity in determining if the Company has the power and ability to affect returns from an investee. The contractual rights and
obligations considered by the Company include, among others, the approvals and decision-making process over significant operating, financing and
investing activities, the responsibilities and scope of decision-making power of the Company, the termination provisions of applicable agreements, the
types and determination of fees paid to the Company and the significance, if any, of any investment made by the Company. The Company reviews its prior
conclusions when facts and circumstances change.
Net Realizable Value
Land, housing and condominium inventory are stated at the lower of cost and net realizable value. In calculating net realizable value, management must
estimate the selling price of these assets based on prevailing market prices at the dates of the consolidated statements of financial position, discounted for
the time value of money, if material, less estimated costs of completion and estimated selling costs. If estimates are significantly different from actual
results, the carrying amounts of these assets may be overstated or understated on the consolidated statements of financial position and, accordingly,
earnings in a particular period may be overstated or understated.
Provisions
Provisions are recorded by the Company when it has determined it has a present obligation, whether legal or constructive, and it is probable that an
outflow of resources will be required to settle the obligation, provided a reliable estimate can be made of the amount of the obligation. Management must
use judgment in assessing the magnitude and timing of the potential economic exposure and the likelihood of a future event occurring. Actual results may
differ significantly from those estimates. The consolidated financial statements include a significant provision for costs to complete land, housing and
condominium projects. The stage of completion of any development project, and the remaining costs to be incurred, are determined by management,
considering relevant available information at each reporting date. In making such determination, management makes significant judgments about
milestones, actual work performed and the estimates of costs to complete the work.
Fair Value of Investment Holdings and Participating Mortgages
Critical judgments are made in determining the fair value of investment holdings and participating mortgages. The fair values of these investments are
reviewed regularly by the Company with reference to the applicable local market conditions and in discussion with the development’s construction
management company. The Company makes judgments with respect to the valuation of market comparables and management assumptions related to
project level returns in order to determine the Company's interest and participating income.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 54
Fair Value of Investment Properties
Critical judgments are made in respect of the fair values of investment properties and the investment properties held in equity accounted investments.
Significant assumptions relating to the estimates of fair values of investment properties include terminal capitalization rates, discount rates, market rents
and capitalization rates. Other assumptions include the receipt of contractual rents, renewal rates, maintenance requirements and current and recent
investment property transaction prices, if any. If there is any change in these assumptions or regional, national or international economic conditions, the
fair value of investment properties may change materially.
On a rotational basis, the Company engages independent, professionally qualified appraisers who are experienced, nationally recognized and qualified in
the professional valuation of real estate in their respective geographic areas. Judgment is applied in determining the extent and frequency of independent
appraisals. A select number of properties are valued by an independent appraiser on a rotational basis at least once every three years. For properties
subject to an independent valuation report, management verifies all major inputs to the valuation and reviews the results with the independent
appraisers.
Fair Value of Development Investment Properties
Fair value measurement of an investment property under development is applied only if the fair value is considered to be reliably measurable. Under
specific circumstances, investment properties under development may be carried at cost until their fair value becomes reliably measurable. It may
sometimes be difficult to determine reliably the fair value of investment properties under development. In order to evaluate whether the fair value of an
investment property under development can be determined reliably, management considers various factors, including significant assumptions related to
terminal capitalization rates, discount rates and market rent and other assumptions related to the terms of the construction contract, the stage of
completion, the location, type and quality of the property, expected completion dates, the level of reliability of cash inflows after completion, the
development risks specific to the property, past experience with similar constructions, status of approvals and/or permits, estimated costs to complete and
market conditions.
Transfer of Inventory to Development Investment Properties
Raw land is usually unentitled property without the regulatory approvals that allow the construction of residential, industrial, commercial and mixed-use
developments. When development plans are formulated, the Company may decide that specific land holdings will be developed into investment
properties. Once appropriate evidence of a change in use is established, the land is transferred to investment properties. This also applies to multi-family
rental properties, which are transferred to investment properties from condominium inventory.
Impairment of Non-Financial Assets
Recreational properties, capital assets and intangible assets with finite lives and equity accounted investments are tested for impairment whenever events
or changes in circumstances indicate the carrying amounts may not be recoverable. Intangible assets with indefinite lives are tested at least annually.
Management uses judgment in performing this impairment test. Imprecision in any of the assumptions and estimates used could affect the valuation of
these assets and the assessment of performance.
IAS 36, "Impairment of Assets", requires management to use judgment in determining the recoverable amount of assets tested for impairment. Judgment
is involved in estimating the fair value less the cost to sell or value-in-use of the CGUs, including estimates of growth rates, discount rates and terminal
rates. The values assigned to these key assumptions reflect past experience and are consistent with external sources of information.
Income Taxes
The determination of the Company’s income and other tax liabilities requires interpretation of complex laws and regulations, often involving multiple
jurisdictions. Judgment is required in determining whether deferred income tax assets should be recognized on the consolidated statements of financial
position. Deferred income tax assets are recognized to the extent the Company believes it is probable that the assets can be recovered. Furthermore,
deferred income tax balances are recorded using enacted or substantively enacted future income tax rates. Changes in enacted income tax rates are not
within the control of management. However, any such changes in income tax rates may result in actual income tax amounts that may differ significantly
from estimates recorded in deferred tax balances.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation
and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Fair Value and Impairment of Financial Instruments
Certain financial instruments are recorded in the Company’s consolidated statements of financial position at values that are representative of or
approximate fair value. The fair value of a financial instrument that is traded in active markets at each reporting date is determined by reference to its
quoted market price or dealer price quotations.
IFRS 9 requires management to use judgment in determining if the Company's financial assets are impaired. The Company's financial assets are subject to
the ECL model whereby the Company estimates on a forward-looking basis possible default scenarios and establishes a provision matrix that considers
various factors including industry and sector performance, economic and technological changes and other external market indicators.
The fair value of certain other financial instruments is determined using valuation techniques. By their nature, these valuation techniques require the use
of assumptions. Changes in the underlying assumptions could materially impact the determination of the fair value of a financial instrument. Imprecision in
determining fair value using valuation techniques may affect the amount of earnings recorded in a particular period.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 55
The Company classifies the fair value of its financial instruments according to the following hierarchy, which is based on the amount of observable inputs
used to value the instrument:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for
the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement
Fair Value of Hedging Instruments and Effectiveness
Critical judgments are made in respect of assumptions used to estimate the fair value of hedging instruments and to assess the effectiveness of the
hedging arrangement. The basis of valuation and assessment of effectiveness for the Company's derivatives is set out in Note 28; however, the fair values
reported may differ from how they are ultimately recognized if there is volatility in interest rates between the valuation date and the settlement date.
5. Accounts receivable
As of December 31, 2024, included in accounts receivable is $184,993 for contracted sales of land under development and housing and condominium sales
which are secured by the underlying real estate assets (December 31, 2023 - $180,642). The carrying value of accounts receivable is reported net of a
provision for impairment of $1,868 (December 31, 2023 - $1,663).
6. Other financial assets
Other financial assets consisted of the following:
2024
2023
Investment holdings(1)
$
16,408
$
46,753
Loans receivable
40,478
43,047
Participating mortgages
—
4,060
Interest rate swaps
1,734
5,962
$
58,620
$
99,822
(1) Included are portfolio bonds of $nil that are recorded at amortized cost (December 31, 2023 - $39,656).
Investment Holdings
In the year ended December 31, 2024, a portfolio of bonds reached maturity and proceeds were used for the repayment of defeased project-level debt
subsequent to December 31, 2024.
Loans Receivable
Loans receivable are amounts owing to the Company pertaining to development partnerships in Toronto and Western Canada. In the year ended
December 31, 2024, the Company advanced two loans for parcels of land in Edmonton totalling $19,765, net of accrued interest and scheduled
repayments.
7. Housing inventory
The movement in housing inventory is as follows:
2024
2023
Balance, beginning of year
$
52,747
$
48,146
Transfers from land inventory (Note 9)
12,051
15,880
Development
31,705
21,175
Housing units occupied
(42,740)
(32,454)
Balance, end of year
$
53,763
$
52,747
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 56
8. Condominium inventory
The movement in condominium inventory is as follows:
2024
2023
Balance, beginning of year
$
383,829
$
346,979
Acquisitions
51,070
13,222
Development
41,947
75,824
Condominium units occupied
(133,533)
(38,885)
Transfers to investment properties (Note 10)
(42,363)
(13,311)
Balance, end of year
$
300,950
$
383,829
During the year ended December 31, 2024, the Company acquired control of a partnership holding condominium, retail and hotel properties where we
previously held a 25-50% interest. Refer to Note 10 for further details.
9. Land inventory
The movement in land inventory is as follows:
2024
2023
Balance, beginning of year
$
458,551
$
470,148
Acquisitions
12,879
4,485
Development
130,245
69,902
Lot and acre sales
(119,945)
(59,146)
Transfers to housing inventory
(12,051)
(15,880)
Transfers to investment properties (Note 10)
—
(10,958)
Transfer to assets held for sale (Note 14)
(221)
—
Balance, end of year
$
469,458
$
458,551
10. Investment properties
The movement in investment properties by segment is as follows:
Total
Total
Recurring income
Development
2024
2023
Balance, beginning of year
$
1,522,148
$
197,024
$
1,719,172
$
1,558,511
Additions/dispositions and transfers to/from investment
properties:
Properties acquired
22,979
—
22,979
42,121
Land and building additions
26,286
100,472
126,758
159,361
Transfers from inventory (Note 8 and 9)
9,920
32,443
42,363
24,269
Transfers between segments
146,055
(146,055)
—
—
Dispositions
(41,889)
—
(41,889)
(9,500)
Gains (losses) included in earnings:
Fair value changes in investment properties(1)
(19,194)
(5,204)
(24,398)
(57,279)
Amortization of tenant incentive and other
(2,349)
—
(2,349)
(2,181)
Change in straight-line rent
(123)
—
(123)
3,870
Balance, end of year
$
1,663,833
$
178,680
$
1,842,513
$
1,719,172
(1) During the year ended December 31, 2024, the Company sold its interest in 100 Steeles and recognized a loss of $11,089 reported in fair value changes in investment properties in the recurring
income segment.
During the year ended December 31, 2024, the Company acquired control of a partnership holding condominium, retail and hotel properties where we
previously held a 25-50% interest, located in Toronto, Ontario for a total purchase price of $119,083, which was paid for by the assumption of debt of
$73,519, a cash payment of $1,750 and the settlement of working capital and loans receivable with a carrying value of $29,119 and $14,695, respectively.
Fair Value of Investment Properties
Fair values of investment properties are determined using valuations prepared by management using inputs that are Level 3 on the fair value hierarchy. To
supplement the assessment of fair value, management obtains valuations of selected investment properties on a rotational basis from qualified external
valuation professionals and verifies the results of such valuations with the external appraisers. As at December 31, 2024, eight investment properties with
a fair value of $525,679 were externally appraised (December 31, 2023 - eight investment properties with a total fair value of $367,085).
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 57
During the year ended December 31, 2024, the Company recorded a fair value loss of $24,398 (year ended December 31, 2023 - loss of $57,279) in the
consolidated statements of earnings. Fair values of investment properties were calculated using a discounted cash flow method or the direct capitalization
method. Included in the fair value changes in investment properties was two assets valued based on highest and best use, which is considered to be the
asset's redevelopment potential. The assets were valued using the direct comparison approach, with density and price per square foot as significant
assumptions. Generally, an increase in density and price per square foot would result in an increase in fair values.
The discount rate is based on the weighted average cost of capital of the Company and is used to determine the net present value of cash flows. The
terminal capitalization rate is based on the location, size and quality of the investment property and takes into account any available market data at the
valuation date.
The following are the significant assumptions in the valuation of investment properties using the discounted cash flow method:
•
Terminal capitalization rate – capitalization rates used to estimate the resale value of the property at the end of the holding period
•
Discount rate – reflecting current market assessments of the uncertainty in the amount and timing of cash flows
•
Market rents – year one rates in the discounted cash flow
Significant unobservable inputs were as follows for December 31, 2024 and December 31, 2023:
2024
2023
Input
Range
Weighted average
Range
Weighted average
Recurring income
Discount rate
6.00%-8.00%
6.6%
5.50%-8.00%
6.3%
Terminal capitalization rate
5.50%-7.50%
6.2%
4.88%-7.50%
5.8%
Market rents (in dollars per square foot)(1)
$16.00-$45.00
$28.38
$16.00-$41.47
$27.27
Development
Discount rate
7.30%
7.3%
5.50%
5.5%
Terminal capitalization rate
7.00%
7.0%
4.00%
4.0%
Market rents (in dollars per square foot)(1)(2)
$26.28
$26.28
$49.50
$49.50
(1) Market rents represent year one rates in the discounted cash flow method. Market rents represent base rents only and do not include the impact of lease incentives.
(2) Market rents as at December 31, 2024 include an office property under development. Market rents as at December 31, 2023 included a multi-family property under development that was
transitioned to the direct capitalization method in the year ended December 31, 2024.
Fair values of investment properties, which include commercial, retail and other properties held for the long term, are calculated using the direct
capitalization method or a discounted cash flow (“DCF”) model, plus a terminal value based on the estimated cash flow in the final year. The DCF model
incorporates, among other things, expected rental income from current leases, assumptions about rental income from future leases and implied vacancy
rates, general inflation and projections of required cash outflows with respect to such leases. The significant unobservable inputs for the fair value of the
Company’s investment properties are provided above.
Fair values of the Company's investment properties are most sensitive to changes in the discount and terminal capitalization rates. An increase in these
rates will result in a decrease in the fair value of an investment property and vice versa.
Increase (decrease) in value
Input sensitivity
+25 bps
-25 bps
Impact of changes to weighted average discount rate
$
(11,511)
$
12,424
Impact of changes to weighted average terminal capitalization rate
(12,242)
13,192
The following are the significant assumptions in the valuation of investment properties using the direct capitalization method:
•
Capitalization rate – capitalization rates used to estimate the fair value of the investment properties
Significant unobservable inputs were as follows for December 31, 2024 and December 31, 2023:
2024
2023
Input
Range
Weighted average
Range
Weighted average
Recurring income
Capitalization rate
3.50%-5.25%
3.9%
3.50%-5.25%
3.8%
Fair values of the Company's investment properties are most sensitive to changes in the capitalization rate. An increase in this rate will result in a decrease
in the fair value of an investment property and vice versa.
Increase (decrease) in value
Input sensitivity
+25 bps
-25 bps
Impact of changes to weighted average capitalization rate
$
(54,056)
$
59,209
Investment properties with a fair value of $1,359,914 as at December 31, 2024 (December 31, 2023 - $1,347,284) are pledged as security for mortgages
and term debt. Investment properties with a fair value of $447,532 as at December 31, 2024 (December 31, 2023 - $350,837) are pledged as security for
construction loans.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 58
The Company's future minimum rental commitments, including joint operations, from non-cancellable tenant operating leases as at December 31, 2024
were as follows:
No longer than 1 year
$
51,745
Between 1 and 2 years
23,308
Between 2 and 3 years
22,514
Between 3 and 4 years
22,330
Between 4 and 5 years
21,238
Longer than 5 years
203,104
$
344,239
11. Recreational properties
The movement in recreational properties is as follows:
2024
2023
Balance, beginning of year
$
82,898
$
80,300
Acquisition
45,034
—
Additions
4,725
11,387
Depreciation
(1,651)
(5,724)
Transfer to assets held for sale
(45,203)
—
Other
(1,096)
(3,065)
Balance, end of year
$
84,707
$
82,898
Cost
$
104,223
$
135,402
Accumulated depreciation
(19,516)
(52,504)
Balance, end of year
$
84,707
$
82,898
During the year ended December 31, 2024, the Company acquired control of a partnership holding condominium, retail and hotel properties where we
previously held a 25-50% interest. Refer to Note 10 for further details.
2024
2023
Operational recreational properties:
Arapahoe Basin ski hill (Colorado)
$
—
$
44,477
Broadview Hotel (Ontario)
29,239
11,624
Gladstone House (Ontario)
27,063
13,551
Postmark Hotel (Ontario)
26,415
11,040
Willows Golf Course (Saskatchewan)
1,990
2,206
$
84,707
$
82,898
12. Equity accounted investments
The Company has entered into certain arrangements in the form of jointly controlled entities for various businesses. These arrangements include
restrictions on the ability to access assets without the consent of all partners and include distribution conditions outlined in partnership agreements. These
arrangements are accounted for under the equity method. The equity method of accounting is also applicable to investments in which the Company is
deemed to be able to exercise significant influence over the investee company. As at December 31, 2024, the carrying value of these arrangements was
$657,908 (December 31, 2023 - $671,030).
In determining if an entity is a subsidiary of the Company, the Company makes significant judgments about whether it has power, and therefore control,
over such an entity. In addition to voting rights, the Company considers the contractual rights and obligations arising from other arrangements, and other
relevant factors relating to an entity in determining if the Company has the power and ability to affect returns from an investee, among other factors. The
contractual rights and obligations considered by the Company include, among others, the approvals and decision-making process over significant
operating, financing and investing activities, the responsibilities and scope of decision-making power of the Company, the termination provisions of
applicable agreements, the types and determination of fees paid to the Company and the significance, if any, of any investment made by the Company.
In the year ended December 31, 2024, the Company recorded an impairment loss of $nil (year ended December 31, 2023 - $72,935) on its investment in
Dream Office REIT as a result of the impairment test trigger resulting from the sustained lower unit price. The impairment loss was calculated as the
difference between its value-in-use and the carrying value. The value-in-use for the investment was determined through preparation of a discounted cash
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 59
flow model which included a scenario weighted approach. The discounted cash flow model incorporates significant key assumptions in the scenarios
including a portfolio capitalization rate, discount rate and Dream Office REIT’s adjusted funds from operations ("AFFO").
The Company projects Dream Office REIT’s AFFO over five years and applies a perpetual long-term growth rate thereafter. The discount rate assumption of
8.0% (December 31, 2023 - 8.2%) represents the Company's assessment of the uncertainty in the amount and timing of cash flows. The portfolio
capitalization rate of 6.5% (December 31, 2023 - 6.5%) is the Company’s estimate based on historical spreads over the cost of debt. Significant judgement
and estimation is required in preparing these calculations, therefore, it is reasonably possible that changes to key assumptions may impact the value-in-use
calculation. An increase of 50 basis points ("bps") in both the discount rate and the portfolio capitalization rate combined with a 10% reduction in AFFO
would result in a lower estimated value-in-use of $53,843. A decrease of 50 bps in both the discount rate and the portfolio capitalization rate combined
with a 10% increase in AFFO would result in a higher estimated value-in-use of $62,116. Generally, the discount rate and portfolio capitalization rate would
be expected to move in the same direction in response to changes in economic circumstances, whereas AFFO is typically independent of the discount rate
and portfolio capitalization rate. However, the sensitivity noted above includes the maximum impact if the assumptions were to change concurrently.
The following tables summarize the Company's proportionate share of assets and liabilities in equity accounted investments (segregated between
development and recurring income investments) as at December 31, 2024 and December 31, 2023.
2024
Project level (100%)
Assets
Liabilities
Net assets
Development investments
Canary District
$
355,601 $
(267,621) $
87,980
Forma
646,975
(461,167)
185,808
Brightwater
639,506
(441,203)
198,303
Victory Silos
180,308
(150,342)
29,966
Canary Landing (formerly West Don Lands)
444,694
(364,667)
80,027
Quayside
277,721
(188,540)
89,181
Other development investments
394,525
(332,695)
61,830
Total development investments
$
2,939,330 $
(2,206,235) $
733,095
Recurring income investments
Dream Office REIT
$
2,584,927 $
(1,457,666) $
1,127,261
Dream Residential REIT
589,466
(210,275)
379,191
Brighton Marketplace
89,120
(51,861)
37,259
Maple House at Canary Landing
541,839
(394,292)
147,547
Other recurring income investments
626,322
(288,680)
337,642
Total recurring income investments
$
4,431,674 $
(2,402,774) $
2,028,900
Total
$
7,371,004 $
(4,609,009) $
2,761,995
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 60
2024
At Dream's share
Ownership
interest
Assets
Liabilities
Net assets
Difference
between net
assets and
deemed cost of
investments(1)
Total
Development investments
Canary District
33%-50% $
155,407 $
(117,941) $
37,466 $
— $
37,466
Forma
33%
226,829
(153,448)
73,381
—
73,381
Brightwater
31%
190,572
(134,861)
55,711
—
55,711
Victory Silos
50%
103,701
(76,112)
27,589
—
27,589
Canary Landing
33%
152,394
(125,806)
26,588
—
26,588
Quayside
50%
135,582
(90,999)
44,583
—
44,583
Other development investments
7%-78%
83,751
(70,297)
13,454
—
13,454
Total development investments
$
1,048,236 $
(769,464) $
278,772 $
— $
278,772
Recurring income investments
Dream Office REIT(2)
31% $
808,871 $
(456,132) $
352,739 $
(161,699) $
191,040
Dream Residential REIT(2)
12%
69,755
(24,883)
44,872
—
44,872
Brighton Marketplace
50%
44,560
(25,931)
18,629
(2,286)
16,343
Maple House at Canary Landing
33%
162,126
(131,452)
30,674
—
30,674
Other recurring income investments
5%-50%
176,923
(80,716)
96,207
—
96,207
Total recurring income investments
$
1,262,235 $
(719,114) $
543,121 $
(163,985) $
379,136
Total
$
2,310,471 $
(1,488,578) $
821,893 $
(163,985) $
657,908
(1) The difference between net assets and the deemed cost of investments is due to the Company's proportionate share of the equity accounted investment's net assets being either higher or lower
than the Company's cost of the investment at the end of the period. Specifically for the Company's investment in Dream Office REIT, the primary difference relates to cumulative impairments.
(2) As at December 31, 2024, the fair value of the Company's unit holdings in Dream Office REIT and Dream Residential REIT were $17.86 per unit and $8.98 per unit, respectively, for a total fair value
of $105,930 and $20,952, respectively.
2023
Project level (100%)
Assets
Liabilities
Net assets
Development investments
Canary District
$
287,410 $
(207,032) $
80,378
Forma
575,311
(381,100)
194,211
Brightwater
694,526
(536,417)
158,109
Victory Silos
180,308
(150,342)
29,966
Canary Landing (formerly West Don Lands)
326,379
(245,012)
81,367
Quayside
264,766
(182,003)
82,763
Other development investments
473,445
(373,200)
100,245
Total development investments
$
2,802,145 $
(2,075,106) $
727,039
Recurring income investments
Dream Office REIT
$
2,668,318 $
(1,413,169) $
1,255,149
Dream Residential REIT
544,813
(256,444)
288,369
Brighton Marketplace
90,221
(51,386)
38,835
Maple House at Canary Landing
510,006
(360,114)
149,892
Other recurring income investments
571,938
(128,274)
443,664
Total recurring income investments
$
4,385,296 $
(2,209,387) $
2,175,909
Total
$
7,187,441 $
(4,284,493) $
2,902,948
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 61
2023
At Dream's share
Ownership
interest
Assets
Liabilities
Net assets
Difference between
net assets and
deemed cost of
investments(1)
Total
Development investments
Canary District
33%-50% $
127,684 $
(93,690) $
33,994 $
— $
33,994
Forma
33%
202,530
(126,946)
75,584
—
75,584
Brightwater
31%
219,563
(164,672)
54,891
—
54,891
Victory Silos
50%
104,239
(75,169)
29,070
—
29,070
Canary Landing
33%
109,107
(82,104)
27,003
—
27,003
Quayside
50%
132,448
(91,074)
41,374
—
41,374
Other development investments
7%-78%
89,992
(76,173)
13,819
—
13,819
Total development investments
$
985,563 $
(709,828) $
275,735 $
— $
275,735
Recurring income investments
Dream Office REIT(2)
30% $
807,917 $
(428,549) $
379,368 $
(158,222) $
221,146
Dream Residential REIT(2)
12%
64,382
(23,011)
41,371
—
41,371
Brighton Marketplace
50%
45,111
(25,693)
19,418
(2,286)
17,132
Maple House at Canary Landing
33%
151,253
(120,068)
31,185
—
31,185
Other recurring income investments
5%-50%
128,670
(43,754)
84,916
(455)
84,461
Total recurring income investments
$
1,197,333 $
(641,075) $
556,258 $
(160,963) $
395,295
Total
$
2,182,896 $
(1,350,903) $
831,993 $
(160,963) $
671,030
(1) The difference between net assets and the deemed cost of investments is due to the Company's proportionate share of the equity accounted investment's net assets being either higher or lower
than the Company's cost of the investment at the end of the period. Specifically for the Company's investment in Dream Office REIT, the primary difference relates to cumulative impairments.
(2) As at December 31, 2023, the fair value of the Company's unit holdings in Dream Office REIT and Dream Residential REIT were $20.96 per unit and $8.93 per unit, respectively, for a total fair value
of $120,324 and $20,833, respectively.
The following tables summarize the Company’s proportionate share of revenue, earnings (loss) and earnings (loss) before depreciation in equity accounted
investments for the years ended December 31, 2024 and 2023.
2024
Project level (100%)
Revenue
Earnings (loss)
Earnings (loss) before
depreciation
Development investments
$
380,919 $
24,636 $
25,787
Recurring income investments
Dream Office REIT
196,114
(109,071)
(108,950)
Dream Residential REIT
36,243
9,046
9,046
Brighton Marketplace
6,856
(1,576)
(1,147)
Maple House at Canary Landing
12,257
93
93
Other recurring income investments
11,738
(8,850)
(7,324)
Total recurring income investments
$
263,208 $
(110,358) $
(108,282)
Total
$
644,127 $
(85,722) $
(82,495)
2024
At Dream's share
Ownership interest
Revenue
Earnings (loss)
Earnings (loss) before
depreciation
Development investments(1)
7%-78% $
142,791 $
11,693 $
11,888
Recurring income investments
Dream Office REIT(2)
31%
61,680
(29,065)
(29,028)
Dream Residential REIT
12%
4,089
1,021
1,021
Brighton Marketplace
50%
3,428
(788)
(573)
Maple House at Canary Landing
33%
4,086
31
31
Other recurring income investments
5%-50%
6,579
(2,023)
(1,632)
Total recurring income investments
$
79,862 $
(30,824) $
(30,181)
Total
$
222,653 $
(19,131) $
(18,293)
(1) Earnings in the year ended December 31, 2024 relate primarily to occupancies at Canary House at Canary Landing and Brightwater Towns.
(2) Loss in the year ended December 31, 2024 primarily relates to the Company's share of Dream Office REIT's losses.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 62
2023
Project level (100%)
Revenue
Earnings (loss)
Earnings (loss) before
depreciation
Development investments
$
64,386 $
13,525 $
14,277
Recurring income investments
Dream Office REIT
190,448
(77,196)
(77,034)
Dream Residential REIT
62,904
(19,639)
(19,639)
Brighton Marketplace
6,886
3,727
4,138
Maple House at Canary Landing
823
27,566
27,566
Other recurring income investments
17,331
2,723
3,973
Total recurring income investments
$
278,392 $
(62,819) $
(60,996)
Total
$
342,778 $
(49,294) $
(46,719)
2023
At Dream's share
Ownership interest
Revenue
Earnings (loss)
Earnings (loss) before
depreciation
Development investments(1)
7%-78% $
23,102 $
5,321 $
5,383
Recurring income investments
Dream Office REIT(2)
30%
63,139
(181,415)
(181,361)
Dream Residential REIT
12%
7,443
(1,683)
(1,683)
Brighton Marketplace
50 %
1,627
1,027
1,232
Maple House at Canary Landing
33%
275
9,189
9,189
Other recurring income investments
5%-50%
8,944
2,255
2,521
Total recurring income investments
$
81,428 $
(170,627) $
(170,102)
Total
$
104,530 $
(165,306) $
(164,719)
(1) Earnings in the year ended December 31, 2023 relate primarily to fair value gains in Canary District and Canary Landing.
(2) Loss in the year ended December 31, 2023 relates to a loss of $88,204 on the disposition of 7,032,649 Dream Office REIT units for gross proceeds of $109,006, as well as an impairment loss of
$72,935 and the Company's share of Dream Office REIT's losses.
13. Capital and other operating assets
Capital and other operating assets consisted of the following:
2024
2023
Restricted cash(1)
$
43,646
$
18,346
Goodwill
13,576
13,576
Prepaid expenses(2)
13,651
20,295
Capital assets
7,890
10,622
Right-of-use assets
1,158
829
Other
4,587
9,561
Total capital and other operating assets
$
84,508
$
73,229
(1) Included in restricted cash as at December 31, 2024 is $38,276 of project-specific cash restricted to debt repayments.
(2) Included in prepaid expenses as at December 31, 2024 is $1,432 of capitalized sales commissions relating to housing and condominium sales to be recognized in future periods (December 31, 2023
- $4,282).
2024
2023
Capital assets
$
23,065
$
26,603
Accumulated depreciation
(15,175)
(15,981)
Total capital assets
$
7,890
$
10,622
Restricted cash represents cash advanced by the Company to secure letters of credit provided to various government agencies to support development
activity, certain customer deposits on land, housing and condominium sales required for specific statutory requirements before closing, and cash held as
security.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 63
Right-of-Use Assets
The movement in right-of-use assets relating to property and equipment is as follows:
2024
2023
Balance, beginning of year
$
829
$
1,931
Additions
678
144
Depreciation
(349)
(392)
Disposition
—
(854)
Balance, end of year
$
1,158
$
829
Goodwill
Goodwill arising from business combinations is allocated at the lowest level within the Company at which it is monitored by management to make business
decisions and, therefore, has been allocated to the Zibi CGU within the Development segment.
The recoverable amount of the Zibi CGU has been estimated using fair value less costs of disposal. The CGU's inventory was fair valued using a third-party
appraisal, whereby the direct comparison approach was used to compare Zibi with similar sites classified as vacant for development that have been
recently sold or offered for sale. The fair value measurement is categorized in Level 3 of the fair value hierarchy.
14. Assets held for sale
In the year ended December 31, 2024, the Company disposed of its interest in Arapahoe Basin, for a gain of $157,362 that was recognized in the
consolidated statement of earnings, net of $6,636 transactions costs, for the year ended December 31, 2024.
Assets held for sale
2024
2023
Balance, beginning of year
$
—
$
—
Transfer from recreational properties (Note 11)
45,203
—
Transfer from land inventory (Note 9)
221
—
Transfer from accounts receivable
2,556
—
Transfer from capital and other assets (Note 13)
1,921
—
Change to assets held for sale
908
—
Assets sold during the year
(50,809)
Balance, end of year
$
—
$
—
Liabilities associated with assets held for sale
2024
2023
Balance, beginning of year
$
—
$
—
Transfer from debt (Note 17)
7,792
—
Transfer from accounts payable (Note 15)
7,695
—
Change to liabilities held for sale
(1,357)
—
Liabilities relieved during the year
(14,130)
Balance, end of year
$
—
$
—
15. Accounts payable and other liabilities
The details of accounts payable and other liabilities are as follows:
2024
2023
Accrued liabilities
$
95,348
$
70,461
Customer deposits
37,180
70,893
Trade payables(1)
69,640
73,310
Lease obligation
1,579
10,088
Deferred revenue
1,290
8,040
Interest rate swaps
6,062
584
$
211,099
$
233,376
(1) Included in trade payables were bank overdraft balances of $3,988 as at December 31, 2024 (December 31, 2023 - $1,779).
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 64
Lease Obligation
2024
2023
Maturity analysis - contractual undiscounted cash flows
Less than one year
$
577
$
1,526
One to two years
504
1,386
Two to three years
412
1,285
Three to four years
112
1,062
Four to five years
86
930
More than five years
99
7,427
Total undiscounted lease obligation as at end of year
$
1,790
$
13,616
Discounted using the lessee's incremental borrowing rate as at end of year
(211)
(3,528)
Total discounted lease obligation as at end of year
$
1,579
$
10,088
Current portion of lease obligation
534
1,462
Non-current portion of lease obligation
1,045
8,626
Total lease obligation
$
1,579
$
10,088
There are no material future cash outflows to which the Company is potentially exposed that are not reflected in the measurement of lease obligations.
16. Provision for real estate development costs
The movement in the provision for real estate development costs is as follows:
2024
2023
Balance, beginning of year
$
61,069
$
74,162
Additional provisions
37,646
22,798
Utilized during the year
(22,890)
(35,891)
Balance, end of year
$
75,825
$
61,069
The provision for real estate development costs includes accrued costs based on the estimated costs to complete land, housing and condominium
development projects for which revenue has been recognized. These amounts have not been discounted, as the majority are expected to be utilized within
one year.
17. Debt
Project-Specific Debt
Construction loans
Operating line -
Western Canada
Mortgages and
term debt
Operating line -
Dream Impact Fund
Total
Balance, January 1, 2024
$
449,540 $
— $
1,059,203 $
10,500 $
1,519,243
Borrowings
190,547
153,500
42,147
10,200
396,394
Repayments
(187,595)
(153,500)
(50,420)
(20,700)
(412,215)
Debt assumed on acquisition
9,847
—
63,672
—
73,519
Interest and other
274
—
505
—
779
Balance, December 31, 2024
$
462,613 $
— $
1,115,107 $
— $
1,577,720
Construction loans
Operating line -
Western Canada
Mortgages and
term debt
Operating line -
Dream Impact Fund
Total
Balance, January 1, 2023
$
328,139 $
73,796 $
869,405 $
9,400 $
1,280,740
Borrowings
240,382
67,000
247,788
40,800
595,970
Repayments
(118,794)
(141,500)
(97,454)
(39,700)
(397,448)
Debt assumed on acquisition
—
—
41,948
—
41,948
Interest and other
(187)
704
(2,484)
—
(1,967)
Balance, December 31, 2023
$
449,540 $
— $
1,059,203 $
10,500 $
1,519,243
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 65
Corporate Debt Facilities
Non-revolving
term facility
Operating line - Dream
Impact Trust
Convertible debenture
(host instrument) -
Dream Impact Trust
Convertible debenture
(conversion feature) -
Dream Impact Trust
Total
Balance, January 1, 2024
$
223,769 $
— $
67,530 $
7 $
291,306
Borrowings
—
23,000
—
—
23,000
Repayments
—
(23,000)
—
—
(23,000)
Interest and other
642
—
705
(7)
1,340
Balance, December 31, 2024
$
224,411 $
— $
68,235 $
— $
292,646
Non-revolving
term facility
Operating line - Dream
Impact Trust
Convertible debenture
(host instrument) -
Dream Impact Trust
Convertible debenture
(conversion feature) -
Dream Impact Trust
Total
Balance, January 1, 2023
$
223,128 $
41,421 $
66,833 $
449 $
331,831
Borrowings
—
5,500
—
—
5,500
Repayments
—
(47,200)
—
—
(47,200)
Interest and other
641
279
697
(442)
1,175
Balance, December 31, 2023
$
223,769 $
— $
67,530 $
7 $
291,306
Further details on the weighted average interest rates and maturities are included in Note 28.
Construction Loans and Mortgages and Term Debt
Construction loans relate to housing and multi-family rental projects under development, project-specific financing and land servicing and may be due on
demand with recourse provisions and/or hold security against the underlying property. Mortgages and term debt are property-specific and may hold
security against the underlying property with or without recourse provisions.
Operating Line - Western Canada
The Company's revolving term credit facility (the "operating line") is primarily used to finance land servicing activity in Saskatchewan and Alberta. The
operating line is available up to a formula-based maximum not to exceed $320,000, with a syndicate of Canadian financial institutions. The operating line
bears interest, at the Company's option, at a rate per annum equal to either the bank's prime lending rate plus 1.25% or at the bank's then prevailing
Canadian Overnight Repo Rate Average ("CORRA") rate plus 2.50%. The operating line is secured by a general security agreement and a first charge against
various real estate assets in Western Canada.
As at December 31, 2024, funds available under this facility were $310,645, as determined by the formula-based maximum calculation with $27,752 of
letters of credit issued against the facility (December 31, 2023 - $320,000, with $46,493 of letters of credit issued against the facility). As of December 31,
2024, $nil was drawn on the operating line (December 31, 2023 - $nil).
Non-Revolving Term Facility
The Company's non-revolving term facility is with a syndicate of Canadian financial institutions, matures on November 30, 2025 and totals $225,000. The
non-revolving term facility bears interest, at the Company's option, at a rate per annum equal to either the bank's prime lending rate plus 1.50% or at the
bank's then prevailing CORRA rate plus 2.75%. The facility is secured by a general security agreement and a first charge against various real estate assets
and other financial assets of the Company.
Operating Line - Dream Impact Trust
During the year ended December 31, 2024, the Company amended its credit facility, reducing the borrowing capacity from $25,000 to $5,000, the credit
facility's maturity date remains April 30, 2025. The facility bears interest at the CORRA rate plus 2.25%, or at the bank's prime rate plus 1.25%.
As at December 31, 2024, $nil was drawn on the facility (December 31, 2023 - $nil) and funds available under this facility were $nil (December 31, 2023 –
$16,700), net of $300 of letters of credit issued against the facility (December 31, 2023 – $300). Dream Impact Trust is not able to borrow under the facility
as the availability under the formula was $nil when the investment properties collateralized under the facility were sold during the year.
Convertible Debentures - Dream Impact Trust
During the year ended December 31, 2022, the Company closed on a public offering of $40,000 aggregate principal amount of impact convertible
unsecured subordinated debentures ("2022 Debentures"), excluding transaction costs of $2,048. The 2022 Debentures bear a coupon interest rate of
5.75% per annum and an effective interest rate of 6.0% per annum, payable semi-annually on June 30 and December 31 of each year, commencing on
December 31, 2022 and maturing on December 31, 2027. The 2022 Debentures are convertible at the holder's option into units of Dream Impact Trust at a
conversion price of $32.00 per unit, representing a conversion rate of 31.2500 units of $1 principal amount, convertible at the holder's option at any time
before the maturity date.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 66
During the year ended December 31, 2021, the Company closed on a public offering of $30,000 aggregate principal amount of impact convertible
unsecured subordinated debentures ("2021 Debentures"), excluding transaction costs of $340. The 2021 Debentures bear a coupon interest rate of 5.50%
per annum and an effective interest rate of 6.2% per annum, payable semi-annually on July 31 and January 31 of each year, commencing on January 31,
2022 and maturing on July 31, 2026. The 2021 Debentures are convertible at the holder's option into units of Dream Impact Trust at a conversion price of
$31.02 per unit, representing a conversion rate of 32.2373 units of $1 principal amount, convertible at the holder's option at any time before the maturity.
The fair value of the host instruments at inception were calculated using an estimated interest rate for an unsecured debenture with a similar term to
maturity and without a conversion feature. The conversion features are recognized as a financial liability and are fair valued for each reporting period.
Margin Facility
In the year ended December 31, 2024, the Company amended its revolving margin facility, reducing it from $150,000 to $100,000. The margin loan bears
interest, at the Company's option, at a rate per annum equal to either the bank's prime lending rate plus 1.25% or at the CORRA rate plus 2.50%. As of
December 31, 2024, funds available were $32,938 (December 31, 2023 - $29,177) and $nil was drawn on the facility (December 31, 2023 - $nil).
Covenants
The Company's debt agreements contain a number of covenants with which the Company must comply and meet certain financial ratios. The Company's
non-revolving term facility and operating line - Western Canada set out a combination of four main covenants which are tested quarterly following each
reporting date based on the results of Dream Asset Management Corporation, prepared on a non-IFRS basis as prescribed by the related agreements. A
failure to meet these tests could result in default and, if not cured or waived, could result in an acceleration of the repayment in the underlying financing.
These covenants are:
•
Debt to Total Asset Ratio – the Company is required to maintain a maximum specified ratio of its total debt obligations and its total assets, each
as defined in the agreement.
•
Interest Coverage Ratio – the Company is required to maintain a minimum specified ratio of earnings before interest, taxes, depreciation and
amortization ("EBITDA"), as defined in the agreement, to total interest expense.
•
Adjusted Net Worth – the Company is required to maintain a minimum amount of equity, as defined in the agreement.
•
Asset Coverage Value – the Company is required to maintain a minimum level of certain assets, as defined in the agreement.
The majority of the Company's remaining project-level debt with covenants reference, or are consistent with, these corporate covenants in the respective
agreements. Should the Company fail a project-specific debt covenant test, the Company generally has cure mechanisms in the related debt agreements
that allow the Company to post a letter of credit or other collateral in order to bring the Company in compliance with the covenant test. As a result, a
failure to meet a covenant test would not immediately constitute an event of default.
The Company received a covenant waiver on a mortgage on a portfolio of properties held in Toronto. The mortgage has been presented as a current
obligation as at December 31, 2024. The next test for this covenant will be as of June 30, 2025.
With the exception of the above, the Company is in compliance with these financial covenants as of December 31, 2024. The carrying amount of the
Company's debt subject to periodic compliance with financial covenants as at December 31, 2024 is $857,847. There are no indications that the Company
may have difficulties complying with the covenants when they will be next tested as at the December 31, 2024 annual reporting date.
Interest Rate Swaps
The Company is exposed to interest rate risk primarily through its variable rate debt obligations. Variable rate debt represented 30% (December 31, 2023 -
26%) of the Company's total debt obligation as at December 31, 2024. In order to manage the interest rate risk on certain variable rate debt, the Company
has entered into interest rate swaps as detailed below.
Maturity date(s)
Notional amount hedged
Weighted average fixed
interest rate
Fair value of hedging
instruments
October 31, 2025 to August 31, 2028
$
330,980
6.38% $
(6,062)
March 18, 2029
75,500
3.43%
1,734
The Company applied hedge accounting to these relationships, whereby the change in fair value of the effective portion of the hedging derivatives was
recognized in accumulated other comprehensive income. Settlements of both the fixed and variable portions of the interest rate swaps occur on a monthly
basis. The full amounts of the hedges were determined to be effective as at December 31, 2024 as all critical terms matched during the year.
18. Dream Impact Trust units
The Company accounts for the 63% interest in Dream Impact Trust held by other unitholders as a financial liability measured at FVTPL (December 31, 2023
- 65%). As at December 31, 2024, the trust units had a fair value of $43,711 based on the trading price on the TSX. The movement in Dream Impact Trust
units is as follows:
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 67
2024
2023
Units
Total
Units
Total
Balance, beginning of year
11,508,852
$
70,779
11,686,387
$
188,385
Units acquired by the Company in the year
—
—
(102,850)
(1,403)
Units issued to other unitholders through distribution
reinvestment plan
10,050
57
21,987
190
Units repurchased and cancelled by Dream Impact Trust
—
—
(111,937)
(1,187)
Deferred units exchanged for Dream Impact Trust units
14,358
57
15,265
196
Fair value adjustment
—
(27,182)
—
(115,402)
Balance, end of year
11,533,260
$
43,711
11,508,852
$
70,779
In the year ended December 31, 2024, the Company recognized a gain related to Dream Impact Trust units of $26,891 in the consolidated statements of
earnings, comprising a fair value gain of $27,182 due to a decrease in Dream Impact Trust's trading price offset by cash distributions to other unitholders of
$291 (year ended December 31, 2023 - gain of $107,427 comprising a fair value gain of $115,402 due to a decrease in Dream Impact Trust's trading price
offset by distributions to other unitholders of $7,975).
19. Dream Impact Fund units
The Company accounts for the 66% interest (December 31, 2023 - 62%) in Dream Impact Fund held by other unitholders as a financial liability and this
amount is remeasured to fair value each period based on the Dream Impact Fund unit's closing net asset value. The movement in Dream Impact Fund units
is as follows:
2024
2023
Units
Total
Units
Total
Balance, beginning of year
9,744,416
$
113,405
6,213,941
$
69,919
Units issued to other unitholders
2,165,649
22,798
3,530,475
39,925
Fair value adjustment
—
(9,828)
—
3,561
Balance, end of year
11,910,065
$
126,375
9,744,416
$
113,405
In the year ended December 31, 2024, third-party investors contributed $22,798 to Dream Impact Fund (year ended December 31, 2023 - $39,925).
In the year ended December 31, 2024, the Company recognized a gain of $9,828 related to Dream Impact Fund units (year ended December 31, 2023 - loss
of $3,561) in the consolidated statements of earnings due to a change in net asset value attributable to Dream Impact Fund's non-controlling interest.
20. Income taxes
In the year ended December 31, 2024, the Company recognized an income tax expense $37,515 (year ended December 31, 2023 – income tax expense
recovery of $2,711), the major components of which include the following items:
2024
2023
Current income taxes:
Current income taxes with respect to profits during the year
$
76,580
$
19,594
Current tax adjustments with respect to prior year
(967)
260
Other items affecting current income tax expense (recovery)
(10,851)
5,963
Current income tax expense
64,762
25,817
Deferred income taxes (recoveries):
Origination and reversal of temporary differences
(26,671)
(28,735)
Expense arising from previously unrecognized temporary difference
(120)
1,126
Impact of changes in income tax rates
(456)
(919)
Deferred income tax recovery
(27,247)
(28,528)
Income tax expense (recovery)
$
37,515
$
(2,711)
Due to non-coterminous tax years of the Company’s partnership and trust interests, income of approximately $2,101 for the year ended December 31,
2024 (year ended December 31, 2023 – income of $60,496) relating to such partnership and trust interests will be included in computing the Company’s
taxable income for its 2025 and 2024 taxation years.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 68
The income tax recovery amount on pre-tax earnings differs from the income tax recovery amount that would arise using the combined Canadian federal
and provincial statutory tax rate of 25.7% (December 31, 2023 - 25.9%) as presented in the table below. Cash paid, net of refunds, for income taxes for the
year ended December 31, 2024 was $125,010 (year ended December 31, 2023 – $3,175).
2024
2023
Earnings (loss) before tax at statutory rate of 25.7% (2023 - 25.9%)
$
57,921
$
(31,026)
Effect on taxes of:
Non-deductible expenses
2,045
3,350
Adjustment in expected future tax rates
(456)
(919)
Non-recognition of the benefit of current year’s tax (gains) losses
347
4,547
Tax adjustments in respect of prior years
(1,189)
1,625
Non-taxable portion of capital (gains) losses
(6,912)
14,959
Other items
(14,241)
4,753
Income tax expense (recovery)
$
37,515
$
(2,711)
The movement in the deferred income taxes in the year ended December 31, 2024 and the year ended December 31, 2023, and the net components of the
Company’s net deferred income tax liabilities, are presented in the following table:
Asset (Liability)
Accounts
receivable
Real estate and
assets held
for sale
Non-coterminous
tax year
Financial
instruments/
equity accounted
investments
Loss carry-
forwards
Total
Balance, January 1, 2023
$
(13,884)
$
(66,941)
$
(25,573)
$
(53,570)
$
27,438
$
(132,530)
(Charged) credited to:
Earnings for the year
1,710
3,333
9,926
7,463
6,096
28,528
Other comprehensive income (loss)
—
(90)
—
1,771
—
1,681
Balance, December 31, 2023
$
(12,174)
$
(63,698)
$
(15,647)
$
(44,336)
$
33,534
$
(102,321)
(Charged) credited to:
Earnings (losses) for the year
(3,805)
5,826
15,107
6,938
3,181
27,247
Other comprehensive income (loss)
—
(161)
—
2,410
—
2,249
Balance, December 31, 2024
$
(15,979)
$
(58,033)
$
(540)
$
(34,988)
$
36,715
$
(72,825)
As at December 31, 2024, the Company had tax losses of $17,971 (December 31, 2023 – $13,586) that expire between 2025 and 2044 and tax losses of
$16,266 (December 31, 2023 - $15,339) that do not expire. Deferred income tax assets have not been recognized in respect of these losses, as it is not
probable that the Company will be able to utilize all of the losses against taxable profits in the future.
21. Share capital
The Company is authorized to issue an unlimited number of Subordinate Voting Shares and an unlimited number of Class B Shares. Holders of Subordinate
Voting Shares and Class B Shares are entitled to one vote and 100 votes, respectively, for each share held. The Class B Shares are convertible into
Subordinate Voting Shares on a one-for-one basis at any time. Holders of Subordinate Voting Shares and Class B Shares are entitled to receive and
participate equally as to dividends, share for share, as and when declared by the directors of the Company. In the event of a liquidation, dissolution or
winding up of the Company, holders of Subordinate Voting Shares and Class B Shares will be entitled to the remaining property and assets of the Company.
2024
2023
Issued and outstanding
Number of shares
Amount
Number of shares
Amount
Subordinate Voting Shares
40,498,896
$
918,551
40,682,688
$
923,245
Class B Shares
1,557,322
38,782
1,557,322
38,782
42,056,218
$
957,333
42,240,010
$
962,027
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 69
The following table summarizes the changes in the Subordinate Voting Shares issued:
2024
2023
Number of shares
Amount
Number of shares
Amount
Issued and outstanding, beginning of year
40,682,688
$
923,245
41,030,346
$
929,294
Class B Shares converted into Subordinate Voting Shares
—
—
34
—
Share based compensation units exercised, net of withholding
taxes
86,299
1,719
9,896
247
Subordinate Voting Shares issued under the Restricted Share
& Restricted Share Unit Plan
116,801
1,787
204,082
4,531
Subordinate Voting Shares repurchased
(386,892)
(8,200)
(561,670)
(10,827)
Issued and outstanding, end of year
40,498,896
$
918,551
40,682,688
$
923,245
The following table summarizes the changes in the Class B Shares issued:
2024
2023
Number of shares
Amount
Number of shares
Amount
Issued and outstanding, beginning of year
1,557,322
$
38,782
1,557,356
$
38,782
Class B Shares converted into Subordinate Voting Shares
—
—
(34)
—
Issued and outstanding, end of year
1,557,322
$
38,782
1,557,322
$
38,782
Share Repurchases
The Company renewed its normal course issuer bid ("NCIB"), which commenced on September 23, 2024, under which the Company has the ability to
purchase for cancellation up to a maximum number of 2,375,743 Subordinate Voting Shares through the facilities of the TSX at prevailing market prices
and in accordance with the rules and policies of the TSX. The actual number of Subordinate Voting Shares that may be purchased, and the timing of any
such purchases as determined by the Company, are subject to a maximum daily purchase limitation of 7,009 shares, except where purchases are made in
accordance with block purchase exemptions under applicable TSX rules.
In connection with the renewal of the NCIB, the Company has established an automatic securities purchase plan (the “Plan”) with its designated broker to
facilitate the purchase of Subordinate Voting Shares under the NCIB at times when the Company would ordinarily not be permitted to purchase its
Subordinate Voting Shares due to regulatory restrictions or self-imposed blackout periods. Purchases will be made by the Company's broker based on the
parameters prescribed by the TSX and the terms of the parties’ written agreement. Outside of such restricted or blackout periods, the Subordinate Voting
Shares may also be purchased in accordance with management’s discretion. The Plan was pre-cleared by the TSX and will terminate on September 22,
2025.
In the year ended December 31, 2024, 386,892 Subordinate Voting Shares were purchased for cancellation by the Company under its NCIB at an average
price of $21.20 (year ended December 31, 2023 – 561,670 Subordinate Voting Shares at an average price of $19.28).
Dividends
In the year ended December 31, 2024, the Company declared dividends of $67,307 on its Subordinate Voting Shares and Class B Shares (year ended
December 31, 2023 - $21,320).
Subsequent to the year ended December 31, 2024, the Company's Board of Directors approved an increase to the annual dividend per Class A Subordinate
Voting Share and Class B Common Share from $0.60 per share to $0.65 per share, effective with the dividend payable on March 31, 2025 to shareholders
of record on March 14, 2025.
22. Accumulated other comprehensive income
The movement in AOCI is as follows:
Interest rate hedges
Foreign currency
translation
Equity accounted
investments
Total
Balance, January 1, 2023
$
8,976
$
12,252
$
5,247
$
26,475
Other comprehensive loss during the year
(4,140)
(623)
(2,765)
(7,528)
Balance, December 31, 2023
4,836
11,629
2,482
18,947
Other comprehensive loss during the year
(7,634)
(806)
432
(8,008)
Foreign currency exchange gain during the year
—
1,422
—
1,422
Balance, December 31, 2024
$
(2,798)
$
12,245
$
2,914
$
12,361
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 70
23. Revenue
Revenue consisted of the following:
2024
2023
Revenue from contracts with customers
$
552,380
$
316,036
Revenue from other sources - loans receivable
216
1,749
Revenue from other sources - rental income
71,910
69,162
Total revenue
$
624,506
$
386,947
Revenue from Contracts with Customers
The following table disaggregates revenue by major revenue stream and timing of revenue recognition:
2024
Land
Housing and
condominium
Investment
properties
Recreational
properties
Asset
management
Total
Revenue
$
206,410 $
210,052 $
23,769 $
56,481 $
75,072 $
571,784
Less: Intercompany revenue
—
(16,383)
—
—
(3,021)
(19,404)
Revenue from external customers
$
206,410 $
193,669 $
23,769 $
56,481 $
72,051 $
552,380
Timing of revenue recognition
At a point in time
$
206,410 $
193,669 $
— $
49,072 $
23,157 $
472,308
Over time
—
—
23,769
7,409
48,894
80,072
$
206,410 $
193,669 $
23,769 $
56,481 $
72,051 $
552,380
2023
Land
Housing and
condominium
Investment
properties
Recreational
properties
Asset
management
Total
Revenue
$
92,205 $
90,692 $
17,873 $
60,919 $
71,124 $
332,813
Less: Intercompany revenue
—
(12,056)
—
—
(4,721)
(16,777)
Revenue from external customers
$
92,205 $
78,636 $
17,873 $
60,919 $
66,403 $
316,036
Timing of revenue recognition
At a point in time
$
92,205 $
78,636 $
— $
50,112 $
4,374 $
225,327
Over time
—
—
17,873
10,807
62,029
90,709
$
92,205 $
78,636 $
17,873 $
60,919 $
66,403 $
316,036
24. Direct operating costs
Direct operating costs consisted of the following:
Recurring income
Development
2024
2023
Direct costs of real estate inventory
$
— $
296,392 $
296,392
$
130,485
Direct costs of operating investment and recreational properties
88,135
3,377
91,512
96,066
Direct costs of development and asset management
34,945
—
34,945
35,201
$
123,080 $
299,769 $
422,849
$
261,752
25. Selling, marketing, depreciation and other operating costs
Selling, marketing, depreciation and other operating costs consisted of the following:
2024
2023
Salary and other compensation
$
15,675
$
16,223
General office and other
20,826
17,604
Selling and marketing costs
6,943
5,498
$
43,444
$
39,325
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 71
26. General and administrative expenses
General and administrative expenses consisted of the following:
2024
2023
Salary and other compensation
$
11,514
$
14,043
Corporate, service and professional fees
7,670
8,221
General office and other(1)
3,732
8,891
$
22,916
$
31,155
(1) Included in general office and other for the year ended December 31, 2024 is $nil related to the settlement of certain outstanding legal claims and one-time compliance costs (year ended December
3 31, 2023 - $5,475).
27. Interest expense
Interest expense consisted of the following:
2024
2023
Interest on project-specific debt
$
75,488 $
68,613
Interest on corporate debt facilities
17,871
17,476
Amortization of deferred financing costs and accretion of effective interest
2,249
2,517
Project-specific interest capitalized to real estate development projects
(17,216)
(20,305)
Total
$
78,392 $
68,301
Interest expense was capitalized to real estate development projects for the year ended December 31, 2024 at a weighted average effective borrowing
rate of 6.38% (year ended December 31, 2023 - 7.22%).
28. Financial instruments fair value and risk management
Fair Value of Financial Instruments
The following table categorizes financial assets or liabilities measured or disclosed at fair value by level according to the significance of inputs used in
making measurements. Quoted market prices represent a Level 1 valuation. When quoted market prices are not available, the Company maximizes the use
of observable inputs. When all significant inputs are observable, the valuation is classified as Level 2. Valuations that require the significant use of
unobservable inputs are considered Level 3.
The Company recognizes transfers into and transfers out of fair value hierarchy levels as at the date of the event or change in circumstances that caused
the transfer. There were no transfers between hierarchy levels during the year.
2024
2023
Fair value
hierarchy
Carrying value
Fair value
Carrying value
Fair value
Recurring measurement
Financial assets
Participating mortgages
Level 3
$
—
$
—
$
4,060
$
4,060
Interest rate swaps
Level 2
1,734
1,734
5,962
5,962
Investment holdings
Level 3
16,408
16,408
46,753
46,753
Loans receivable
Level 3
40,478
40,478
4,611
4,611
Financial liabilities
Dream Impact Trust units
Level 1
43,711
43,711
70,779
70,779
Dream Impact Fund units
Level 3
126,375
126,375
113,405
113,405
Interest rate swaps
Level 2
6,062
6,062
584
584
Convertible debentures (conversion features) - Dream Impact Trust
Level 3
—
—
7
7
Fair values disclosed
Lease obligation
Level 3
1,579
1,579
10,088
10,088
Loans receivable
Level 3
—
—
38,436
36,075
Operating line - Dream Impact Fund
Level 3
—
—
10,500
10,500
Construction loans
Level 3
462,613
445,199
449,540
427,597
Mortgages and term debt
Level 3
1,115,107
1,022,036
1,059,203
1,003,596
Non-revolving term facility
Level 3
224,411
225,000
223,769
225,000
Convertible debentures (host instruments) - Dream Impact Trust
Level 3
68,235
67,335
67,530
65,675
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 72
Cash and cash equivalents, accounts receivable, loans receivable, deposits, restricted cash and certain financial instruments included in accounts payable
and other liabilities, with the exception of lease obligations, are carried at amortized cost, which approximates their fair values due to their short-term
nature.
The fair value of the Dream Impact Trust units is based on the listed market price on the TSX as at December 31, 2024 of $3.79 per unit for the 11,533,260
outstanding trust units not held by the Company.
Level 3 Fair Value Measurements
The Company used the following techniques to determine the fair value measurements categorized in Level 3:
Dream Impact Fund Units
The fair value of the Dream Impact Fund units liability is remeasured to fair value each period based on the Dream Impact Fund unit's closing net asset
value.
Loans Receivable
The fair value of loans receivable as at December 31, 2024 was determined by discounting the expected cash flows of each loan using a market interest
rate. The market interest rates were determined taking into consideration similar instruments with corresponding maturity dates, plus a credit adjustment
in accordance with the borrower's creditworthiness as well as considering the risk characteristic of the underlying development.
Project-Specific Debt, Non-Revolving Term Facilities and Revolving Term Facilities, Convertible Debentures and Lease Obligation
The fair value of the operating line - Western Canada, construction loans, mortgages and term debt, non-revolving term facilities and revolving term
facilities and convertible debentures (host instruments) has been calculated by discounting the expected cash flows of each loan using a discount rate
specific to each individual loan or obligation. The discount rate is determined using the bond yield for similar instruments of similar maturity adjusted for
each individual project’s specific credit risk. In determining the adjustment for credit risk, the Company considers current market conditions and other
indicators of the Company’s creditworthiness.
Convertible Debentures (Conversion Features) - Dream Impact Trust
The significant unobservable inputs used in the fair value measurement of the conversion features on the convertible debentures is the volatility. The
Company calculated the expected volatility of the conversion features using historical pricing of Dream Impact Trust and other similar companies in the
industry. The volatility used as at December 31, 2024 was 31.5%. If the volatility used in the fair value calculation were to increase or decrease by 5%, the
value of the conversion features would have a nominal impact.
Valuation Process
The Company’s finance department is responsible for either determining the fair value measurements directly or reviewing the fair value measurements
provided by third-party appraisers. On a quarterly basis, management will review the valuation policies, procedures and analysis of changes in fair value
measurements. Refer to Note 19 for a continuity of the Company's Dream Impact Fund units.
Loans receivable
Investment holdings
Convertible
debentures
(conversion features)
Interest rate swaps
Participating
mortgages
Balance, December 31, 2023
$
43,047
$
46,753
$
(7)
$
5,378
$
4,060
Issued or acquired during the year:
Contributions/borrowings/advances
30,368
10,804
—
—
—
Distributions
—
(39,377)
—
—
—
Repayments
(33,629)
—
—
—
(4,400)
Interest capitalized, amortization and other
692
—
—
—
—
Total gains or losses for the year included in net
earnings:
Change in fair value
—
—
7
—
340
Included in other comprehensive income:
Change in fair value
—
(1,772)
—
(9,706)
—
Balance, December 31, 2024
$
40,478
$
16,408
$
—
$
(4,328)
$
—
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 73
Loans receivable
Investment holdings
Convertible
debentures
(conversion features)
Interest rate swaps
Participating
mortgages
Balance, December 31, 2022
$
59,619
$
40,950
$
(449)
$
10,376
$
5,193
Issued or acquired during the year:
Contributions/borrowings/advances
56
10,554
—
—
—
Distributions
—
(4,751)
—
—
—
Repayments
(19,435)
—
—
—
—
Interest capitalized, amortization and other
2,807
—
—
—
—
Total gains or losses for the year included in net
earnings:
Change in fair value
—
—
442
—
(1,133)
Included in other comprehensive income:
Change in fair value
—
—
—
(4,998)
—
Balance, December 31, 2023
$
43,047
$
46,753
$
(7)
$
5,378
$
4,060
Risk Management
The Company is exposed to financial risks due to the nature of its business and the financial assets and liabilities that it holds. The Company’s overall risk
management strategy seeks to minimize potential adverse effects on the Company’s financial performance.
Market Risk
Market risk is the risk a material loss may arise from fluctuations in the fair value of a financial instrument. For purposes of this disclosure, the Company
segregates market risk into two categories: fair value risk and interest rate risk.
Fair Value Risk
Fair value risk is the risk of a potential loss from adverse movements in the values of assets and liabilities, excluding movements relating to changes in
interest rates and foreign exchange currency rates, because of changes in market prices.
The Company’s liability associated with the Dream Impact Trust units is fair valued in reference to Dream Impact Trust's unit trading price as listed on the
TSX. A 10% absolute change in the market price would increase (decrease) the carrying amount of the Dream Impact Trust liability by $4,371 before
associated taxes with a corresponding decrease (increase) in earnings before income taxes.
The Company’s liability associated with Dream Impact Fund units is fair valued in reference to Dream Impact Fund's net asset value. A 10% absolute
change in net asset value would increase (decrease) the carrying amount of the Dream Impact Fund liability by $12,638 before associated taxes with a
corresponding decrease (increase) in earnings before income taxes.
Credit Risk
Credit risk is the risk one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation. Credit risk arises
from the possibility that builders or other third-party purchasers of the Company’s real estate inventory, or other entities to which the Company may have
advanced funds, may not fulfill their contractual obligations to repay amounts due to the Company. The Company mitigates its credit risk by requiring
graduated deposits from buyers and withholding real estate titles until final payments are received. The Company also mitigates credit risk by dealing only
with builders and other third-party buyers the Company considers to have secure financial standing and by diversifying the mix of builders and markets.
Credit risk related to the loans receivable and investment holdings arises from the possibility that a borrower may not be able to honour its debt
commitments as a result of a negative change in market conditions that could result in a loss to the Company. The Company mitigates risk by actively
monitoring the mortgage and loan investments and initiating recovery procedures, in a timely manner, when required.
Credit risk may also arise from a borrower that may not be able to honour its debt commitments as a result of a negative change in market conditions that
could result in a loss to the Company. Credit risk related to financial guarantees provided by the Company arises from the possibility that counterparties
default on their financial obligations. The Company mitigates these risks by actively monitoring the mortgage/loan receivables, loan investment and
financial guarantees, and initiating recovery procedures, in a timely manner, when required. Further considerations were taken on the fair value of certain
loans within loans receivable discussed below.
Credit risk may also arise from a customer that may not be able to close financing on a land lot or condominium unit previously occupied and recognized in
revenue. The Company mitigates this risk by requiring deposits on signing, mortgage pre-approvals on initial deposit, actively monitoring collection of
interim occupancy payments, working closely with project-specific mortgage brokers, where applicable, retaining title to the underlying land or unit until
final closing, and initiating recovery procedures when required.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 74
The maximum exposure to credit risk at December 31, 2024 was $395,294 (December 31, 2023 - $570,663). This is the fair value of the Company's
accounts receivable from previously recognized land and condominium revenue, participating mortgages, loans receivable, which includes interest
receivable, and contingent liabilities for the obligation of other owners of the unincorporated joint operations and joint ventures. The Company has
recourse under these investments in the event of default by the counterparty, in which case the Company would have a claim against the underlying
collateral.
Interest Rate Risk
Interest rate risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Company is exposed to interest rate risk primarily through its variable rate debt obligations. Variable rate debt represented 30% (December 31,
2023 – 26%) of total debt obligations as at December 31, 2024. Interest rate risk is mitigated, in part, by borrowing long-term fixed rate mortgages with
relatively consistent interest expense. In addition, there is interest rate risk associated with the Company's fixed rate debt due to the expected
requirement to refinance such debts in the year of maturity. The Company is exposed to the variability in market interest rates and credit spreads on
maturing debt to be renewed. The Company has entered into interest rate swaps to further mitigate interest rate risk. See Note 17 for further details.
The Company has exposure to the variability in market interest rates on its loans receivable investments with variable rate loans and fixed rate loans
maturing within the next 12 months. As at December 31, 2024, there are no variable rate loans within loans receivable. The Company invests in mortgages
and loans secured by all types of residential and commercial real estate property that represent an acceptable underwriting risk.
The Company’s interest expense associated with variable rate interest debt would increase (decrease) depending on the loan's agreements and the Bank
of Canada's overnight rate. An increase in interest rates would correspond with an increase in interest expense. The following table is a sensitivity if
interest rates were to increase 1% or decrease 1%.
Year ended December 31, 2024
Increase 1%
Decrease 1%
Interest expense
$
5,597 $
(5,597)
Foreign Exchange Risk
Foreign exchange currency risk is the risk that the value of investments denominated in currencies other than the functional currency of the Company will
fluctuate and could adversely impact our aggregate foreign currency exposure. Equities in foreign markets are exposed to currency risk as the prices
denominated in foreign currencies are converted to the Company's functional currency in determining fair value. The Company holds assets and liabilities,
including cash and investments that are denominated in currencies other than the Canadian dollar, the functional currency. The Company is therefore
exposed to currency risk as the value of the securities denominated in other currencies fluctuates due to changes in exchange rates. As at December 31,
2024, the Company has exposure to the United States dollar through its investments in Dream Residential REIT and Dream U.S. Industrial Fund, both the
U.S. dollar and euro through its asset management agreement with Dream Industrial REIT and certain multi-family joint ventures and the U.S. dollar
through its fund management agreement with Dream U.S. Industrial Fund.
Liquidity Risk
Liquidity risk is the risk the Company will encounter difficulty in meeting obligations associated with the maturity of financial liabilities. The Company
manages its liquidity risk primarily through the management of its financial leverage. The Company uses various debt and equity ratios to monitor its
capital adequacy and debt requirements, including interest coverage, minimum net worth, average term to debt maturity, and the ratio of variable rate
debt to aggregate debt. These ratios assist the Company in assessing the debt level maintained by the Company in order to ensure adequate cash flows for
real estate development. The Company manages maturities of outstanding debt by matching them to project closing dates and monitoring the repayment
dates to ensure sufficient capital will be available to cover obligations. Management also actively monitors both project-specific and corporate-level debt
covenant compliance in addition to the Company's availability under the operating lines and margin facility.
As at December 31, 2024, the Company had $366,905 in corporate-level cash and availability under various revolving facilities. As at December 31, 2024,
the Company has sufficient liquidity available to cover obligations as they become due. As at December 31, 2024, current liabilities exceed current assets
by $654,351 (December 31, 2023 - $193,817). Current liabilities include the $225,000 non-revolving term facility maturing in November 2025. The
Company's main sources of liquidity are its cash and cash equivalents on hand, and its operating line - Western Canada. The Company is able to use its
operating line - Western Canada on short notice, which eliminates the need to hold a significant amount of cash and cash equivalents on hand.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 75
A summary of the Company’s weighted average effective interest rates as at December 31, 2024 is as follows:
Weighted average effective interest rates
Debt amount
2024
2023
Maturity dates
2024
2023
Fixed rate
Construction loans
2.83%
2.81%
2025-2047 $
180,023 $
145,588
Mortgages and term debt
3.88%
3.80%
2025-2052
942,842
937,443
Convertible debenture (host instrument) - Dream
Impact Trust
6.10%
6.10%
2026-2027
68,235
67,530
Convertible debenture (conversion feature) - Dream
Impact Trust
n/a
n/a
2026-2027
—
7
Non-revolving term facility - hedged portion
6.72%
5.45%
2025
120,000
220,000
Total fixed rate debt
4.09%
4.15%
1,311,100
1,370,568
Variable rate
Construction loans
5.90%
7.79%
2025-2026
282,590
303,952
Mortgages and term debt
5.77%
7.53%
2025-2027
172,265
121,760
Operating line - Dream Impact Fund
n/a
7.20%
2025
—
10,500
Non-revolving term facility - unhedged portion
7.18%
8.20%
2025
104,411
3,769
Total variable rate debt
6.10%
7.71%
559,266
439,981
Total debt
4.69%
5.02%
$
1,870,366 $
1,810,549
The following table summarizes the aggregate of the scheduled principal repayments and debt maturities as at December 31, 2024:
Construction loans
Mortgages and
term debt
Non-revolving
term facility
Convertible
debentures -
Dream Impact
Trust
Total
2025
$
246,083 $
234,746 $
225,000 $
— $
705,829
2026
64,004
76,144
—
30,827
170,975
2027
897
477,674
—
38,619
517,190
2028
909
70,899
—
—
71,808
2029
920
76,273
—
—
77,193
2030 and thereafter
150,874
184,363
—
—
335,237
463,687
1,120,099
225,000
69,446
1,878,232
Discount/Unamortized premium/financing costs
(1,074)
(4,992)
(589)
(1,211)
(7,866)
$
462,613 $
1,115,107 $
224,411 $
68,235 $
1,870,366
The contractual payments above include the principal repayments, including accrued interest, owing in future periods. The amounts presented above are
shown consistent with their contractual repayments. Certain facilities may be due on demand.
29. Share-based compensation
Stock Option Plan
The Company has a stock option plan under which key officers and employees are granted options to purchase Subordinate Voting Shares. Each option
granted can be exercised for one Subordinate Voting Share.
2024
2023
Options
Weighted average
exercise price
Options
Weighted average
exercise price
Options outstanding, beginning of year
810,845
$
16.23
865,845
$
16.96
Exercised
(727,500)
15.72
—
—
Expired
—
—
(55,000)
27.76
Options outstanding, end of year
83,345
$
19.71
810,845
$
16.23
Options exercisable, end of year
83,345
$
19.71
790,836
$
16.17
As at December 31, 2024, 83,345 options were outstanding under the stock option plan collectively. The fair value of the stock option grants is estimated
based on the value of the entity's shares. The fair value of the liability is remeasured at each reporting date until the date of settlement. In the year ended
December 31, 2024, a fair value gain of $201 was recognized in Investment and other income (year ended December 31, 2023 - $nil)
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 76
Performance Share Unit Plan
PSUs may be granted to current employees and are subject to either time vesting only, or time and performance vesting. PSUs subject to performance
vesting provide the holder with a minimum of 0 and a maximum of 1.5 Subordinate Voting Shares based on the achievement of predetermined Company
performance goals. In lieu of receiving Subordinate Voting Shares on vesting, PSU holders have the right to request a cash payment equal to the five-day
trailing weighted average share price of the Company’s Subordinate Voting Shares on the vesting date or settlement date, when applicable; however, the
form of payment on vesting is ultimately the decision of the Company.
2024
2023
Units
Weighted average fair
value at grant date
Units
Weighted average fair
value at grant date
Units outstanding, beginning of year
849,317
$
22.11
705,856
$
20.10
Granted
163,520
21.25
149,804
28.66
Forfeited
(8,932)
28.65
(14,920)
38.10
PSUs added by performance factor
3,754
21.56
7,501
24.94
Reinvested
71,079
21.94
19,751
22.19
Exercised
(46,261)
21.56
(18,675)
24.94
Units outstanding, end of year
1,032,477
$
21.93
849,317
$
22.11
In the year ended December 31, 2024, compensation expense of $2,945 (year ended December 31, 2023 – $3,612) related to this plan was recognized in
general and administrative expenses.
The fair value of PSUs granted in the year ended December 31, 2024 was estimated on the historical grant date with the following assumptions:
Risk-free interest rate
4.0%
Expected life
3 years
Contractual life
10 years
Deferred Share Unit Plan
The Company has a DSU incentive plan pursuant to which DSUs may be granted to eligible directors, senior management and certain service providers. As
at December 31, 2024, there were 372,637 units outstanding (December 31, 2023 – 343,891 units outstanding). In the year ended December 31, 2024,
compensation expense of $894 (year ended December 31, 2023 – $802) related to this plan was recognized in general and administrative expenses.
2024
2023
Units outstanding, beginning of year
343,891
298,896
Granted
43,217
37,479
Exercised
(40,038)
—
Reinvested
25,567
7,516
Units outstanding, end of year
372,637
343,891
Restricted Share & Restricted Share Unit Plan
The Company has an RS & RSU Plan that grants to participants an amount of cash (a “Restricted Share Award”) to be used exclusively to subscribe for
Subordinate Voting Shares (“Restricted Shares”) in accordance with the terms of the RS & RSU Plan.
In the year ended December 31, 2024, $1,787 in Restricted Share Awards was granted to be used to subscribe for Subordinate Voting Shares and 116,801
Restricted Shares were issued to be held in escrow until February 2034 (year ended December 31, 2023 - $4,531 in Restricted Share Awards and 204,082
Restricted Shares were held in escrow until February 2033). In the year ended December 31, 2024, compensation expense of $3,259 (year ended
December 31, 2023 – $2,891) related to this plan was recognized in general and administrative expenses.
The net changes in contributed surplus relating to share-based compensation were as follows:
2024
2023
Balance, beginning of year
$
20,984
$
18,082
Granted and added by performance factor, net of forfeitures
5,325
2,809
Dividends reinvested
1,887
559
Transfer of stock options to accounts payable and other liabilities
(15,406)
—
Exercised
(1,720)
(466)
Balance, end of year
$
11,070
$
20,984
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 77
30. Earnings (loss) per share
Basic earnings (loss) per share is calculated by dividing the Company’s earnings (loss) attributable to shareholders of the Company by the weighted average
number of shares outstanding in the year.
Diluted earnings (loss) per share is calculated by dividing the Company’s earnings (loss) attributable to the shareholders of the Company by the weighted
average number of shares outstanding after the dilutive effect of the stock options, performance share units and deferred share units. The diluted
weighted average number of shares used in the diluted earnings per share calculation is determined by assuming that the total proceeds received for the
conversion of such units is used to repurchase Subordinate Voting Shares at the average selling price of such publicly traded units over the term of the
calculation.
The following table summarizes the basic and diluted earnings per share and the weighted average number of shares outstanding:
2024
2023
Earnings (loss) attributable to the shareholders of the Company, basic and diluted
$
187,858 $
(117,079)
Weighted average number of shares outstanding:
Dream Subordinate Voting Shares
40,531,340
41,109,891
Dream Class B Shares
1,557,322
1,557,344
Total weighted average number of shares
42,088,662
42,667,235
Effect of dilutive securities on weighted average number of shares outstanding at the end of the year:
Share-based compensation(1)
1,624,539
—
Total weighted average number of shares outstanding after dilution
43,713,201
42,667,235
Basic earnings (loss) per share
$
4.46 $
(2.74)
Diluted earnings (loss) per share
4.30
(2.74)
(1) For the year ended December 31, 2024, 215,393 stock options and PSUs were considered anti-dilutive (year ended December 31, 2023 – 2,462,319 stock options, DSUs, RSUs and PSUs).
31. Capital management
The Company’s capital consists of debt and shareholders’ equity. The Company’s objectives in managing capital are to:
i)
Ensure adequate operating funds are available to fund the development of real estate inventory and other assets, including investments
through joint ventures and joint operations;
ii)
Ensure the Company is able to meet its lease and capital expenditure obligations relating to its investment and recreational properties;
iii)
Ensure the Company has adequate resources available to benefit from acquisition opportunities, should they arise; and
iv)
Generate a targeted rate of return on its investments.
The Company continuously monitors its debt structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics
of the underlying real estate industry.
32. Commitments and contingencies
Capital Commitments
The Company is obligated, under certain contract terms, to construct and develop investment properties, condominium and housing inventory. The
Company has entered into contracts with various suppliers and is committed to future payments of approximately $495,000 (December 31, 2023 -
$170,000).
Letters of Credit and Surety Bonds
The Company is contingently liable for letters of credit and surety bonds that have been provided to support land developments, equity accounted
investments and other activities in the amount of $120,033 (December 31, 2023 – $109,024). The Company is also contingently liable for bonds that have
been provided to support certain urban development condominium partnerships that expire at the end of a specified warranty period.
The Company is committed to pay levies in the future of up to $29,839 (December 31, 2023 – $11,499) relating to signed municipal agreements on
commencement of development of certain real estate assets. Additional development costs may also be required to satisfy the requirements of these
municipal agreements.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 78
Joint Operations, Co-ownerships, Joint Ventures and Associates
The Company may conduct its real estate activities from time to time through joint operations and joint ventures with third-party partners. The Company
was contingently liable for the obligations of the other owners of the unincorporated joint operations and joint ventures in the amount of $170,548 as at
December 31, 2024 (December 31, 2023 – $343,560). These guarantees include contingent liabilities for certain obligations of our joint venture partners,
which are exclusive of our share of those guarantees that are included in our equity accounted investments on the consolidated statements of financial
position. However, the Company would have available to it the other co-venturers’ share of assets to satisfy any obligations that may arise. From time to
time, the Company may be required to fund capital contributions to its various investments.
Legal and Other Contingencies
The Company and its operating subsidiaries may become liable under guarantees that are issued in the normal course of business and with respect to
litigation and claims that arise from time to time. In the opinion of management, any liability that may arise from such contingencies would not have a
material adverse effect on the consolidated financial statements of the Company.
33. Asset management and management services agreements and related party transactions
Dream Industrial REIT
The Company entered into an asset management agreement with Dream Industrial REIT effective October 2012, which was amended effective January 1,
2022, pursuant to which the Company provides a range of management and advisory services. The Company receives revenue in respect of these services
including base annual management fees, acquisition fees, financing fees, capital expenditure fees, development fees and incentive fees, determined in
accordance with the formulas set forth in the agreement. The incentive fee is payable in respect of each 12-month period during the term of the
agreement in an amount equal to 15% of Dream Industrial REIT’s funds from operations per unit as defined in the asset management agreement, inclusive
of gains on the disposition of any properties, in excess of a hurdle amount. The amount of the incentive fee payable by Dream Industrial REIT is contingent
on a variety of factors, including, but not limited to, changes in the fair value of investment properties, timing of dispositions and foreign exchange rates.
The asset management agreement has an initial term of 10 years and is renewable for further five-year terms. Subject to the termination provisions in the
agreement, the Company is automatically reappointed at the expiration of each five year term. Upon termination of the asset management agreement, all
accrued fees, including the incentive fee, become payable to the Company in accordance with the provisions of the agreement. In such circumstances or if
Dream Industrial REIT is acquired, the incentive fee is calculated as if all of Dream Industrial REIT’s properties were sold on the applicable date.
In addition, the Company has entered into a shared services agreement with Dream Industrial REIT. Pursuant to the agreement, Dream Industrial REIT
reimburses the Company for shared costs allocated in each calendar year on a cost recovery basis.
In the years ended December 31, 2024 and 2023, the Company earned/recovered the following amounts pursuant to the asset management and shared
services agreements with Dream Industrial REIT:
2024
2023
Asset management fees charged by Dream(1)
$
21,968 $
25,930
Cost recoveries charged by Dream
1,972
1,767
(1) Included in asset management fees charged to Dream Industrial REIT for the year ended December 31, 2024 were incentive fees of $592 (December 31, 2023 – $nil).
Included in accounts receivable are balances due from Dream Industrial REIT related to asset management agreements and cost sharing agreements of
$6,789 (December 31, 2023 - $6,505).
Office REIT
In 2019, the Company and Dream Office REIT entered into a shared services agreement pursuant to which the Company will act as the development
manager for Dream Office REIT's future development projects and Dream Office REIT will act as the property manager for the Company's stabilized
investment properties. The shared services agreement maintains certain resource sharing arrangements between the Company and Dream Office REIT.
Under the shared services agreement, in connection with each future development project, the Company earns a development fee equal to 3.75% of the
total net revenue of the development or, for rental properties, 3.75% of the IFRS Accounting Standards value upon completion, without any promote or
other incentive fees. In connection with the property management services provided by Dream Office REIT, the Company pays a fee up to 3.5% of gross
revenue of the portfolio.
The Company, via Dream Impact Trust, and Dream Office REIT entered into a property management agreement pursuant to which Dream Office REIT will
perform property management services including tenant administration, accounting, etc., for a fee of 3.5% of gross revenues. Additionally, Dream Office
REIT will perform services with respect to the leasing and construction management of the office properties for a fee equal to expenses incurred or a
percentage of the expenses incurred for each property. The property management agreement can be terminated upon an unremedied default by the
property manager, Dream Office REIT, or if there is a change in the ownership of the property.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 79
Amounts earned/recovered under the shared services and property management agreements during the years ended December 31, 2024 and 2023 are as
follows:
2024
2023
Cost recoveries charged by Dream to Dream Office REIT
$
2,232
$
1,867
Cost recoveries charged by Dream Office REIT to Dream
13,082
12,055
Cost recoveries charged by Dream Office REIT to Dream Impact Trust
2,427
2,551
Fees charged by Dream to Dream Office REIT
704
1,795
Fees charged by Dream Office REIT to Dream
547
426
Fees charged by Dream Office REIT to Dream Impact Trust
1,027
939
The net amount owing to Dream Office REIT as of December 31, 2024 was $632 (December 31, 2023 – $416).
Dream Residential REIT
The Company, through a subsidiary, and a third-party service provider ("Asset Managers") entered into an asset management agreement with Dream
Residential REIT effective May 6, 2022, pursuant to which the Asset Managers provide a range of management and advisory services. The Asset Managers
earn fees on a 50/50 basis in respect of these services including base annual management fees, acquisition fees, financing fees, capital expenditure fees
and incentive fees, determined in accordance with the formulas set forth in the agreement. The incentive fee is payable in respect of each 12-month
period during the term of the agreement in an amount equal to 15% of Dream Residential REIT’s funds from operations per unit as defined in the asset
management agreement, inclusive of gains on the disposition of any properties, in excess of a hurdle amount. The amount of the incentive fee payable by
Dream Residential REIT is contingent on a variety of factors, including, but not limited to, changes in the fair value of investment properties, timing of
dispositions and foreign exchange rates. The asset management agreement has an initial term of 10 years and is renewable for further five-year terms.
Subject to the termination provisions in the agreement, the Asset Managers are automatically reappointed at the expiration of each five-year term. Upon
termination of the asset management agreement, all accrued fees, including the incentive fee, become payable to the Asset Managers in accordance with
the provisions of the agreement. In such circumstances or if Dream Residential REIT is acquired, the incentive fee is calculated as if all of Dream Residential
REIT’s properties were sold on the applicable date.
In addition, the Company has entered into a shared services agreement with Dream Residential REIT. Pursuant to the agreement, Dream Residential REIT
reimburses the Company for shared costs allocated in each calendar year on a cost recovery basis. Fees paid by Dream Residential REIT to the Company
are paid in U.S. dollars.
In the years ended December 31, 2024 and 2023, the Company earned/recovered the following amounts pursuant to the asset management and shared
services agreements with Dream Residential REIT:
2024
2023
Asset management fees charged by Dream(1)
$
941
$
1,071
Cost recoveries charged by Dream
400
281
(1) Included in asset management fees charged to Dream Residential REIT for the years ended December 31, 2024 and 2023 were incentive fees of $nil.
Included in accounts receivable are balances due from Dream Residential REIT related to asset management agreements and cost sharing agreements of
$430 (December 31, 2023 - $332).
Industrial Joint Ventures
In the year ended December 31, 2023, Dream Industrial REIT and a global sovereign wealth fund created a joint venture ("Dream Summit Industrial LP")
which acquired Summit Industrial Income REIT. The Company, through a subsidiary, entered into asset management and development management
agreements with Dream Summit Industrial LP effective February 2023 pursuant to which the Company provides asset management and development
management services.
In the year ended December 31, 2022, the Company along with Dream Industrial REIT formed a develop-to-hold joint venture with a global sovereign
wealth fund (the "GTA Land Joint Venture"). A subsidiary of the Company entered into an asset management agreement with the GTA Land Joint Venture,
effective April 28, 2022, pursuant to which the Company provides asset management services. The asset management agreement is renewable annually
and the Company is automatically reappointed at the expiration of each one-year term. The Company received revenue in respect of these services,
including asset management fees, acquisition fees, development fees and promote fees.
In the year ended December 31, 2021, Dream Industrial REIT seeded a private open-ended U.S. Industrial Fund by selling 18 assets (29 buildings) from its
U.S. portfolio. Dream entered into a fund management agreement with Dream U.S. Industrial Fund, effective July 2021, pursuant to which the Company
provides fund management services. The fund management agreement is renewable annually and the Company is automatically reappointed at the
expiration of each one-year term. The Company received revenue in respect of these services, including fund management fees. Fund management fees
are calculated as 0.50% per annum with increases as capital contributions are made by a limited partner after 90 days up to a maximum of 1.20% per
annum and are subject to foreign exchange rates. Fees paid by Dream U.S. Industrial Fund to the Company are paid in U.S. dollars.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 80
Amounts earned under the various agreements with the Company's industrial-focused joint ventures during the years ended December 31, 2024 and 2023
are as follows:
2024
2023
Fees earned under the fund/asset management agreements
$
39,389
$
19,096
Fees earned under the development management agreements
706
2,913
Included in accounts receivable are balances due from the industrial joint ventures related to various agreements of $16,900 (December 31, 2023 -
$6,353).
In the year ended December 31, 2024, carried interest of $17,940 was earned related to Dream US Industrial Fund.
Distributions Earned from Investments
The Company earned distributions from Dream Residential REIT and Dream Office REIT (Note 12).
Other Transactions
In the year ended December 31, 2018, the Company, along with Dream Office REIT, entered into a strategic partnership, Alate Partners, focused on the
property technology market. The Company and Dream Office REIT each initially held a 25% interest in Alate Partners, included within other development
interests in equity accounted investments. In the year ended December 31, 2022, the Company restructured its investment in Alate Partners to allow for
third-party capital in a new fund, Alate I L.P.
Compensation of Key Management
Compensation expense for the year for key management personnel and the Company's directors is shown in the table below.
2024
2023
Compensation and benefits
$
5,925
$
8,845
Share-based compensation
4,384
4,339
Directors' fees
894
802
$
11,203
$
13,986
34. Supplementary cash flow information
Components of other adjustments include:
2024
2023
Accrued interest on loans receivable and other expenses
$
1,492
$
469
Share-based compensation expense
5,492
2,902
Fair value changes in financial instruments
1,722
(691)
Other
(2,740)
3,921
$
5,966
$
6,601
Components of changes in non-cash working capital include:
2024
2023
Accounts receivable
$
(35,269)
$
(6,093)
Accounts payable and other liabilities
(29,758)
(2,730)
Income and other taxes payable
64,368
22,601
Provision for real estate development costs
14,756
(13,093)
Deposits
1,795
(1,654)
Restricted cash
(27,083)
(11,904)
Prepaid expenses and other assets
4,142
(3,843)
$
(7,049)
$
(16,716)
The breakdown of cash and cash equivalents is as follows:
2024
2023
Cash
$
83,765
$
60,087
Money market funds, term deposits and GICs
116
116
$
83,881
$
60,203
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 81
35. Segmented information
The Company's segment reporting considers how the Company presents information for financial reporting and management decision-making.
The Company's operating segments are as follows:
•
Recurring income: Comprised of our asset management and development management agreements with Dream Industrial REIT, Dream Residential
REIT and various development partners, fees earned through our private asset management business, a 31% equity interest in Dream Office REIT, a
12% equity interest in Dream Residential REIT, and our stabilized income producing assets in the Greater Toronto Area ("GTA"), National Capital
Region, Western Canada and Colorado.
•
Development: Comprised of mixed-use developments in the GTA and National Capital Region, land, housing, retail/commercial, hospitality assets and
multi-family rental developments in Saskatchewan and Alberta.
While not considered an individual reportable segment, Corporate and other includes: corporate-level cash and other working capital, consolidated tax
balances and expense, our term facility and related interest expense, general and administrative expenses not allocated to a particular segment and the
liability and fair value adjustments to Dream Impact Trust units and Dream Impact Fund units held by other unitholders.
Management has determined the operating segments based on how the President and Chief Responsible Officer and senior management review the
business and manage risk. Gross margin represents revenue, less direct operating costs, excluding selling, marketing and other operating costs. Net margin
represents gross margin, as defined above, including selling, marketing and other operating costs. Used as a percentage of revenue to evaluate operational
efficiency, these margins are employed as fundamental business considerations in updating budgets, forecasts and strategic planning. The allocation of
other components of earnings would not assist management in the evaluation of the segments’ contributions to earnings and are categorized as Corporate
and other.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 82
Segmented Statement of Earnings
Segmented revenue and expenditures for the years ended December 31, 2024 and 2023 are as follows:
2024
Recurring income
Development
Corporate and other
Consolidated Dream
Revenue
$
221,240 $
403,266 $
— $
624,506
Direct operating costs
(123,080)
(299,769)
—
(422,849)
Gross margin
98,160
103,497
—
201,657
Selling, marketing, depreciation and other operating costs
(4,165)
(39,279)
—
(43,444)
Net margin
93,995
64,218
—
158,213
Fair value changes in investment properties
(19,194)
(5,204)
—
(24,398)
Share of earnings from equity accounted investments
(30,824)
11,693
—
(19,131)
Investment and other income
620
11,327
5,969
17,916
Interest expense
(42,807)
(12,781)
(22,804)
(78,392)
Gain on disposition of Arapahoe Basin
157,362
—
—
157,362
Net segment earnings (loss)
$
159,152 $
69,253 $
(16,835) $
211,570
General and administrative expenses(1)
—
—
(22,916)
(22,916)
Adjustments related to Dream Impact Trust units(1)
—
—
26,891
26,891
Adjustments related to Dream Impact Fund units(1)
—
—
9,828
9,828
Income tax expense(1)
—
—
(37,515)
(37,515)
Net earnings
$
159,152 $
69,253 $
(40,547) $
187,858
2023
Recurring income
Development
Corporate and other
Consolidated Dream
Revenue
$
213,343 $
173,604 $
— $
386,947
Direct operating costs
(128,541)
(133,211)
—
(261,752)
Gross margin
84,802
40,393
—
125,195
Selling, marketing, depreciation and other operating costs
(9,070)
(30,255)
—
(39,325)
Net margin
75,732
10,138
—
85,870
Fair value changes in investment properties
(52,619)
(4,660)
—
(57,279)
Share of earnings (loss) from equity accounted investments
(170,627)
5,321
—
(165,306)
Investment and other income
(57)
11,542
1,030
12,515
Interest expense
(40,036)
(10,280)
(17,985)
(68,301)
Net segment earnings (loss)
$
(187,607) $
12,061 $
(16,955) $
(192,501)
General and administrative expenses(1)
—
—
(31,155)
(31,155)
Adjustments related to Dream Impact Trust units(1)
—
—
107,427
107,427
Adjustments related to Dream Impact Fund units(1)
—
—
(3,561)
(3,561)
Income tax recovery(1)
—
—
2,711
2,711
Net earnings (loss)
$
(187,607) $
12,061 $
58,467 $
(117,079)
(1) Certain line items are included in Corporate and other as balances are reviewed on a consolidated basis.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 83
Segmented Assets and Liabilities
Segmented assets and liabilities as at December 31, 2024 and December 31, 2023 were as follows:
2024
Recurring income
Development
Corporate and other
Consolidated Dream
Assets
Cash and cash equivalents
$
28,490 $
23,250 $
32,141 $
83,881
Accounts receivable
60,333
219,162
5,249
284,744
Other financial assets
15,142
25,021
18,457
58,620
Housing inventory
—
53,763
—
53,763
Condominium inventory
—
300,950
—
300,950
Land inventory
—
469,458
—
469,458
Investment properties
1,663,833
178,680
—
1,842,513
Recreational properties
84,707
—
—
84,707
Equity accounted investments
379,136
278,772
—
657,908
Capital and other operating assets
41,402
35,963
7,143
84,508
Total assets
$
2,273,043 $
1,585,019 $
62,990 $
3,921,052
Liabilities
Accounts payable and other liabilities
$
51,664 $
135,415 $
24,020 $
211,099
Income and other taxes payable(1)
—
—
19,322
19,322
Provision for real estate development costs
—
75,825
—
75,825
Debt
1,234,505
343,215
292,646
1,870,366
Dream Impact Trust units(1)
—
—
43,711
43,711
Dream Impact Fund units(1)
—
—
126,375
126,375
Deferred income taxes(1)
—
—
72,825
72,825
Total liabilities
$
1,286,169 $
554,455 $
578,899 $
2,419,523
Shareholders' equity
986,874
1,030,564
(515,909)
1,501,529
Total equity
$
986,874 $
1,030,564 $
(515,909) $
1,501,529
(1) Certain liabilities are included in Corporate and other as balances are reviewed on a consolidated basis.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 84
2023
Recurring income
Development
Corporate and other
Consolidated Dream
Assets
Cash and cash equivalents
$
33,506 $
20,214 $
6,483 $
60,203
Accounts receivable
46,168
221,227
6,646
274,041
Other financial assets
60,033
37,550
2,239
99,822
Housing inventory
—
52,747
—
52,747
Condominium inventory
—
383,829
—
383,829
Land inventory
221
458,330
—
458,551
Investment properties
1,522,148
197,024
—
1,719,172
Recreational properties
82,898
—
—
82,898
Equity accounted investments
395,295
275,735
—
671,030
Capital and other operating assets
9,608
51,663
11,958
73,229
Total assets
$
2,149,877 $
1,698,319 $
27,326 $
3,875,522
Liabilities
Accounts payable and other liabilities
$
63,144 $
159,071 $
11,161 $
233,376
Income and other taxes payable(1)
—
—
79,964
79,964
Provision for real estate development costs
17
61,052
—
61,069
Debt
1,097,068
422,175
291,306
1,810,549
Dream Impact Trust units(1)
—
—
70,779
70,779
Dream Impact Fund units(1)
—
—
113,405
113,405
Deferred income taxes(1)
—
—
102,321
102,321
Total liabilities
$
1,160,229 $
642,298 $
668,936 $
2,471,463
Total equity
$
989,648 $
1,056,021 $
(641,610) $
1,404,059
(1) Certain liabilities are included in Corporate and other as balances are reviewed on a consolidated basis.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 85
36. Classification of items in consolidated statements of financial position
A summary of the classification of assets and liabilities to be recovered or settled within or over twelve months is presented below.
2024
Less than
12 months
Greater than
12 months
Non-determinable
Total
Assets
Cash and cash equivalents
$
83,881 $
— $
— $
83,881
Accounts receivable
205,526
79,218
—
284,744
Other financial assets
30,810
27,810
—
58,620
Housing inventory
—
—
53,763
53,763
Condominium inventory
—
—
300,950
300,950
Land inventory
—
—
469,458
469,458
Investment properties
—
1,842,513
—
1,842,513
Recreational properties
—
84,707
—
84,707
Equity accounted investments
—
—
657,908
657,908
Capital and other operating assets
52,751
31,757
—
84,508
Total assets
$
372,968 $
2,066,005 $
1,482,079 $
3,921,052
Liabilities
Accounts payable and accrued liabilities
$
171,878 $
2,041 $
37,180 $
211,099
Income and other taxes payable
19,322
—
—
19,322
Provision for real estate development costs
75,825
—
—
75,825
Debt(1)
760,294
1,110,072
—
1,870,366
Dream Impact Trust units(2)
—
—
43,711
43,711
Dream Impact Fund units(2)
—
—
126,375
126,375
Deferred income taxes
—
72,825
—
72,825
Total liabilities
$
1,027,319 $
1,184,938 $
207,266 $
2,419,523
(1) The amounts presented are shown consistent with the contractual terms of repayment, which may be due on demand.
(2) Dream Impact Trust units and Dream Impact Fund units may be redeemed at the option of the holder with no expiry date.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 86
2023
Less than
12 months
Greater than
12 months
Non-determinable
Total
Assets
Cash and cash equivalents
$
60,203 $
— $
— $
60,203
Accounts receivable
188,761
85,280
—
274,041
Other financial assets
49,914
49,908
—
99,822
Housing inventory
—
—
52,747
52,747
Condominium inventory
—
—
383,829
383,829
Land inventory
—
—
458,551
458,551
Investment properties
—
1,719,172
—
1,719,172
Recreational properties
—
82,898
—
82,898
Equity accounted investments
—
—
671,030
671,030
Capital and other operating assets
23,224
50,005
—
73,229
Total assets
$
322,102 $
1,987,263 $
1,566,157 $
3,875,522
Liabilities
Accounts payable and accrued liabilities
$
150,123 $
12,360 $
70,893 $
233,376
Income and other taxes payable
79,964
—
—
79,964
Provision for real estate development costs
61,069
—
—
61,069
Debt(1)
224,763
1,585,786
—
1,810,549
Dream Impact Trust units(2)
—
—
70,779
70,779
Dream Impact Fund units(2)
—
—
113,405
113,405
Deferred income taxes
—
102,321
—
102,321
Total liabilities
$
515,919 $
1,700,467 $
255,077 $
2,471,463
(1) The amounts presented are shown consistent with the contractual terms of repayment, which may be due on demand.
(2) Dream Impact Trust units and Dream Impact Fund units may be redeemed at the option of the holder with no expiry date.
Notes to the Consolidated Financial Statements
(in thousands of Canadian dollars, except number of shares and per share amounts)
______________________________________________________________________________________________________________________________________________
Dream Unlimited Corp. – December 31, 2024 | 87
Dream Unlimited Crop
Title
Directors
Michael J. Cooper4
Toronto, Ontario
President & Chief Responsible Officer
Dream Unlimited Corp.
James EatonInd.
Toronto, Ontario
President
Weatons Holdings
Joanne FerstmanInd.,1,3,4,5
Toronto, Ontario
Corporate Director
Richard GatemanInd.,2, 3
Calgary, Alberta
Corporate Director
P. Jane Gavan4
Toronto, Ontario
President, Asset Management
Dream Unlimited Corp.
Duncan JackmanInd.
Toronto, Ontario
Chairman, President & CEO
E-L Financial Corporation Limited
Jennifer Lee KossInd.,1,2
Oslo, Norway
Founding Partner
Springbank
Vincenza SeraInd.,1, 2, 3,4
Toronto, Ontario
Corporate Director
Legend:
Ind. Independent
1.
Member of the Audit Committee
2.
Member of the Governance,
Environmental and Nominating
Committee
3.
Member of the Organization, Design
and Culture Committee
4.
Member of Leaders and Mentors
Committee
5.
Chair of the Board
Management Team
Michael J. Cooper
President & Chief Responsible Officer
Meaghan Peloso
Chief Financial Officer
P. Jane Gavan
President, Asset Management
30 Adelaide Street East,
Toronto,ON
Corporate Information
HEAD OFFICE
Dream Unlimited Corp.
30 Adelaide Street East, Suite 301
Toronto, Ontario M5C 3H1
Phone: (416) 365-3535
Fax: (416) 365-6565
Website: www.dream.ca
INVESTOR RELATIONS
Phone: (416) 365-3535
Toll free: 1 877 365-3535
Email: info@dream.ca
Website: www.dream.ca
TRANSFER AGENT
(for change of address, registration
or other unitholder enquiries)
Computershare Trust
Company of Canada
100 University Avenue, 8th Floor
Toronto, Ontario M5J 2Y1
Phone: (514) 982-7555 or 1 800 564-6253
Fax: (416) 263-9394 or 1 888 453-0330
Website: www.computershare.com
Email: service@computershare.com
AUDITOR
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2500
Toronto, Ontario M5J 0B2
CORPORATE COUNSEL
Osler, Hoskin & Harcourt LLP
Box 50, 1 First Canadian Place, Suite 6200
Toronto, Ontario M5X 1B8
STOCK EXCHANGE LISTING
The Toronto Stock Exchange
Listing Symbol: Subordinate Voting
Shares: DRM
For more information, please visit
dream.ca
Corporate Office
30 Adelaide Street East, Suite 301
Toronto, Ontario M5C 3H1
Phone: 416.365.3535
Fax: 416.365.6565
Website: www.dream.ca
Email: info@dream.ca