DREAM Unlimited Corp. — Management Reports 2021

Feb 23, 2021

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 year ended December 31, 2020 and December 31, 2019, which can be found under the Company’s profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") (www.sedar.com). The financial statements underlying this MD&A, including 2019 comparative information, have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). Certain disclosures included herein are non-IFRS measures. Refer to the "Non-IFRS Measures" section of this MD&A for further details.

All dollar amounts in tables within this MD&A are in thousands of Canadian dollars, unless otherwise specified. Unless otherwise specified, all references to "we", "us", "our" or similar terms refer to Dream and its subsidiaries. This MD&A is dated as of, and reflects all material events up to, February 23, 2021.

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 is a leading developer of exceptional office and residential assets in Toronto, owns stabilized income generating assets in both Canada and the U.S., and has an established and successful asset management business, inclusive of $10 billion of assets under management across three Toronto Stock Exchange ("TSX") listed trusts and numerous partnerships. We also develop land and residential assets in Western Canada. Dream expects to generate more recurring income in the future as its development properties are completed and held for the long term. Dream has a proven track record for being innovative and for our ability to source, structure and execute on compelling investment opportunities. An illustrative chart showing the structure and diversity of our business is set out below and a comprehensive overview of our holdings is included in the "Summary of Dream's Assets and Holdings" section of this MD&A.

From the outset, we have successfully identified and executed on opportunities for the benefit of the business and shareholders, including the creation of Dream Asset Management Corporation ("DAM") in 1996 as a public company, its subsequent privatization in 2003 and reorganization in 2013, the creation of Dream Office REIT in 2003, the establishment of our asset management business, the creation of Dream Global REIT, Dream Industrial REIT and Dream Impact Trust ("Dream Impact"), formerly Dream Hard Asset Alternatives Trust, in 2011, 2012 and 2014, respectively, and the sale of the assets and subsidiaries of Dream Global REIT in 2019.

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Dream Unlimited Corp. – December 31, 2020 | 1

Summary of Results – Fourth Quarter and Year Ended 2020

Update on Dream Equity Partners

We created our private equity business in 2020 to pursue opportunities to invest capital on behalf of institutions and high net worth individuals through funds that we create and segregated accounts. We are of the view that Dream will have increased opportunities if it has access to manage both private and public capital. On February 2, 2021, Dream entered into a partnership with a global investment manager with over US$100 billion of assets under management to create a multi-family platform in the United States. Dream and PaulsCorp sold 90% of the 1,200 Dallas apartments that were acquired earlier in 2020 into the partnership and PaulsCorp and Dream will become the general partners, earning asset management fees, property management fees and a promote on assets under management. Immediately after entering into this arrangement, we agreed to acquire 792 apartment units in Phoenix, Arizona for US$120 million adding to our platform. In aggregate, Dream is launching the U.S. multi-family platform with 2,000 units worth approximately US$300 million and will seek to grow the portfolio further in 2021.

In 2020, Dream identified impact investing as an asset class that we believe will continue to grow at increasing rates and which Dream has over two decades of experience in and a strong track record. The impact investing asset class focuses on generating market returns while creating measurable positive, social and environmental impact in our communities. Real estate provides an opportunity for Dream to achieve competitive returns while creating impact on attainable/affordable housing, resource management and more inclusive communities. Our impact will be defined, measured and verified. We are a signatory to the Operating Principles for Impact Management and have also joined the Global Impact Investing Network. Our impact framework will be completed and made public in the second quarter of 2021.

Dream Impact Trust is Canada’s first public impact vehicle and was created from the former Dream Hard Asset Alternatives Trust in October. In addition, in the coming weeks Dream will launch a private Impact Fund which will have a similar impact strategy to invest in real estate properties and projects that we believe will have the ability to generate measurable social, environmental and financial returns. Dream will contribute its interest in the Indigenous Hub (Canary Block 10), Block 8 in the West Don Lands, the Federal Government building under construction at Zibi and our interest in Zibi Community Utility, the system created in partnership with Hydro Ottawa to provide net zero heating and cooling to the entire Zibi project. Dream is targeting a $250 million capital raise for our private open-ended impact fund. We expect that we will have a first closing on at least $125 million from some of Canada’s leading institutions and high net worth individuals and we intend to raise the balance subsequent to first close. Between the public Dream Impact Trust and the proceeds following the first closing of the new private Impact Fund, Dream will have over $700 million of assets under management committed to impact investing.

Dream will continue to focus on investing, managing and growing our apartment and impact platforms through 2021 and beyond, as well as seeking other opportunities to grow the private equity division.

Recurring Income

In the three months ended December 31, 2020, our recurring income segment generated revenue and net operating income of $19.8 million and $6.3 million, respectively, compared to $309.3 million and $289.3 million in the prior period. 2019 results included fees earned on the disposition of Dream Global REIT totalling $280.2 million. The remaining decrease was primarily driven by reduced income from Dream Impact Trust's portfolio due to prior year asset dispositions and scheduled loan repayments.

In the year ended December 31, 2020, our recurring income segment generated revenue and net operating income of $92.2 million and $27.2 million, respectively, down from $431.1 million and $348.1 million in the comparative period. Along with the aforementioned disposition of Dream Global REIT and Dream Impact Trust's dispositions, results were impacted by the ongoing capacity restrictions at Arapahoe Basin, our ski hill in Colorado, and the Broadview Hotel in Toronto due to the COVID-19 pandemic.

Included in revenue for the three months ended December 31, 2020 was $5.1 million relating to asset management and development contracts with Dream Industrial REIT, Dream Office REIT and our partnerships, which are expected to grow over time as we actively pursue new asset management opportunities. Dream Industrial REIT’s asset base continues to grow, with over $620 million in acquisitions in 2020 and $355 million currently under contract, in exclusive negotiations or closed in 2021. In the fourth quarter, Dream Industrial REIT was assigned an issuer rating of BBB with stable trend by DBRS Limited, providing Dream Industrial REIT with access to new sources of capital to continue executing on its growth strategy.

We made great progress on repositioning Dream Impact Trust as the first public impact investment vehicle in Canada and became a signatory to the Operating Principles for Impact Management in 2020. We will be establishing an impact framework to incorporate the Trust’s governance and monitoring processes for identifying and measuring impact which will provide a systematic ranking methodology to be applied to the Trust’s portfolio. We are creating pathways and KPIs for our three impact verticals, attainable and affordable housing, inclusive communities and resource efficiency. We expect to leverage our impact expertise across our private asset management business and other areas of our business.

With the exception of the Broadview Hotel, one of our boutique hotels in Toronto, results for the quarter were minimally impacted by the ongoing COVID-19 pandemic. Despite social distancing measures at Arapahoe Basin, strong ski pass sales have contributed to relatively consistent results in the fourth quarter and early 2021 results are well ahead of 2020. Inclusive of retail in Western Canada, Dream’s average monthly rent collection in the three months ended December 31, 2020 exceeded 89% and we have collected 89% of previously deferred rent due to the pandemic.

Dream Unlimited Corp. – December 31, 2020 | 2

Across the Dream group platform, which includes assets held through the Company, Dream Impact Trust and Dream Office REIT, we have approximately 6.7 million square feet ("sf") of gross leasable area ("GLA") in stabilized rental, retail and commercial properties, in addition to our recreational properties. As at February 21, 2021, the Company had a 26% interest in Dream Impact Trust and 32% interest in Dream Office REIT.

Development

In the fourth quarter, our development segment generated revenue and net margin of $28.9 million and $0.6 million, respectively, compared to $74.1 million and ($11.7 million) in the prior year, inclusive of a $23.2 million land writedown in Regina. Results were driven by lower lot and acre sales in Western Canada relative to the prior year. Results for the fourth quarter of 2019 included occupancies at Riverside Square and BT Towns, with no activity in the current quarter.

Year-to-date, revenue and net margin for the development segment were up by $106.1 million and $67.9 million, respectively, over the prior year primarily due to Western Canada acre sales, including the sale of 480 acres in Glacier Ridge, and condominium occupancies at Riverside Square, BT Towns and Kanaal at Zibi.

We achieved 335 lot sales, 107 housing occupancies and 526 acre sales in 2020, inclusive of the 480-acre sale of Glacier Ridge in the first quarter. 2020 saw the groundbreaking on our first phase of Alpine Park, within the master-planned Providence community, located in southwest Calgary. The first phases of Alpine Park comprise 136 acres, representing nearly 800 lots and 485 multi-family units on completion. Inclusive of Alpine Park, as of February 21, 2021, we have secured commitments for 644 lots and 62 houses expected to close in 2021.

In the fourth quarter we completed Brighton Village Centre, our 121-unit purpose-built rental building in our master-planned community of Holmwood in Saskatoon. The building is 46% leased as of February 21, 2021 and we expect to commence construction on the second 117-unit rental building and 15 rental townhomes this spring.

Across our development platform, we achieved a significant number of zoning approvals totalling 2.2 million sf in gross floor area ("GFA"). We expect 2021 to further contribute to our exceptional pipeline as outlined below, in addition to the overall site zoning approved for the Zibi master planned community totalling 4 million sf of density.

2020 approvals:
Project	City	Entity	Dream ownership(1)	Total residential units(2)	Total GFA(2)
250 Dundas St. West	Toronto	Dream Office REIT	31.6%	522	500,000
WDL Block 3/4/7	Toronto	Dream/Dream Impact	33.3%	855	869,000
WDL Block20	Toronto	Dream/Dream Impact	33.3%	661	848,000
Total 2020				2,038	2,217,000

2021 pipeline:
City	Entity	Dream ownership(1)	Total residential units(2)	Total GFA(2)	Gross acres
Downtown Toronto & GTA	Various	31.6% - 50.0%	7,432	6,444,000	n/a
Calgary	Dream	100.0%	TBD	TBD	163
Regina	Dream	100.0%	TBD	TBD	229
Saskatoon	Dream	100.0%	TBD	TBD	1,358
Total 2021			**7,432 **	6,444,000	1,750

(1) Dream and Dream Impact Trust holdings at fully consolidated ownership. Dream Office REIT at 31.6% ownership as of December 31, 2020.

(2) Residential units and GFA are at 100% project level and include planned units. Planned residential units may be developed as condominium units or purpose-built rentals as supported by market demand, targeted studies and return objectives.

In the year ended December 31, 2020, we achieved 306 condominium unit occupancies (99 units at Dream's share) at Phase 1 of Riverside Square, our 5- acre, two phase mixed-use development located in the east end of downtown Toronto. The first phase of the project consists of 688 condominium units, a multi-level auto-plex and 20,000 sf of retail GLA and is expected to close in the first half of 2021. Vertical construction on Phase 2, comprising 227 condominium units and an additional 36,000 sf of commercial space, began in late 2020 with first occupancies expected in 2022.

In 2020, we also achieved 133 condominium unit occupancies (67 units at Dream's share) and final closing at Canary Block, our first condominium building on our Stage 2 Canary District lands in downtown Toronto's east end. Construction continues at Canary Commons, a 401-unit condominium building with expected occupancies in 2022, and Block 8, the first building in our purpose-built rental project in the West Don Lands neighbourhood. With the Municipal Zoning Order ("MZO") obtained in the fourth quarter of 2020, we expect to deliver 2,286 rental units, inclusive of 686 affordable units, and 300,000 sf of commercial space across all three blocks in this neighbourhood.

During the three months ended December 31, 2020, Dream closed on a $444 million loan (at the project level) on Block 3/4/7 in the West Don Lands with construction expected to commence in 2021. As a result of progress achieved to date on Block 3/4/7, a fair value gain was recognized in the fourth quarter of 2020. Dream and Dream Impact Trust have an aggregate 33% interest in this development. The West Don Lands is adjacent to the Distillery District, Canary District and future Lakeshore East development which in aggregate comprise over 7,200 condominium/rental units and 1.1 million sf of commercial/retail space developed by Dream and its various partners. The area includes amenities such as the 18-acre Corktown Common Park, the 82,000 sf Cooper-Koo YMCA and numerous retail amenities and restaurants.

Dream Unlimited Corp. – December 31, 2020 | 3

Our Brightwater development reached another key milestone with the successful sales launch of its first two condominium buildings in late 2020. As at December 31, 2020, all 311 units brought to market have been pre-sold, with occupancies commencing in 2023. Brightwater is our large master-planned 72-acre waterfront community in Mississauga's Port Credit area which will include approximately 3,000 residential units, 400,000 sf of retail and commercial space, and 18 acres of parks and public spaces.

In the year ended December 31, 2020, construction continued to progress at Zibi, our 34-acre mixed-use development expected to comprise over 4.3 million sf of density upon completion. Key achievements in 2020 include 64 condominium unit occupancies at Kanaal, our first residential building in Ottawa, and securing $10.0 million of non-traditional financing to support the building of affordable housing units for various blocks.

Across the Dream group platform, we have approximately 5.0 million sf of GLA in retail or commercial properties and over 19,500 condominium or purpose-built rental units (at the project level) in our development pipeline.

Share Repurchase Activity, Return to Shareholders & Liquidity Update

Effective July 6, 2020, the Company completed a share consolidation of all issued and outstanding Class A subordinate voting shares ("Subordinate Voting Shares") of Dream on the basis of one post-consolidation Subordinate Voting Share for every two pre-consolidation Subordinate Voting Shares, and all of the issued and outstanding Class B common shares ("Class B Shares") of Dream on the basis of one post-consolidation Class B Share for every two preconsolidation Class B Shares ("the Share Consolidation"). Upon completion of the Share Consolidation, the number of Subordinate Voting Shares issued and outstanding as of July 6, 2020 was consolidated from 91,641,438 to 45,820,395, and the number of Class B Shares issued and outstanding was consolidated from 3,114,845 to 1,557,356. All share and per share amounts disclosed herein reflect the post-Share Consolidation shares for all periods presented, unless otherwise specified.

In the year ended December 31, 2020, 7.7 million Subordinate Voting Shares were purchased for cancellation by the Company at an average price of $22.07 under a substantial issuer bid ("SIB") and a normal course issuer bid ("NCIB") for total proceeds of $170.4 million (year ended December 31, 2019 – 1.0 million Subordinate Voting Shares at an average price of $16.14).

Dividends of $2.7 million and $11.2 million were declared and paid on its Subordinate Voting Shares and Class B Shares in the three and twelve months ended December 31, 2020, respectively (three and twelve months ended December 31, 2019 - $2.6 million and $10.6 million). Subsequent to December 31, 2020, the Company’s board of directors approved an increase to the annual dividend from $0.24 to $0.28 per Subordinate Voting Share and Class B Share, effective with the dividend payable to shareholders on March 31, 2021.

As of December 31, 2020, the Company had $426.1 million in corporate-level cash and available under its various revolving credit facilities and a conservative leverage position with a debt to total assets ratio of 26.6%.

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Dream Unlimited Corp. – December 31, 2020 | 4

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;

• Maintain a conservative balance sheet and liquidity position;

• Create positive and lasting impacts through our co-owned assets with Dream Impact Trust;

• Work with exceptional partners and stakeholders to maximize the value of our assets and developments;

• Manage our asset mix and profile to maximize long-term value to shareholders; and

• 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 Trust and Dream Office REIT, our portfolio totals almost 21,000 residential units and 11.8 million sf of commercial/retail GLA as at December 31, 2020 (at 100% project level).

Commencing in the first quarter of 2020, we redefined our reporting segment information to better reflect how we manage our business, including Dream Impact Trust. Comparative information has been reclassified in accordance with our new segment presentation.

The Company's reporting segments consist of the following:

• Recurring income: Comprised of our asset management and development management agreements with Dream Industrial REIT, Dream Office REIT and various development partners, a 32% equity interest in Dream Office REIT, Dream Impact Trust's lending portfolio, and our stabilized income producing assets in the Greater Toronto Area ("GTA"), Western Canada and Colorado.

• Development : Comprised of mixed-use developments in the GTA and Ottawa/Gatineau, land, housing, multi-family and retail/commercial development in Saskatchewan and Alberta, and Dream Impact Trust's investment in the Virgin Hotels Las Vegas.

Recurring income is important to our business as it provides stable cash flows in order to fund our ongoing interest, fixed operating costs and dividends. This provides enhanced stability and financial flexibility as we continue to execute on our development pipeline. Assets that contribute to recurring income include our asset and development management contracts, our 32% equity ownership in Dream Office REIT and our stabilized income generating assets, such as the Distillery District in Toronto and Arapahoe Basin, our ski hill in Colorado. Our future recurring income properties will include those that are currently being developed within our mixed-use developments in Toronto and Ottawa.

Our development assets, comprised of residential, commercial and retail buildings, and raw land, are located across Toronto, Ottawa and 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 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.

Selected Key Operating Metrics by Segment

						For the three months	For the three months	ended December 31, 2020
(in thousands of dollars, except outstanding share amounts)		Recurring income(1)		Development		Corporate and other		Total
Revenue	$	19,758	$	28,881	$	—	$	48,639
% of total revenue		40.6%		59.4%		—%		100.0%
Net margin	$	4,597	$	648	$	—	$	5,245
Net margin (%)(2)		23.3%		2.2%		n/a		10.8%
						For the	year	ended December 31, 2020
Revenue	$	92,229	$	255,394	$	—	$	347,623
% of total revenue		26.5%		73.5%		—%		100.0%
Net margin	$	20,637	$	51,683	$	—	$	72,320
Net margin (%)(2)		22.4%		20.2%		n/a		20.8%
								As at December 31, 2020
Segment assets	$	1,118,871	$	1,560,924	$	164,578	$	2,844,373
Segment liabilities		313,274		452,100		672,387		1,437,761
Segment shareholders' equity(3)		805,597		1,093,858		(507,809)		1,391,646
Total issued and outstanding shares								45,011,928

Dream Unlimited Corp. – December 31, 2020 | 5

						For the three months ended December 31, 2019	For the three months ended December 31, 2019	For the three months ended December 31, 2019
(in thousands of dollars, except outstanding share amounts)		Recurring income(1)		Development		Corporate and other		Total
Revenue	$	309,277	$	74,083	$	—	$	383,360
% of total revenue		80.7%		19.3%		—%		100.0%
Net margin	$	287,452	$	(11,659)	$	—	$	275,793
Net margin (%)(2)		92.9%		n/a		n/a		71.9%
						For the year ended December 31, 2019
(in thousands of dollars, except per share amounts)		Recurring income(1)		Development		Corporate and other		Total
Revenue	$	431,142	$	149,288	$	—	$	580,430
% of total revenue		74.3%		25.7%		—%		100.0%
Net margin	$	341,212	$	(16,216)	$	—	$	324,996
Net margin (%)(2)		79.1%		n/a		n/a		56.0%
								As at December 31, 2019
Segment assets	$	1,133,201	$	1,546,373	$	354,459	$	3,034,033
Segment liabilities		255,863		444,407		901,154		1,601,424
Segment shareholders' equity(3)		877,338		1,080,317		(546,695)		1,410,960
Total issued and outstanding shares(4)								52,658,860

(1)[Asset management revenue and net margin from Dream Impact Trust are eliminated upon consolidation within this segment.]

(2) Net margin (%) is a non-IFRS measure. Refer to the "Non-IFRS Measures" section of this MD&A for further details.

(3) Shareholders' equity for the development segment excludes $15.0 million of non-controlling interest as at December 31, 2020 (December 31, 2019 - $21.6 million).

(4) Number of shares reflects the Share Consolidation as at December 31, 2019.

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 recognize revenue generally when a 15% deposit has been received from the third-party purchaser, ultimate collection of the full purchase price is reasonably assured and certain other development milestones are substantially met. 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 and market conditions. Traditionally, our highest sales volume quarter for our land and housing divisions has been the fourth quarter, while our lowest has been the first quarter. As a result, the Company’s results can vary significantly from quarter to quarter.

Dream Unlimited Corp. – December 31, 2020 | 6

Key Financial Information and Performance Indicators

Selected Financial Information

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)		2020		2019		2020		2019
Revenue	**$ **	48,639	$	383,360	**$ **	347,623	$	580,430
Gross margin	**$ **	11,967	$	286,095	**$ **	105,154	$	364,234
Gross margin (%)(1)		24.6%		74.6%		30.2%		62.8%
Net margin	**$ **	5,245	$	275,793	**$ **	72,320	$	324,996
Net margin (%)(2)		10.8%		71.9%		20.8%		56.0%
Earnings (loss) before income taxes	**$ **	(31,181)	$	458,329	**$ **	197,620	$	440,426
Earnings (loss) for the period	**$ **	(32,315)	$	349,191	**$ **	159,638	$	331,745
Basic earnings (loss) per share(3)(5)	**$ **	(0.70)	$	6.65	**$ **	3.37	$	6.25
Diluted earnings (loss) per share(3)(5)	**$ **	(0.70)	$	6.43	**$ **	3.31	$	6.09
Weighted average number of shares outstanding, basic(5)		45,728,250		52,675,624		47,262,426		53,143,526
Total earnings (loss) for the period attributable to:
Shareholders(4)	**$ **	(32,164)	$	350,106	**$ **	159,221	$	332,246
						December 31, 2020		December 31, 2019
Total assets					**$ **	2,844,373	$	3,034,033
Total liabilities					**$ **	1,437,761	$	1,601,424
Total equity					**$ **	1,406,612	$	1,432,609
Total issued and outstandingshares(5)						45,011,928		52,658,860

(1) Gross margin (%) (a non-IFRS measure) represents gross margin as a percentage of revenue. For additional details, refer to the "Non-IFRS Measures" section of this MD&A.

(2) Net margin (%) (a non-IFRS measure) represents net margin as a percentage of revenue. For additional details, refer to the "Non-IFRS Measures" section of this MD&A.

(3) See Note 33 of the Company’s consolidated financial statements for the year ended December 31, 2020 for further details on the calculation of basic and diluted earnings (loss) per share.

(4) Total earnings attributable to shareholders excludes the portion allocated to non-controlling interests.

(5) Shares and per share amounts reflect the Share Consolidation for all periods presented.

The Company evaluates its development segment using net margin. The Company's recurring income segment is evaluated using net operating income. Stated as a percentage to evaluate operational efficiency, these metrics are used as fundamental business considerations for updating budgets, forecasts and strategic planning.

Overview of Results

Earnings before income taxes after adjusting for fair value gains/losses taken on Dream Impact Trust units held by other unitholders for the three months ended December 31, 2020 was $28.9 million, a decrease of $447.9 million relative to the prior year. The change is primarily due to prior period transactional activity, inclusive of the sale of Dream Global REIT that generated earnings before taxes of $415.6 million and lower fair value gains on investment properties, including those held through equity accounted investments.

Earnings before income taxes for the year ended December 31, 2020 was $119.9 million, down from $553.9 million in the prior year after adjusting for fair value gains/losses on Dream Impact Trust units. The decrease was primarily due to the aforementioned factors in addition to reduced earnings from the temporary closure of our ski hill in Colorado and businesses impacting our Toronto income properties as a result of the COVID-19 pandemic. This was partially offset by a gain on sale of the renewable power portfolio in the second quarter of 2020, the sale of 480 acres in Glacier Ridge in the first quarter of 2020 and lower interest expense as a result of reduced interest rates and lower debt levels.

Dream Impact Trust units held by other unitholders are treated as a liability on the consolidated statements of financial position of Dream and are fair valued each period under IFRS, generating fair value losses (gains) with the fluctuation of Dream Impact Trust’s unit price. In the three months ended December 31, 2020, the fair value loss on the Dream Impact Trust units was $60.1 million (as a result of the unit price increasing to $6.03 at December 31, 2020 from $4.88 at September 30, 2020), compared to a loss of $18.6 million in the comparative period (as a result of the unit price increasing to $7.75 at December 31, 2019 from $7.50 at September 30, 2019). In the year ended December 31, 2020, the fair value gain on the Dream Impact Trust units was $77.8 million (as a result of the unit price decreasing to $6.03 at December 31, 2020 from $7.75 at December 31, 2019), compared to a loss of $113.5 million in the comparative period (as a result of the unit price increasing to $7.75 at December 31, 2019 from $6.24 at December 31, 2018).

Dream Unlimited Corp. – December 31, 2020 | 7

Summary of Dream's Assets and Holdings

The following table includes supplementary information on our portfolio as at December 31, 2020.

Project/Property	Entity	Dream ownership(1)	Status	Total residential units at completion(2)	Residential GFA(2) (at 100%)	Total commercial and retail GLA(2)	In-place/ committed occupancy	Occupancy/ stabilization date
RECURRING INCOME SEGMENT
Downtown Toronto & GTA
Commercial:
Adelaide Place	Dream Office REIT	31.6%	Income property	—	—	658,000	96.6%
50 & 90 Burnhamthorpe Road West (Sussex Centre)	Dream Office REIT/ Dream Impact	65.8%	Income property	—	—	655,000	86.4%
2200-2206 Eglinton Avenue East & 1020 Birchmount Road	Dream Office REIT	31.6%	Income property	—	—	442,000	58.5%
State Street Financial Centre	Dream Office REIT	31.6%	Income property	—	—	414,000	100.0%
Distillery District	Dream	50.0%	Income property	—	—	395,000	99.7%
438 University Avenue	Dream Office REIT	31.6%	Income property	—	—	323,000	99.1%
655 Bay Street	Dream Office REIT	31.6%	Income property	—	—	301,000	97.8%
74 Victoria Street/137 Yonge Street	Dream Office REIT	31.6%	Income property	—	—	266,000	98.9%
720 Bay Street	Dream Office REIT	31.6%	Income property	—	—	248,000	100.0%
36 Toronto Street	Dream Office REIT	31.6%	Income property	—	—	214,000	98.2%
330 Bay Street	Dream Office REIT	31.6%	Income property	—	—	165,000	84.0%
20 Toronto Street/33 Victoria Street	Dream Office REIT	31.6%	Income property	—	—	158,000	96.5%
250 Dundas Street West	Dream Office REIT	31.6%	Income property	—	—	121,000	98.5%
Victory Building	Dream Office REIT	31.6%	Income property	—	—	101,000	72.4%
49 Ontario	Dream Impact	100.0%	Redevelopment	TBD	TBD	88,000	91.5%
425 Bloor Street East	Dream Office REIT	31.6%	Income property	—	—	83,000	97.5%
212 King Street West	Dream Office REIT	31.6%	Income property	—	—	73,000	100.0%
357 Bay Street	Dream Office REIT	31.6%	Income property	—	—	65,000	100.0%
10 Lower Spadina	Dream Impact	100.0%	Income property	—	—	61,000	100.0%
100 Steeles Avenue West	Dream/Dream Impact	50.0%	Redevelopment	TBD	TBD	59,000	96.4%
360 Bay Street	Dream Office REIT	31.6%	Income property	—	—	58,000	86.8%
67 Richmond Street West	Dream Office REIT	31.6%	Income property	—	—	50,000	94.4%
6 Adelaide Street East	Dream Office REIT	31.6%	Income property	—	—	53,000	84.9%
350 Bay Street	Dream Office REIT	31.6%	Income property	—	—	53,000	94.8%
366 Bay Street	Dream Office REIT	31.6%	Income property	—	—	36,000	34.0%
Plaza Imperial	Dream Impact	40.0%	Income property	—	—	35,000	86.2%
349 Carlaw	Dream Impact	100.0%	Income property	—	—	34,000	91.6%
56 Temperance Street	Dream Office REIT	31.6%	Income property	—	—	32,000	89.2%
Canary District - Stage 1 retail	Dream	50.0%	Income property	—	—	32,000	86.3%
Plaza Bathurst	Dream Impact	40.0%	Income property	—	—	24,000	100.0%
Queen and Mutual	Dream Impact	9.0%	Income property	—	—	24,000	80.0%
220 King Street West	Dream Office REIT	15.8%	Income property	—	—	22,000	83.4%
Other GTA retail	Dream	17.1-50.0%	Income property	—	—	290,000	83.5%
Other:
The Broadview Hotel	Dream	50.0%	Income property	—	—	—
The Gladstone Hotel	Dream	50.0%	Income property	—	—	—
Total Downtown Toronto & GTA				—	—	5,633,000	91.1%
U.S.
Arapahoe Basin ski hill, Colorado	Dream	100.0%	Income property	—	—	n/a
Abbey at Vista Ridge, Texas	Dream	50.0%	Income property	300	297,000		90.0%
Tallows Apartments, Texas	Dream	50.0%	Income property	252	218,000		95.2%
Villas at Waterchase, Texas	Dream	50.0%	Income property	244	215,000		94.7%
Tall Timbers Apartments, Texas	Dream	50.0%	Income property	216	201,000		95.8%
Fieldcrest Apartments, Texas	Dream	50.0%	Income property	180	144,000		93.3%
12800 Foster Street, Overland Park, Kansas	Dream Office REIT	31.6%	Income property	—	—	185,000	100.0%
Total U.S.				1,192	1,075,000	185,000	94.5%

Dream Unlimited Corp. – December 31, 2020 | 8

Project/Property	Type	Entity	Dream ownership(1)	Status	Total residential units at completion(2)	Residential GFA(2) (at 100%)	Total commercial and retail GLA(2)	In-place/ committed occupancy	Occupancy/ stabilization date
Western Canada
Residential and Mixed-Use:
Kensington, Saskatoon		Dream	100.0%	Income property	48	75,000	—	100.0%
Commercial:
444 - 7th Building, Calgary		Dream Office REIT	31.6%	Income property	—	—	261,000	74.5%
Saskatoon Square, Saskatoon		Dream Office REIT	31.6%	Income property	—	—	228,000	64.2%
Princeton Tower, Saskatoon		Dream Office REIT	31.6%	Income property	—	—	136,000	48.1%
606 - 4th Building & Barclay Parkade, Calgary		Dream Office REIT	31.6%	Income property	—	—	126,000	76.5%
Kensington House, Calgary		Dream Office REIT	31.6%	Income property	—	—	78,000	95.7%
Shops of South Kensington, Saskatoon		Dream	100.0%	Income property	—	—	72,000	96.4%
234 - 1st Avenue South, Saskatoon		Dream Office REIT	31.6%	Income property	—	—	10,000	66.8%
Other:
Willows, Saskatoon		Dream	100.0%	Income property	—	—	n/a
Total Western Canada					48	75,000	911,000	73.9%
Total Recurring Income Segment					1,240	1,150,000	6,729,000	89.5%
DEVELOPMENT SEGMENT
Downtown Toronto & GTA
Residential and Mixed-Use:
Riverside Square - Phase 2	Sell	Dream	32.5%	Planning	227	195,000	43,000		2022
Canary Commons (Block 12)	Sell	Dream	50.0%	Under construction	401	372,000	15,000	100.0%	2022
WDL Block 8	Hold	Dream/Dream Impact	33.3%	Under construction	770	623,000	4,000		2023
Brightwater I and II	Sell	Dream/Dream Impact	31.0%	Planning	311	216,000	110,000	33.0%	2023
Canary House (Block 10 - Condo)	Sell	Dream	50.0%	Planning	206	158,000	25,000		2024
Canary Block 10 - Rental	Hold	Dream/Dream Impact	33.3%	Planning	239	200,000	—		2024
Brightwater future blocks	Various	Dream/Dream Impact	31.0%	Planning	2,684	2,897,000	290,000		2024-2032
WDL Block 3/4/7	Hold	Dream/Dream Impact	33.3%	Planning	855	830,000	39,000		2025
Canary Block 13	Hold	Dream	50.0%	Planning	477	468,000	7,000		TBD
WDL Block 20	Hold	Dream/Dream Impact	33.3%	Planning	661	586,000	262,000		TBD
Scarborough Junction	Sell	Dream Impact	45.0%	Planning	6,619	5,270,000	165,000		TBD
Frank Gehry	Sell	Dream/Dream Impact	33.3%	Planning	1,500	1,652,000	260,000		TBD
Lakeshore East	TBD	Dream/Dream Impact	50.0%	Planning	1,100	989,000	32,000		TBD
Distillery District - 31A Parliament	Hold	Dream	50.0%	Planning	500	448,000	300,000	30.7%	TBD
Seaton	Sell	Dream Impact	7.0%	Planning	TBD	TBD	TBD		TBD
Other	Sell	Various	Various	Various	1,195	1,304,000	58,000		TBD
Total Downtown Toronto & GTA					17,745	16,208,000	1,610,000	33.7%
Zibi (Ottawa/Gatineau)
Block 211	Hold	Dream/Dream Impact	89.0%	Under construction	—	—	185,000	86.0%	2021
Block 2-3	Hold	Dream/Dream Impact	89.0%	Under construction	—	—	55,000	81.2%	2021
Block 208	Hold	Dream/Dream Impact	89.0%	Under construction	—	—	34,000	79.8%	2022
Block 10	Hold	Dream/Dream Impact	89.0%	Under construction	162	147,000	1,500		2022
Block 206	Hold	Dream/Dream Impact	89.0%	Planning	198	166,000	14,000		2023
Block 11	Hold	Dream/Dream Impact	89.0%	Planning	126	116,000	5,000		2023
Block 207	Hold	Dream/Dream Impact	89.0%	Planning	—	—	90,000		2023
Future blocks	Various	Dream/Dream Impact	89.0%	Planning	1,233	1,387,000	2,054,000		TBD
Total Zibi (Ottawa/Gatineau)					1,719	1,816,000	2,438,500	84.3%
U.S.
Las Vegas industrial site	Hold	Dream	10.0%	Planning	—	—	464,000		TBD
Virgin Hotels Las Vegas	Sell	Dream Impact	10.0%	Under construction	—	—	TBD		2023
Total U.S.					—	—	464,000
Western Canada
Residential:
Brighton Village Rentals 1, Saskatoon	Hold	Dream	100.0%	In occupancy	121	81,000	—	12.4%	2021
Brighton Village Rentals 2, Saskatoon	Hold	Dream	100.0%	Planning	132	112,000	13,000		2022-2023
Brighton Recreation, Saskatoon	Hold	Dream	100.0%	Under construction	—	—	6,000	100.0%	2021
Commercial:
1900 Sherwood Place, Regina	Hold	Dream Office REIT	31.6%	Redevelopment	—	—	210,000	100.0%	2021
Brighton Marketplace, Saskatoon	Hold	Dream	50.0%	Under construction	—	—	222,000	77.2%	2022
Harbour Landing, Regina	Hold	Dream	100.0%	Under construction	—	—	41,000	58.2%	2022
Montrose, Calgary	Hold	Dream	100.0%	Under construction	—	—	24,000	66.0%	2022
Hampton Heights, Saskatoon	Hold	Dream	100.0%	Under construction	—	—	22,000	91.0%	2022
Total Western Canada					253	193,000	538,000	75.4%
Total Development Segment					19,717	18,217,000	5,050,500	63.7%
Total Dream Platform					20,957	19,367,000	11,779,500	85.8%

Dream Unlimited Corp. – December 31, 2020 | 9

Western Canada Land Holdings
City	Acre equivalents
Calgary	1,892
Edmonton	858
Saskatoon	3,116
Regina	3,321
Total(3)	9,187

Summary by Geography

		Future GLA	In-place and	Residential
		under	committed	units at	Residential
Location	Current GLA	development(2)	occupancy	completion(2)	GFA(2)
Downtown Toronto & GTA	5,633,000	1,610,000	87.1%	17,745	16,208,000
Ottawa/Gatineau	—	2,438,500	84.3%	1,719	1,816,000
U.S.	185,000	464,000	94.5%	1,192	1,075,000
Western Canada(3)	1,121,000	328,000	74.5%	301	268,000
Total	6,939,000	4,840,500	85.8%	20,957	19,367,000

(1) Dream and Dream Impact Trust holdings at fully consolidated ownership. Dream Office REIT at 31.6% ownership as of December 31, 2020.

(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) Dream's acre equivalents in Western Canada represent an estimated 15,000 residential units that we plan to build out over time.

Recurring Income

A summary of the major asset types within our recurring income segment is included below.

Asset Management and Equity Ownership

We provide asset management and development management services to Dream Industrial REIT and Dream Office REIT, respectively, and on behalf of various institutional partnerships/third-party real estate. Asset management fees earned from Dream Impact Trust and our 16.6 million units held in Dream Impact Trust are eliminated on consolidation. As of December 31, 2020, we held an aggregate of 17.6 million units in Dream Office REIT, representing a 31.6% interest, which generate monthly cash distributions for Dream. It is important to note that fees earned on transactional activity in a period are not recurring in nature and accordingly will impact related margins. 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.

Our asset management and management services team consists of real estate professionals with backgrounds in architecture, urban planning, engineering, development and redevelopment, construction, finance, accounting and law. The team brings experience from a range of major organizations in Canada; is actively involved with internal training opportunities; and has expertise in capital markets, structured finance, real estate investments and management across a broad spectrum of property types in diverse geographic markets. We carry out our own research and analysis, financial modelling, due diligence, and financial planning, and have completed approximately $35 billion of commercial real estate and real estate alternatives transactions. We also act as lead or co-lead developer on behalf of Dream Office REIT, Dream Impact Trust and our third-party partnerships.

Effective December 31, 2020, the Company has updated its calculation methodology for assets under management and fee earning assets under management. Refer to the "Non-IFRS Measures" section of this MD&A for further details. Prior periods have been recast to reflect these updates. As at December 31, 2020, Dream managed assets with a total value of approximately $10 billion (December 31, 2019 – $10 billion), including fee earning assets under management of approximately $5 billion (December 31, 2019 - $6 billion).

Stabilized Income Generating Assets

Dream owns a number of income generating assets, which are key contributors to our sources of recurring income. These assets include Arapahoe Basin, our ski hill in Colorado, and income producing assets in Toronto and Western Canada, the largest being the Distillery District. As of December 31, 2020, we held over 7.9 million sf of GLA in retail, residential 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.

Lending Portfolio

Dream Impact Trust invests in mortgages and loans secured by all types of residential and commercial real estate property that represent an acceptable underwriting risk. Working within these risk parameters, Dream Impact Trust also invests in higher-yielding development and construction loans and bridge loans, where we are comfortable with the underlying security, guarantees and covenants of the borrower.

Dream Unlimited Corp. – December 31, 2020 | 10

Selected Segment Key Operating Metrics

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)		2020		2019		2020		2019
Revenue	$	19,758	$	309,277	$	92,229	$	431,142
Net operating income(1)		6,267		289,284		27,222		348,054
Net margin		4,597		287,452		20,637		341,212
Net margin (%)(1)		23.3%		92.9%		22.4%		79.1%
Fair value changes in investment properties	$	6,089	$	49,711	$	72	$	40,239
Share of earnings from equityaccounted investments		8,297		29,522		65,801		63,025

(1) Net operating income and net margin (%) are non-IFRS measures. Refer to the "Non-IFRS Measures" section of this MD&A for further details.

Results of Operations

In the three months ended December 31, 2020, revenue and net operating income derived from recurring income sources decreased by $289.5 million and $283.0 million, respectively, from the comparative period, primarily due to the incentive fee earned on the Dream Global REIT disposition in 2019 and reduced contribution from Dream Impact Trust due to non-core asset dispositions and scheduled lending portfolio repayments. Similarly, in the twelve months ended December 31, 2020, revenue and net operating income from recurring income sources decreased by $338.9 million and $320.8 million, respectively, from the comparative period, due to the aforementioned factors in addition to reduced earnings from the 2019/2020 ski season at Arapahoe Basin due to social distancing measures taken. Results for the three and twelve months ended December 31, 2019 included fees earned from Dream Global REIT and related entities of $283.2 million and $297.5 million, respectively.

Arapahoe Basin abruptly closed on March 15, 2020 due to the COVID-19 pandemic. We re-opened for summer operations in June with our new Aerial Adventure Park open to the public and for the 2020/2021 ski season on November 9, 2020. Over the past two years, we have invested US$4.4 million in capital expenditures to support a new ski lift and expanded summer activities, including a climbing course, the Aerial Adventure Park and extended mountain biking trails. We remain committed to maintaining the appropriate social distancing measures while providing a safe and enjoyable customer experience.

Fair value gains on investment properties of $6.1 million and $0.1 million for the three and twelve months ended December 31, 2020, respectively were driven by a gain on a redevelopment property held by Dream Impact Trust, partially offset by losses on retail and commercial properties due to revised market growth assumptions.

Asset management revenues declined relative to the comparative period as a result of the sale of Dream Global REIT, partially offset by higher fees earned from Dream Industrial REIT. In the three and twelve months ended December 31, 2020, total asset management and development management fees generated from contracts with Dream Industrial REIT, Dream Office REIT and our partnerships were $5.1 million and $20.3 million, respectively. Net operating income from our asset management business declined in the three and twelve months ended December 31, 2020, relative to prior periods, due to the sale of Dream Global REIT in 2019 and increased platform costs as we invested in the expansion of our asset management business. This was partially offset by transactional activity at Dream Industrial REIT and higher development management fees earned in 2020.

Earnings from equity accounted investments in the three months ended December 31, 2020 declined by $21.2 million relative to the comparative period as a result of reduced earnings from our recurring income investments due to lower fair value adjustments to investment properties. Earnings from equity accounted investments in the year ended December 31, 2020 increased by $2.8 million from the prior year primarily due to the pre-tax gain of $34.2 million, net of transaction costs, recognized on the sale of Dream's indirect interest in a renewable power portfolio. This was partially offset by the aforementioned factors, a foregone deposit incurred in 2020 and prior year earnings from the renewable power portfolio.

Dream Unlimited Corp. – December 31, 2020 | 11

Over the next five years, an additional 2.3 million sf of residential GFA and 0.8 million sf of commercial/retail GLA will be added to our recurring income segment (at the project level). Details of projects we expect to be completed during this time period include the following:

Project/Property	Entity	Dream ownership(1)	Total residential units(2)	Residential GFA(2) (at 100%)	Commercial and retail GLA(2)(at 100%)	Committed occupancy	Occupancy date
357 Bay Street	Dream Office REIT	31.6%	—	—	65,000	100.0%	2021
1900 Sherwood Place	Dream Office REIT	31.6%	—	—	210,000	100.0%	2021
Brighton Village Rental 1	Dream	100.0%	121	81,000	—	12.4%	2021
Brighton Village Rental 2	Dream	100.0%	132	112,000	13,000		2022-2023
Brightwater I and II	Dream/Dream Impact	31.0%	—	—	110,000	33.0%	2023
WDL Block 8	Dream/Dream Impact	33.3%	770	623,000	4,000		2023
Canary Block 10 - Rental	Dream/Dream Impact	33.3%	239	200,000	—		2024
WDL Block 3/4/7	Dream/Dream Impact	33.3%	855	830,000	39,000		2025
Zibi
Block 2-3	Dream/Dream Impact	89.0%	—	—	55,000	81.2%	2021
Block 211	Dream/Dream Impact	89.0%	—	—	185,000	86.0%	2021
Block 208	Dream/Dream Impact	89.0%	—	—	34,000	79.8%	2022
Block 10	Dream/Dream Impact	89.0%	162	147,000	1,500		2022
Block 206	Dream/Dream Impact	89.0%	198	166,000	14,000		2023
Block 207	Dream/Dream Impact	89.0%	—	—	90,000		2023
Block11	Dream/Dream Impact	89.0%	126	116,000	5,000		2023
Total			2,603	2,275,000	825,500	74.6%

(1) Dream and Dream Impact Trust holdings at fully consolidated ownership. Dream Office REIT at 31.6% ownership as of December 31, 2020.

(2) Residential units, GLA and GFA are at 100% project level and include planned units. Planned residential units may be developed as condominium units or purpose-built rentals as supported by market demand, targeted studies and return objectives.

Development

An overview of our development segment by geography is included below.

Urban Development - Toronto & Ottawa

Our urban development assets are comprised of exceptional development opportunities in various planning and construction phases across Toronto & Ottawa and are comprised of condominium, purpose-built rental and mixed-use developments. A large proportion of assets carried within this segment are held at cost and will contribute meaningfully to the Company's earnings in future periods as properties are developed and completed. In addition, through our equity ownership in Dream Impact Trust and Dream Office REIT, we have indirect investments in high-quality assets located in the GTA with significant redevelopment potential.

Over the last five years, we have significantly expanded our investment pipeline in this segment. A number of these investments were acquired on a 25%/75% basis with Dream Impact Trust including Brightwater, West Don Lands, the Frank Gehry development and the Lakeshore East development, in which Dream is the co-developer alongside its partners for each of these sites. Refer to the "Summary of Dream's Assets and Holdings" section of this MD&A for a comprehensive overview of our Development holdings.

The developments that we hold today do not require a significant amount of capital and are financed primarily through project-specific debt including both land loans and construction financing, providing us with additional financial flexibility. In cases where we are developing investment properties for hold, fair value gains are recognized as key milestones are achieved through the development period over the time frame to stabilization and/or completion. Development margin from these assets is earned in periods where we have inventory available for occupancies in condominium or investment properties. With the repositioning of our development portfolio away from Western Canada to the GTA, we anticipate a larger proportion of our income to be derived from this segment in future years.

As at December 31, 2020, our GTA and Ottawa pipeline across the Dream portfolio is comprised of over 19,500 residential units and approximately 4.0 million sf of commercial/retail GLA.

Dream Unlimited Corp. – December 31, 2020 | 12

We develop or co-develop all of the projects below with exceptional partners:

	Dream/Dream Impact
Project	Ownership Interest %	Project Inception
Distillery District	50%	2004
Riverside Square and other mixed-use developments	32.5%-50%	2007
Canary District - Blocks 12 and 13	50%	2011
Zibi	89%	2014
Lakeshore East	50%	2016
Brightwater	31%	2017
Frank Gehry	33%	2017
West Don Lands	33%	2018
100 Steeles Avenue West	50%	2018
Canary District - Block 10	33%-50%	2019

Western Canada Community Development

Dream’s Western Canada community development is comprised of land, housing, multi-family and retail/commercial assets within our master-planned communities in Saskatchewan and Alberta. We currently own approximately 9,200 acres of land in Western Canada, of which nearly 8,600 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. As at December 31, 2020, our Western Canada pipeline across the Dream portfolio is comprised of 253 purpose-built rental units and 0.6 million sf of commercial/retail GLA.

Building on our own land delays the recognition of revenue, as the land sale is not recognized until the property is occupied by a third-party purchaser or tenant. In comparison, when selling land to a third party, revenue is generally recognized on receipt of a 15% deposit from the land buyer and when there is substantial completion of the underground servicing work. Due to the economic conditions in Western Canada, we may not make new investments in undeveloped land at the same rate as in past years unless management considers the lands to be strategic to existing land positions already owned by the Company. With continued challenging market conditions in Western Canada and the impact of COVID-19 on global oil demand, we are closely monitoring the fair values of our investment properties under development, customer demand, pricing trends and inventory supply across the division. Nevertheless, we expect that we will generate profits from building on our own land in the future upon market stabilization.

Land development is financed through our operating line, which is secured by our lands in Western Canada and associated trade receivables. Housing, retail, commercial and multi-family development is financed through project-specific construction financing.

With the intent of diversifying our business, over the last few years we have focused on repatriating capital out of Western Canada and redeploying proceeds to our Toronto developments.

Selected Segment Key Operating Metrics

Selected Segment Key Operating Metrics
		For the three months ended December 31,				For theyear ended December 31,
(in thousands of dollars, except unit and acre amounts)		2020		2019		2020		2019
DIRECTLY OWNED
Revenue	**$ **	28,881	$	74,083	**$ **	255,394	$	149,288
Gross margin		5,700		(3,189)		77,932		16,180
Net margin		648		(11,659)		51,683		(16,216)
Fair value change on investment properties		322		(2,274)		1,651		722
Condominium occupancy units (project level) - Toronto & Ottawa		2		229		421		395
Condominium occupancy units (Dream's share) - Toronto & Ottawa		2		77		190		136
Acres sold - Western Canada		5		11		525		16
EQUITY ACCOUNTED INVESTMENTS
Share of earnings from equity accounted investments	**$ **	20,499	$	11,643	**$ **	16,893	$	30,326
Condominium occupancy units (project level) - Toronto & Ottawa		—		62		133		626
Condominium occupancy units (Dream's share) - Toronto & Ottawa		—		28		67		111

Dream Unlimited Corp. – December 31, 2020 | 13

Results of Operations

In the three months ended December 31, 2020, we generated revenue and net margin of $28.9 million and $0.6 million, respectively, compared to revenue of $74.1 million and negative net margin of $11.7 million in the comparative period. Results for the three and twelve months ended December 31, 2019 included a $23.2 million writedown of land held for development in Regina. Excluding the impact of the prior period writedown, reduced results were driven by fewer lot and acre sales in Western Canada and prior period occupancies at Riverside Square and BT Towns, with limited occupancies in the current quarter.

In the year ended December 31, 2020, revenue and net margin increased by $106.1 million and $67.9 million, respectively, from the prior year. These increases were primarily driven by acre sales in Western Canada, including the sale of a 73% interest in our 480-acre land in Glacier Ridge, as well as condominium unit occupancies at Riverside Square, BT Towns and Kanaal at Zibi. Prior period results include the aforementioned land writedown in Regina. The sale of our 73% interest in Glacier Ridge generated revenue and net margin of $82.6 million and $43.9 million in the first quarter of 2020, respectively. The Company sold an additional 13% interest in Glacier Ridge in the fourth quarter of 2020 for proceeds of $4.9 million.

Earnings from equity accounted investments for the three and twelve months ended December 31, 2020 were $20.5 million and $16.9 million, respectively, driven by fair value gains on an equity accounted investment property and a one-time gain triggered by a project-level debt extinguishment.

In the year ended December 31, 2020, land and condominium inventory decreased by $53.7 million and $42.8 million, respectively, as a result of the aforementioned land sales and occupancies, in addition to transfers of certain Zibi blocks to investment properties under development. This was partially offset by spend across our active developments. Over the same period, equity accounted investments increased by $54.1 million primarily as a result of increasing our interest in the Frank Gehry development to 33% as at December 31, 2020.

Minimal condominium occupancies are expected in 2021. Our development team remains focused on building out our exceptional development pipeline, including Phase 2 of Riverside Square, Canary Commons, Brightwater I and II and West Don Lands Block 8 which are expected to occupy between 2022 to 2023; however, as the development manager for our projects, we are able to adjust, in real-time, should adverse changes to the market arise.

Active Projects

Zibi

In the three months ended December 31, 2020, vertical construction at Zibi continued on all active blocks. The project is a multi-phase development that includes over 4 million sf of density consisting of over 1,800 residential units (inclusive of purpose-built rental units), over 2 million sf of commercial space and 8 acres of riverfront parks and plazas. Zibi will be one of Canada's most sustainable communities and the country's first "One Planet Master-Planned Community". In partnership with Hydro Ottawa, we are developing the District Thermal Energy System, the first post-industrial waste heat recovery system in a master-planned community in North America, which will provide net-zero heating and cooling for all tenants, residents and visitors at Zibi.

Riverside Square

Riverside Square is a 5-acre, two-phase, mixed-use development located in Toronto’s downtown east end on the south side of Queen Street East and immediately east of the Don Valley Parkway. Dream has a 32.5% interest in the project alongside its partners. The first phase of the project consists of 688 residential condominium units, a state-of-the-art multi-level auto-plex and approximately 20,000 sf of retail GLA and is fully occupied. The second phase is planned to consist of approximately 36,000 sf of multi-tenant commercial space with a proposed grocery-anchored component together with 227 condominium units. Vertical construction on the second phase commenced in late 2020 with first occupancies expected in 2022.

Downtown Toronto's East End

In the year ended December 31, 2020, Canary Block, our first condominium building on our Stage 2 Canary lands, completed unit occupancies. The Canary District is developed in a 50/50 partnership with Kilmer Van Nostrand Co. Ltd. and is located in downtown Toronto’s east end. Construction is ongoing at Canary Commons (Block 12), a 401-unit condominium building, and Block 8, the first building in our purpose-built rental community in the West Don Lands neighbourhood. Block 8 will comprise 770 rental units, of which 30% are affordable, with first occupancies expected in 2023. Construction on West Don Lands Block 3/4/7 is expected to commence in mid-2021. This block will add an additional 855 rental units (30% affordable), with initial occupancies planned for 2025. This area is a significant development hub for Dream, as it includes the 35-acre Canary District, the adjacent West Don Lands and Distillery District development assets, in addition to the future Lakeshore East site.

Brightwater

Brightwater is a 72-acre waterfront property for development in Mississauga's Port Credit area, with plans to transform the site into a complete, vibrant and diverse waterfront community. The site is expected to be redeveloped into a large master-planned residential/mixed-use community. Highlights of the draft master plan proposal include nearly 3,000 residential units and 400,000 sf of retail and commercial space. The source remediation program is complete and vertical construction is expected to commence in 2021 on the project's first residential buildings, which are fully pre-sold as of December 31, 2020.

Other Items

Interest Expense

In the three and twelve months ended December 31, 2020, interest expense decreased by $5.6 million and $18.1 million, respectively, from the comparative periods primarily due to a decline in interest rates, the redemption of Dream's Series 1, preference shares, and lower corporate debt levels.

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General and Administrative Expenses

In the three and twelve months ended December 31, 2020, general and administrative expenses were $3.8 million and $16.7 million, down from $6.6 million and $24.3 million, respectively, in the comparative periods largely due to government assistance received through the Canadian Emergency Wage Subsidy in the current year, as well as a reduction in Dream Impact Trust's deferred unit incentive plan liability, as a result of a decrease in Dream Impact Trust's unit price from $7.75 as at December 31, 2019 to $6.03 as at December 31, 2020. Included in general and administrative expenses for the three and twelve months ended December 31, 2020 was government assistance received of $1.5 million and $3.6 million, respectively.

Income Tax Expense

The Company's effective income tax (recovery) rate was (3.6%) and 19.2% for the three months and year ended December 31, 2020 (three months and year ended December 31, 2019 – 23.1% and (22.4%)). The effective income tax rate for the three months and year ended December 31, 2020 is different than the statutory combined federal and provincial tax rate of 26.1% 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 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, 2020.

A summary of our working capital and financial assets and liabilities as at December 31, 2020 and December 31, 2019 is presented below. Project-specific inventory and debt balances are excluded from the table below as the sale of inventory funds the repayment of project-specific construction facilities and cash flow from investment properties is used to fund regular payments on mortgages and term debt.

	December 31, 2020 December 31, 2019
	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 Accounts receivable Other financial assets(1) Lending portfolio Equity accounted investment in Dream Office REIT	$ 185,121 $ — $ —$ 185,121$ 388,521 $ — $ — $ 388,521 180,039 20,851 — 200,890 164,105 38,053 — 202,158 24,302 112,947 — 137,249 11,365 118,091 — 129,456 9,497 13,751 — 23,248 51,216 13,489 — 64,705 — — 476,686 476,686 — — 433,373 433,373
Subtotal assets	398,959 147,549 476,686 1,023,194 615,207 169,633 433,373 1,218,213
Accounts payable and accrued liabilities Income and other taxes payable Provision for real estate development costs Corporate debt facilities Dream Impact Trust units	120,480 35,531 42,824 198,835 132,748 23,289 50,243 206,280 58,091 — — 58,091 154,361 — — 154,361 31,040 — — 31,040 36,853 — — 36,853 — 202,452 — 202,452 — 224,105 — 224,105 — — 289,330 289,330 — — 411,078 411,078
Subtotal liabilities	209,611 237,983 332,154 779,748 323,962 247,394 461,321 1,032,677
Net excess (deficiency)	$ 189,348 $ (90,434) $ 144,532$ 243,446$ 291,245 $ (77,761) $ (27,948) $ 185,536

(1) Other financial assets as at December 31, 2020 excludes $40.0 million in project-specific investment holdings (December 31, 2019 – $nil).

As at December 31, 2020, 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, which is inconsistent with the repayment timing expected by management. 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. Management continuously reviews the timing of expected debt repayments and actively pursues refinancing opportunities as they arise. As at December 31, 2020, we had $426.1 million in corporate-level cash and available under our revolving credit facilities.

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, 2020, on a consolidated basis, we had $185.1 million in cash and cash equivalents (December 31, 2019 – $388.5 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. As at December 31, 2020, our debt maturing in 2020 is project-specific and is expected to be funded through proceeds from condominium unit closings. In addition, we anticipate that cash from operations and recurring income will continue to provide the cash necessary to fund operating expenses and debt service requirements.

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Debt

As at December 31, 2020, total debt was $755.9 million (December 31, 2019 – $699.0 million). A breakdown of project-specific and corporate debt facilities is detailed in the table below.

is detailed in the table below.
(in thousands of Canadian dollars)	Balance Weighted average interest rate
	December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019
Operating line - Western Canada Construction loans Mortgages and term debt	$ — $ — 2.98% 4.64% 221,952 217,341 3.17% 4.79% 331,472 257,509 3.57% 4.23%
Total project-specific debt	$ 553,424 $ 474,850 3.41% 4.41%
Non-revolving term facility Margin facility Operating line - Dream Impact Trust	$ 202,452 $ 224,105 2.99% 5.08% — — 2.98% 4.56% — — 2.45% 3.95%
Total corporate debt facilities	$ 202,452 $ 224,105 2.99% 5.08%
Total debt	$ 755,876 $ 698,955 3.30% 4.63%
Debt to total assets ratio(1)	26.6% 23.0%

(1) Debt to total assets ratio is a non-IFRS measure. Refer to the "Non-IFRS Measures" section of this MD&A for further details.

As at December 31, 2020, $285.9 million (December 31, 2019 – $195.8 million) of aggregate development loans and term debt were subject to a fixed, weighted average interest rate of 3.47% (December 31, 2019 – 4.08%) and will mature between 2021 and 2030. A further $470.0 million (December 31, 2019 – $503.2 million) of real estate debt was subject to a weighted average variable interest rate of 3.19% (December 31, 2019 – 4.91%) and will mature between 2021 and 2023. Included within total debt is $178.7 million of variable debt that the Company has hedged through fixed interest rate swaps.

Contractual Obligations

Our liquidity is impacted by contractual debt and lease commitments as follows:

							2026 and
		2021	2022	2023	2024	2025	thereafter	Total
Project-specific debt(1)	$	257,411 $	107,402 $	24,060 $	9,487 $	60,656 $	94,408 $	553,424
Corporate debt facilities(1)		—	202,452	—	—	—	—	202,452
Lease commitments		1,469	1,097	1,071	1,124	1,106	6,880	12,747
	$	258,880$	310,951$	25,131$	10,611$	61,762$	101,288$	768,623

(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, 2020, there were 43,454,572 Subordinate Voting Shares and 1,557,356 Class B Shares outstanding (December 31, 2019 - 51,101,471 Subordinate Voting Shares and 1,557,389 Class B Shares).

Including the Subordinate Voting Shares of Dream and Class B Shares held or controlled directly or indirectly, the President and Chief Responsible Officer ("CRO") owned an approximate 41% economic interest and 87% voting interest in the Company as at December 31, 2020.

Share Repurchases

The Company renewed its NCIB, which commenced on September 21, 2020, under which the Company has the ability to purchase for cancellation up to a maximum number of 2,604,395 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 25,412 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 20, 2021.

In the year ended December 31, 2020, the Company completed a SIB and purchased for cancellation 5.0 million Subordinate Voting Shares at a price of $23.50 per share for aggregate proceeds of $117.5 million. In addition, in the year ended December 31, 2020, 2.7 million Subordinate Voting Shares were purchased for cancellation by the Company under its NCIB at an average price of $19.45, respectively (year ended December 31, 2019 – 1.0 million Subordinate Voting Shares at an average price of $16.14).

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Subsequent to the year ended December 31, 2020, the Company repurchased for cancellation an additional 0.9 million Subordinate Voting Shares at a total purchase price of $18.6 million.

Off-Balance Sheet Arrangements, Commitments and Contingencies

We conduct our real estate activities from time to time through joint arrangements with third-party partners. A discussion of our off-balance sheet arrangements, commitments and contingencies is included in Note 35 of the consolidated financial statements for the year ended December 31, 2020.

Transactions with Related Parties

The Company has agreements for services and transactions with related parties, which are outlined in Note 36 of our consolidated financial statements for the year ended December 31, 2020.

Critical Accounting Estimates

The preparation of the consolidated financial statements in accordance with IFRS 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 Note 4 of our consolidated financial statements for the year ended December 31, 2020.

Internal Control over Financial Reporting

As at December 31, 2020 financial year-end, the President and Chief Responsible Officer and the Chief Financial Officer (the "Certifying Officers"), with the assistance of senior management, have evaluated the design and effectiveness of the Company's disclosure controls and procedures ("DC&P"), as defined in National Instrument 52-109, "Certification of Disclosure in Issuers' Annual and Interim Filings" ("NI 52-109"). Based on that evaluation, the Certifying Officers have concluded that, as at December 31, 2020, the DC&P are adequate and effective in order to provide reasonable assurance that material information has been accumulated and communicated to management, to allow timely decisions of required disclosures by the Company and its consolidated subsidiary entities, within the required time periods.

The Company's internal control over financial reporting ("ICFR") (as defined by NI 52-109) is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS. Using the framework established in "2013 Committee of Sponsoring Organizations (COSO) Internal Control Framework", published by the Committee of Sponsoring Organizations of the Treadway Commission, the Certifying Officers, together with other members of management, have evaluated the design and operation of the Company's ICFR. Based on that evaluation, the Certifying Officers have concluded that the Company's ICFR was effective as at December 31, 2020.

There were no changes in the Company's internal control over financial reporting in the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

Accounting Standards Adopted During the Period

Refer to Note 3 of the consolidated financial statements for the year ended December 31, 2020 for information pertaining to accounting pronouncements that will be effective in future years. The Company has adopted the following new or revised standards including any consequential amendments thereto, for the period effective January 1, 2020. Changes in accounting policies adopted by the Company were made in accordance with the applicable transitional provisions as provided in those standards and amendments. As required by IAS 8, "Accounting Policies, Changes in Accounting Estimates and Errors", the nature and the effect of these changes are disclosed below and in Note 3 of the consolidated financial statements for the year ended December 31, 2020.

IFRS 3, “Business Combinations”

IFRS 3 sets out to emphasize that the output of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others. The amended definition of a business was effective on January 1, 2020 and applies to the Company's future business combinations.

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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. For a discussion of the risks and uncertainties identified by the Company, please refer to our Annual Report for the year ended December 31, 2020 and our most recent Annual Information Form filed on SEDAR (www.sedar.com). For a discussion of the risks and uncertainties identified specific to Dream Impact Trust, published under the former name of Dream Hard Asset Alternatives Trust, please refer to the Dream Impact Trust Annual Report for the year ended December 31, 2020 and the most recent Annual Information Form filed by Dream Impact Trust on SEDAR.

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 and unforeseeable delays.

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.

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.

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 building industry is highly competitive. Residential home and condominium builders compete for buyers, desirable properties, building materials, labour and capital. We compete with other local, regional and national homebuilders. 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 homebuilding industry 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 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 or repay debt in respect of such properties, and the need to obtain the co-venturers’/partners’ consent with respect to certain major decisions in respect of such properties.

In addition, 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 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.

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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.

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, 2020, the Company had not identified any material adverse effect on our business as a result of the current softening 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.

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 periods 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.

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.

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.

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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

The Company expects to be increasingly involved in mixed-use development projects that include residential rentals. 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.

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.

Environmental and Climate Change Risks

As an owner of real estate property, we are subject to various federal, provincial and state laws relating to environmental matters. Such laws provide that we could be liable for the costs of removal and remediation of certain hazardous, toxic substances released on or in our properties or disposed of at other locations, as well as potentially significant penalties. We have insurance and other policies and procedures in place to review and monitor environmental exposure, which we believe mitigates these risks to an acceptable level. Some of the properties in which we have an interest currently have or have had occupants that use hazardous substances or create waste. Such uses can potentially create environmental liabilities. A few issues have been identified through site assessments, including the need to remediate or otherwise address certain contaminations. These issues are being carefully managed with the involvement of professional consultants. Where circumstances warrant, designated substance surveys and/or environmental assessments are conducted. Although environmental assessments provide some assurance, we may become liable 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 do not currently anticipate material expenditures in respect of any required remediation.

Climate change continues to attract the focus of governments and the general public as an important threat, given the emission of greenhouse gases and other activities continue to negatively impact the planet. We face the risk that our properties 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 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 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 may 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.

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.

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 period. 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.

Dream Unlimited Corp. – December 31, 2020 | 20

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. Terminations 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 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 terminations could have a material adverse effect on our revenue from management fees.

Lending Portfolio and Investment Holdings

Default Risk

If a borrower under a loan defaults under any 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 all or substantially all of the principal and interest 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 lending portfolio may vary widely from time to time and may be concentrated by type of security, industry or geography, resulting in it being less diversified at some times than at other times. 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 participations 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 or held by us, a change in the financial condition of a borrower could have a negative financial impact on us.

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 or counterparty or related group of borrowers or counterparties to which the Company has concentrated exposure could significantly and adversely affect the overall performance of the Company.

Financial and Liquidity Risk

Financing Risk

We will require access to capital to ensure properties are maintained, as well to fund our growth strategy and significant capital expenditures. 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, the market's perception of our growth potential, our then current and expected future earnings and our cash flows. Upon the expiry of the terms of the financing of any particular property, refinancing may not be available or may not be available on reasonable terms.

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.

Dream Unlimited Corp. – December 31, 2020 | 21

Other Applicable Risk

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 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 cyberattacks. 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 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 Canadian tax laws taken by the Company in its tax filings, which could lead to reassessments. These reassessments could have a material impact on the Company in future periods.

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, Vice-Chair, Development, 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 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

In light of Dream Impact Trust’s new impact investment strategy, Dream Impact Trust will be adopting new objectives and deploying its capital into new impact investment opportunities that are intended to align with Dream Impact Trust’s three impact verticals. Dream Impact Trust's ability to achieve its investment objectives and to continue to pay distributions to us will be dependent on Dream Impact Trust's ability to successfully identify and realize on investment opportunities that align with their investment framework. There can be no assurance that they will achieve these objectives or that its impact investments or developments will generate positive returns in a timely manner. In addition, Dream Impact Trust will be creating their own impact investing framework, which it believes will be aligned with existing frameworks in this field. However, these may or may not be interpreted differently from other

Dream Unlimited Corp. – December 31, 2020 | 22

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, Health Crises

Adverse Canadian, U.S., European and global market, economic and political conditions, including dislocations and volatility in credit markets and general global economic uncertainty, 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.

In late 2019, the novel coronavirus (COVID-19) was reported and subsequently spread around the world, with resulting business and social disruption. On March 11, 2020, the World Health Organization declared this outbreak a global pandemic. Public health crises, pandemics and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, COVID-19, could, particularly if prolonged, 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. Contagion in one of our properties or markets or the quarantine of one of our properties could negatively impact our reputation, the reputation of our customers and the attractiveness of that market. All of these factors may have a material adverse effect on our business, results of operations and our ability to pay cash dividends to shareholders.

The speed and extent of the spread of COVID-19, and the duration and intensity of resulting business disruption and related financial and social impact, are uncertain, and such adverse effects may be material. Efforts to slow the spread of COVID-19 could severely impact the operation of our businesses, properties and development projects. To date, a number of governments have declared states of emergency and have implemented restrictive measures such as travel bans, quarantine and self-isolation. The Company is unable to accurately predict the impact that COVID-19 will have on its results of operations, due to uncertainties including the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and actions that may be taken by governmental authorities to contain COVID-19 or to treat its impact. While governmental agencies and private sector participants will seek to mitigate the adverse effects of COVID-19, and the medical community is seeking to develop vaccines and other treatment options, the efficacy and timing of such measures remains uncertain. If the outbreak of COVID-19 and related developments lead to a prolonged or significant impact on global, national or local markets or economic growth, the Company’s cash flows, financial condition or results of operations and our ability to pay cash dividends to shareholders may be materially and adversely affected.

Furthermore, the outbreak of COVID-19 may affect our and our customers’ businesses by disrupting supply chains and transactional activities. Many of the Company’s customers rely on third-party suppliers and manufacturers, many of which are located outside of Canada. This outbreak has resulted, or may result, in the extended shutdown of certain businesses, which may in turn result in disruptions, delays or reductions to our and our customers’ supply chains. These may include disruptions from the temporary closure of third-party supplier and manufacturer facilities, interruptions in supply or restrictions on the export, import or shipment of products, including those sourced from China, Europe or the United States The outbreak of COVID-19 may also negatively impact consumer demand for our and our customers’ products or services as well as consumer spending, which may negatively impact our business or the business of our customers. These factors may impact our customers’ ability to meet their payment and other obligations due to the Company, which could have a material adverse effect on Dream.

Finally, the actual and threatened spread of COVID-19 globally could adversely affect global economies and financial markets resulting in a prolonged economic downturn and a decline in the value of the Subordinate Voting Share price. The extent to which COVID-19 (or any other disease, epidemic or pandemic) impacts business activity or financial results, and the duration of any such negative impact, will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning COVID-19 and the actions required to contain or treat its impact, among others.

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 the COVID-19 pandemic and resulting disruptions; anticipated levels of development, asset management and other management fees in future periods; the expansion of our asset management business; expectations that recurring income generating assets will increase over time; our development plans and proposals for current and future projects, including projected sizes, density, timelines, uses and tenants; the redevelopment potential of our assets and the assets held by Dream Office REIT and 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 and debt repayments; the contribution of our development segment to our earnings in future periods and the proportion of our income to be derived from this segment in future years; the total residential units at completion of our development projects, their anticipated occupancy/stabilization date and our future GLA under development; expectations that distributions from Dream Office REIT and Dream Impact Trust may increase over time; expectations of future profit contributions from Western Canada and our rate of investment in this division in the future; our acquisition and development pipeline; the sustainability rating of Zibi upon completion and Zibi becoming the first One Planet community in Canada; the District Thermal Energy System providing net-zero heating and cooling for all tenants, residents and visitors at Zibi; expectations that our private equity portfolio will grow in 2021; expectations regarding a $250 million capital raise for our private open-ended impact fund, including the expectation that

Dream Unlimited Corp. – December 31, 2020 | 23

Dream will have over $700 million of assets under management committed to impact investing after the first close of the private impact fund; the expectation that the first occupancies of Phase 2 of Riverside Square will take place in 2022; the expectation that our income generating assets will grow over time; our expected sources of funding of current liabilities, short-term liquidity requirements, operating expenses and debt service requirements; 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", "project", "continue", "target' 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. 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 we will meet our future objectives, priorities and growth targets; that we receive the licences, permits or approvals in necessary connection with our projects; 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 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 occur as expected; and the nature of development lands held and the development potential of such lands, our ability to bring new developments to market, anticipated positive general economic and business conditions, including low unemployment and interest rates, 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 Western Canada land 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, the impact of the COVID-19 pandemic on the Company and uncertainties surrounding the COVID-19 pandemic, including government measures to contain the COVID-19 pandemic, employment levels, regulatory risks, mortgage rates and regulations, environmental risks, consumer confidence, seasonality, adverse weather conditions, reliance on key clients and personnel and competition and other risks and factors described from time to time in the documents filed by the Company with the securities regulators.

All forward-looking information is as of February 23, 2021. 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.

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Additional Information - Consolidated Dream

Segmented Assets and Liabilities

Segmented Assets and Liabilities
												December 31, 2020
												Less:
												Consolidation
		Recurring income		Development	Corporate and other			Consolidated Dream		Less: Dream Impact Trust(1)		and fair value adjustments(1)		Dream standalone(1)
Assets
Cash and cash equivalents	$	13,136	$	21,630	$	150,355	$	185,121	$	110,671	$	3,840	$	70,610
Accounts receivable		15,205		179,257		6,428		200,890		1,306		(1,345)		200,929
Other financial assets(2)		41,240		135,989		—		177,229		73,662		(94,306)		197,873
Lending portfolio		23,248		—		—		23,248		23,248		—		—
Housing inventory		—		29,195		—		29,195		—		—		29,195
Condominium inventory		—		248,506		—		248,506		—		17,190		231,316
Land inventory		764		484,074		—		484,838		—		—		484,838
Investment properties		426,632		193,240		—		619,872		213,352		15,496		391,024
Recreational properties		60,560		—		—		60,560		—		—		60,560
Equity accounted investments		531,113		231,539		—		762,652		224,390		(59,738)		598,000
Capital and other operating assets		6,973		37,494		7,795		52,262		1,885		417		49,960
Intangible asset		—		—		—		—		—		(43,000)		43,000
Total assets	$	1,118,871	$	1,560,924	$	164,578	$	2,844,373	$	648,514	$	(161,446)	$	2,357,305
Liabilities
Accounts payable and other liabilities	$	39,879	$	141,031	$	17,925	$	198,835	$	12,055	$	30,905	$	155,875
Income and other taxes payable(3)		—		—		58,091		58,091		7		—		58,084
Provision for real estate development costs		—		31,040		—		31,040		—		—		31,040
Debt		273,395		280,029		202,452		755,876		88,195		—		667,681
Dream Impact Trust units(3)		—		—		289,330		289,330		—		289,330		—
Deferred income taxes(3)		—		—		104,589		104,589		8,380		17,077		79,132
Total liabilities	$	313,274	$	452,100	$	672,387	$	1,437,761	$	108,637	$	337,312	$	991,812
Non-controlling interest	$	—	$	14,966	$	—	$	14,966	$	—	$	(62,775)	$	77,741
Shareholders' equity		805,597		1,093,858		(507,809)		1,391,646		539,877		(435,983)		1,287,752
Total equity	$	805,597	$	1,108,824	$	(507,809)	$	1,406,612	$	539,877	$	(498,758)	$	1,365,493

(1) Refer to the "Non-IFRS Measures" section of this MD&A for the definition of Dream Impact Trust, consolidation and fair value adjustments and Dream standalone.

(2) Other financial assets on a Dream standalone basis includes the Company's investment in Dream Impact Trust of $93.8 million, which is eliminated on a consolidated basis.

(3) Certain liabilities are included in Corporate and other as balances are reviewed on a consolidated basis.

Dream Unlimited Corp. – December 31, 2020 | 25

												December 31, 2019	December 31, 2019	December 31, 2019
												Less:
												Consolidation
		Recurring income		Development	Corporate and other			Consolidated Dream		Less: Dream Impact Trust(1)		and fair value adjustments(1)		Dream standalone(1)
Assets
Cash and cash equivalents	$	11,518	$	31,327	$	345,676	$	388,521	$	117,787	$	1,244	$	269,490
Accounts receivable		11,093		188,555		2,510		202,158		4,179		(2,240)		200,219
Other financial assets(2)		—		129,456		—		129,456		119,887		(94,249)		103,818
Lending portfolio		64,705		—		—		64,705		64,705		—		—
Housing inventory		—		38,607		—		38,607		—		—		38,607
Condominium inventory		—		291,304		—		291,304		—		15,129		276,175
Land inventory		786		537,785		—		538,571		—		—		538,571
Investment properties		419,991		98,433		—		518,424		201,624		15,786		301,014
Recreational properties		48,779		—		—		48,779		—		—		48,779
Equity accounted investments		520,284		188,556		—		708,840		186,713		(41,651)		563,778
Capital and other operating assets		6,956		42,350		6,273		55,579		1,188		8,196		46,195
Intangible asset		—		—		—		—		—		(43,000)		43,000
Assets held for sale(4)		49,089		—		—		49,089		—		—		49,089
Total assets	$	1,133,201	$	1,546,373	$	354,459	$	3,034,033	$	696,083	$	(140,785)	$	2,478,735
Liabilities
Accounts payable and other liabilities	$	52,413	$	136,154	$	17,713	$	206,280	$	35,087	$	22,926	$	148,267
Income and other taxes payable(3)		—		—		154,361		154,361		(58)		—		154,419
Provision for real estate development costs		—		36,853		—		36,853		—		—		36,853
Debt(4)		203,450		271,400		224,105		698,955		88,988		24		609,943
Dream Impact Trust units(3)		—		—		411,078		411,078		—		411,078		—
Deferred income taxes(3)		—		—		93,897		93,897		4,515		6,985		82,397
Total liabilities	$	255,863	$	444,407	$	901,154	$	1,601,424	$	128,532	$	441,013	$	1,031,879
Non-controlling interest	$	—	$	21,649	$	—	$	21,649	$	—	$	(43,297)	$	64,946
Shareholders' equity		877,338		1,080,317		(546,695)		1,410,960		567,551		(538,500)		1,381,910
Total equity	$	877,338	$	1,101,966	$	(546,695)	$	1,432,609	$	567,551	$	(581,797)	$	1,446,856

(1) Refer to the "Non-IFRS Measures" section of this MD&A for the definition of Dream Impact Trust, consolidation and fair value adjustments and Dream standalone.

(2) Other financial assets on a Dream standalone basis includes the Company's investment in Dream Impact Trust of $93.8 million, which is eliminated on a consolidated basis.

(3) Certain liabilities are included in Corporate and other as balances are reviewed on a consolidated basis.

(4) Debt associated with assets held for sale totalling $30.1 million is classified as current within debt as at December 31, 2019.

Dream Unlimited Corp. – December 31, 2020 | 26

Segmented Statement of Earnings (Loss)

										For the three	months ended December 31, 2020	months ended December 31, 2020	months ended December 31, 2020	months ended December 31, 2020
												Less:
												Consolidation
		Recurring income		Development		Corporate and other		Consolidated Dream		Less: Dream Impact Trust(1)		and fair value adjustments(1)		Dream standalone(1)
Revenue	$	19,758	$	28,881	$	—	$	48,639	$	4,634	$	(1,518)	$	45,523
Direct operating costs		(13,491)		(23,181)		—		(36,672)		(2,036)		(337)		(34,299)
Gross margin		6,267		5,700		—		11,967		2,598		(1,855)		11,224
Selling, marketing, depreciation and other
operating costs		(1,670)		(5,052)		—		(6,722)		—		(301)		(6,421)
Net margin		4,597		648		—		5,245		2,598		(2,156)		4,803
Fair value changes in investment properties		6,089		322		—		6,411		10,165		(72)		(3,682)
Investment and other income		51		1,004		346		1,401		186		(172)		1,387
Interest expense		(2,677)		(190)		(2,808)		(5,675)		(832)		87		(4,930)
Fair value changes in financial instruments		14		(3,411)		—		(3,397)		(3,411)		—		14
Share of earnings from equity accounted
investments		8,297		20,499		—		28,796		13,541		813		14,442
Net segment earnings (loss)		16,371		18,872		(2,462)		32,781		22,247		(1,500)		12,034
General and administrative expenses(2)		—		—		(3,832)		(3,832)		(3,325)		1,619		(2,126)
Adjustments related to Dream Impact Trust units(3)		—		—		(60,130)		(60,130)		—		(60,130)		—
Income tax expense(2)		—		—		(1,134)		(1,134)		(4,054)		6,129		(3,209)
Net earnings (loss)(3)	$	16,371	$	18,872	$	(67,558)	$	(32,315)	$	14,868	$	(53,882)	$	6,699

										For the three	months ended December 31, 2019	months ended December 31, 2019	months ended December 31, 2019	months ended December 31, 2019
												Less:
												Consolidation
		Recurring income		Development		Corporate and other		Consolidated Dream		Less: Dream Impact Trust(1)		and fair value adjustments(1)		Dream standalone(1)
Revenue	$	309,277	$	74,083	$	—	$	383,360	$	9,383	$	(2,023)	$	376,000
Direct operating costs		(19,993)		(77,272)		—		(97,265)		(4,064)		(321)		(92,880)
Gross margin		289,284		(3,189)		—		286,095		5,319		(2,344)		283,120
Selling, marketing, depreciation and other
operating costs		(1,832)		(8,470)		—		(10,302)		—		—		(10,302)
Net margin		287,452		(11,659)		—		275,793		5,319		(2,344)		272,818
Fair value changes in investment properties		49,711		(2,274)		—		47,437		21,119		(60)		26,378
Investment and other income		131		521		175		827		830		(19)		16
Interest expense		(3,634)		(1,729)		(5,889)		(11,252)		(1,331)		24		(9,945)
Net gain on disposition of Dream Global REIT		135,474		—		—		135,474		—		—		135,474
Loss on disposition of assets held for sale		(8,515)		—		—		(8,515)		—		(8,515)		—
Fair value changes in financial instruments		3,468		(1,054)		125		2,539		(3,404)		—		5,943
Share of earnings from equity accounted
investments		29,522		11,643		—		41,165		8,685		1,498		30,982
Net segment earnings (loss)		493,609		(4,552)		(5,589)		483,468		31,218		(9,416)		461,666
General and administrative expenses(2)		—		—		(6,573)		(6,573)		(3,550)		2,402		(5,425)
Adjustments related to Dream Impact Trust units(3)		—		—		(18,566)		(18,566)		—		(18,566)		—
Income tax expense(2)		—		—		(109,138)		(109,138)		(1,800)		(1,920)		(105,418)
Net earnings (loss)(3)	$	493,609	$	(4,552)	$	(139,866)	$	349,191	$	25,868	$	(27,500)	$	350,823

(1) Refer to the "Non-IFRS Measures" 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.

(3) Includes earnings attributable to non-controlling interest.

Dream Unlimited Corp. – December 31, 2020 | 27

For the year ended December 31, 2020	For the year ended December 31, 2020
Recurring income Development Corporate and other Consolidated Dream Less: Dream Impact Trust(1) Less: Consolidation and fair value adjustments(1) Dream standalone(1)
Revenue $ 92,229 $ 255,394 $ —$ 347,623$ 21,276 $ (4,566)$ 330,913 Direct operating costs (65,007) (177,462) — (242,469) (9,265) (1,474) (231,730)
Gross margin 27,222 77,932 — 105,154 12,011 (6,040) 99,183
Selling, marketing, depreciation and other operating costs (6,585) (26,249) — (32,834) — (469) (32,365)
Net margin 20,637 51,683 — 72,320 12,011 (6,509) 66,818
Fair value changes in investment properties 72 1,651 — 1,723 10,322 (364) (8,235) Investment and other income 427 6,432 1,712 8,571 1,922 (132) 6,781 Interest expense (9,706) (3,189) (10,946) (23,841) (3,284) 25 (20,582) Fair value changes in financial instruments (2,949) (1,981) — (4,930) (4,863) — (67) Share of earnings (loss) from equity accounted investments 65,801 16,893 — 82,694 12,675 (8,101) 78,120
Net segment earnings (loss) 74,282 71,489 (9,234) 136,537 28,783 (15,081) 122,835
General and administrative expenses(2) — — (16,681) (16,681) (8,579) 5,237 (13,339) Adjustments related to Dream Impact Trust units(2) — — 77,764 77,764 — 77,764 — Income tax expense(2) — — (37,982) (37,982) (3,865) (10,092) (24,025)
Net earnings(3) $ 74,282 $ 71,489 $ 13,867$ 159,638$ 16,339 $ 57,828	$ 85,471

										For	the year ended December 31, 2019	the year ended December 31, 2019	the year ended December 31, 2019	the year ended December 31, 2019
												Less:
												Consolidation
		Recurring income		Development		Corporate and other		Consolidated Dream		Less: Dream Impact Trust(1)		and fair value adjustments(1)		Dream standalone(1)
Revenue	$	431,142	$	149,288	$	—	$	580,430	$	52,229	$	(8,358)	$	536,559
Direct operating costs		(83,088)		(133,108)		—		(216,196)		(18,158)		(1,564)		(196,474)
Gross margin		348,054		16,180		—		364,234		34,071		(9,922)		340,085
Selling, marketing, depreciation and other
operating costs		(6,842)		(32,396)		—		(39,238)		—		—		(39,238)
Net margin		341,212		(16,216)		—		324,996		34,071		(9,922)		300,847
Fair value changes in investment properties		40,239		722		—		40,961		15,064		(470)		26,367
Investment and other income		3,592		5,454		1,119		10,165		2,696		440		7,029
Interest expense		(17,672)		(6,776)		(17,455)		(41,903)		(8,470)		250		(33,683)
Fair value changes in financial instruments		28,400		(4,844)		201		23,757		(7,194)		—		30,951
Net gain on disposition of Dream Global REIT		135,474		—		—		135,474		—		—		135,474
Loss on disposition of assets held for sale		(8,515)		—		—		(8,515)		—		(8,515)		—
Share of earnings from equity accounted
investments		63,025		30,326		—		93,351		22,922		1,884		68,545
Net segment earnings (loss)		585,755		8,666		(16,135)		578,286		59,089		(16,333)		535,530
General and administrative expenses(2)		—		—		(24,348)		(24,348)		(16,455)		9,007		(16,900)
Adjustments related to Dream Impact Trust units(2)		—		—		(113,512)		(113,512)		—		(113,512)		—
Income tax recovery (expense)(2)		—		—		(108,681)		(108,681)		(4,358)		11,815		(116,138)
Net earnings (loss)(3)	$	585,755	$	8,666	$	(262,676)	$	331,745	$	38,276	$	(109,023)	$	402,492

(1) Refer to the "Non-IFRS Measures" 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.

(3) Includes earnings attributable to non-controlling interest.

Dream Unlimited Corp. – December 31, 2020 | 28

Consolidated Statements of Cash Flows

Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)	For the three months ended December 31, For the year ended December 31,
	2020 2019 2020 2019
Operating activities Earnings (losses) for the period Adjustments for non-cash items: Depreciation and amortization Fair value changes in investment properties Share of earnings from equity accounted investments Deferred income tax expense (recovery) Other adjustments Loss on disposition of assets Net gain on disposition of Dream Global REIT Changes in non-cash working capital Acquisition of condominium inventory, net of acquired cash and working capital Sale of housing inventory, net of development Sale of condominium inventory, net of development Advances on construction loans, net of repayments Acquisition of land inventory Fair value adjustment on Dream Impact Trust units Development of land inventory, net of sales	$ (32,315)$ 349,191 $ 159,638$ 331,745 549 1,974 7,119 9,456 (6,411) (47,437) (1,723) (40,961) (28,796) (41,165) (82,694) (93,351) (5,774) 7,053 11,223 (938) 4,941 21,140 (3,282) (2,648) — 8,515 — 8,515 — (135,474) — (135,474) 55,272 63,168 (109,504) 85,866 — — (5,300) (18,033) 1,549 4,495 12,848 21,558 (6,871) 20,000 23,488 (43,716) (19,647) 24,673 4,603 39,305 — — — (3,244) 55,320 13,260 (98,016) 90,931 1,610 13,237 (905) 7,059
Net cash flows (used in) provided by operating activities	19,427 302,630 (82,505) 256,070
Investing activities Acquisitions and additions to investment properties and assets held for sale Acquisitions and additions to recreational properties and renewable power assets, net Investments in equity accounted investments Contributions to equity accounted investments Distributions and disposals of equity accounted investments Disposal of investment properties Acquisitions of financial assets and other assets Distributions and disposals of financial assets and other assets Proceeds on disposition of assets, net Proceeds on disposition of asset management agreement and other transaction costs, net Loans receivable advances, net of repayments Lending portfolio repayments, net of advances and lender fees	(21,853) (27,166) (72,349) (51,271) (3,360) (2,947) (16,613) (5,642) — (52,752) (23,720) (64,054) 10,232 (9,793) (33,966) (27,442) 12,001 4,107 106,023 21,912 — (2,641) — — (2,415) 8,499 (57,353) (18,507) 8,070 71,158 61,470 111,026 46,330 101,236 46,330 116,559 — 133,127 — 133,127 (18,183) 127 (21,032) 3,097 13,462 71,822 41,986 82,755
Net cash flows provided by investing activities	44,284 294,777 30,776 301,560
Financing activities Borrowings from mortgages and term debt facilities Repayments of mortgages and term debt facilities Advances from operating lines, net of repayments Repayments of margin loan facility, net of advances Repayments pursuant to non-revolving term facility Advances from equity accounted investments Contributions from non-controlling interest, net of distributions Dream Impact Trust units repurchased from other unitholders Dividends paid Repayments of lease obligations Redemption of Preference shares, series 1 Shares repurchased	10,797 (27) 131,431 48,492 (40,874) (31,722) (58,004) (51,766) — (96,500) — (49,000) — (100,000) — (100,000) — — (22,000) — 595 3,599 6,815 31,615 — 2,519 — 5,821 (1,094) — (24,610) (59,102) (2,717) (2,635) (11,164) (10,615) (926) (924) (3,706) (3,694) — (28,675) — (28,675) (19,338) (2,527) (170,433) (16,478)
Net cash flows used in financing activities	(53,557) (256,892) (151,671) (233,402)
Change in cash and cash equivalents Cash and cash equivalents, beginning of year	10,154 340,515 (203,400) 324,228 174,967 48,006 388,521 64,293
Cash and cash equivalents, end of year	$ 185,121$ 388,521 $ 185,121$ 388,521

Dream Unlimited Corp. – December 31, 2020 | 29

Revenue by Geographic Region

The Company’s revenue segmented by geographic region, net of eliminations, is as follows:

			For the three months ended	For the three months ended	December 31,		For the	year ended	December 31,
			2020		2019		2020		2019
Western Canada
Alberta	**$ **	7,954	16.4%$	18,163	4.7%**$ **	116,168	33.4%$	39,337	6.8%
British Columbia		—	—%	911	0.2%	983	0.3%	3,742	0.6%
Saskatchewan		20,637	42.4%	27,709	7.2%	61,810	17.8%	68,532	11.8%
	**$ **	28,591	58.8%$	46,783	12.1%**$ **	178,961	51.5%$	111,611	19.2%
Ontario		9,335	19.2%	42,186	11.0%	119,168	34.2%	111,675	19.3%
Quebec		—	—%	—	—%	946	0.3%	—	—%
Eastern Canada		—	—%	347	0.1%	—	—%	4,456	0.8%
Canada		37,926	78.0%	89,316	23.2%	299,075	86.0%	227,742	39.3%
United Kingdom		—	—%	667	0.2%	—	—%	2,857	0.5%
United States		5,762	11.8%	7,442	1.9%	24,217	7.0%	39,332	6.8%
Non-segmented (asset management)		4,951	10.2%	285,935	74.7%	24,331	7.0%	310,499	53.4%
Total	**$ **	48,639	100.0%$	383,360	100.0%**$ **	347,623	100.0%$	580,430	100.0%

Net Margin by Geographic Region

The Company’s net margin segmented by geographic region is as follows:

			For the three	months ended	December 31,		For the	year ended	December 31,
			2020		2019		2020		2019
Western Canada
Alberta	**$ **	1,572	30.0%$	2,864	1.0%**$ **	46,999	65.0%$	3,534	1.1%
British Columbia		—	—%	911	0.3%	983	1.4%	3,742	1.2%
Saskatchewan		1,066	20.3%	(17,747)	(6.4%)	6,401	8.9%	(19,480)	(6.0%)
	**$ **	2,638	50.3%$	(13,972)	(5.1%)**$ **	54,383	75.3%$	(12,204)	(3.7%)
Ontario		1,319	25.2%	13,294	4.9%	16,621	23.0%	35,955	11.1%
Quebec		106	2.0%	—	—%	154	0.2%	—	—%
Eastern Canada		—	—%	283	0.1%	—	—%	3,133	0.9%
Canada		4,063	77.5%	(395)	(0.1%)	71,158	98.5%	26,884	8.3%
United Kingdom		—	—%	228	0.1%	—	—%	1,274	0.3%
United States		(561)	(10.7%)	(1,263)	(0.5%)	(1,941)	(2.7%)	6,083	1.9%
Non-segmented (asset management)		1,743	33.2%	277,223	100.5%	3,103	4.2%	290,755	89.5%
Total	**$ **	5,245	100.0%$	275,793	100.0%**$ **	72,320	100.0%$	324,996	100.0%

Quarterly Business Trends

A summary of revenue, earnings (loss), and basic and diluted earnings (loss) per share for the previous eight quarters is presented below.

(in thousands of dollars,		Dec 31,	Sep 30,	Jun 30,	Mar 31,	Dec 31,	Sep 30,	Jun 30,	Mar 31,
except per share amounts)		2020	2020	2020	2020	2019	2019	2019	2019
Revenue	**$ **	48,639$	60,485 $	62,044 $	176,455 $	383,360 $	64,069 $	76,044 $	56,957
Earnings (loss) for the period(1)		(32,315)	(4,653)	10,776	185,830	349,191	27,167	(11,089)	(33,524)
Basic earnings (loss) per share(1)		(0.70)	(0.11)	0.23	3.78	6.65	0.51	(0.22)	(0.62)
Diluted earnings(loss) per share(1)		(0.70)	(0.11)	0.22	3.72	6.43	0.50	(0.22)	(0.62)

(1) Per share amounts reflect the Share Consolidation for all periods presented.

Selected Annual Information

Selected Annual Information
				Year ended December 31,
(in thousands of dollars, except per share amounts)		2020	2019	2018
Revenue	$	347,623$	580,430$	339,873
Earnings before income taxes		197,620	440,426	213,492
Earnings for the year		159,638	331,745	192,053
Earnings for the year attributable to shareholders		159,221	332,246	190,948
Basic earnings per share(1)		3.37	6.25	3.52
Diluted earnings per share(1)		3.31	6.09	3.42
Total assets		2,844,373	3,034,033	2,751,566
Total liabilities		1,437,761	1,601,424	1,631,986
Total equity		1,406,612	1,432,609	1,119,580

(1) Per share amounts reflect the Share Consolidation for all periods presented.

Dream Unlimited Corp. – December 31, 2020 | 30

Non-IFRS Measures

In addition to using financial measures determined in accordance with IFRS, we believe that important measures of operating performance include certain financial measures that are not defined under IFRS and, as such, may not be comparable to similar measures used by other companies. Throughout this MD&A, there are references to certain non-IFRS measures, including those described below, which management believes are relevant in assessing the economics of the business of Dream. While these performance measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other companies, we believe that they are informative and provide further insight as supplementary measures of earnings for the period and cash flows.

"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 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. Effective December 31, 2020, the Company has updated its calculation methodology for assets under management and fee earnings assets under management. Management of the Company made this change as we believe gross balances are a truer indicator of AUM and the size of our portfolio.

"Consolidation and fair value adjustments" represents certain IFRS adjustments required to reconcile Dream standalone and Dream Impact Trust results to the consolidated results as at and for the year ended December 31, 2020 and 2019. 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.

"Debt to total assets ratio" represents the Company's financial leverage and is calculated as debt as a percentage of total assets per the consolidated financial statements. A reconciliation of the debt to total assets ratio can be found below.

		December 31, 2020		December 31, 2019
Debt	$	755,876	$	698,955
Total assets		2,844,373		3,034,033
Debt to total assets ratio		26.6%		23.0%

"Dream standalone" represents the results of Dream, excluding the impact of Dream Impact Trust's consolidated results. Refer to the "Segmented Assets and Liabilities" and "Segmented Statement of Earnings" sections of this MD&A for a reconciliation of Dream excluding Dream Impact Trust results to the consolidated financial statements.

“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 carrying value of gross assets of the underlying development project subject to development management agreements; and (iii) 100% of 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.

“Net operating income" represents revenue less direct operating costs. Net operating income less general, administrative and overhead expenses, and amortization, is equal to net margin as per Note 38 of the consolidated financial statements. Net operating income for the recurring income segment for the year ended December 31, 2020 and 2019 is calculated as follows:

		For the three months ended December 31,	For the three months ended December 31,	For the year ended December 31,	For the year ended December 31,
		2020	2019	2020	2019
Revenue	**$ **	19,758$	309,277**$ **	92,229$	431,142
Less: Direct operating costs		(13,491)	(19,993)	(65,007)	(83,088)
Less: Selling,marketing,depreciation and other indirect costs		(1,670)	(1,832)	(6,585)	(6,842)
Net margin	**$ **	4,597$	287,452**$ **	20,637$	341,212
Add: Depreciation		1,196	1,467	4,740	4,895
Add: General and administrative expenses		474	365	1,845	1,947
Net operating income	**$ **	6,267$	289,284**$ **	27,222$	348,054

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.sedar.com. The Subordinate Voting Shares trade on the TSX under the symbol “DRM” .

Dream Unlimited Corp. – December 31, 2020 | 31

Appendix - Supplemental Segmented Information

Recurring Income

Recurring Income
	For the three months ended December 31, 2020
Asset management Stabilized properties Arapahoe Basin	Dream Impact Trust & consolidation and fair value adjustments(1) Total recurring income - Dream consolidated
Revenue $ 6,719 $ 4,161 $ 5,762 $ 3,116$ 19,758 Net margin 3,630 785 (561) 743 4,597
	For theyear ended December 31, 2020
Asset management Stabilized properties Arapahoe Basin	Dream Impact Trust & consolidation and fair value adjustments(1) Total recurring income - Dream consolidated
Revenue $ 29,874 $ 21,428 $ 24,217 $ 16,710$ 92,229 Net margin 9,118 7,489 (1,941) 5,971 20,637
	For the three months ended December 31,2019
Asset management Stabilized properties Arapahoe Basin	Dream Impact Trust & consolidation and fair value adjustments(1) Total recurring income - Dream consolidated
Revenue $ 288,214 $ 6,261 $ 7,442 $ 7,360 $ 309,277 Net margin 283,590 2,150 (1,263) 2,975 287,452
	For theyear ended December 31,2019
Asset management Stabilized properties Arapahoe Basin	Dream Impact Trust & consolidation and fair value adjustments(1) Total recurring income - Dream consolidated
Revenue $ 319,741 $ 28,198 $ 39,332 Net margin 300,585 10,395 6,083	$ 43,871 $ 431,142 24,149 341,212

(1) Dream Impact Trust, and consolidation and fair value adjustments are non-IFRS measures. Refer to the "Non-IFRS Measures" section of this MD&A for further details.

Development

Development
	For the three months ended December 31, 2020
Urban development Western Canada community development	Dream Impact Trust & consolidation and fair value adjustments(1) Total development - Dream consolidated
Revenue $ 1,690 $ 27,191 Net margin (1,524) 2,473	$ —$ 28,881 (301) 648
	For theyear ended December 31, 2020
Urban development Western Canada community development	Dream Impact Trust & consolidation and fair value adjustments(1) Total development - Dream consolidated
Revenue $ 87,318 $ 168,076 Net margin 2,631 49,521	$ —$ 255,394 (469) 51,683
	For the three months ended December 31,2019
Urban development Western Canada community development	Dream Impact Trust & consolidation and fair value adjustments(1) Total development - Dream consolidated
Revenue $ 30,124 $ 43,959 $ — $ 74,083 Net margin 3,663 (15,322) — (11,659)
	For theyear ended December 31,2019
Urban development Western Canada community development	Dream Impact Trust& consolidation and fair value adjustments(1) Total development - Dream consolidated
Revenue $ 53,553 $ 95,735 $ — $ 149,288 Net margin 3,607 (19,823) — (16,216)

(1) Dream Impact Trust, and consolidation and fair value adjustments are non-IFRS measures. Refer to the "Non-IFRS Measures" section of this MD&A for further details.

Dream Unlimited Corp. – December 31, 2020 | 32