WCM.A Wilmington Capital Management

Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported net income for the three months ended December 31, 2022 of $0.5 million or $0.04 per share compared to net income of $0.04 million or $0.00 per share for the same period in 2021. For the year ended December 31, 2022, the Corporation recognized net income of $2.8 million or $0.23 per share compared to a net loss of $0.5 million or ($0.04) per share for the previous year.

OPERATIONS REVIEW – For the Year Ended December 31, 2022As at December 31, 2022, Wilmington had assets under management in its operating platforms of approximately $373 million ($93 million representing Wilmington’s share). A summary of the Corporation and the operations of its investees is set out below.

MarinasMaple Leaf PartnershipsIn 2022, the Maple Leaf Partnerships successfully completed the acquisition of four marinas in Ontario and now owns 18 marinas with over 6,800 boat slips, all within 2 hours driving time of Toronto, Ontario. This represents an approximate 37% increase in the number of slips owned at the beginning of 2022. The total acquisition cost was $25.3 million which was funded by cash on hand and mortgage financing.

Slip occupancies for the 2022 boating season were strong across the portfolio. Marinas primarily serving cottagers, remained 100% occupied and marinas serving larger boats were approximately 90% occupied, resulting in an average occupancy of 91% for the portfolio.

To date, the Corporation has invested $9.3 million in the Maple Leaf Partnerships of which $8.7 million was on account of income producing properties and $0.6 million pertained to a waterfront development project, Champlain Shores. The Corporation receives a 10% distribution on its investment attributed to the income producing properties.

The re-development of Champlain Shores (formerly Bay Moorings) to a water-front residential community continues to make good progress with site servicing for the 84 freehold lots and the pre-sales program well underway. Home construction has commenced and the first completed homes are expected to be completed in summer 2023. To facilitate the home construction program, the Corporation replaced the initial $5.0 million revolving loan with a $12.0 million revolving loan facility, bearing interest between 7.5% to 10.5% per annum.

Real EstateBow City PartnershipThe Bow City Self Storage facility continues to gain occupancy and has strong rental rates. To date, the Corporation has invested $2.5 million in the Bow City Partnerships.

Sunchaser PartnershipSeasonal occupancy at the two RV resorts under ownership remained very strong and seasonal rates have increased on average 9% year over year. Following a prolonged permitting effort, construction of approximately 125 new seasonal sites is now underway at Half Moon Lake Resort, with the majority of new sites being available by June 2023.

Private EquityNorthbridge, Northbridge Fund 2016, Northbridge Fund 2021 SP#1 and Northbridge Fund 2022 SP#2 and Northbridge Fund SP#4During the year ended December 31, 2022, Northbridge formed two special purpose funds investing in private and public energy companies, with the total commitments being $27.8 million. $10.6 million has been funded in 2022 and the remaining $17.2 million is expected to be called in 2023.

During 2022, Northbridge returned $7.8 million to investors from the Northbridge Fund 2016 (Corporation’s share - $0.24 million).

Northbridge manages approximately $74 million of funded and committed capital as at December 31, 2022 (2021 - $47 million).

Outlook2022 was another strong year for each of the operating platforms from both organic and inorganic growth perspectives.

The Maple Leaf Partnerships successfully integrated five marinas during the year resulting in significant growth in total slips, waterfront acreage and boat sales.

Bow City Storage continued to exceed initial expectations in terms of net absorption and rental rates and the Sunchaser Partnership experienced a strong season in terms of occupancy and revenue growth.

Northbridge had another strong year as the energy sector saw renewed optimism and investment. Northbridge raised two new funds during the year, returned a significant portion of capital to limited partners and is seeking further investment opportunities.

Since the sale of Real Storage Private Trust in 2019 and the subsequent $1/share dividend, Wilmington had taken a cautious approach when acquiring and expanding businesses in niche real estate and energy markets aiming to avoid investing in overpriced assets. Since 2019, Wilmington has seen good growth despite being selective with several initiatives due to valuation concerns. In 2023 and the years ahead, we see a more normalized asset pricing environment and we aim to continue to grow organically and by acquisition, in a responsible manner.

FINANCIAL RESULTS

STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (unaudited)

For the	Three Months ended December 31,						Year ended December 31,
(CDN $ thousands, except per share amounts)		2022			2021		2022		2021
Management fee revenue		111			100		489		386
Interest and other income		926			622		2,547		1,559
		1,037			722		3,036		1,945
Expenses
General and administrative		(716		)	(346	)	(2,013	)	(1,399	)
Amortization		(7		)	(12	)	(28	)	(124	)
Finance costs		(2		)	(5	)	(9	)	(11	)
Stock-based compensation		(56		)	(145	)	(328	)	(553	)
		(781		)	(508	)	(2,378	)	(2,087	)
Fair value adjustments and other activities
Fair value adjustments to investments		218			---		2,573		(279	)
Loss on sale of Energy Security		---			---		(146	)	---
Equity accounted income (loss)		28			(10	)	174		56
		246			(10	)	2,601		(223	)
Income (loss) before income taxes		502			204		3,259		(365	)
Current income tax recovery (expense)		11			(105	)	(76	)	(8	)
Deferred income tax recovery (expense)		(47		)	(55	)	(387	)	(88	)
Provision for income taxes		(36		)	(160	)	(463	)	(96	)
Net income (loss)		466			44		2,796		(461	)
Other comprehensive income
Items that will not be reclassified to net income:
Fair value adjustments to investments		112			1,151		3,010		1,547
Related income taxes		(21		)	(171	)	(355	)	(218	)
Other comprehensive income, net of income taxes			91		980		2,655		1,329
Comprehensive income		557			1,024		5,451		868
Net income (loss) per share
Basic		0.04			---		0.23		(0.04	)
Diluted		0.03			---		0.22		(0.04	)

BALANCE SHEETS

(unaudited)			December 31,	December 31,
(CDN $ thousands)			2022	2021
Assets
NON-CURRENT ASSETS
Investment in Maple Leaf Partnerships			18,637	15,887
Investment in Bow City Partnerships			3,864	3,010
Investment in Sunchaser Partnership			1,806	1,366
Investment in Northbridge and Energy Securities			7,284	3,980
Note receivable			---	2,058
Right-of-use asset			92	120
			31,683	26,421
CURRENT ASSETS
Cash			4,007	1,924
Short term securities			22,000	35,000
Amounts receivable and other assets			13,083	676
Total assets			70,773	64,021
Liabilities
NON-CURRENT LIABILITIES
Deferred income tax liabilities			1,316	574
Lease liabilities			116	145
			1,432	719
CURRENT LIABILITIES
Lease liabilities			38	19
Income taxes payable			118	25
Amounts payable and other			790	642
Total liabilities			2,378	1,405
Equity
Shareholders’ equity			51,179	51,179
Contributed surplus			1,482	1,154
Retained earnings			7,382	4,586
Accumulated other comprehensive income			8,352	5,697
Total equity			68,395	62,616
Total liabilities and equity			70,773	64,021

Executive Officers of the Corporation will be available at 403-705-8038 to answer any questions on the Corporation’s financial results.

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND OTHER MEASUREMENTSCertain statements included in this document may constitute forward-looking statements or information under applicable securities legislation. Forward-looking statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding the operations, business, financial conditions, expected financial results, performance, opportunities, priorities, ongoing objectives, strategies and outlook of the Corporation and its investee entities and contain words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation.

While the Corporation believes the anticipated future results, performance or achievements reflected or implied in those forward-looking statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond the Corporation’s control, which may cause the actual results, performance and achievements of the Corporation to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.

Factors and risks that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include but are not limited to: the ability of management of Wilmington and its investee entities to execute its and their business plans; availability of equity and debt financing and refinancing within the equity and capital markets; strategic actions including dispositions; business competition; delays in business operations; the risk of carrying out operations with minimal environmental impact; industry conditions including changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; operational matters related to investee entities business; incorrect assessments of the value of acquisitions; fluctuations in interest rates; stock market volatility; general economic, market and business conditions; risks associated with existing and potential future law suits and regulatory actions against Wilmington and its investee entities; uncertainties associated with regulatory approvals; uncertainty of government policy changes; uncertainties associated with credit facilities; changes in income tax laws, tax laws; changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the effect of applying future accounting changes; and other risks, factors and uncertainties described elsewhere in this document or in Wilmington's other filings with Canadian securities regulatory authorities.

The foregoing list of important factors that may affect future results is not exhaustive. When relying on the forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statements or information, that may be as a result of new information, future events or otherwise. These forward-looking statements are effective only as of the date of this document.