Walton Ontario. Second Quarter Report 2014 For the three and six months ended June 30, 2014 and June 30, 2013

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1 Walton Ontario Land L.P. 1 Second Quarter Report 2014 For the three and six months ended June 30, 2014 and June 30, 2013

2 Table of Contents CEO Message to Unitholders Management s Discussion and Analysis Financial Statements (Unaudited) Walton Group of Companies Ottawa

3 CEO Message to Unitholders Included in this report are the fiscal results for the second quarter of 2014 for Walton Ontario Land L.P. 1 (the Partnership ). Launched in January 2010, the Partnership s objective is to maximize returns to limited partners through the management of the entity, concept planning and eventual sale of the Ottawa Property (the Property ).The Property consists of approximately 300 acres adjacent to existing residential communities located to the north and northwest, and immediately south of Ottawa s current urban area boundary. During the second quarter of 2014, the Partnership continued to participate in the City of Ottawa s 2014 Official Plan review process to support the inclusion of the Property in future expansions to Ottawa s urban boundary. The City has issued a decision on its Official Plan review process and has decided not to expand its urban boundary, however completion of the process is not final until the Minister of Municipal Affairs and Housing ( MMAH ) has made a final ruling and all appeals have been exhausted. During the course of the City s review process, the Partnership made submissions citing that the future prosperity and competitiveness of the City in promoting economic development is contingent on the quality and quantity of employment lands being made available to existing and future users. The Partnership has filed an appeal to the MMAH about the City s review process and in particular for not adequately addressing the quality of employment lands in its deliberations. Walton s appeal along with those of 31 other appellants was received and their status confirmed by the Ministry on May 30, A pre-hearing has been suggested for the spring of 2015 to determine the joint status of the appellants. The Partnership believes that the Property is well suited for an urban boundary expansion providing an excellent opportunity to accommodate employment and supporting mixed uses, in an enterprise designated concept plan that has the potential to create new employment opportunities in the Ottawa area. As the Partnership s investment objective is to maximize returns to its limited partners, these initiatives would position the Property to achieve the highest and best potential based on market demand. Overall, the Partnership is performing as expected by management and consistent with the Partnership s intention of holding its interest in the Ottawa Property as an investment until market conditions are appropriate, at which time a sale will be made Walton Ontario Land L.P. 1, Ottawa Property Second Quarter Report 2014 Walton Ontario Land L.P. 1 3

4 Top: Walton Ontario Land L.P. 1, Alliston Property (Sold in October of 2012) Plan. Bottom: Walton Ontario Land L.P. 1, Ottawa Property Outline 4 Walton Ontario Land L.P. 1 Second Quarter Report 2014

5 Market Environment Economic activity in Ottawa-Gatineau remains subdued, with real Gross Domestic Product ( GDP ) forecast to climb by 0.9% during Activity is anticipated to start picking up in 2015, as economic growth is forecast to improve to 1.9%. 1 Despite the steep public sector job cuts and the weak economy, demand for new housing in Ottawa-Gatineau has remained healthy due to low mortgage rates. 1 Approximately 8,500 homes were started in 2013, only 500 units below the average of the prior 10 years and 300 below the 2012 figure. 1 Some of the current revitalization in lowrise construction began in 2013, and as employment conditions are expected to remain modest, developers will reduce construction of single-detached, semi- and row units until employment and income strengthen which is anticipated to occur in Employment is projected to grow from 699,000 in 2014 to 747,000 jobs in Walton believes that the residential and commercial development activity currently occurring near the Property demonstrates the strength of the new home and commercial market in the area, and that the Partnership s land is well positioned for future development. Our belief is supported by the growth of the following neighbouring developments: Monahan Landing, a subdivision comprising single-family and townhouse units, located just inside Ottawa s urban boundary and directly adjacent to the Property, is well underway with Phase 2 of its development. Currently, Phase 3 is being prepared for servicing. Blackstone and Fernbank Crossing are two communities consisting of single-detached homes, townhouses and low rise condominiums located 2.5 km northwest of the Property and within the City s boundaries. Both communities are part of the overall Fernbank Community Design Plan which will eventually accommodate more than 10,000 homes; and The new SmartCentres Kanata Retail Plaza, approximately 2 km northwest of the Ottawa Property, which includes a Walmart Supercenter and other retail outlets. The 195,000 sq.ft. development has only one pad of 2,000 sq.ft. available for commercial tenants. Walton believes strongly in the quality of our assets and is proud to offer our clients and investors the opportunity to participate in our land-based real estate projects. We will continue to work with municipal governments and other stakeholders in the planning and development of our projects to realize the most effective use of our lands to attain our investment goals. Thank you for investing in the Partnership, and for your support and confidence in the Walton Group of Companies. Best regards, william k. Doherty Chief Executive Officer Walton Ontario Land 1 Corporation, General Partner of Walton Ontario Land L.P Conference Board of Canada, Metropolitan Outlook 1 - Spring Canada Housing and Mortgage Corporation - Housing Market Outlook Ottawa (Ontario part of Ottawa-Gatineau CMA) - Date Released Spring 2014 Second Quarter Report 2014 Walton Ontario Land L.P. 1 5

6 MANAGEMENT S DISCUSSION & ANALYSIS For the three and six months ended June 30, 2014 August 19, 2014 The following management s discussion and analysis ( MD&A ) is a review of the financial condition and results of operations of Walton Ontario Land L.P.1 (the Partnership ) for the three and six months ended June 30, The MD&A should be read in conjunction with the Partnership s unaudited condensed interim financial statements for the three and six months ended June 30, 2014 and the Partnership s audited financial statements for the years ended December 31, 2013 and December 31, All financial information is reported in Canadian dollars and has been prepared in accordance with the International Accounting Standard ( IAS ) 34 Interim Financial Reporting and uses accounting policies that are consistent with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ). In limited situations, IFRS has not issued rules and guidance applicable to the real estate investment and development industry. In such instances, the Partnership has followed guidance issued by the Real Property Association of Canada to the extent that such guidance does not conflict with the requirements under IFRS or the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the IFRS framework. Additional information about the Partnership is available on SEDAR at CRITICAL ACCOUNTING ESTIMATES The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and equity at the date of the financial statements, and the reported amount of revenues and expenses during the year. The estimates and assumptions which have the most significant effect on the financial statements and note disclosures are related to the recoverability of land and the fair value of land, which are determined using a market approach using comparable market data through the use of an independent valuator to assess the value as is. This requires management to use its judgment to assess the highest and best use of the investment property. Changes in these estimates and assumptions could cause the actual results to differ materially from those estimates. FORWARD-LOOKING STATEMENTS Certain information set forth in this MD&A is based on the Partnership s current expectations, intentions, plans, and beliefs, which are based on experience and the Partnership s assessment of historical and future trends. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond management s control. These risks and uncertainties include, but are not limited to, the timing of approval by municipalities, and the business and general economic environment. These uncertainties may cause the Partnership s actual performance, as well as financial results in future periods, to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Investors are cautioned against attributing undue certainty to forward-looking statements because actual results could differ materially from management s targets, expectations or estimates. See also Risk Factors in this MD&A. The forward-looking statements contained in this MD&A are given as of the date hereof. Except as otherwise required by law, the Partnership does not intend to, and assumes no obligation to, update or revise these or other forwardlooking statements it may provide, whether as a result of new information, plans or events or otherwise. 6 Walton Ontario Land L.P. 1 Second Quarter Report 2014

7 RESPONSIBILITY OF MANAGEMENT This MD&A has been prepared by, and is the responsibility of, the management of the general partner of the Partnership, Walton Ontario Land 1 Corporation (the General Partner ). APPROVAL BY THE BOARD OF DIRECTORS The MD&A was authorized for issue by the board of directors of the General Partner (the Board of Directors ) on August 19, BUSINESS OVERVIEW The Partnership was established on October 2, 2009, for the purpose of acquiring and syndicating undeveloped strategically-located land within Ontario growth corridors. The Partnership s investment objective is to maximize returns to its limited partners through the acquisition, management, concept planning and sale of two properties, consisting of an aggregate of 455 acres of undeveloped land in southern Ontario (the Properties ). The Properties which were acquired by the Partnership consist of: Toronto Area: The property was located near Toronto in Alliston, Ontario (the Alliston Property ) and is made up of two parcels of land, comprised of 155 acres. These parcels were designated as Urban Industrial Holding (UM*H), and are adjacent to the Honda Canada manufacturing facility. City of Ottawa: The property is located in the southwest quadrant of the City of Ottawa (the Ottawa Property ) and is made up of a single parcel of land, comprised of approximately 300 acres. This land is designated as Agriculture Resource Area. It is adjacent to an existing residential subdivision, and is immediately south of Ottawa s current urban area boundary. On October 12, 2012, the Partnership sold the Alliston Property. As a result, the interest in the Ottawa Property is the remaining investment held by the Partnership as at June 30, The Partnership is managed by WIGI. The project manager is Walton Development and Management (Alberta) LP (formerly Walton Development and Management L.P. ) ( WDM ). It is the current intention of the Partnership to hold its interest in the Ottawa Property as an investment and to dispose of it prior to its physical development. If the limited partners determine that the Partnership should participate in the development of the Ottawa Property (other than pre-development concept planning), the activities of the Partnership also may include the partial or full development of the Ottawa Property prior to its sale. The net proceeds from the disposition of the Ottawa Property, after satisfaction of liabilities and payment of, or provision for, all fees and expenses, including any amounts that the General Partner reasonably considers necessary to retain in order to replenish the refundable expense reserve, will be distributed by the Partnership. Included in such fees and expenses is a performance fee payable to WIGI, provided that the limited partners receive distributions equal to the amount of their purchase price allocation, plus an amount equal to an 8% annual cumulative return on contributed capital that has not been paid to the limited partners in respect of previous distributions. Net income, if any, earned from the Property prior to, or between its sales has not been, and is not anticipated to be, significant. As a result, the Partnership is not expected to distribute a significant amount of cash to unitholders other than at such time that the Property is sold. Second Quarter Report 2014 Walton Ontario Land L.P. 1 7

8 The address of the registered office of the General Partner is 23rd Floor, 605 5th Avenue SW, Calgary, Alberta, T2P 3H5. SUMMARY OF FINANCIAL DATA For the three months ended June 30 For the six months ended June Total revenue ($) 10,050 12,711 17,095 25,565 Total expenses ($) 248, , , , 472 Net loss and comprehensive loss ($) (238,184) (234,800) (478,673) (467,907) Weighted average units outstanding 1,2 1,961,840 1,961,840 1,961,840 1,961,840 Basic and diluted net income (loss) per unit ($) (0.12) (0.12) (0.24) (0.24) 1 The weighted average units outstanding exclude the general partner unit issued. Based on the terms of the Limited Partnership Agreement, the holder of the general partner unit does not share equally in the income/loss of the Partnership but instead receives 0.001% of the net income/loss. 2 The weighted average units outstanding and net income/(loss) per unit for all periods presented have been restated to reflect the November 15, 2012 unit consolidation, which resulted in a 1,618,160 reduction in the limited partnership units outstanding. As at June 30, 2014 December 31, 2013 Total assets ($) 17,200,619 17,633,260 Total non-current liabilities ($) - - Total liabilities ($) 120,589 74,557 Total equity ($) 17,080,030 17,588,703 Limited partnership units outstanding 1,961,840 1,961,840 REVIEW OF OPERATIONS Summary The Ottawa Property is adjacent to existing residential communities located to the north and northwest, and immediately south of Ottawa s current urban area boundary. During the second quarter of 2014, the Partnership continued to participate in the City of Ottawa s ( the City ) 2014 Official Plan review process to support the inclusion of the Ottawa Property in future expansions to Ottawa s urban boundary. The City has issued a decision on its Official Plan review process and has decided not to expand its urban boundary, however completion of the process is not final until the Provincial Minister of Municipal Affairs and Housing ( MMAH ) has made a final ruling and all appeals have been exhausted. Throughout the course of City s 2014 Official Plan review process, Management made submissions citing the future prosperity and competitiveness of the City in promoting economic development, and is contingent on the quality of employment lands being available to existing and future users, as well as the quantity of suitable lands. The Partnership has filed an appeal to the MMAH about the City s Official Plan review process and in particular for Ottawa not adequately addressing the quality of employment lands in their deliberations. The Partnership s appeal, along with the appeals from 31 other appellants, was received and its status confirmed by MMAH on May 30, A pre-hearing has been suggested during the Spring of 2015 to determine the joint party status of appellants. 8 Walton Ontario Land L.P. 1 Second Quarter Report 2014

9 Management believes that the Property is well suited for an urban boundary expansion in 2015 by providing an excellent opportunity to locate employment and supporting mixed uses in an enterprise designated concept plan that has the potential to accommodate new jobs in the Ottawa area. The Partnership s investment objective is to maximize returns to its limited partners and these initiatives would position the Property to achieve the highest and best use potential. During the three months ended June 30, 2014, the Partnership realized a net loss of $238,184 compared to a net loss of $234,800 for the three months ended June 30, This was consistent with management s expectation because the Partnership is not expected to generate significant revenues, except during periods when either property is sold and the Partnership s expenses are also expected to remain fairly constant throughout the life of the Partnership. This is because the most significant expenses of the Partnership, being the management fees, servicing fees and directors fees, are fixed over the life of their respective contracts. Overall, the Partnership is performing as expected by management and consistent with the Partnership s intention of holding its interest in the Ottawa Property as an investment until market conditions are appropriate, at which time a sale will be made. ANALYSIS OF FINANCIAL CONDITION As at June 30, 2014, the Partnership had total assets of $17,200,619 (December 31, 2013 $17,633,260), total liabilities of $120,589 (December 31, $74,557) and total partners equity of $17,080,030 (December 31, $17,558,703). The major components of the Partnership s total assets were land of $15,150,723 (December 31, $15,066,849) and cash of $2,011,400 (December 31, $2,554,867). Both the expenses and land development costs of the Partnership are funded through the cash reserve set aside by the Partnership out of the gross proceeds from the Initial public offering via prospectus dated January 27, 2010 ( IPO ) and private placement via offering memorandum dated March 19, 2010 ( Private Placement ) (collectively, the Offerings ) and the retained cash of $308,136 from the sale of the Alliston Property in October The cash on hand as at June 30, 2014, is expected by management to be adequate to fund operations over the next 12 months, and anticipated to be sufficient for the Partnership to carry out its investment objectives. LAND The carrying amount of land increased from $15,066,849 at December 31, 2013 to $15,150,723 as at June 30, The increase in the carrying value of the land was a result of the capitalized costs associated with the concept planning for the Ottawa Property throughout the first and second quarters of The fair value of the property is determined using a market approach using comparable market sales adjusted for factors specific to the Partnership s property including sales date, property rights conveyed, financing terms, conditions of sale, location, site area, site utility, planning and development timeframe and a report from an independent valuation firm which holds recognized and relevant professional qualifications and has recent experience in the location and category of the investment property being valued. Second Quarter Report 2014 Walton Ontario Land L.P. 1 9

10 The current fair value is based on conditions existing at the balance sheet date. Fair value measurements are classified using a three tier fair value hierarchy where each level reflects the significance of the inputs used in making the measurements. In level 1, values are based on unadjusted quoted prices in an active market that are accessible at the measurement date for identical assets and liabilities; level 2 values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability; and level 3 values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Overall, the valuation is considered to fall into level 3 of the fair value hierarchy because of unobservable adjustments reflecting the condition and location of the Partnership s land. In applying this valuation method, the fair value of the remaining Ottawa Property as at June 30, 2014 was estimated to be approximately $25,450,000 (December 31, $25,450,000). The General Partner is responsible for determining the measurements used to determine fair value as well as reviewing all major inputs and assumptions included in the valuation and reviewing the results of the independent valuator. The General Partner, along with the audit committee, discusses the valuation process and key inputs on a quarterly basis. Assumptions underlying these estimates are limited by the availability of reliable comparable data. By nature, these estimates are subjective and do not necessarily result in precise determinations. Should the underlying assumptions change, the estimated proceeds from the ultimate sale may change by a material amount and may result in a write-down of the carrying amount of the land. In determining the fair value of our investment property, judgment is required in assessing the highest and best use as required under IFRS 13, Fair Value measurement. The property is currently zoned for and is used as agricultural land which is not considered to be its highest and best use. The highest and best use of the property is considered to be property containing employment and mixed uses, including residential and commercial building. However, it should be noted that the property is not currently zoned for this use. The current fair value is considered to be what a willing market participant would be willing to pay for the property in its current condition as at June 30, The current fair value considers that if the property were to be sold at June 30, 2014 to a market participant, such participant would take into account the potential use of the property as nonagricultural land and the risks associated with obtaining the appropriate permits and zoning for that use. In addition to the fair value analysis discussed above, management also reviews the market value of the Ottawa Property on an as entitled basis. Estimating the market value on an as entitled basis involves analysis of a variety of land transactions within the immediate and surrounding areas of sales of vacant residential lands already designated as residential areas. Using this valuation method of the Ottawa Property as entitled, the fair value of the remaining Ottawa Property as at June 30, 2014, was estimated to be approximately $56,880,000 (December 31, $56,880,000). This as entitled basis does not represent the current fair value of the property, and is a projected value based on certain hypothetical and extraordinary assumptions. The as entitled estimate is the estimate of the market value of real property based on the hypothetical condition and extraordinary assumption that the property in its entirety is located inside the urban boundary and is designated within the Official Plan as employment/mixed-use development land ready for development. There is a risk that such municipal approvals may not be obtained in a timely manner, or at all. MANAGEMENT FEES Under the terms of the Management Services and Fee Agreement between the Partnership and WIGI, the Partnership is required to pay WIGI: i) An annual management fee for providing ongoing management and administrative services to the Partnership. The annual management fee of $665,880 (quarterly, $166,470) (calculated as 2% of $33,294,000, being the net proceeds raised by the Partnership, less offering costs) is payable by the partnership and is due quarterly until all of the properties are disposed. 10 Walton Ontario Land L.P. 1 Second Quarter Report 2014

11 ii) A performance fee equal to 25% of the priority return of 8% divided by 0.75, plus 25% of the balance remaining after the priority return and the above portion of the performance fee. The priority return is calculated on the partners investment amount from the closing date of the Partnership s unit offering, on contributed capital that has not been paid to the limited partners in respect of all dispositions. The performance fee will still be payable to WIGI should the Partnership remove WIGI as manager under the Management Services and Fee Agreement. No performance fee was incurred during the three and six months ended June 30, 2014 and June 30, 2013, as there was no return on the land sale to the City of Ottawa during the year. iii) A disposition fee equal to 1.5% of the gross proceeds received by the Partnership when the Partnership sells all or any part of its interest in the Properties. The disposition fee will still be payable to WIGI should the Partnership remove WIGI as manager under the Management Services and Fee Agreement. No disposition fee was incurred during the three and six months ended June 30, 2014 and June 30, SERVICING FEES Servicing fees are paid in accordance with the Agency Agreements between the Partnership and its agents. Under the terms of the Agency Agreements, the Partnership is required to pay a servicing fee equal to 0.50% annually of the net proceeds raised through the IPO and Private Placement, less offering costs. The portion of the servicing fee relating to the Partnership s Private Placement is payable to WIGI, which is responsible for the distribution of the servicing fee to the agents. The servicing fee is calculated and paid semi-annually commencing on June 30, 2010, until the earlier of the dissolution of the Partnership and June 30, TRANSACTIONS WITH RELATED PARTIES WIGI and WDM are related to the General Partner of the Partnership by virtue of the fact that they are all controlled by Walton Global. Included in accounts payable and accrued liabilities are the following amounts which were payable to related parties. These amounts are unsecured, due on demand, bear no interest and have no fixed terms of repayment. As at June 30, 2014 As at December 31, 2013 Walton International Group Inc. ($) 3, Walton Development and Management (Alberta) LP ($) 36, Total 39, Walton International Group Inc. In accordance with the terms of the Management Services and Fee Agreement between the Partnership and WIGI, the Partnership incurred management fees during the three and six months ended June 30, 2014, of $166,470 (June 30, $166,470) and $332,940 (June 30, $332,940), respectively. No performance fee has been paid to WIGI during the three and six months ended June 30, 2014 and June 30, In accordance with the Agency Agreements between the Partnership and its agents, the Partnership incurred total servicing fees during the three and six months ended June 30, 2014, of $41,618 (June 30, $41,618) and Second Quarter Report 2014 Walton Ontario Land L.P. 1 11

12 $83,235 (June 30, $83,236), respectively. The servicing fees are payable to WIGI, which is responsible for the distribution of the servicing fees to the agents. The Partnership and WIGI entered into a funding agreement on February 25, 2010 (the Funding Agreement ). In accordance with the Funding Agreement the Partnership established a refundable expense reserve that was equal to multiplied by the Partnership s gross proceeds received. WIGI will pay, for and on behalf of the Partnership, or fund to the Partnership, to a maximum of 5% of the Partnership s gross proceeds (the Maximum Financing Obligation ) any expenses incurred by the Partnership in respect of concept planning and any Partnership administrative expenses that are in excess of the then current balance of the refundable expense reserve, as such reserve may be replenished from time to time in the sole discretion of the directors of the General Partner. The Partnership and WIGI agreed that WIGI may pay the amounts of the Partnership s excess expenses that WIGI determines either from its own funds or help the Partnership to arrange financing for such amounts and the Partnership shall be obligated to agree to such financing provided that such financing is on terms that are commercially reasonable to the Partnership in the reasonable judgment of the Partnership. WIGI may, in its sole discretion, pay for Partnership expenses in excess of the Maximum Financing Obligation. The loan will bear interest at an annual interest rate equal to the prime rate, and if WIGI is no longer manager of the Properties, the loan shall bear interest at an annual rate equal to Prime plus 5%. At June 30, 2014, there are no amounts (December 31, $nil) owing under the Funding Agreement. Walton Development and Management (Alberta) LP In accordance with the Concept Planning Services Agreement between the Partnership, WIGI and WDM, the fees and costs for services provided in relation to concept planning are divided into the following two categories: i) the services conducted internally by WDM ( WDM Services ), which will be provided at a rate of $25 per acre per year; and ii) the services, with respect to the Properties, coordinated and managed by WDM ( Managed Services ) where outside consultants are engaged by WDM to undertake work in relation to concept planning. The Partnership will be responsible to pay, from the refundable expense reserve, the fees, expenses and cost of the outside consultants engaged by WDM. In addition, WDM will be entitled to receive a fee in an amount equal to 10% of the fees paid to outside consultants engaged by WDM in relation to such Managed Services. Both the WDM Services fee and Managed Services fee are capitalized as part of land. During the three and six months ended June 30, 2014, the Partnership incurred a total amount payable to WDM of $71,572 (June 30, $16,678) and $72,676 (June 30, $37,179), respectively, for third party invoices initially funded by WDM related to the services entered into in accordance with the concept planning services agreement. These amounts have been capitalized as part of land. During the three and six months ended June 30, 2014, the Partnership incurred total services fees of $1,874 (June 30, $1,874) and $3,748 (June 30, $3,748), respectively. This was consistent with management s expectations because the amount of the services fees is based on a fee per acre rate over the life of the Concept Planning Services Agreement. The total services fees incurred during the three months ended June 30, 2014, were consistent with the terms of the Concept Planning Services Agreement and management s expected use of funds. The total Managed Services fee charged to the Partnership during the three and six months ended June 30, 2014, was $6,929 (June 30, $1,618) and $7,451 (June 30, $3,464), respectively. These amounts were charged as 10% of the Managed Services of the Properties during the year. The year over year increase in Managed Services was due to an increase in the concept planning work performed during the first quarter of 2014 compared to that of Walton Ontario Land L.P. 1 Second Quarter Report 2014

13 Key Management Compensation Key management personnel are comprised of the directors and executive officers of the General Partner. The independent directors are paid a fixed amount of compensation for the life of the Partnership, which is payable quarterly in advance. The amount of compensation expense incurred by the Partnership relating to its independent directors was as follows: For the three months ended June 30 For the six months ended June Directors fees ($) 20,452 20,903 41,355 41,806 All services performed for the Partnership by its executive officers and its non-independent director are governed by the Management and Services Fee Agreement. The annual management fee that WIGI receives under the Management and Services Fee Agreement has been disclosed above. The compensation of key management does not include the remuneration paid to individuals who are paid directly by Walton Global and WIGI. The Officers of the Partnership are also Officers and Directors of numerous entities controlled or managed by Walton Global and it is not practicable to make a reasonable apportionment of their compensation in respect of each of those entities. Second Quarter Report 2014 Walton Ontario Land L.P. 1 13

14 SUMMARY OF QUARTERLY RESULTS A summary of operating results for the past eight quarters is as follows: June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013 March 31, 2013 December 31, 2012 September 30, 2012 Total assets ($) 17,200,619 17,403,102 17,633,260 17,862,186 18,046,854 18,486,360 18,531,875 31,180,614 Total liabilities ($) 120,589 84,888 74,557 74,740 65, ,911 82,319 69,859 Total equity ($) 17,080,030 17,318,214 17,558,703 17,787,446 17,981,649 18,216,449 18,449,556 31,110,755 Total revenue ($) 10,050 7,045 16,912 39,778 12,711 12,854 33,547 10,520 Total expenses ($) (248,234) (247,534) (245,657) (233,950) (247,511) (245,961) (2,509,854) (246,234) Net income / (loss) before other items (238,184) (240,489) (228,745) (194,172) (234,800) (233,107) (2,476,307) (235,714) ($) (Loss)/gain on land disposal ($) (29) ,295,322 - Comprehensive (loss)/income ($) (238,184) (240,489) (228,745) (194,201) (234,800) (233,107) 8,819,015 (235,714) Weighted average units outstanding 1,2 1,961,840 1,961,840 1,961,840 1,961,840 1,961,840 1,961,840 1,961,840 1,961,840 Basic and diluted net income / (loss) per unit ($) Limited partnership units outstanding end of year (0.12) (0.12) (0.12) (0.10) (0.12) (0.12) 4.50 (0.12) 1,961, ,961, ,961, ,961, ,961, ,961, ,961, ,580,000 1 Weighted average units outstanding exclude the general partner unit issued. Based on the terms of the Limited Partnership Agreement, the holder of the general partner unit does not share equally in the income/loss of the Partnership but instead receives 0.001% of the net income/loss. 2 The weighted average units outstanding and net income/(loss) per unit for all periods presented have been restated to reflect the November 15, 2012 unit consolidation, which resulted in a 1,618,160 reduction in the limited partnership units outstanding. 3 Change in limited partnership units outstanding are a result of a unit consolidation on November 15, 2012, immediately following the distribution due to the Alliston sale in Each outstanding unit became approximately of a unit. Quarter over quarter the operating results of the Partnership have been consistent with the exception of the fourth quarter of 2012 during which the Partnership sold the Alliston Property and realized a gain on this sale in the amount of $11,295,322. This reasonable consistency is management s expected trending given the Partnership s investment objectives. 14 Walton Ontario Land L.P. 1 Second Quarter Report 2014

15 SUPPLEMENTAL INFORMATION Liquidity and Capital Resources The Partnership s capital consist of partners equity and balances due to related parties. The Partnership s objectives when managing capital are to: (i) (ii) (iii) ensure adequate capital is retained by the Partnership to fund the ongoing operations of the Partnership; ensure that the Partnership is able to meet all obligations relating to the entity and the management, concept planning and sale and the development of the land; and maximize the rate of return to unit holders. The Partnership manages the capital structure by using short and long term cash flow projections to determine that the amount of cash available to meet on-going obligations is either retained by the Partnership or is available through agreements with related parties. There were no changes to the way we define capital, our objectives, and our policies and processes for managing capital from the prior fiscal year. The Partnership has the following sources of capital to finance its operations: i) Of the gross proceeds raised under the IPO and the Private Placement, approximately 17.9% ($6.4 million) was set aside by the Partnership in a refundable expense reserve. This reserve will be used to fund the annual management fee, the Partnership s ongoing administrative and operating expenses (including the servicing fee, disclosure costs, accounting, audit and legal expenses, investor communications costs and directors fees), and for any concept planning costs incurred with respect to the Properties over the next five years. The balance of the refundable expense reserve at June 30, 2014, was $2,011,400 (December 31, $2,554,867). ii) The Partnership has also entered into a Funding Agreement with WIGI, pursuant to which WIGI will fund as a loan, to a maximum of $1,790,000, (being 5% of the gross proceeds raised by the Partnership in connection with the issuance of units), the ongoing administrative and operational costs of the Partnership, other than the servicing fee. This loan shall bear interest at an annual interest rate equal to Prime. Management regularly reviews the levels of its cash reserves to determine if sufficient cash is available to fund the operating costs, concept planning costs, and management expenses that the Partnership expects to incur over the next twelve months. As at June 30, 2014, no funds have been advanced under the terms of the Partnership s Funding Agreement. Second Quarter Report 2014 Walton Ontario Land L.P. 1 15

16 Cash Requirements The following table presents future commitments of the Partnership under the Agency Agreements, Management Services and Fee Agreement, and the Concept Planning Services Agreement. It does not include any potential performance fee or disposition fee under the Management Services and Fee Agreement. The amount of any performance fee payable by the Partnership is determined at the time when distributions occur. The amount of the disposition fee is determined at the time land sales are completed. Servicing fee Management fee WDM Services Total $ $ $ $ , ,940 3, , , , , , ,880 7, , ,880 7, ,377 Thereafter - 665,880 7, , ,470 2,996,460 33,736 3,196, Commitments for WDM Services will extend for the length of the project. 2 - While the Partnership has set aside adequate reserves in the refundable expense reserve for management fees until June 30, 2015, this fee will continue until the project is complete, any amount due will not be payable until the final distribution. The Partnership s intention is to meet short-term liquidity requirements through cash from the refundable expense reserve. Sources and uses of cash The Partnership s primary use of capital includes paying operating expenses and concept planning expenditures. The Partnership believes that the cash available within the refundable expense reserve will be sufficient to cover the Partnership s normal operating expenditures. The following table summarizes the Partnership s cash flows from (used in) operating, and financing activities as reflected in the Statement of Cash Flows for the three and six months ended: Three months ended June Six months ended June $ $ $ $ Cash flows from operating activities (226,884) (459,169) (459,593) (370,107) Cash flows from investing activities (75,494) (1,638) (83,874) (39,861) More land improvement costs were incurred during the three and six months ended June 30, 2014 compared to the same periods of 2013, resulting in higher outflows of cash from investing activities. Due to the longer term nature of this project, operating cash flows may vary from period to period. Off-Balance Sheet Arrangements There were no off-balance sheet arrangements as at June 30, Walton Ontario Land L.P. 1 Second Quarter Report 2014

17 Financial Instruments The Partnership's financial instruments consist of accounts receivable, cash and accounts payable and accrued liabilities. Accounts receivable and cash have been classified as loans and receivables, and are carried at amortized cost using the effective interest rate method. Accounts payable and accrued liabilities have been classified as other financial liabilities, and is carried at amortized cost using the effective interest rate method. The fair value of these financial instruments approximates their carrying value due to the short-term nature of these items. Although it is management s opinion that the financial instruments of the Partnership do not give rise to significant credit, interest or currency risk, the Partnership is exposed to liquidity risk. Liquidity risk arises from the possibility that the Partnership will encounter difficulties in meeting its financial obligations as they become due. The Partnership manages its liquidity risk by continuously monitoring the adequacy of its capital resources and by managing cash receipts and payments as discussed above. Refer to Analysis of Financial Condition for the Partnership s plan for settling existing liabilities. Outstanding Units As of the date of this MD&A, the Partnership had 1,961,840 limited partnership units outstanding. CURRENT AND FUTURE ACCOUNTING POLICY CHANGES Current Changes in Accounting Policies The accounting policies used in the preparation of these condensed interim financial statements are consistent with those which were disclosed in the Partnership s audited financial statements for the year ended December 31, 2013, except for the following accounting standards and interpretations that were adopted on January 1, IAS 32 Financial instruments: Presentation offsetting financial instruments amendment was issued by the IASB in December 2011, for retrospective application in annual periods beginning on or after January 1, The amendments address inconsistencies in practice when applying the current criteria for offsetting financial instruments by clarifying the meaning of currently has a legally enforceable right to set-off', and clarifying that some gross settlement systems may be considered equivalent to net settlement. The amendment did not have an impact on the condensed interim financial statements of the Partnership. In May 2013, the IASB issued International Financial Reporting Interpretation Committee ( IFRIC ) 21 IFRIC 21 Levies ( IFRIC 21 ), which provided guidance on when to recognize a liability for a levy imposed by the government, both for levies that are accounted for in accordance with IAS 37 Provisions, contingent liabilities and contingent assets, and those where the timing and the amount of the levy is certain. The Partnership has adopted the interpretation effective January 1, The adoption of IFRIC 21 did not result in any change to the condensed interim financial statements of the Partnership. Second Quarter Report 2014 Walton Ontario Land L.P. 1 17

18 Future Changes in Accounting Policies IFRS 15 Revenue from Contracts with Customers ( IFRS 15 ) was issued in May 2014 by the IASB and supersedes IAS 18 Revenue, IAS 11 Construction Contracts and other interpretive guidance associated with revenue recognition. IFRS 15 provides a single model to determine how and when an entity should recognize revenue, as well as requiring entities to provide more informative, relevant disclosures in respect of its revenue recognition criteria. IFRS 15 is to be applied retrospectively or through the recognition of the cumulative effect to opening retained earnings and is effective for annual periods beginning on or after January 1, 2017, with earlier application permitted. The Partnership is currently evaluating the impact that IFRS 15 may have on the financial statements. CORPORATE GOVERNANCE Board of Directors The mandate of the Board of Directors is to oversee the management of the business of the General Partner and the Partnership, with a view to maximizing the Partnership s unitholder value, and ensuring corporate conduct in an ethical and legal manner via an appropriate system of corporate governance and internal control processes and procedures. The Board of Directors facilitates its exercise of independent supervision over management of the General Partner through, among other things: a) The adoption by the Board of Directors of a written mandate requiring that a majority of the members of the Board of Directors be independent of management; and b) The requirement, in the Board of Directors written mandate for its audit committee, that the audit committee be comprised solely of directors that are independent of management. The Board is comprised of Clifford H. Fryers, Jon N. Hagan and Richard R. Singleton. Within the meaning of National Instrument Audit Committees ( NI ), Jon N. Hagan and Richard R. Singleton are independent of management of the General Partner, while Clifford H. Fryers is not independent as his spouse is the Corporate Secretary of the General Partner. Mr. Fryers is the Chairman of the Board of Directors. The only standing committee of the Board of Directors is the audit committee (the Audit Committee ), which consists of Jon N. Hagan and Richard R. Singleton. Mr. Hagan is the Chairman of the Audit Committee. Personal Profiles Clifford H. Fryers Mr. Fryers is the Chairman and Chief Executive Officer of White Iron Inc. and Stampede Entertainment Inc., both entertainment companies. He recently retired as the Chair of the Board of the Manning Centre for Building Democracy and the Manning Foundation for Democratic Education. He is also former Chairman of the Board of Directors for ENMAX Corporation. Mr. Fryers is on the board of directors of several companies in the Walton Group, including the following reporting issuers: Walton Big Lake Development Corporation, being the general partner of Walton Big Lake Development L.P.; Walton Edgemont Development Corporation; Walton Yellowhead Development Corporation; and Walton Westphalia Development Corporation. He was on the Board of Advisors of Walton Global Investments Ltd. for eight years, retiring as Vice Chairman in November of From 1997 until 2000, Mr. Fryers was Chief of Staff to the Leader of Her Majesty s Official Opposition in the House of Commons. Prior to that, he was a Senior Tax Partner and Managing Partner with the law firm of Milner Fenerty (now Dentons LLP) which he joined in He worked in the Tax Litigation Section of the Department of Justice, Ottawa from 1971 to 1977 and then as General Tax Counsel for Mobil Oil Canada, Ltd. until Mr. Fryers holds the ICD.D certification granted by the Institute of Corporate Directors. 18 Walton Ontario Land L.P. 1 Second Quarter Report 2014

19 Jon N. Hagan Mr. Hagan has been the principal of JN Hagan Consulting since December He provides assistance to major corporations regarding real estate capital markets, and acquisition and disposition transactions covering situations in Canada, the United States of America, Mexico and China. Mr. Hagan is also a director and member of the audit and executive committees of the board of directors of First Capital Realty Inc., which is a reporting issuer in Canada. He is Chair of the board and the Compensation, Nomination, and Governance Committee, and on the Audit Committee of Regal Lifestyle Communities Inc., which is a reporting issuer in Canada. He was formerly a director and member of the audit, human resources, corporate governance and investment committees of Bentall Kennedy Group from 2001 to He was a trustee of Sunrise Senior Living Real Estate Investment Trust from 2004 to 2007, and was the chair of the audit committee thereof. He was the Chairman of Teranet Income Fund from 2006 to He was a director and on the audit committee of the board of directors of The Mills Corporation for the first three months of 2007 to assist in the sale of The Mills Corporation. Mr. Hagan is also on the board of directors and Chair of the Audit Committee of the following reporting issuers within the Walton Group: Walton Big Lake Development Corporation, being the general partner of Walton Big Lake Development L.P.; Walton Edgemont Development Corporation, Walton Yellowhead Development Corporation; and Walton Westphalia Development Corporation. Mr. Hagan has held a number of executive finance positions in the real estate industry, beginning with Oxford in the 1970s. His career took him to Cambridge Shopping Centres in 1980, where he eventually became Senior Vice-President, Corporate Group and Chief Financial Officer. He then joined the Empire Company Limited where he was Executive Vice-President, Finance and Corporate Development. From 1996 through 2000, he was Executive Vice President and Chief Financial Officer of Cadillac Fairview Corporation. Mr. Hagan's experience spans corporate strategy, corporate and real estate finance, real estate acquisition and disposition, compensation programs, computer systems, financial reporting, forecasting and budgeting. Mr. Hagan is a chartered accountant. He holds a BSc in Mechanical Engineering from the University of Saskatchewan and attended the Executive MBA program at the University of Alberta. Richard R. Singleton Mr. Singleton was one of the lead architectural partners with Cohos Evamy Partners, Architects, Engineers, Planners (now called Dialogue Design) for 36 years. He primarily focused on larger commercial projects and planning work in Alberta and throughout Canada. Mr. Singleton has been retired since 2008, and, during that time, he has consulted and provided assistance to developers in various planning and building projects. During his career, Mr. Singleton s work included major land planning and land parcel development projects primarily in Alberta and other major commercial projects in other parts of Canada. His experience spanned land use project financial proforma analyses, budgeting for land use and development projects, concept design and approval agency policy planning initiatives. Mr. Singleton is also on the board of directors of the following reporting issuers within the Walton Group: Walton Big Lake Development Corporation, being the general partner of Walton Big Lake Development L.P.; Walton Edgemont Development Corporation; Walton Yellowhead Development Corporation; and Walton Westphalia Development Corporation. Mr. Singleton is a past director of the National Music Centre (Cantos Foundation), a member of the Advisory Board of Thermal Systems KWC Ltd., a past member of the Calgary Arts Development Authority, Member of the board of Kahanoff Center of Charitable Activities and sits on its building committee, Member of the building Committee of the YWCA Calgary and a board member of a private real estate investment group. He was previously a member of the board of advisors of Walton Global Investments Ltd. Mr. Singleton holds a Bachelor of Architecture from the University of Manitoba and is LEED (Leadership in Energy and Environmental Design) accredited. LEED is a set of rating systems for the design, construction and operation of high performance green buildings, homes and neighbourhoods. Mr. Singleton holds the ICD.D certification granted by the Institute of Corporate Directors. Second Quarter Report 2014 Walton Ontario Land L.P. 1 19

20 Compensation The Partnership has agreed to pay to each of the directors who are independent within the meaning of NI , an annual retainer of $40,000 per year, paid quarterly in advance. This amount was determined by the General Partner and the directors prior to the retention of the directors. The executive officers of the General Partner do not receive any compensation from the General Partner or the Partnership. Orientation and Continuing Education New directors will attend a briefing with existing directors on all aspects of the nature and operation of the Partnership s business from the existing directors and the senior management of the General Partner. Directors will be afforded the opportunity to attend and participate in seminars and continuing education programs and are encouraged to identify their continuing education needs through a variety of means, including discussions with senior management of the General Partner and at meetings of the directors. Outside experts may be retained, as appropriate, to provide directors with ongoing education on specific subject matters. Nomination of Directors The original members of the Board of Directors were appointed by the shareholder of the General Partner. If and when a director resigns, the remaining directors will identify a new director with a view to ensuring overall diversity of experience and skill. The new director may be appointed by the remaining directors or by the shareholder of the General Partner. Assessments The directors will regularly assess themselves with respect to their effectiveness and contribution. Audit Committee The primary function of the Audit Committee is to assist the Board of Directors in fulfilling their responsibility of oversight and supervision of the Partnership s accounting and financial reporting practices and procedures, the adequacy of internal controls and procedures, and the quality and integrity of its financial statements. In addition, the Audit Committee will be responsible for directing the auditors examination of specific areas, for the selection of the Partnership s independent auditors and for the approval of all non-audit services for which its auditors may be engaged, including the fees for such services. The Audit Committee currently consists of Jon N. Hagan and Richard R. Singleton. Each member of the Audit Committee is independent as contemplated by NI and each is financially literate, meaning that each has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the financial statements of the Partnership. 20 Walton Ontario Land L.P. 1 Second Quarter Report 2014

21 Ethical Business Conduct Directors who have, or may be reasonably perceived to have, a personal interest in a transaction or agreement being contemplated by the Partnership are required to declare such interest at any meeting at which the matter is being considered and, where appropriate, leave the meeting during the discussion and abstain from voting on such matter. The directors encourage and promote a culture of ethical business conduct by expecting each director, as well as the officers of the General Partner, to act in a manner that exemplifies ethical business conduct. The Partnership has established a Code of Business Conduct and Ethics to which all directors, officers and employees of the General Partner are required to adhere. This code requires that all such individuals conduct themselves in a professional and ethical manner, and that they must not condone or encourage unethical conduct. This code also requires that any individuals who are aware of dishonest activities or conduct to report the conduct to the President and CEO of the General Partner. Whistleblower Policy The Partnership has established a Whistleblower Policy to ensure the integrity of the accounting records and financial statements of the Partnership and its compliance with applicable laws. Under the whistleblower policy, any employee who becomes aware of any questionable accounting, internal accounting controls, auditing matters or potential violations of law are encouraged to contact their immediate supervisor, their immediate supervisor s manager, or the President of the General Partner. Employees also have the option of reporting such matters directly to the chair of the Audit Committee or the chair of the Board of Directors of the General Partner. Appropriate procedures are then undertaken to ensure that the report is promptly and thoroughly investigated. RISK FACTORS Risks of Real Property Ownership Real estate investments are generally subject to varying degrees of risk depending on the nature of the property. Such risks include the highly competitive nature of the real estate industry, changes in general economic conditions (such as the availability and cost of mortgage funds), local conditions (such as the supply of office, industrial, retail space or warehousing or the demand for residential real estate in the area), government regulation and changes therein (such as planning, zoning, taxation of property and environmental legislation), changes in governments and the political environment in the applicable jurisdictions and the attractiveness of the property to potential purchasers and developers. In addition, each segment in the real estate development industry is capital intensive and is typically sensitive to interest rates and general economic conditions. The income generated by real estate properties, if any, is dependent upon general economic conditions and, accordingly, the return in investment may be affected by changes in those conditions. There is also no assurance that the Ottawa Property can be expected to be developed profitably by a third party developer that may wish to acquire the Ottawa Property. Economic conditions also may affect the municipalities and their ability and willingness to fund infrastructure projects necessary to support development. The market for real property can be affected adversely by economic factors, which may be regional, national or international in scope. Second Quarter Report 2014 Walton Ontario Land L.P. 1 21

22 Throughout Canada, the real estate market has been experiencing increased weakness and volatility. The recent recession in Canada and the United States and the increased default rates on subprime mortgages in the U.S. and the effect of these increased default rates on the mortgage backed securities market in U.S. and Canada has significantly reduced the amount of debt financing available for real estate projects, in particular, residential real estate projects in the U.S., but in Canada as well. Some experts believe that as a consequence of significant drops in prices in the real estate sector, the current value of real estate investments could considerably decrease. This could mean that the development of the Ottawa Property may not turn out as planned or that the Ottawa Property may even decrease in value. These factors may have a negative impact on the value of the Partnership s interests in the Ottawa Property, on the length of time the Partnership will be required to hold the Ottawa Property and on the purchase price of the Ottawa Property when they are eventually sold. The Partnership will be required to make certain expenditures in respect of its activities, including, but not limited to, the payment of property taxes, maintenance costs, insurance costs and related charges, regardless of whether the Ottawa Property are producing sufficient income to service such expenses. If the Partnership is unable or unwilling to meet such payment obligations, losses could be sustained as a result of the exercise by creditors of rights of foreclosure or sale. Regulatory Approvals The desirability of the Ottawa Property to potential developers who may wish to acquire them from the Partnership will depend on the ability to obtain amendments to municipal plans, approvals for zoning and subdivision plans and other approvals from municipal and provincial government agencies through the efforts of WDM. For example, for the Ottawa Property to be attractive for development by a future developer, the Partnership and WDM may choose to update municipal plans and zoning designations to fit market conditions and obtain other associated required approvals. The process of obtaining such approvals may take a significant period of time and the costs of holding the Ottawa Property will accrue while regulatory approvals are being sought. There are no assurances that any such amendments or approvals or any appeals to any decisions made in connection therewith will be obtained or will be successful or obtained in a manner that is acceptable to the Partnership or future developers of the Ottawa Property, including that no conditions will be attached to any approval that are not acceptable to the Partnership or such developers. There is also a possibility that additional approvals to those described above may be necessary due to new legislation or for other reasons. Failure to obtain acceptable approvals in a timely manner could have a significant negative affect on the value of the Ottawa Property. In addition, there is always the potential for the discovery of archaeological sites on the Ottawa Property, which may require the Partnership to preserve the site at its expense and refrain from developing all or a portion of the Ottawa Property. Funding Agreement In the event that, WIGI is unable to provide funding under the Funding Agreement to the Partnership or the obligations of WIGI under the Funding Agreement terminate, the Partnership will have to find other sources of funding to finance their ongoing costs and expenses, which other sources of funding may not be available or may not be available under terms that are acceptable to the Partnership. The inability of the Partnership to obtain adequate funding for its operations could have a material adverse effect on the Partnership and the value of the Ottawa Property. 22 Walton Ontario Land L.P. 1 Second Quarter Report 2014

23 Environmental Matters and Other Concerns There can be no assurances that environmental contamination on the Ottawa Property from any activity on, or occupation of, the Ottawa Property or farming, other operations or other occupation on adjacent parcels of land. There can be no assurances that if such environmental contamination does occur that it will not be significant or will not significantly reduce the value of the Ottawa Property. Under various environmental laws, ordinances and regulations, the current or previous owners or operators of the Ottawa Property, may be liable for the costs of removal or remediation of hazardous or toxic substances on, under or in the Ottawa Property. These costs could be substantial. Such laws could impose liability whether or not the Partnership knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to remove or remediate such substances, if any, or restrictions imposed by environmental laws on the manner in which the Ottawa Property may be operated or developed, could adversely affect the Partnership s ability to sell lots from the Ottawa Property or to borrow using the Ottawa Property as collateral and also could potentially result in claims against the Partnership. Environmental laws provide for sanctions for non-compliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of, and exposure to, hazardous substances into the air. Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances. The cost of defending against claims of liability, of complying with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could be substantial. The Partnership may be subject to liability for undetected pollution or other environmental hazards against which it cannot insure, or against which it may elect not to insure where premium costs are disproportionate to the General Partner s or WAM s or WDM s perception of relative risk. Political and Economic Climate The Province of Ontario, and more specifically, the City of Ottawa and the County of Simcoe, present social, economic and political conditions that are reasonably stable. However, these levels of government and the federal government could implement legislation and policies that would have an adverse effect on the value of the Units. Examples of such policies are tax reform, zoning restrictions, land ownership restrictions, transportation policies, development moratoriums, annexation proceedings or other adverse economic and/or monetary policies. Finally, the Ontario economy may not attain levels of growth that it has achieved in the past and projections regarding future growth may not be accurate. Changes in Legislation and Policies There can be no assurances that provincial, county or municipal legislation will not be implemented or policies and frameworks will not be implemented by the applicable municipal bodies or other government regulators having jurisdiction over the Ottawa Property which places restrictions on the ability to develop the Ottawa Property or which generally has the effect of significantly reducing the value, or the potential value, of the Ottawa Property. Second Quarter Report 2014 Walton Ontario Land L.P. 1 23

24 Competition The Partnership competes with other investors, developers, and owners of Ottawa Property for the sale of desirable real estate properties. Some of the commercial, retail and residential properties of the competitors of the Partnership are newer, better located or more developed than the Ottawa Property. Certain of these competitors have greater financial and other resources and greater operating flexibility than the Partnership. The existence of competing developers and owners could have a material adverse effect on the ability of the Partnership and WIGI to market the Ottawa Property, and could adversely affect the profitability of the Partnership. Single Asset The Partnership currently exists solely to complete entitlement, planning and eventual sale of the Ottawa Property. The Ottawa Property represents the only significant asset of the Partnership and, therefore, the Partnership s financial performance will be directly tied to the value of the Ottawa Property. 24 Walton Ontario Land L.P. 1 Second Quarter Report 2014

25 UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS Walton Ontario Land L.P.1 For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS Section 4.3(3) of National Instrument , Continuous Disclosure Obligations, provides that if an auditor has not performed a review of the condensed interim financial statements, the condensed interim financial statements must be accompanied by a notice indicating that the condensed interim financial statements have not been reviewed by an auditor. The Partnership s external auditors have not performed a review of these condensed interim financial statements of Walton Ontario Land L.P.1 Second Quarter Report 2014 Walton Ontario Land L.P. 1 25

26 WALTON ONTARIO LAND L.P.1 Condensed Interim Statements of Financial Position Unaudited As at June 30, 2014 and December 31, 2013 (Expressed in Canadian Dollars) June 30, 2014 $ December 31, 2013 $ ASSETS Land (note 5) 15,150,723 15,066,849 Prepaid expenses 26, GST recoverable 9,458 8,626 Accounts receivable 2,072 2,554 Cash (note 7) 2,011,400 2,554,867 TOTAL ASSETS 17,200,619 17,633,260 LIABILITIES Accounts payable and accrued liabilities (note 6) 120,589 74,557 TOTAL LIABILITIES 120,589 74,557 PARTNERS EQUITY 17,080,030 17,558,703 TOTAL LIABILITIES AND EQUITY 17,200,619 17,633,260 The accompanying notes to the condensed interim financial statements are an integral part of these statements. 26 Walton Ontario Land L.P. 1 Second Quarter Report 2014

27 WALTON ONTARIO LAND L.P. 1 Condensed Interim Statements of Comprehensive Loss Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) REVENUE Three months ended Six months ended June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013 $ $ $ $ Interest income 6,550 9,461 13,595 19,065 Other revenue (note 5) 3,500 3,250 3,500 6,500 10,050 12,711 17,095 25,565 EXPENSES Management fees (note 6) 166, , , ,940 Servicing fees (note 6) 41,618 41,618 83,235 83,236 Director fees (note 6) 20,452 20,903 41,355 41,806 Office and other 11,210 8,896 24,956 20,680 Professional fees 8,484 9,624 13,282 14, , , , ,472 NET LOSS AND COMPREHENSIVE LOSS (238,184) (234,800) (478,673) (467,907) Basic and diluted loss per unit (note 9) (0.12) (0.12) (0.24) (0.24) The accompanying notes to the condensed interim financial statements are an integral part of these statements. Second Quarter Report 2014 Walton Ontario Land L.P. 1 27

28 WALTON ONTARIO LAND L.P. 1 Condensed Interim Statements of Changes in Partners Equity Unaudited For the six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) Accumulated Limited Partnership Units General Partnership Unit Total Deficit # of Units $ # of Units $ $ $ JANUARY 1, ,961,840 33,294, (14,844,494) 18,449,556 Net loss and comprehensive loss (467,907) (467,907) JUNE 30, ,961,840 33,294, (15,312,401) 17,981,649 Net loss and comprehensive loss (422,946) (422,946) DECEMBER 31, ,961,840 33,294, (15,735,347) 17,558,703 Net loss and comprehensive loss (478,673) (478,673) JUNE 30, ,961,840 33,294, (16,214,020) 17,080,030 The accompanying notes to the condensed interim financial statements are an integral part of these statements. 28 Walton Ontario Land L.P. 1 Second Quarter Report 2014

29 WALTON ONTARIO LAND L.P. 1 Condensed Interim Statements of Cash Flows Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) For the three months ended June 30, June 30, $ $ For the six months ended June 30, June 30, $ $ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Comprehensive loss for the period (238,184) (234,800) (478,673) (467,907) Interest income (6,550) (9,461) (13,595) (19,065) Changes in non-cash working capital items Increase in prepaid expenses (23,595) (333) (26,602) - (Increase)/decrease in GST recoverable (993) (17,734) (832) 104,258 Increase in due from related parties - 15,714-15,214 Increase/(decrease) in accounts payable and accrued liabilities 35,701 (222,739) 46,032 (19,109) Interest received 6,737 10,184 14,077 16,502 (226,884) (459,169) (459,593) (370,107) INVESTING ACTIVITIES Land improvements (75,494) (1,638) (83,874) (39,861) Decrease in cash (302,378) (460,807) (543,467) (409,968) Cash Beginning of period 2,313,778 3,449,039 2,554,867 3,398,200 Cash End of period 2,011,400 2,988,232 2,011,400 2,988,232 The accompanying notes to the condensed interim financial statements are an integral part of these statements. Second Quarter Report 2014 Walton Ontario Land L.P. 1 29

30 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) 1. NATURE OF BUSINESS Walton Ontario Land L.P. 1 (the "Partnership") was formed on October 2, 2009, when the certificate of limited partnership was filed under the Partnership Act (Alberta). The Partnership was formed to issue a maximum of 3,580,000 limited partnership units at $10 per unit to raise proceeds for the purchase of interests in properties comprised of approximately 155 acres of undeveloped land in Alliston, Ontario (the Alliston Property ) and approximately 300 acres of undeveloped land (the Ottawa Property ) located in the southwest quadrant of Ottawa, Ontario (collectively, the Properties ), holding that interest as an investment, and eventually selling or otherwise disposing of that interest with a view to making a profit, and performing such other activities as may be incidental to, or arising from, the foregoing purposes as may be reasonably determined by the General Partner, including, without limitation, participating in concept planning with respect to the Properties. On October 12, 2012, the Alliston Property was sold. The Partnership owns 100% of the Ottawa Property as an investment and plans to eventually dispose of it prior to physical development. Should the partners of the Partnership determine that it would be appropriate for the Partnership to participate in the development of the Ottawa Property (other than pre-development concept planning), the activities of the Partnership may also include the partial or full development of the Ottawa Property prior to the sale thereof. The net proceeds from the disposition of the Ottawa Property, after satisfaction of liabilities and payment of, or provision for, all fees and expenses, including any amounts that the General Partner reasonably considers necessary to retain in order to replenish the refundable expense reserve, will be distributed by the Partnership. Included in such fees and expenses is a performance fee payable to Walton International Group Inc. ( WIGI ), provided that the limited partners receive distributions equal to an amount equal to their purchase price allocation, plus an amount equal to an 8% annual cumulative return on contributed capital that has not been paid to the limited partners in respect of previous distributions. The address of the registered office is 23rd Floor, 605 5th Avenue SW, Calgary, Alberta, T2P 3H5. These financial statements were authorized for issue by the Board of Directors on August 19, BASIS OF PREPARATION These condensed interim financial statements including comparatives have been prepared in accordance with International Accounting Standard ( IAS ) 34: Interim Financial Reporting and using accounting policies that are in full compliance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ). They do not include all of the information required for full annual financial statements and should be read in conjunction with the Partnership s audited annual financial statements for the year ended December 31, Walton Ontario Land L.P. 1 Second Quarter Report 2014

31 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) The Partnership s condensed interim financial statements have been prepared on the historical cost basis, except for certain financial instruments which are initially measured at fair value. The statements of financial position have been prepared using a liquidity based presentation because the operating cycle of the Partnership revolves around the sale of land, the timing of which is uncertain. As a result, presentation based on liquidity is considered by management to provide information that is more reliable and relevant to the users of the financial statements. 3. GENERAL PARTNER Walton Ontario Land 1 Corporation (the General Partner ) was incorporated on October 1, 2009 under the laws of the Province of Alberta to act as the General Partner and manage the affairs of the Partnership and is a subsidiary of Walton G.P. Holdco Ltd., a wholly owned subsidiary of WIGI. WIGI is a wholly owned subsidiary of Walton Global Investments Ltd. ( Walton Global ). 4. ACCOUNTING POLICIES Changes in accounting policies The accounting policies used in the preparation of these condensed interim financial statements are consistent with those which were disclosed in the Partnership s audited financial statements for the year ended December 31, 2013, except for the following accounting standards and interpretations that were adopted on January 1, 2014: IAS 32 Financial instruments: Presentation offsetting financial instruments amendment was issued by the IASB in December 2011, for retrospective application in annual periods beginning on or after January 1, The amendments address inconsistencies in practice when applying the current criteria for offsetting financial instruments by clarifying the meaning of currently has a legally enforceable right to set-off', and clarifying that some gross settlement systems may be considered equivalent to net settlement. The amendment did not have an impact on the condensed interim financial statements of the Partnership. In May 2013, the IASB issued International Financial Reporting Interpretation Committee ( IFRIC ) 21 Levies ( IFRIC 21 ), which provided guidance on when to recognize a liability for a levy imposed by the government, both for levies that are accounted for in accordance with IAS 37 Provisions, contingent liabilities and contingent assets, and those where the timing and the amount of the levy is certain. The Partnership has adopted the interpretation effective January 1, The adoption of IFRIC 21 did not result in any change to the condensed interim financial statements of the Partnership. Second Quarter Report 2014 Walton Ontario Land L.P. 1 31

32 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) Future changes in accounting policies IFRS 15 Revenue from Contracts with Customers ( IFRS 15 ) was issued in May 2014 by the IASB and supersedes IAS 18 Revenue, IAS 11 Construction Contracts and other interpretive guidance associated with revenue recognition. IFRS 15 provides a single model to determine how and when an entity should recognize revenue, as well as requiring entities to provide more informative, relevant disclosures in respect of its revenue recognition criteria. IFRS 15 is to be applied retrospectively or through the recognition of the cumulative effect to opening retained earnings and is effective for annual periods beginning on or after January 1, 2017, with earlier application permitted. The Partnership is currently evaluating the impact that IFRS 15 may have on the financial statements. Estimates and judgments The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and equity at the date of the financial statements and the reported amount of revenue and expenses during the year. There have been no significant changes in accounting judgments, estimates and assumptions made by the Partnership in the preparation of these condensed interim financial statements from those judgments, estimates and assumptions disclosed in the Partnership s audited financial statements for the year ended December 31, LAND The carrying amount of land is comprised of the following: June 30, 2014 $ December 31, 2013 $ BALANCE BEGINNING OF PERIOD 15,066,849 14,992,521 Land improvements 83,874 86,887 Land sale - Ottawa Property - (12,559) BALANCE END OF PERIOD 15,150,723 15,066,849 The fair value of the property is determined using a market approach using comparable market sales adjusted for factors specific to the Partnership s property including sales date, property rights conveyed, financing terms, conditions of sale, location, site area, site utility, planning and development timeframe and a report from an independent valuation firm which holds recognized and relevant professional qualifications and has recent experience in the location and category of the investment property being valued. 32 Walton Ontario Land L.P. 1 Second Quarter Report 2014

33 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) The current fair value is based on conditions existing at the balance sheet date. Overall, the valuation is considered to fall into level 3 of the fair value hierarchy because of unobservable adjustments reflecting the condition and location of the Partnership s land. In applying this valuation method, the fair value of the remaining Ottawa Property as at June 30, 2014 was estimated to be approximately $25,450,000 (December 31, $25,450,000). In determining the fair value of our investment properties, judgment is required in assessing the highest and best use as required under IFRS 13, Fair Value measurement. The property is currently zoned for and is used as agricultural land which is not considered to be its highest and best use. The highest and best use of the property is considered to be property containing employment and mixed uses, including residential and commercial buildings. The current fair value is considered to be what a willing market participant would be willing to pay for the property in its current condition as at June 30, The current fair value considers that if the property were to be sold at June 30, 2014 to a market participant, such participant would take into account the potential use of the property as nonagricultural land and the risks associated with obtaining the appropriate permits and zoning for that use. The General Partner is responsible for determining the measurements used to determine fair value as well as reviewing all major inputs and assumptions included in the valuation and reviewing the results of the independent valuator. The General Partner, along with the audit committee, discusses the valuation process and key inputs on a quarterly basis. Assumptions underlying these estimates are limited by the availability of reliable comparable data. By nature, these estimates are subjective and do not necessarily result in precise determinations. Should the underlying assumptions change, the estimated proceeds from the ultimate sale may change by a material amount and may result in a write-down of the carrying amount of the land. As at June 30, 2014 and December 31, 2013, the fair value of land exceeded its carrying value, and, as a result, an impairment has not been recognized in the carrying value of the land. The total rental income earned by the Partnership on the Ottawa Property during the three and six months ended June 30, 2014, was $3,500 (June 30, $3,250) and $3,500 (June 30, $6,500), respectively. Second Quarter Report 2014 Walton Ontario Land L.P. 1 33

34 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) 6. RELATED PARTY TRANSACTIONS Included within accounts payable and accrued liabilities are balances due to related parties as outlined in the table below. These amounts are unsecured, due on demand, bear no interest and have no fixed terms of repayment. June 30, 2014 $ December 31, 2013 $ Walton International Group Inc. 3, Walton Development and Management (Alberta) LP 36, , Walton International Group Inc. Management fees of $166,470 (June 30, $166,470) and $332,940 (June 30, $332,940) were incurred and paid during the three and six months ended June 30, 2014, respectively. No performance fee or disposition fees were incurred during the three and six months ended June 30, 2014 and June 30, During the three and six months ended June 30, 2014, $41,618 (June 30, $41,618) and $83,235 (June 30, $83,236), respectively, was paid to WIGI in relation to servicing fees. During the three and six months ended June 30, 2014, WIGI incurred $6,882 (June 30, $6,311) and $7,218 (June 30, $6,941), respectively, in third party invoices related to general and administrative expenses of the Partnership. During the three and six months ended June 30, 2014, $3,500 (June 30, $6,078) and $4,381 (June 30, $6,378), respectively, was paid to WIGI in relation to these costs. Walton Development and Management (Alberta) LP During the three and six months ended June 30, 2014, the Partnership incurred a total amount payable to WDM of $71,572 (June 30, $16,678) and $72,676 (June 30, $37,179), respectively, for third party invoices initially funded by WDM related to the services entered into in accordance with the concept planning services agreement. These amounts have been capitalized as part of land (note 5). During the three and six months ended June 30, 2014, $1,874 (June 30, $1,874) and $3,748 (June 30, $3,748), respectively, was charged by WDM for Services Fees. These amounts have been capitalized as part of land (note 5). 34 Walton Ontario Land L.P. 1 Second Quarter Report 2014

35 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) During the three and six months ended June 30, 2014, $6,929 (June 30, $1,618) and $7,451 (June 30, $3,464), respectively, was charged by WDM for Managed Services of the Ottawa Property. These amounts were calculated as 10% of the Managed Services of the Ottawa Property during the period, and have been capitalized as part of land (note 5). During the three and six months ended June 30, 2014, $37,854 (June 30, $44,185) and $47,691 (June 30, $53,133), respectively, was paid to WDM in regards to the above amounts and previously payable amounts. Key Management Compensation Key management personnel are comprised of the Partnership s directors and executive officers. Total compensation expense incurred by the Partnership related to its independent directors during the period was as follows: For the three months ended June 30 For the six months ended June $ 2013 $ 2014 $ Directors fees 20,452 20,903 41,355 41, $ All services performed for the Partnership by its executive officers and its non-independent director are governed by the Management and Services Fee Agreement. The quarterly management fee that WIGI receives under the Management and Services Fee Agreement has been disclosed above. The compensation of key management does not include the remuneration paid to individuals who are paid directly by Walton Global and WIGI. The Officers of the Partnership are also Officers and Directors of numerous entities controlled or managed by Walton Global and it is not practicable to make a reasonable apportionment of their compensation in respect of each of those entities. Second Quarter Report 2014 Walton Ontario Land L.P. 1 35

36 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) 7. REFUNDABLE EXPENSE RESERVE Included in the table below is a reconciliation of the movement in the refundable expense reserve on a cash basis. This differs from the statements of cash flow, which has been prepared on an accrual basis, using the indirect method. June 30, 2014 $ December 31, 2013 $ REFUNDABLE EXPENSE RESERVE BEGINNING OF PERIOD 2,554,867 3,398,200 Add income received (cash basis): Interest 14,077 36,305 GST (paid)/recovered (832) 113,645 Other revenue 3,500 46,732 Land sales - 12,530 16, ,212 Less expenses paid (cash basis): Management fees (note 6) 332, ,880 Servicing fees (note 6) 83, ,546 Directors fees (note 6) 41,355 83,613 Land improvements 47,691 79,227 Property taxes - 10,922 Office and other expense 39,876 23,686 Professional fees 15,115 17, ,212 1,052,545 REFUNDABLE EXPENSE RESERVE END OF PERIOD 2,011,400 2,554, Walton Ontario Land L.P. 1 Second Quarter Report 2014

37 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) 8. FINANCIAL INSTRUMENTS The Partnership s financial instruments consist of cash, accounts receivable and accounts payable and accrued liabilities. The following tables set out the Partnership s classification and carrying amount of the financial instruments along with the fair value as at June 30, 2014 and December 31, JUNE 30, 2014 Fair Value Amortized Cost Totals Asset (liability): Through profit and loss Loans and receivables Other financial liabilities Carrying amount Fair Value $ $ $ $ $ Accounts receivable - 2,072-2,072 2,072 Cash - 2,011,400-2,011,400 2,011,400 Accounts payable and accrued liabilities - - (120,589) (120,589) (120,589) - 2,013,472 (120,589) 1,892,883 1,892,883 DECEMBER 31, 2013 Asset (liability): Fair Value Amortized Cost Totals Through profit and loss Loans and receivables Other financial liabilities Carrying amount Fair Value $ $ $ $ $ Accounts receivable - 2,554-2,554 2,554 Cash - 2,554,867-2,554,867 2,554,867 Accounts payable and accrued liabilities - - (74,557) (74,557) (74,557) - 2,557,421 (74,557) 2,482,864 2,482,864 Second Quarter Report 2014 Walton Ontario Land L.P. 1 37

38 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) The future undiscounted obligations of the Partnership are as follows: Maturity analysis of liabilities - As at June 30, 2014 Less than 90 days Between 91 days and 1 year Greater than 1 year Accounts payable and accrued liabilities ($) 101,465 19,124 - Maturity analysis of liabilities As at December 31, 2013 Less than 90 days Between 91 days and 1 year Greater than 1 year Accounts payable and accrued liabilities ($) 48,204 26, PARTNERS CAPITAL Basic and diluted net loss per unit is calculated by dividing the Partnership s net loss by the weighted average number of limited partnership units outstanding during the period. The weighted average number of limited partnership units outstanding during the three months ended June 30, 2014, was 1,961,840 (June 30, ,961,840). The weighted average number of limited partnership units outstanding excludes the general partner unit issued. Based on the terms of the Limited Partnership Agreement, the holder of the general partner unit does not share equally in the income/loss of the Partnership but instead receives 0.001% of the net income/loss. The Partnership does not issue debt or equity instruments which could result in the issuance of additional Partnership units. As a result, the weighted average units outstanding are equal to the weighted average diluted units outstanding. 38 Walton Ontario Land L.P. 1 Second Quarter Report 2014

39 WALTON ONTARIO LAND L.P. 1 Notes to the Condensed Interim Financial Statements Unaudited For the three and six months ended June 30, 2014 and June 30, 2013 (Expressed in Canadian Dollars) 10. COMMITMENTS The following table presents future commitments of the Partnership under the Agency Agreements, Management Services and Fee Agreement, and the Concept Planning Services Agreement. It does not include any potential performance fee or disposition fee under the Management Services and Fee Agreement. The amount of any performance fee payable by the Partnership is determined at the time when distributions occur. The amount of the disposition fee is determined at the time land sales are completed. Servicing fee Management fee WDM Services Total $ $ $ $ , ,940 3, , , , , , ,880 7, , ,880 7, ,377 Thereafter - 665,880 7, , ,470 2,996,460 33,736 3,196, Commitments for WDM Services will extend for the length of the project. 2 - While the Partnership has set aside adequate reserves in the refundable expense reserve for management fees until June 30, 2015, this fee will continue until the project is complete, any amount due will not be payable until the final distribution. Second Quarter Report 2014 Walton Ontario Land L.P. 1 39

40 Notes 40 Walton Ontario Land L.P. 1 Second Quarter Report 2014

41 Notes Second Quarter Report 2014 Walton Ontario Land L.P. 1 41

42 Walton Group of companies The Walton Group of Companies (Walton) is a family-owned, multinational real estate investment, planning, and development firm concentrating on the research, acquisition, administration, planning and development of strategically located land in major North American growth corridors. With more than 88,000 acres* of land under administration and management, Walton is one of North America s premier land asset administrators and managers. Walton has been in business for over 30 years. We take a long-term approach to land planning and development. Our expertise in real estate investment, land planning and development positions Walton to responsibly transition land into sustainable communities where people live, work and play. Our communities are comprehensively designed in collaboration with local residents for the benefit of community stakeholders. Our goal is to build communities that will stand the test of time: hometowns for present and future generations. *As of June 30, Walton Ontario Land L.P. 1 Second Quarter Report 2014

43 Members of the Walton Group of Companies include: Walton Ontario Land 1 Corporation is the General Partner of the Walton Ontario Land L.P. 1. Walton International Group is the manager of Walton Ontario Land L.P. 1. Walton Development and Management is the project manager for Walton Ontario Land L.P. 1. Walton Capital Management is a registered exempt market securities dealer which distributed limited partnership units for Walton Ontario Land L.P. 1. Walton Asset Management is the Walton Group entity responsible for capital sourcing for real estate investments. Walton Global Investments is the parent company of the Walton Group of Companies. Second Quarter Report 2014 Walton Ontario Land L.P. 1 43

44 Global Head Office Calgary Auditor PricewaterhouseCoopers LLP Suite 3100, th Avenue SW Calgary, Alberta Canada T2P 5L3 Main: Fax: To learn more about Walton visit Walton.com W_WOLLP1_Q2_2014_ProspectusReports_CMYK_140904_WEB 23 rd Floor, th Avenue SW Calgary, Alberta Canada T2P 3H5 Main: Fax: