Management’s Discussion and Analysis
Dollar amounts are in thousands of Canadian dollars (except as noted)
Depreciation Expense
For the years ended December 31,
2013 2012 % change
t otal $589 $540 9.1%
Depreciation expense relates to the Company’s head office building, vehicles, heavy equipment and administrative office furniture, fixtures 
and computer equipment. Although the vehicles and equipment are used at various properties, they are not considered part of investment 
properties and are depreciated for accounting purposes. The increase year‑over‑year was a result of depreciation of additional vehicles, 
computer software and leasehold improvements.
Amortization of Deferred Financing Costs
For the years ended December 31,
2013 2012 % change
t otal $1,643 $1,605 2.4%
Deferred financing amortization increased 2.4% as a result of refinancings and new debt placements on acquired properties and completed 
developments. This was partially offset by the sale of the MHCs portfolios in May 2012 and November 2013 and their related deferred financing 
costs.
Deferred financing costs include mortgage assumption fees, application fees and legal costs related to obtaining financing, and these costs are 
amortized over the term of the respective mortgage. CMHC insurance fees are amortized over the amortization period of the mortgage. The 
costs associated with the convertible debentures are amortized over the terms of the debentures.
Administration Expenses
For the years ended December 31,
2013 2012 % change
t otal $7,878 $8,832 (10.8)%
as a percentage of total revenues 5.6% 6.6%
Administration expenses include expenses which are not specific to an individual property. These expenses include TSX related costs, 
management and head office salaries and benefits, marketing costs, office equipment leases, professional fees and other head office and 
regional office expenses.
Administrative expenses as a percentage of revenues were lower in 2013 due to increased capitalized overhead as a result of the increased 
capital spending on the developments and the remaining portfolio, a decrease in consulting and professional fees, lower incentive payments and 
a reduction in salary related costs year‑over‑year. Theses savings were offset by an increase in marketing costs which aided in Killam’s success in 
reducing vacancy in most regions.
Management targets annualized administrative costs at approximately 6.0% of total revenues.
Killam ProPerties inc | 2013 43