Notes to the Consolidated Financial Statements
Dollar amounts are in thousands of Canadian dollars (except share and per share amounts)
20. Financing Costs
For the years ended December 31, 2013 2012
Mortgage, loan and construction loan interest $30,090 $28,590
Amortization of fair value adjustments on assumed debt (459) (229)
Convertible debenture interest 6,687 6,632
subordinated debenture interest 10 703
capitalized interest (1,097) (1,063)
$35,231 $34,633
21. Income Taxes
The income tax provisions differ from that computed using the statutory rates for the following reasons:
 
For the years ended December 31, 2013 2012
Net income before income taxes $51,733 $73,463
Income tax expense at federal statutory rates 14,977 29.0%    21,069 28.7%   
Non‑taxable component of fair value gain  (4,942) (9.6)%    (3,209) (4.4)%   
Non‑deductible share compensation  181 0.3%    166 0.2%   
Impact of change in effective tax rates  1,608 3.1%    578 0.8%   
other  (1,023) (2.0)%    630 0.9%   
Tax expense $10,801     20.9%   $19,234  26.2%   
Deferred income taxes reflect the net effects of temporary differences between the carrying amount of assets and liabilities for financial 
reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income tax assets 
and liabilities are as follows:
consolidated statements of 
Financial Position
consolidated statements of 
income
2013 2012 2013 2012
Real estate properties $90,871 $86,980 $3,981 $22,610
loss carryforwards ‑     (3,884)  3,884  (3,884) 
Convertible debentures  1,324  1,565  (241)  (231) 
other  1,026  (790)  1,726  739 
Net deferred tax expense $9,350 $19,234
Net deferred tax liabilities $93,221 $83,871
Reconciliation of net deferred tax liabilities         
Balance, beginning of year $83,871 $65,139
r ecognized in statement of income  9,350  19,234 
r ecognized in equity on issuance of shares ‑     (502) 
Balance, end of year $93,221 $83,871
The temporary differences associated with investments in subsidiaries for which a deferred tax liability has not been recognized, aggregate 
to $Nil (December 31, 2012 ‑ $65,186).
88 Killam ProPerties inc | 2013