text: **Stability in Controllable Operating Costs**
  
  Excluding energy and property taxes, Killam delivered an impressively modest 0.3% increase in same store operating expenses in 2013 compared 
  to 2012. Killam managed operating costs by renegotiating key contracts, including garbage and elevator contracts, and reducing repair and 
  maintenance and property administrative expenses through a company‑wide focus on minimizing discretionary spending. In addition, the 
  increase in same store property tax expense was managed to 2.8% as a result of successful assessment appeals. 
  
  **Interest Cost Savings on Refinancings**
  
  During 2013 Killam successfully refinanced $66.7 million of maturing apartment mortgages at a weighted average interest rate of 3.03%, 155 
  basis points (“bps”) lower than the weighted average interest rate prior to refinancing. The Company also refinanced $10.7 million of MHC 
  mortgages at a weighted average interest rate of 4.34%, 190 bps lower than the weighted average interest rate prior to refinancing. These 
  refinancings create interest savings of $1.2 million on an annualized basis. 
  
  **Stable FFO Despite Pressures on Non‑Controllable Costs**
  
  Killam generated FFo per share of $0.72 during 2013 consistent with FFo per share of $0.72 in 2012. lower interest costs, earnings associated 
  with new acquisitions and developments, and savings in administrative costs were offset by an unprecedented increase in natural gas pricing 
  in Atlantic Canada, a reduction in NOI related to the disposition of ten MHCs in December 2013 and twelve MHCs in May 2012, and an 8.9% 
  increase in the weighted average number of shares outstanding. the equity raise in late 2012 included funds to support development and 
  acquisitions, the full benefit of which was not realized until halfway through 2013. The Company also acquired land for future development of 
  $2.9 million and incurred costs related to two new developments projects in St. John’s and Cambridge totalling $12.7 million during 2013. The 
  benefit on FFO of the deployment of these funds will not be realized until the respective projects are completed in Q3 2014 and early 2015. 