text: • Net operating income (“NOI”) is calculated by the Company as income from property operations. The use of NOI when referring to a 
  particular segment is calculated as property revenue less property operating costs for that segment. 
  
  • 
  
  Funds from operations (“FFO”) are calculated by the Company as net income plus deferred tax expense, loss on disposition and 
  depreciation on owner‑occupied property, less fair value gains, gain on disposition and non‑controlling interest. Killam’s definition of FFO is 
  calculated in accordance with the REALpac definition. 
  
  • 
  
  Adjusted funds from operations (“AFFO”) are calculated by the Company as FFO less the industry standard of $450 per apartment unit for 
  “maintenance” versus “noi enhancing” related capital costs and $100 per manufactured Home community (“mHc”) site, although the 
  mHc industry does not have a standard amount for “maintenance” related capital costs. 
  
  • 
  Same store results in relation to the Company are revenues and property operating expenses for stabilized properties the Company has 
  owned for equivalent periods in 2013 and 2012 (89% of the portfolio based on December 31, 2013 unit count). 
  
  •  Capitalization Rate (“cap‑rate”) is the rate calculated by dividing the forecasted NOI from a property by the property’s purchase price. 
  
  •  Interest coverage is calculated by dividing the earnings before interest, tax, depreciation, and fair value adjustments by interest expense. 
  
  • 
  Debt service coverage is calculated by dividing the earnings before interest, tax, depreciation, and fair value adjustments by interest expense 
  and principal mortgage repayments. 