text: **PART I**
  
  **Basis of Presentation**
  
  The following Management’s Discussion and Analysis (“MD&A”) has been prepared by Management and focuses on key statistics from 
  the consolidated financial statements and pertains to known risks and uncertainties. To ensure that the reader is obtaining the best overall 
  perspective, this MD&A should be read in conjunction with material contained in the Company’s audited consolidated financial statements for 
  the years ended December 31, 2013, and 2012. The consolidated financial statements for the years ended December 31, 2013, and 2012 have 
  been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards 
  Board (“IASB”). These documents, along with the Company’s 2013 Annual Information Form, are available on SEDAR at www.sedar.com. The 
  discussions in this MD&A are based on information available as at February 18, 2014. 
  
  **Forward‑looking Statements**
  
  Certain statements in this MD&A constitute “forward‑looking statements”. In some cases, forward‑looking statements can be identified by the 
  use of words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “potential”, “continue” or the negative of these 
  terms or other comparable terminology, and by discussions of strategies that involve risks and uncertainties. Readers should be aware that 
  these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially 
  from those anticipated or implied, or those suggested by any forward looking statements, including: competition, national and regional 
  economic conditions and the availability of capital to fund further investments in Killam’s business. Further information regarding these risks, 
  uncertainties and other factors may be found under the heading “Risk Management” in this MD&A and in the Company’s most recent Annual 
  Information Form. Given these uncertainties, readers are cautioned not to place undue reliance on any forward‑looking statements contained, or 
  incorporated by reference, in this mD&a. 