Management’s Discussion and Analysis Dollar amounts are in thousands of Canadian dollars (except as noted) 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. For the years ended December 31, 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 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 For the years ended December 31, Administration Expenses 2013 2012 % change total $7,878 $8,832 (10.8)% as a percentage of total revenues 5.6% 6.6% 2013 2012 % change total $1,643 $1,605 2.4% 2013 2012 % change total $589 $540 9.1% Depreciation Expense For the years ended December 31, Amortization of Deferred Financing Costs