Management’s Discussion and Analysis Dollar amounts are in thousands of Canadian dollars (except as noted) Part VII Quarterly Results & Discussion of Q4 Operations Summary of Quarterly Results An eight quarter trend highlighting key operating results is shown below: In thousands (except per share amounts) For the three months ended December 31, 2013 2012 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Property revenue $36,262 $37,095 $34,506  $33,249  $33,360  $33,894  $33,679 $32,631  Operating expenses 14,863 13,845 14,281 15,083 13,801 12,452 13,161 13,781 Net operating income 21,399 23,250 20,225 18,166 19,559 21,442 20,518 18,850 Operating margin % 59.0% 62.7% 58.6% 54.6% 58.6% 63.3% 60.9% 57.8% Home sale income 66 44 154 59 101 93 231 44 equity & other income (loss) 165 484 1,031 362 527 439 508 322 net (loss) income applicable  to common shareholders  (4,543) 12,117 23,238 8,967 10,425 12,662 18,558 10,082 Per share (basic) (0.10) 0.22 0.43 0.17 0.20 0.26 0.37 0.20 FFo 9,812 11,668 9,478 7,812 8,732 10,721 9,179 7,463 FFo/share (basic) 0.18 0.22 0.18 0.15  0.17 0.21 0.19 0.15 2013 2012 Property revenue $36,262 $33,360 Property operating expenses (14,863) (13,801) Home sales 66 101 equity income 138 240 other income 27 287 21,630 20,187 Financing costs (9,061) (8,315) Depreciation (149) (199) Amortization of deferred financing costs (431) (366) Administration (2,185) (2,361) (11,826) (11,241) Income before fair value gains (losses), gain (loss) on  disposition and income taxes 9,804 8,946 Fair value (losses) gains (13,827) 10,057 (Loss) gain on disposition (1,572) 24 Income before income tax expense (5,595) 19,027 Income tax expense 1,410 (7,357) Net (loss) income $(4,185) $11,670 Net income attributable to: common shareholders $(4,543) $10,425 Non‑controlling interest 358 1,245 $(4,185) $11,670 Killam ProPerties inc | 2013 57 Q4 ‑ Consolidated Statements of Income