HALIFAX, Nov. 3 /CNW/ -- Killam Properties Inc. (TSX:KMP/KMP:DB) today announced its financial results for the third quarter ended September 30, 2009.

Highlights of Killam's Third Quarter Financial Results

- Achieved an 8.8% increase in net operating income ("NOI") from same
store properties, compared to the third quarter of 2008.
- Maintained high occupancy rates, ending the third quarter with total
apartment occupancy of 98.2%, consistent with the record occupancy
level achieved in September 2008.
- Strengthened balance sheet with the successful completion of a $24.7
million public share offering, reducing total debt to gross book value
of assets to 65.6%.
- Increased funds from operations ("FFO") by 11.3% to $8.4 million from
$7.5 million in the third quarter of 2008.
- Notwithstanding a 14% increase in shares outstanding, maintained FFO
per share of $0.22 per share (2008 - $0.22 per share).
- Increased FFO per share for the 9 months ended September 30, 2009 by
12% to $0.56 per share (2008 - $0.50 per share).
- Refinanced $12.3 million of mortgage debt that matured in the third
quarter.
Financial Highlights (in thousands, except per share information)
For the three months ended September 30,       2009      2008  % Change
Rental Revenue                              $26,808   $25,572       4.8%
Net Operating Income                        $17,728   $16,302       8.7%
Net Income Before Tax and Depreciation       $7,861    $7,015      12.1%
Net Income                                     $597       $58       N/A
Funds from Operations                        $8,405    $7,549      11.3%
Funds from Operations per Share               $0.22     $0.22         -
Shares Outstanding (weighted average)        38,344    33,624      14.0%
For the nine months ended September 30,        2009      2008  % Change
Rental Revenue                              $77,679   $72,264       7.5%
Net Operating Income                        $47,520   $42,914      10.7%
Net Income Before Tax and Depreciation      $18,096   $15,329      18.1%
Net Loss                                    ($1,671)  ($3,315)    (49.6%)
Funds from Operations                       $19,923   $16,865      18.1%
Funds from Operations per Share               $0.56     $0.50      12.0%
Shares Outstanding (weighted average)        35,493    33,509       5.9%
Sept 30,   Dec 31,
Balance Sheet as at,                           2009      2008  % Change
Total Assets                               $752,491  $738,668       1.9%
Total Liabilities                          $570,762  $565,475       0.9%
Total Shareholders' Equity                 $181,729  $173,193       4.9%
Gross Debt as a % of Gross Book Value          65.6%     67.7%     (3.1%)

FFO Per Share of $0.22 in the Third Quarter

Killam generated $8.4 million in FFO in the third quarter, an 11.3% increase from the third quarter of 2008. The increase was primarily attributable to the Company's same store NOI growth and the positive impact of acquisitions made during 2008. These improvements were partially offset by lower new manufactured home sales and higher general and administrative costs in the quarter.

Management considers FFO per share to be a key measure of operating performance. FFO per share for the third quarter of 2009 was $0.22 per share, consistent with $0.22 earned during the same period of 2008. It is noteworthy that the 11.3% increase in FFO for the quarter was not reflected in the FFO per share results due to the issuance of an additional 4.255 million shares on July 2, 2009; the $23.4 million of net proceeds from the issuance has not yet been fully deployed.

Same Store NOI Growth of 8.8% Compared to the Third Quarter of 2008

Killam achieved same store NOI growth of 8.8% during the third quarter of 2009. Same store properties account for 96% of the Company's portfolio. Consolidated operating revenue increased 3.2% quarter-over-quarter due primarily to increased monthly rental rates, which increased an average of 2.5% from the same period last year. Consolidated operating expenses decreased by 5.7% in the quarter as the Company benefited from decreased energy costs and operating efficiencies.