Crombie REIT announces first quarter 2009 results



    STELLARTON, NS, May 7 /CNW/ - Crombie Real Estate Investment Trust
("Crombie") (TSX: CRR.UN) is pleased to report its results for the first
quarter ended March 31, 2009.

    
                                         Three months ended March 31,
                                ---------------------------------------------
                                                              Variance
    (In millions of dollars,                           ----------------------
     except per unit amounts)       2009        2008           $           %
    -------------------------------------------------------------------------
    FFO                          $20.739     $13.839      $6.900        49.9%
    Per Unit                       $0.40       $0.33       $0.07        21.2%
    FFO Payout ratio                56.2%       64.1%          -         7.9%
    -------------------------------------------------------------------------
    AFFO                         $16.026      $8.096      $7.930        97.9%
    Per Unit                       $0.31       $0.19       $0.12        63.2%
    AFFO Payout ratio               72.7%      109.5%          -        36.8%
    -------------------------------------------------------------------------

    Funds from Operations (FFO) for the first quarter of 2009 increased to
$20.7 million ($0.40 per unit) from $13.8 million ($0.33 per unit) in the
first quarter of 2008. The improvement was due to the portfolio acquisition of
61 retail properties from subsidiaries of Empire Company Limited (the
"Portfolio Acquisition") on April 22, 2008 and the impact of the Saskatoon
property acquisition in June 2008.
    Adjusted Funds from Operations (AFFO) for the first quarter of 2009 was
$16.0 million ($0.31 per unit) compared to $8.1 million ($0.19 per unit) for
the first quarter of 2008. Growth in AFFO during the first quarter was
primarily due to the improved FFO results and lower maintenance capital and
leasing costs. The first quarter AFFO payout ratio for 2009 was 72.7% which is
substantially below the target payout ratio of 95% and the first quarter of
2008 payout ratio of 109.5%.
    Commenting on the first quarter results, J. Stuart Blair, President and
Chief Executive Officer stated: "We are pleased with the results for the first
quarter of 2009 given the uncertainty in the economic conditions in Canada and
globally. We continue to be cautious with our outlook for the remainder of
2009 and we will maintain our focus on achieving consistent results from our
existing portfolio."

    2009 First Quarter Highlights

    - Crombie completed leasing activity on 47.4% of its 2009 expiring leases
      as at March 31, 2009.

    - Occupancy for the properties was 94.2% at March 31, 2009 compared with
      94.9% at December 31, 2008.

    - Property revenue for the quarter ended March 31, 2009 increased by
      $15.7 million, or 42.2%, to $53.0 million compared to $37.3 million for
      the quarter ended March 31, 2008.

    - Same-asset Net Operating Income (NOI) of $21.9 million decreased 0.1%,
      compared to $22.0 million for the quarter ended March 31, 2008.

    - The FFO payout ratio for the quarter ended March 31, 2009 was 56.2%
      which was below the target annual payout ratio of 70% and below the
      payout ratio of 64.1% for the same period in 2008.

    - The AFFO payout ratio for the quarter ended March 31, 2009 was 72.7%
      which was below the target annual AFFO payout ratio of 95% and was
      below the payout ratio of 109.5% for the same period in 2008.

    - Debt to gross book value increased slightly to 54.8% at March 31, 2009
      compared to 54.4% at December 31, 2008.

    - Crombie's interest service coverage ratio for the quarter ended March
      31, 2009 was 2.93 times EBITDA and debt service coverage ratio was 2.08
      times EBITDA, compared to 3.08 times EBITDA and 1.98 times EBITDA,
      respectively, for the same period in 2008.

    The table below presents a summary of the financial performance for the
quarter ending March 31, 2009 compared to the same period in fiscal 2008.

    -------------------------------------------------------------------------
                                                       Quarter       Quarter
                                                         ended         ended
    (In millions of dollars,                           Mar. 31,      Mar. 31,
     except where otherwise noted)                        2009          2008
    -------------------------------------------------------------------------
    Property revenue                                   $52.992       $37.262
    Property expenses                                   19.971        15.312
    -------------------------------------------------------------------------
    Property NOI                                        33.021        21.950
    -------------------------------------------------------------------------
    NOI margin percentage                                 62.3%         58.9%
    -------------------------------------------------------------------------
    Expenses:
      General and administrative                         1.644         1.952
      Interest                                          10.730         6.500
      Depreciation and amortization                     12.491         7.995
    -------------------------------------------------------------------------
                                                        24.865        16.447
    -------------------------------------------------------------------------
    Income from continuing operations before other
     items, income taxes and non-controlling
     interest                                            8.156         5.503
    Other items                                          0.092             -
    -------------------------------------------------------------------------
    Income from continuing operations before
     income taxes and non-controlling interest           8.248         5.503
    Income taxes - Future                                0.200         0.400
    -------------------------------------------------------------------------
    Income from continuing operations before
     non-controlling interest                            8.048         5.103
    Income from discontinued operations                      -         0.263
    -------------------------------------------------------------------------
    Income before non-controlling interest               8.048         5.366
    Non-controlling interest                             3.856         2.583
    -------------------------------------------------------------------------
    Net income                                          $4.192        $2.783
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Basic and diluted net income per unit                $0.15         $0.13
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Property NOI

    First quarter property NOI for 2009 increased to $33.0 million (50.4%)
from the same period in 2008 due to the Portfolio Acquisition and the
Saskatoon property acquisition completed since January 1, 2008. Overall NOI
margin increased to 62.3% for the first quarter of 2009 from 58.9% for the
same period in 2008.

    Same-Asset Property NOI

    -------------------------------------------------------------------------
                                                       Quarter       Quarter
                                                         ended         ended
                                                       Mar. 31,      Mar. 31,
    (In millions of dollars)                              2009          2008
    -------------------------------------------------------------------------
    Same-asset property revenue                        $38.048       $37.262
    Same-asset property expenses                        16.128        15.312
    -------------------------------------------------------------------------
    Same-asset property NOI                            $21.920       $21.950
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Same-asset NOI margin %                               57.6%         58.9%
    -------------------------------------------------------------------------

    Same-asset property revenue of $38.0 million in the first quarter of 2009
was 2.1% higher than the first quarter in 2008 due primarily to increased
average rent per square foot results and increased recoverable common area
expenses.
    Same-asset property expenses of $16.1 million in the first quarter of 2009
were 5.3% higher than the $15.3 million for the first quarter of 2008. The
increased property expenses were due to increased recoverable common area
expenses primarily from increased utility, snow removal and property taxes.

    Acquisition Property NOI

    The Portfolio Acquisition and the Saskatoon property acquisition completed
since January 1, 2008 provided the following results:

    -------------------------------------------------------------------------
                                                       Quarter       Quarter
                                                         ended         ended
                                                       Mar. 31,      Mar. 31,
    (In millions of dollars)                              2009          2008
    -------------------------------------------------------------------------
    Acquisition property revenue                       $14.944            $-
    Acquisition property expense                         3.843             -
    -------------------------------------------------------------------------
    Acquisition property NOI                           $11.101            $-
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Acquisition NOI margin %                              74.3%            -%
    -------------------------------------------------------------------------


    General and Administrative Expenses

    General and administrative expenses decreased by 15.8% during the first
quarter of 2009 to $1.6 million from $2.0 million in 2008 due to reduced
incentive payments partially offset by increased professional fees and
salaries and benefits costs. General and administrative costs as a percentage
of revenue have decreased to 3.1% in the first quarter of 2009 compared to
5.2% in 2008.

    Interest

    -------------------------------------------------------------------------
                                                       Quarter       Quarter
                                                         ended         ended
                                                       Mar. 31,      Mar. 31,
    (In millions of dollars)                              2009          2008
    -------------------------------------------------------------------------
    Same-asset interest expense                         $6.762        $6.500
    Acquisition interest expense                         3.968             -
    -------------------------------------------------------------------------
    Interest expense                                   $10.730        $6.500
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    The increase in interest expense for the first quarter of 2009 was due to
the Portfolio Acquisition and the Saskatoon property acquisition completed
since January 1, 2008. Same-asset interest expense was higher in the first
quarter of 2009 compared to 2008 due to the amortization of payments made on
interest rate swap agreements during the first quarter, offset in part by a
decrease in the floating interest rate on the revolving credit facility.

    Definition of Non-GAAP Measures

    Certain financial measures included in this news release do not have
standardized meaning under Canadian generally accepted accounting principles
and therefore may not be comparable to similarly titled measures used by other
publicly traded companies. Crombie includes these measures because it believes
certain investors use these measures as a means of assessing Crombie's
financial performance.

    - Property NOI is property revenue less property expenses.
    - Debt is defined as bank loans plus commercial property debt and
      convertible debentures.
    - Gross book value means, at any time, the book value of the assets of
      Crombie and its consolidated subsidiaries plus accumulated depreciation
      and amortization in respect of Crombie's properties (and related
      intangible assets) less (i) the amount of any receivable reflecting
      interest rate subsidies on any debt assumed by Crombie and (ii) the
      amount of future income tax liability arising out of the fair value
      adjustment in respect of the indirect acquisitions of certain
      properties.
    - FFO is calculated as net income (computed in accordance with GAAP),
      excluding gains (or losses) from sales of depreciable real estate and
      extraordinary items, plus depreciation and amortization, future income
      taxes and after adjustments for equity accounted entities and non-
      controlling interests.
    - AFFO is defined as FFO adjusted for non-cash amounts affecting revenue
      and discontinued operations, less maintenance capital expenditures and
      maintenance tenant improvements and lease costs.

    About Crombie

    Crombie is an open-ended real estate investment trust established under,
and governed by, the laws of the Province of Ontario. The trust invests in
income-producing retail, office and mixed-use properties in Canada, with a
future growth strategy focused primarily on the acquisition of retail
properties. Crombie currently owns a portfolio of 113 commercial properties in
seven provinces, comprising approximately 11.2 million square feet of rentable
space.

    This news release contains forward looking statements that reflect the
current expectations of management of Crombie about Crombie's future results,
performance, achievements, prospects and opportunities. Wherever possible,
words such as "may", "will", "estimate", "anticipate", "believe", "expect",
"intend" and similar expressions have been used to identify these forward
looking statements. These statements reflect current beliefs and are based on
information currently available to management of Crombie. Forward looking
statements necessarily involve known and unknown risks and uncertainties. A
number of factors, including those discussed in the 2008 annual Management
Discussion and Analysis under "Risk Management", could cause actual results,
performance, achievements, prospects or opportunities to differ materially
from the results discussed or implied in the forward looking statements. These
factors should be considered carefully and a reader should not place undue
reliance on the forward looking statements. There can be no assurance that the
expectations of management of Crombie will prove to be correct.
    In particular, certain statements in this document discuss Crombie's
anticipated outlook of future events. These statements include, but are not
limited to:

    (i)  anticipated or target distributions and payout ratios, which could
         be impacted by seasonality of capital expenditures, results of
         operations and capital resource allocation decisions; and

    (ii) the anticipated refinancing of the term loan facility.

    Readers are cautioned that such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from these statements. Crombie can give no assurance that actual
results will be consistent with these forward-looking statements.
    Additional information relating to Crombie can be found on Crombie's web
site at www.crombiereit.com or on the SEDAR web site for Canadian regulatory
filings at www.sedar.com.

    Conference Call Invitation

    Crombie will provide additional details concerning its first quarter
results on a conference call to be held Thursday, May 7, 2009, at 4:00 PM ADT.
To join this conference call you may dial (416) 644-3432 or (800) 814-4890.
You may also listen to a live audio web cast of the conference call by
visiting Crombie's website located at www.crombiereit.com. Replay will be
available until midnight May 21, 2009, by dialling (416) 640-1917 or (877)
289-8525 and entering pass code 21304868#, or on the Crombie website for 90
days after the meeting.


                     CROMBIE REAL ESTATE INVESTMENT TRUST
                  Interim Consolidated Financial Statements
                                  Unaudited
                               March 31, 2009


                     CROMBIE REAL ESTATE INVESTMENT TRUST
                         Consolidated Balance Sheets
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                                      March 31,  December 31,
                                                          2009          2008
                                                -----------------------------
                                                                    Restated
    Assets                                                           (Note 3)
      Commercial properties (Note 4)                $1,305,699    $1,308,347
      Intangible assets (Note 5)                       124,072       131,403
      Notes receivable (Note 6)                         10,537        11,323
      Other assets (Note 7)                             18,407        20,934
      Cash and cash equivalents                            168         4,028
      Assets related to discontinued
       operations (Note 21)                              7,162         7,184
                                                -----------------------------
                                                    $1,466,045    $1,483,219
                                                -----------------------------
                                                -----------------------------

    Liabilities and Unitholders' Equity
      Commercial property debt (Note 8)               $812,342      $808,971
      Convertible debentures (Note 9)                   29,029        28,968
      Payables and accruals (Note 10)                   80,048        94,462
      Intangible liabilities (Note 11)                  38,916        41,061
      Employee future benefits obligation                4,911         4,836
      Distributions payable                              3,883         3,883
      Future income tax liability (Note 16)             80,000        79,800
      Liabilities related to discontinued
       operations (Note 21)                              6,450         6,517
                                                -----------------------------
                                                     1,055,579     1,068,498

    Non-controlling interest (Note 12)                 197,115       199,163

    Unitholders' equity                                213,351       215,558
                                                -----------------------------
                                                    $1,466,045    $1,483,219
                                                -----------------------------
                                                -----------------------------

    Commitments and contingencies (Note 18)
    Subsequent event (Note 23)



                     CROMBIE REAL ESTATE INVESTMENT TRUST
                      Consolidated Statements of Income
             (In thousands of dollars, except per unit amounts)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                -----------------------------
                                                                    Restated
    Revenues                                                         (Note 3)

      Property revenue (Note 14)                       $52,992       $37,262
      Lease terminations                                    92             -
                                                -----------------------------
                                                        53,084        37,262
                                                -----------------------------

    Expenses
      Property expenses                                 19,971        15,312
      General and administrative expenses                1,644         1,952
      Interest expense (Note 15)                        10,730         6,500
      Depreciation of commercial properties              4,800         3,403
      Amortization of tenant improvements/
       lease costs                                       1,131           768
      Amortization of intangible assets                  6,560         3,824
                                                -----------------------------
                                                        44,836        31,759
                                                -----------------------------
    Income from continuing operations
     before income taxes and non-controlling
     interest                                            8,248         5,503
    Income tax expense - Future  (Note 16)                 200           400
                                                -----------------------------

    Income from continuing operations before
     non-controlling interest                            8,048         5,103
    Income from discontinued operations
     (Note 21)                                               -           263
                                                -----------------------------
    Income before non-controlling interest               8,048         5,366
    Non-controlling interest                             3,856         2,583
                                                -----------------------------
    Net income                                          $4,192        $2,783
                                                -----------------------------
                                                -----------------------------
    Basic and diluted net income per unit
    Continuing operations                                $0.15         $0.12
    Discontinued operations                              $0.00         $0.01
                                                -----------------------------
    Net income                                           $0.15         $0.13
                                                -----------------------------
                                                -----------------------------

    Weighted average number of units
     outstanding
      Basic                                         27,147,380    21,543,940
                                                -----------------------------
                                                -----------------------------
      Diluted                                       27,271,888    21,648,985
                                                -----------------------------
                                                -----------------------------



                     CROMBIE REAL ESTATE INVESTMENT TRUST
           Consolidated Statements of Comprehensive Income (Loss)
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                -----------------------------
    Net income                                          $4,192        $2,783
                                                -----------------------------
      Losses on derivatives designated as
       cash flow hedges transferred to net
       income in the current year                          108             -
      Net change in derivatives designated as
       cash flow hedges                                   (459)       (4,294)
                                                -----------------------------
    Other comprehensive loss                              (351)       (4,294)
                                                -----------------------------
    Comprehensive income (loss)                         $3,841       $(1,511)
                                                -----------------------------
                                                -----------------------------



                     CROMBIE REAL ESTATE INVESTMENT TRUST
               Consolidated Statements of Unitholders' Equity
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                                Accumu-
                                                 lated
                                                 Other
                                                Compre-
                                      Contri-  hensive
                  REIT       Net       buted     (Loss)     Distri-
                 Units    Income     Surplus    Income     butions     Total
              ---------------------------------------------------------------
              (Note 13)

    Unit-
     holders'
     equity,
     Janu-
     ary 1,
     2009     $265,096   $34,652         $34  $(29,567)   $(54,635) $215,580
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)        -       (22)          -         -           -       (22)
              ---------------------------------------------------------------
    Unit-
     holders'
     equity,
     Janu-
     ary 1,
     2009 as
     re-
     stated    265,096    34,630          34   (29,567)    (54,635)  215,558
    EUPP
     compen-
     sation          -         -          11         -           -        11
    Repay-
     ment
     of
     EUPP
     loans
     recei-
     vable           9         -           -         -           -         9
    Net
     income          -     4,192           -         -           -     4,192
    Distri-
     butions         -         -           -         -      (6,068)   (6,068)
    Other
     compre-
     hensive
     loss            -         -           -      (351)          -      (351)
              ---------------------------------------------------------------
    Unit-
     holders'
     equity,
     March
     31,
     2009     $265,105   $38,822         $45  $(29,918)   $(60,703) $213,351
              ---------------------------------------------------------------
              ---------------------------------------------------------------


    Unit-
     holders'
     equity,
     Janu-
     ary 1,
     2008     $205,273   $20,064         $12   $(3,000)   $(31,515) $190,834
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)        -       (22)          -         -           -       (22)
              ---------------------------------------------------------------
    Unit-
     holders'
     equity,
     Janu-
     ary 1,
     2008
     as res-
     tated    $205,273   $20,042         $12   $(3,000)   $(31,515) $190,812
    EUPP
     compen-
     sation          -         -           9         -           -         9
    Repay-
     ment
     of
     EUPP
     loans
     recei-
     vable           7         -           -         -           -         7
    Net
     income          -     2,783           -         -           -     2,783
    Distri-
     butions         -         -           -         -      (4,599)   (4,599)
    Other
     compre-
     hensive
     loss            -         -           -    (4,294)          -    (4,294)
              ---------------------------------------------------------------
    Unit-
     holders'
     equity,
     March
     31,
     2008
     as res-
     tated    $205,280   $22,825         $21   $(7,294)   $(36,114) $184,718
              ---------------------------------------------------------------
              ---------------------------------------------------------------


                     CROMBIE REAL ESTATE INVESTMENT TRUST
                    Consolidated Statements of Cash Flows
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                -----------------------------
                                                                    Restated
    Cash flows provided by (used in)                                 (Note 3)

    Operating Activities
      Net income                                        $4,192        $2,783
      Items not affecting cash:
        Non-controlling interest                         3,856         2,583
        Depreciation of commercial properties            4,800         3,438
        Amortization of tenant improvements/
         lease costs                                     1,131           782
        Amortization of deferred financing costs           480           154
        Amortization of swap settlements                   207             -
        Amortization of intangible assets                6,560         3,853
        Amortization of above market leases                771           770
        Amortization of below market leases             (2,145)       (1,190)
        Accrued rental revenue                            (883)         (318)
        Unit based compensation                             11             9
        Future income taxes                                200           400
                                                -----------------------------
                                                        19,180        13,264

    Additions to tenant improvements and lease
     costs                                              (1,240)       (4,557)
    Change in other non-cash operating items
     (Note 17)                                          (7,276)       (3,072)
                                                -----------------------------
    Cash provided by operating activities               10,664         5,635
                                                -----------------------------

    Financing Activities
    Issue of commercial property debt                   57,000             -
    Increase in deferred financing charges                (557)            -
    Issue of convertible debentures                          -        30,000
    Issue costs of convertible debentures                    -        (1,376)
    Settlement of interest rate swap agreements         (4,535)            -
    Repayment of commercial property debt              (53,491)      (27,157)
    Decrease in liabilities related to
     discontinued operations                               (67)            -
    Collection of notes receivable                         786         1,414
    Repayment of EUPP loan receivable                        9             7
    Payment of distributions                           (11,649)       (8,867)
                                                -----------------------------
    Cash used in financing activities                  (12,504)       (5,979)
                                                -----------------------------

    Investing Activities
    Additions to commercial properties                  (1,730)       (1,712)
    Additions to recoverable capital
     expenditures                                         (312)         (652)
    Decrease in assets related to discontinued
     operations                                             22             -
                                                -----------------------------
    Cash used in investing activities                   (2,020)       (2,364)
                                                -----------------------------
    Decrease in cash and cash equivalents
     during the period                                  (3,860)       (2,708)
    Cash and cash equivalents, beginning of
     period                                              4,028         2,708
                                                -----------------------------
    Cash and cash equivalents, end of period              $168          $Nil
                                                -----------------------------
                                                -----------------------------
    See accompanying notes to the interim consolidated financial statements.

    1) CROMBIE REAL ESTATE INVESTMENT TRUST

    Crombie Real Estate Investment Trust ("Crombie") is an unincorporated
"open-ended" real estate investment trust created pursuant to the Declaration
of Trust dated January 1, 2006, as amended. The units of Crombie are traded on
the Toronto Stock Exchange ("TSX") under the symbol "CRR.UN".

    2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a) Basis of presentation

    These interim consolidated financial statements are prepared in accordance
with Canadian generally accepted accounting principles ("GAAP") as prescribed
by the Canadian Institute of Chartered Accountants ("CICA"). These interim
consolidated financial statements do not include all of the disclosures
included in Crombie's annual consolidated financial statements. Accordingly,
these interim consolidated financial statements should be read in conjunction
with the consolidated financial statements for the year ended December 31,
2008 as set out in the 2008 Annual Report.
    The accounting policies used in preparation of these interim consolidated
financial statements conform with those used in the 2008 annual consolidated
financial statements, except as described in Note 3.

    (b) Property acquisitions

    Upon acquisition of commercial properties, Crombie performs an assessment
of the fair value of the properties' related tangible and intangible assets
and liabilities (including land, buildings, origination costs, in-place
leases, above and below-market leases, and any other assumed assets and
liabilities), and allocates the purchase price to the acquired assets and
liabilities. Crombie assesses and considers fair value based on cash flow
projections that take into account relevant discount and capitalization rates
and any other relevant sources of market information available. Estimates of
future cash flow are based on factors that include historical operating
results, if available, and anticipated trends, local markets and underlying
economic conditions.
    Crombie allocates the purchase price based on the following:

    Land - The amount allocated to land is based on an appraisal estimate of
    its fair value.

    Buildings - Buildings are recorded at the fair value of the building on
    an "as-if-vacant" basis, which is based on the present value of the
    anticipated net cash flow of the building from vacant start up to full
    occupancy.

    Origination costs for existing leases - Origination costs are determined
    based on estimates of the costs that would be incurred to put the
    existing leases in place under the same terms and conditions. These costs
    include leasing commissions as well as foregone rent and operating cost
    recoveries during an assumed lease-up period.

    In-place leases - In-place lease values are determined based on estimated
    costs required for each lease that represents the net operating income
    lost during an estimated lease-up period that would be required to
    replace the existing leases at the time of purchase.

    Tenant relationships - Tenant relationship values are determined based on
    costs avoided if the respective tenants were to renew their leases at the
    end of the existing term, adjusted for the estimated probability that the
    tenants will renew.

    Above and below market existing leases - Values ascribed to above and
    below market existing leases are determined based on the present value of
    the difference between the rents payable under the terms of the
    respective leases and estimated future market rents.

    Fair value of debt - Values ascribed to fair value of debt are determined
    based on the differential between contractual and market interest rates
    on long term liabilities assumed at acquisition.

    (c) Revenue recognition

    Property revenue includes rents earned from tenants under lease
agreements, percentage rent, realty tax and operating cost recoveries, and
other incidental income. Certain leases have rental payments that change over
their term due to changes in rates. Crombie records the rental revenue from
these leases on a straight-line basis over the term of the lease. Accordingly,
an accrued rent receivable/payable is recorded for the difference between the
straight-line rent recorded as property revenue and the rent that is
contractually due from the tenants. Percentage rents are recognized when
tenants are obligated to pay such rent under the terms of the related lease
agreements. The value of the differential between original and market rents
for existing leases is amortized using the straight-line method over the terms
of the tenant lease agreements. Realty tax and other operating cost
recoveries, and other incidental income, are recognized on an accrual basis.

    (d) Income taxes

    Crombie is taxed as a "mutual fund trust" for income tax purposes.
Pursuant to the terms of the Declaration of Trust, Crombie must make
distributions not less than the amount necessary to ensure that Crombie will
not be liable to pay income tax, except for the amounts incurred in its
incorporated subsidiaries.
    Future income tax liabilities of Crombie relate to tax and accounting
basis differences of all incorporated subsidiaries of Crombie. Income taxes
are accounted for using the liability method. Under this method, future income
taxes are recognized for the expected future tax consequences of differences
between the carrying amount of balance sheet items and their corresponding tax
values. Future income taxes are computed using substantively enacted corporate
income tax rates for the years in which tax and accounting basis differences
are expected to reverse.

    (e) Employee future benefits obligation

    The cost of pension benefits for the defined contribution plans is
expensed as contributions are paid. The cost of the defined benefit pension
plan and post-retirement benefit plan is accrued based on actuarial
valuations, which are determined using the projected benefit method pro-rated
on service and management's best estimate of the expected long-term rate of
return on plan assets, salary escalation, retirement ages and expected growth
rate of health care costs. The defined benefit plan and post-retirement
benefit plan are unfunded.
    The impact of changes in plan amendments is amortized on a straight-line
basis over the expected average remaining service life ("EARSL") of active
members. For the supplementary executive retirement plan, the impacts of
changes in the plan provisions are amortized over five years. The total
defined benefit cost related to pension plans and post retirement benefit
plans for the three months ended March 31, 2009 was $75 (three months ended
March 31, 2008 - $96).
    The compensation expense related to the EUPP during the three months ended
March 31, 2009 was $73 (three months ended March 31, 2008 - $96).

     (f) Use of estimates

    The preparation of consolidated financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the balance sheet, and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates. The significant areas of estimation and assumption
include:

    - Impairment of assets;
    - Depreciation and amortization;
    - Employee future benefit obligation;
    - Future income taxes;
    - Allocation of purchase price on property acquisitions; and
    - Fair value of commercial property debt, convertible debentures and
      assets and liabilities related to discontinued operations.

    (g) Payment of distributions

    The determination to declare and make payable distributions from Crombie
are at the discretion of the Board of Trustees of Crombie and, until declared
payable by the Board of Trustees of Crombie, Crombie has no contractual
requirement to pay cash distributions to Unitholders' of Crombie. During the
three months ended March 31, 2009 $11,649 (three months ended March 31, 2008 -
$8,867) in cash distributions were declared payable by the Board of Trustees
to Crombie Unitholders and Crombie Limited Partnership Unitholders (the "Class
B LP Units").

    (h) Convertible debentures

    Debentures with conversion features are assessed at inception as to the
value of both their equity component and their debt component. Based on the
assessment, Crombie has determined to date that no amount should be attributed
to equity and thus its convertible debentures have been classified as
liabilities. Distributions to debenture holders are presented as interest
expense. Issue costs on convertible debentures are netted against the
convertible debentures and amortized over the original life of the convertible
debentures using the effective interest rate method.

    (i) Hedges

    Crombie has cash flow hedges which are used to manage exposures to
increases in variable interest rates. Cash flow hedges are recognized on the
balance sheet at fair value with the effective portion of the hedging
relationship recognized in other comprehensive (loss) income. Any ineffective
portion of the cash flow hedge is recognized in net income. Amounts recognized
in accumulated other comprehensive (loss) income are reclassified to net
income in the same periods in which the hedged item is recognized in net
income. Fair value hedges and the related hedge items are recognized on the
balance sheet at fair value with any changes in fair value recognized in net
income. To the extent the fair value hedge is effective, the changes in the
fair value of the hedge and the hedged item will offset each other.
    Crombie has fixed interest rate swap agreements and a number of delayed
interest rate swap agreements designated as cash flow hedges. Crombie has
identified these hedges against increases in benchmark interest rates and has
formally documented all relationships between these derivative financial
instruments and hedged items, as well as the risk management strategy and
objectives. Crombie assesses on an ongoing basis whether the derivative
financial instrument continues to be effective in offsetting changes in
interest rates on the hedged items.

    (j) Comprehensive (loss) income

    Comprehensive (loss) income is the change in Unitholders' equity during a
period from transactions and other events and circumstances from non-owner
sources. Crombie reports a consolidated statement of comprehensive (loss)
income, comprising net income and other comprehensive (loss) income for the
period. Accumulated other comprehensive (loss) income, has been added to the
consolidated statements of unitholders' equity.

    (k) Discontinued operations

    Crombie classifies properties that meet certain criteria as held for sale
and separately discloses any net income and gain (loss) on disposal for
current and prior periods as discontinued operations. A property is classified
as held for sale at the point in time when it is available for immediate sale,
management has committed to a plan to sell the property and is actively
locating a purchaser for the property at a sales price that is reasonable in
relation to the current estimated fair market value of the property, and the
sale is expected to be completed within a one year period. Properties held for
sale are carried at the lower of their carrying values and estimated fair
value less costs to sell. In addition, assets held for sale are no longer
depreciated. A property that is subsequently reclassified as held in use is
measured at the lower of its carrying value amount before it was classed as
held for sale, adjusted for an amortization expense that would have been
recognized had it been continuously classified as held and in use, and its
estimated fair value at the date of the subsequent decision not to sell.

    (l) Impairment of long-lived assets

    Long-lived assets are reviewed for impairment annually or whenever events
or changes in circumstances indicate the carrying value of an asset may not be
recoverable.
    If it is determined that the net recoverable value of a long-lived asset
is less than its carrying value, the long-lived asset is written down to its
fair value. Net recoverable amount represents the undiscounted estimated
future cash flow expected to be received from the long-lived asset. Assets
reviewed under this policy include commercial properties and intangible
assets.

    3) CHANGES IN ACCOUNTING POLICIES

    Effective January 1, 2009 Crombie has adopted two new accounting standards
that were issued by the CICA in 2008 and one Emerging Committee Abstract
issued by the CICA in January 2009. These accounting policy changes have been
adopted in accordance with the transitional provisions.
    The new standards and accounting policy changes are as follows:

    Goodwill and Intangible Assets

    Effective January 1, 2009, the accounting and disclosure requirements of
the CICA's two new accounting standards were adopted: "Handbook Section 3064,
Goodwill and Intangible Assets" and "Handbook Section 3450, Research and
Development Costs."
    These standards are effective for annual and interim financial statements
related to fiscal years beginning on or after October 1, 2008 and are
applicable for Crombie's first quarter of fiscal 2009. Section 3064 states
that intangible assets may be recognized as assets only if they meet the
definition of an intangible asset. Section 3064 also provides further
information on the recognition of internally generated intangible assets,
(including research and development).
    These standards have been applied retrospectively with restatement of
prior periods. The adoption of these new standards resulted in an increase of
$229 to depreciation of commercial properties and a decrease of $229 to
property expenses in the consolidated Statements of Income for the three
months ended March 31, 2008. In the consolidated Balance Sheets, there was an
increase of $3,946 to commercial properties, an increase of $38 to
receivables, a decrease of $4,246 to prepaid expenses, and a decrease of $220
to payables and accruals at December 31, 2008, and a decrease of $20 to
non-controlling interest and a decrease of $22 to unitholders' equity at
January 1, 2008.

    Financial instruments - recognition and measurement

    In January 2009, the CICA issued Emerging Issue Committee Abstract 173
("EIC 173"), "Credit Risk and the Fair Value of Financial Assets and Financial
Liabilities". EIC 173 requires that a company take into account its own credit
risk and the credit risk of its counterparty in determining the fair value of
financial assets and financial liabilities. This Abstract must be applied
retrospectively without restatement of prior periods to all financial assets
and liabilities measured at fair value in interim and annual financial
statements for periods ending on or after January 20, 2009. The adoption of
EIC 173 did not have a significant impact on Crombie's financial results,
position or disclosures.

    Effect of new accounting standards not yet Implemented

    International Financial Reporting Standards

    On February 13 2008, the Accounting Standards Board of Canada announced
that GAAP for publicly accountable enterprises will be replaced by
International Financial Reporting Standards ("IFRS"). IFRS must be adopted for
interim and annual financial statements related to fiscal years beginning on
or after January 1, 2011, with retroactive adoption and restatement of the
comparative fiscal year ended December 31, 2010. Accordingly, the conversion
from Canadian GAAP to IFRS will be applicable to Crombie's reporting for the
first quarter of fiscal 2011 for which the current and comparative information
will be prepared under IFRS.
    Crombie, with the assistance of its external advisors, have launched an
internal initiative to govern the conversion process and is currently
evaluating the potential impact of the conversion to IFRS on its financial
statements. At this time, the impact on Crombie's future financial position
and results of operations is not reasonably determinable or estimatable.
Crombie expects the transition to IFRS to impact accounting, financial
reporting, internal control over financial reporting, information systems and
business processes.
    Crombie has developed a formal project governance structure, and is
providing regular progress reports to senior management and the audit
committee. Crombie has also completed a diagnostic impact assessment, which
involved a high level review of the major differences between current GAAP and
IFRS, as well as establishing an implementation guideline. In accordance with
this guideline Crombie has established a staff training program and is in the
process of completing analysis of the key decision areas and making
recommendations on the same.
    Crombie will continue to assess the impact of the transition to IFRS and
to review all of the proposed and ongoing projects of the International
Accounting Standards Board to determine their impact on Crombie. Additionally,
Crombie will continue to invest in training and resources throughout the
transition period to facilitate a timely conversion.

    4) COMMERCIAL PROPERTIES

                                                 March 31, 2009
                                    -----------------------------------------
                                                   Accumulated      Net Book
                                            Cost  Depreciation         Value
                                    -----------------------------------------
    Land                                $288,566          $Nil      $288,566
    Buildings                          1,037,935        44,032       993,903
    Tenant improvements and
     leasing costs                        30,994         7,764        23,230
                                    -----------------------------------------
                                      $1,357,495       $51,796    $1,305,699
                                    -----------------------------------------
                                    -----------------------------------------

                                                December 31, 2008
                                    -----------------------------------------
                                                   Accumulated      Net Book
                                            Cost  Depreciation         Value
                                    -----------------------------------------
                                        Restated      Restated      Restated
                                         (Note 3)      (Note 3)      (Note 3)
    Land                                $288,566          $Nil      $288,566
    Buildings                          1,035,892        39,232       996,660
    Tenant improvements and
     leasing costs                        29,754         6,633        23,121
                                    -----------------------------------------
                                      $1,354,212       $45,865    $1,308,347
                                    -----------------------------------------
                                    -----------------------------------------

    5) INTANGIBLE ASSETS

                                                  March 31, 2009
                                    -----------------------------------------
                                                   Accumulated      Net Book
                                            Cost  Amortization         Value
                                    -----------------------------------------
    Origination costs for existing
     leases                              $54,419       $13,493       $40,926
    In-place leases                       57,376        21,708        35,668
    Tenant relationships                  57,098        16,857        40,241
    Above market existing leases          16,015         8,778         7,237
                                    -----------------------------------------
                                        $184,908       $60,836      $124,072
                                    -----------------------------------------
                                    -----------------------------------------

                                                December 31, 2008
                                    -----------------------------------------
                                                   Accumulated      Net Book
                                            Cost  Amortization         Value
                                    -----------------------------------------
    Origination costs for existing
     leases                              $54,419       $11,680       $42,739
    In-place leases                       57,376        19,072        38,304
    Tenant relationships                  57,098        14,746        42,352
    Above market existing leases          16,015         8,007         8,008
                                    -----------------------------------------
                                        $184,908       $53,505      $131,403
                                    -----------------------------------------
                                    -----------------------------------------

    6) NOTES RECEIVABLE

    On March 23, 2006, Crombie acquired 44 properties from Empire Company
Limited's subsidiary, ECL Properties Limited ("ECL") and certain affiliates,
resulting in ECL issuing two demand non-interest bearing promissory notes in
the amounts of $39,600 and $20,564. Payments on the first note of $39,600 are
being received as funding is required for a capital expenditure program
relating to eight commercial properties over the period from 2006 to 2010.
Payments on the second note of $20,564 are being received on a monthly basis
to reduce the effective interest rate to 5.54% on certain assumed mortgages
with an average term to maturity of approximately 3 years.

    The balance of each note is as follows:

                                                      March 31,  December 31,
                                                          2009          2008
                                                -----------------------------
    Capital expenditure program                           $505          $505
    Interest rate subsidy                               10,032        10,818
                                                -----------------------------
                                                       $10,537       $11,323
                                                -----------------------------
                                                -----------------------------

    7) OTHER ASSETS

                                                      March 31,  December 31,
                                                          2009          2008
                                                -----------------------------
                                                                    Restated
                                                                     (Note 3)
    Gross accounts receivable                           $6,619        $7,286
    Provision for doubtful accounts                       (360)         (250)
                                                -----------------------------
    Net accounts receivable                              6,259         7,036
    Accrued straight-line rent receivable                8,669         7,786
    Prepaid expenses                                     2,550         5,174
    Restricted cash                                        929           938
                                                -----------------------------
                                                       $18,407       $20,934
                                                -----------------------------
                                                -----------------------------

    8) COMMERCIAL PROPERTY DEBT


                                            Weighted    Weighted
                                             average     average
                                            interest     term to    March 31,
                                   Range        rate    maturity        2009
                              -----------------------------------------------
    Fixed rate mortgages       4.82-6.44%       5.51%  6.1 years    $565,980
    Floating rate term
     facility                                   3.24%  0.6 years     140,323
    Floating rate revolving
     credit facility                            3.59%  2.3 years     111,400
    Floating rate demand
     credit facility                             Nil      Demand           -
    Deferred financing
     charges                                                          (5,361)
                                                                 ------------
                                                                    $812,342
                                                                 ------------
                                                                 ------------

                                            Weighted    Weighted
                                             average     average       Decem-
                                            interest     term to      ber 31,
                                   Range        rate    maturity        2008
                              -----------------------------------------------
    Fixed rate mortgages       5.15-6.44%       5.55%  6.1 years    $531,970
    Floating rate term
     facility                                   4.87%  0.8 years     178,824
    Floating rate revolving
     credit facility                            4.37%  2.5 years      93,400
    Floating rate demand
     credit facility                            3.50%     Demand      10,000
    Deferred financing
     charges                                                          (5,223)
                                                                 ------------
                                                                    $808,971
                                                                 ------------
                                                                 ------------

    As March 31, 2009, debt retirements for the next 5 years are:

                                   Fixed    Floating   Financing
                                    Rate        Rate       Costs       Total
                              -----------------------------------------------
    Remaining 2009               $14,098    $140,323        $Nil    $154,421
    2010                         121,489           -           -     121,489
    2011                          42,094     111,400           -     153,494
    2012                          15,863           -           -      15,863
    2013                          46,698           -           -      46,698
    Thereafter                   315,604           -           -     315,604
                              -----------------------------------------------
                                 555,846     251,723           -     807,569
    Deferred financing
     charges                           -           -      (5,361)     (5,361)
    Fair value debt
     adjustment                   10,134           -           -      10,134
                              -----------------------------------------------
                                $565,980    $251,723     $(5,361)   $812,342
                              -----------------------------------------------
                              -----------------------------------------------


    The floating rate term facility is used to partially finance the
acquisition of 61 properties from subsidiaries of Empire Company Limited. The
floating interest rate is based on a specific margin over prime rate or the
Banker Acceptance Rate, which margin increases over time. It is secured by a
charge on the secured properties, together with an assignment of leases. The
floating rate term facility contains financial and non-financial covenants
that are customary for a credit facility of this nature and which mirror the
covenants set forth in the revolving credit facility.
    The floating rate revolving credit facility has a maximum principal amount
of $150,000 and is used by Crombie for working capital purposes. It is secured
by a pool of first and second mortgages and negative pledges on certain
properties. The floating interest rate is based on specific margins over prime
rate or bankers acceptance rates. The specified margin increases as Crombie's
overall debt leverage increases.
    On February 12, 2009, Crombie completed mortgage financings of $39,000 to
refinance a portion of the floating rate term facility. Fixed rate first
mortgages were placed with a third party for a total of $32,800. The first
mortgages have a weighted average interest rate of 4.88% with a maturity date
of March 2014. In addition, $6,200 of fixed rate second mortgages were
provided by Empire Company Limited. The second mortgages have a weighted
average interest rate of 5.38% with a maturity date of March 2014.
    The floating rate demand credit facility is a $13,800 credit facility with
Empire Company Limited on substantially the same terms and conditions that
govern the floating rate revolving credit facility.


    9) CONVERTIBLE DEBENTURES
                                                           March    December
                                Maturity    Interest          31,         31,
                                    date        rate        2009        2008
                              -----------------------------------------------
    Series A                    March 20,        7.0%    $30,000     $30,000
                                    2013
    Transaction costs                                       (971)     (1,032)
                                                      -----------------------
                                                         $29,029     $28,968
                                                      -----------------------
                                                      -----------------------


    Series A convertible debentures
    -------------------------------

    On March 20, 2008, Crombie issued $30,000 in unsecured convertible
debentures related to the agreements to acquire a portfolio of 61 retail
properties from subsidiaries of Empire Company Limited.
    Each convertible debenture will be convertible into units of Crombie at
the option of the debenture holder up to the maturity date of March 20, 2013
at a conversion price of $13 per unit.
    The convertible debentures bear interest at an annual fixed rate of 7%,
payable semi-annually, on June 30 and December 31 in each year. The
convertible debentures are not redeemable prior to March 20, 2011. From March
20, 2011 to March 20, 2012, the convertible debentures may be redeemed, in
whole or in part, on not more than 60 days' and not less than 30 days' prior
notice, at a redemption price equal to the principal amount thereof plus
accrued and unpaid interest, provided that the volume-weighted average trading
price of the units on the TSX for the 20 consecutive trading days ending on
the fifth trading day preceding the date on which notice on redemption is
given exceeds 125% of the conversion price. After March 20, 2012, and prior to
March 20, 2013, the convertible debentures may be redeemed, in whole or in
part, at anytime at the redemption price equal to the principal amount thereof
plus accrued and unpaid interest. Provided that there is not a current event
of default, Crombie will have the option to satisfy its obligation to pay the
principal amount of the convertible debentures at maturity or upon redemption,
in whole or in part, by issuing the number of units equal to the principal
amount of the convertible debentures then outstanding divided by 95% of the
volume-weighted average trading price of the units for a stipulated period
prior to the date of redemption or maturity, as applicable. Upon change of
control of Crombie, debenture holders have the right to put the convertible
debentures to Crombie at a price equal to 101% of the principal amount plus
accrued and unpaid interest.
    Crombie will also have an option to pay interest on any interest payment
date by selling units and applying the proceeds to satisfy its interest
obligation.
    Transaction costs related to the convertible debentures have been deferred
and are being amortized into interest expense over the term of the convertible
debentures using the effective interest rate method.

    10) PAYABLES AND ACCRUALS

                                                      March 31,  December 31,
                                                          2009          2008
                                                -----------------------------
                                                                    Restated
                                                                     (Note 3)
    Tenant improvements and capital expenditures       $11,868       $13,384
    Property operating costs                            14,028        20,166
    Advance rents                                        1,616         5,364
    Interest on commercial property debt and
     debentures                                          3,147         2,504
    Fair value of interest rate swap agreements         49,389        53,044
                                                -----------------------------
                                                       $80,048       $94,462
                                                -----------------------------
                                                -----------------------------


    11) INTANGIBLE LIABILITIES

                                                 March 31, 2009
                                    -----------------------------------------
                                                   Accumulated      Net Book
                                            Cost  Amortization         Value
                                    -----------------------------------------
    Below market existing leases         $55,703       $16,787       $38,916
                                    -----------------------------------------
                                    -----------------------------------------

                                                December 31, 2008
                                    -----------------------------------------
                                                   Accumulated      Net Book
                                            Cost  Amortization         Value
                                    -----------------------------------------
    Below market existing leases         $55,703       $14,642       $41,061
                                    -----------------------------------------
                                    -----------------------------------------


    12) NON-CONTROLLING INTEREST
                                                Accumu-
                                                 lated
                                                 Other
                                                Compre-
                                      Contri-  hensive
               Class B       Net       buted    Income      Distri-
              LP Units    Income     Surplus     (Loss)    butions     Total
              ---------------------------------------------------------------
    Balance,
     January
     1, 2009  $244,520   $32,118        $Nil  $(27,254)   $(50,201) $199,183
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)        -       (20)          -         -           -       (20)
              ---------------------------------------------------------------
    Balance,
     January
     1, 2009
     as
     restated  244,520    32,098         Nil   (27,254)    (50,201)  199,163
    Net
     income          -     3,856           -         -           -     3,856
    Distri-
     butions         -         -           -         -      (5,581)   (5,581)
    Other
     compre-
     hensive
     loss            -         -           -      (323)          -      (323)
              ---------------------------------------------------------------
    Balance,
     March 31,
     2009     $244,520   $35,954        $Nil  $(27,577)   $(55,782) $197,115
              ---------------------------------------------------------------
              ---------------------------------------------------------------


                                                Accumu-
                                                 lated
                                                 Other
                                                Compre-
                                      Contri-  hensive
               Class B       Net       buted    Income      Distri-
              LP Units    Income     Surplus     (Loss)    butions     Total
              ---------------------------------------------------------------
    Balance,
     January
     1, 2008  $191,302   $18,678        $Nil   $(2,784)   $(29,277) $177,919
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)        -       (20)          -         -           -       (20)
              ---------------------------------------------------------------
    Balance,
     January
     1, 2008
     as
     restated  191,302    18,658         Nil    (2,784)    (29,277)  177,899
    Net
     income          -     2,583           -         -           -     2,583
    Distri-
     butions         -         -           -         -      (4,268)   (4,268)
    Other
     compre-
     hensive
     loss            -         -           -    (3,985)          -    (3,985)
              ---------------------------------------------------------------
    Balance,
     March 31,
     2008 as
     resta-
     ted      $191,302   $21,241        $Nil   $(6,769)   $(33,545) $172,229
              ---------------------------------------------------------------
              ---------------------------------------------------------------


    13) UNITS OUTSTANDING

                                  Crombie REIT Special
                                    Voting Units and
              Crombie REIT Units    Class B LP Units             Total
              ------------------  --------------------  ---------------------
                Number                Number                Number
              of Units    Amount    of Units    Amount    of Units    Amount
              ---------------------------------------------------------------
    Balance,
     January
     1,
     2009   27,271,888  $265,096  25,079,576  $244,520  52,351,464  $509,616
    Net
     change
     in EUPP
     loans
     receiva-
     ble             -         9           -         -           -         9
              ---------------------------------------------------------------
    Balance,
     March
     31,
     2009   27,271,888  $265,105  25,079,576  $244,520  52,351,464  $509,625
              ---------------------------------------------------------------
              ---------------------------------------------------------------


                                  Crombie REIT Special
                                    Voting Units and
              Crombie REIT Units    Class B LP Units             Total
              ------------------  --------------------  ---------------------
                Number                Number                Number
              of Units    Amount    of Units    Amount    of Units    Amount
              ---------------------------------------------------------------
    Balance,
     January
     1,
     2008   21,648,985  $205,273  20,079,576  $191,302  41,728,561  $396,575
    Net
     change
     in EUPP
     loans
     receiva-
     ble             -         7           -         -           -         7
              ---------------------------------------------------------------
    Balance,
     March
     31,
     2008   21,648,985  $205,280  20,079,576  $191,302  41,728,561  $396,582
              ---------------------------------------------------------------
              ---------------------------------------------------------------


    Crombie REIT Units

    Crombie is authorized to issue an unlimited number of units ("Units") and
an unlimited number of Special Voting Units. Issued and outstanding Units may
be subdivided or consolidated from time to time by the Trustees without the
approval of the Unitholders. Units are redeemable at any time on demand by the
holders at a price per Unit equal to the lesser of: (i) 90% of the weighted
average price per Crombie Unit during the period of the last ten days during
which Crombie's Units traded; and (ii) an amount equal to the price of
Crombie's Units on the date of redemption, as defined in the Declaration of
Trust.
    The aggregate redemption price payable by Crombie in respect of any Units
surrendered for redemption during any calendar month will be satisfied by way
of a cash payment in Canadian dollars within 30 days after the end of the
calendar month in which the Units were tendered for redemption, provided that
the entitlement of Unitholders to receive cash upon the redemption of their
Units is subject to the limitation that:

      i. the total amount payable by Crombie in respect of such Units and all
         other Units tendered for redemption, in the same calendar month must
         not exceed $50 (provided that such limitation may be waived at the
         discretion of the Trustees);

     ii. at the time such Units are tendered for redemption, the outstanding
         Units must be listed for trading on the TSX or traded or quoted on
         any other stock exchange or market which the Trustees consider, in
         their sole discretion, provides representative fair market value
         prices for the Units;

    iii. the normal trading of Units is not suspended or halted on any stock
         exchange on which the Units are listed (or if not listed on a stock
         exchange, in any market where the Units are quoted for trading) on
         the Redemption Date or for more than five trading days during the
         ten-day trading period commencing immediately after the Redemption
         Date.

    Crombie REIT Special Voting Units and Class B LP Units

    The Declaration of Trust and the Exchange Agreement provide for the
issuance of voting non-participating Units (the "Special Voting Units") to the
holders of Class B LP Units used solely for providing voting rights
proportionate to the votes of Crombie's Units. The Special Voting Units are
not transferable separately from the Class B LP Units to which they are
attached and will be automatically transferred upon the transfer of such Class
B LP Unit. If the Class B LP Units are exchanged in accordance with the
Exchange Agreement, a like number of Special Voting Units will be redeemed and
cancelled for no consideration by Crombie.
    The Class B LP Units issued by a subsidiary of Crombie to ECL have
economic and voting rights equivalent, in all material aspects, to Crombie's
Units. They are indirectly exchangeable on a one-for-one basis for Crombie's
Units at the option of the holder, under the terms of the Exchange Agreement.
    Each Class B LP Unit entitles the holder to receive distributions from
Crombie, pro rata with distributions made by Crombie on Units.
    The Class B LP Units are accounted for as non-controlling interest.

    Employee Unit Purchase Plan ("EUPP")

    Crombie provides for unit purchase entitlements under the EUPP for certain
senior executives. Awards made under the EUPP will allow executives to
purchase units from treasury at the average daily high and low board lot
trading prices per unit on the TSX for the five trading days preceding the
issuance. Executives are provided non-recourse loans at 3% annual interest by
Crombie for the purpose of acquiring Units from treasury and the Units
purchased are held as collateral for the loan. The loan is repaid through the
application of the after-tax amounts of all distributions received on the
Units, as well as the after-tax portion of any Long-Term Incentive Plan
("LTIP") cash awards received, as payments on interest and principal. As at
March 31, 2009, there are loans receivable from executives of $1,282 under
Crombie's EUPP, representing 124,508 Units, which are classified as a
reduction of Unitholders' Equity. Loan repayments will result in a
corresponding increase in Unitholders' Equity. Market value of the Units at
March 31, 2009 was $828.

    Earnings per Unit Computations

    Basic net earnings per Unit is computed by dividing net earnings by the
weighted average number of Units outstanding during the period. Diluted
earnings per Unit is calculated on the assumption that all EUPP loans were
repaid at the beginning of the period. For all periods, the assumed exchange
of all Class B LP Units would not be dilutive. The convertible debentures are
anti-dilutive and have not been included in diluted net earnings per unit or
diluted weighted average number of units outstanding. As at March 31, 2009,
there are no other dilutive items.

    14) PROPERTY REVENUE
                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                -----------------------------
    Rental revenue contractually due from
     tenants                                           $50,735       $36,512
    Straight-line rent recognition                         883           318
    Below market lease amortization                      2,145         1,185
    Above market lease amortization                       (771)         (753)
                                                -----------------------------
                                                       $52,992       $37,262
                                                -----------------------------
                                                -----------------------------


    15) INTEREST
                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                -----------------------------
    Fixed rate mortgages                                $8,152        $5,575
    Floating rate term, revolving and demand
     facilities                                          2,060           862
    Convertible debentures                                 518            63
                                                -----------------------------
    Interest expense                                    10,730         6,500
    Amortization of fair value debt adjustment             786           866
    Interest paid on discontinued operations                 -            89
    Change in accrued interest                            (643)         (220)
    Amortization of hedges                                (207)            -
    Amortization of deferred financing charges            (480)         (154)
                                                -----------------------------
    Interest paid                                      $10,186        $7,081
                                                -----------------------------
                                                -----------------------------


    16) FUTURE INCOME TAXES

    On September 22, 2007, tax legislation Bill C-52, the Budget
Implementation Act, 2007 (the "Act") was passed into law. The Act related to
the federal income taxation of publicly traded income trusts and partnerships.
The Act subjects all existing income trusts, or specified investment
flow-through entities ("SIFTs"), to corporate tax rates beginning in 2011,
subject to an exemption for real estate investment trusts ("REITs"). A trust
that satisfies the criteria of a REIT throughout its taxation year will not be
subject to income tax in respect of distributions to its unitholders or be
subject to the restrictions on its growth that would apply to SIFTs.
    Crombie's management and their advisors have completed an extensive review
of Crombie's organizational structure and operations to support Crombie's
assertion that it meets the REIT technical tests contained in the Act. The
relevant tests apply throughout the taxation year of Crombie and, as such, the
actual status of Crombie for any particular taxation year can only be
ascertained at the end of the year.
    The future income tax liability of the wholly-owned corporate subsidiary
which is subject to income taxes consists of the following:



                                                      March 31,  December 31,
                                                          2009          2008
                                                -----------------------------
    Tax liabilities relating to difference
     in tax and book value                             $86,365       $86,060
    Tax asset relating to non-capital loss
     carry-forward                                      (6,365)       (6,260)
                                                -----------------------------
    Future income tax liability                        $80,000       $79,800
                                                -----------------------------
                                                -----------------------------

    The future income tax expense consists of the following:

                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                -----------------------------
    Provision for income taxes at the
     expected rate                                      $2,812        $1,960
    Tax effect of income attribution to
     Crombie's unitholders                              (2,612)       (1,560)
                                                -----------------------------
    Income tax expense                                    $200          $400
                                                -----------------------------
                                                -----------------------------

    17) CHANGE IN OTHER NON-CASH OPERATING ITEMS

                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                -----------------------------
                                                                    Restated
    Cash provided by (used in):                                      (Note 3)
      Receivables                                         $777          $327
      Prepaid expenses and other assets                  2,633         1,106
      Payables and other liabilities                   (10,686)       (4,505)
                                                -----------------------------
                                                      $ (7,276)      $(3,072)
                                                -----------------------------
                                                -----------------------------

    18) COMMITMENTS AND CONTINGENCIES

    There are various claims and litigation, which Crombie is involved with,
arising out of the ordinary course of business operations. In the opinion of
management, any liability that would arise from such contingencies would not
have a significant adverse effect on these financial statements.
    Crombie has agreed to indemnify, in certain circumstances, the trustees
and officers of Crombie.
    Crombie has entered into a management cost sharing agreement with a
subsidiary of Empire Company Limited. Details of this agreement are described
in Note 19.
    Crombie has land leases on certain properties. These leases have annual
payments of $969 per year over the next five years. The land leases have terms
of between 12 and 76 years remaining, including renewal options.
    Crombie obtains letters of credit to support our obligations with respect
to construction work on our commercial properties and defeasing commercial
property debt. In connection with the defeasance of the discontinued
operations commercial property debt, Crombie has issued a standby letter of
credit in the amount of $1,715 in favour of the mortgage lender. In addition,
Crombie has $145 in standby letters of credit for construction work that is
being performed on its commercial properties. Crombie does not believe that
any of these standby letters of credit are likely to be drawn upon.

    19) RELATED PARTY TRANSACTIONS

    As at March 31, 2009, Empire Company Limited, through its wholly-owned
subsidiary ECL, holds a 47.9% indirect interest in Crombie. Crombie uses the
exchange amount as the measurement basis for the related party transactions.
    For a period of five years commencing March 23, 2006, certain executive
management individuals and other employees of Crombie will provide general
management, financial, leasing, administrative, and other administration
support services to certain real estate subsidiaries of Empire Company Limited
on a cost sharing basis. The costs assumed by Empire Company Limited pursuant
to the agreement during the three months ended March 31, 2009 were $297 (three
months ended March 31, 2008 - $455) and were netted against general and
administrative expenses owing by Crombie to Empire Company Limited.
    For a period of five years, commencing March 23, 2006, certain on-site
maintenance and management employees of Crombie will provide property
management services to certain real estate subsidiaries of Empire Company
Limited on a cost sharing basis. In addition, for various periods, ECL has an
obligation to provide rental income and interest rate subsidies. The costs
assumed by Empire Company Limited pursuant to the agreement during the three
months ended March 31, 2009 were $376 (three months ended March 31, 2008 -
$689) and was netted against property expenses owing by Crombie to Empire
Company Limited. The head lease subsidy during the three months ended March
31, 2009 was $250 (three months ended March 31, 2008 - $398).
    Crombie also earned rental revenue of $14,560 for the three months ended
March 31, 2009 (three months ended March 31, 2008 - $6,362) from Sobeys Inc.,
Empire Theatres and ASC Commercial Leasing Limited ("ASC"). These companies
were all subsidiaries of Empire Company Limited until September 8, 2008 when
ASC was sold. Property revenue from ASC is included in this note disclosure
until the sale date.
    Empire Company Limited has provided Crombie with a $13,800 floating rate
demand credit facility on substantially the same terms and conditions that
govern the floating rate revolving credit facility. During the first quarter
of 2009, $10,000 outstanding at December 31, 2008 was repaid to the demand
credit facility.

    20) FINANCIAL INSTRUMENTS

    a) Fair value of financial instruments

    The fair value of a financial instrument is the estimated amount that
Crombie would receive or pay to settle the financial assets and financial
liabilities as at the reporting date.
    Crombie has classified its financial instruments in the following
categories:

    i.   Held for trading - Restricted cash and cash and cash equivalents
    ii.  Held to maturity investments - Assets related to discontinued
         operations
    iii. Loans and receivables - Notes receivable and accounts receivable
    iv.  Other financial liabilities - Commercial property debt, liabilities
         related to discontinued operations, convertible debentures, tenant
         improvements and capital expenditures payable, property operating
         costs payable and interest payable

    The book value of cash and cash equivalents, restricted cash, receivables,
payables and accruals approximate fair values at the balance sheet date.
    The fair value of other financial instruments is based upon discounted
future cash flows using discount rates that reflect current market conditions
for instruments with similar terms and risks. Such fair value estimates are
not necessarily indicative of the amounts Crombie might pay or receive in
actual market transactions.
    The following table summarizes the carrying value (excluding deferred
financing charges) and fair value of those financial instruments which have a
fair value different from their book value at the balance sheet date.

                                    March 31, 2009       December 31, 2008
                                ---------------------------------------------
                                Carrying        Fair    Carrying        Fair
                                   Value       Value       Value       Value
                                ---------------------------------------------
    Assets related to
     discontinued operations      $7,162      $7,497      $7,184      $7,477
                                ---------------------------------------------
                                ---------------------------------------------
    Commercial property debt    $817,703    $822,864    $814,194    $812,488
                                ---------------------------------------------
                                ---------------------------------------------
    Convertible debentures       $30,000     $26,400     $30,000     $25,950
                                ---------------------------------------------
                                ---------------------------------------------
    Liabilities related to
     discontinued operations      $6,450      $6,617      $6,487      $6,599
                                ---------------------------------------------
                                ---------------------------------------------

    The following summarizes the significant methods and assumptions used in
estimating the fair values of the financial instruments reflected in the above
table:

    Assets related to discontinued operations: The fair value of the bonds and
treasury bills are based on market trading prices at the reporting date.

    Commercial property debt and liabilities related to discontinued
operations: The fair value of Crombie's commercial property debt and
liabilities related to discontinued operations is estimated based on the
present value of future payments, discounted at the yield on a Government of
Canada bond with the nearest maturity date to the underlying debt, plus an
estimated credit spread at the reporting date.

    Convertible debentures: The fair value of the convertible debentures is
estimated based on the market trading prices, at the reporting date, of the
convertible debentures.

    b) Risk management

    In the normal course of business, Crombie is exposed to a number of
financial risks that can affect its operating performance. These risks, and
the action taken to manage them, are as follows:

    Credit risk

    Credit risk arises from the possibility that tenants may experience
financial difficulty and be unable to fulfill their lease commitments.
Crombie's credit risk is limited to the recorded amount of tenant receivables.
An allowance for doubtful accounts is taken for all anticipated problem
accounts (see Note 7).
    Crombie mitigates credit risk by geographical diversification, utilizing
staggered lease maturities, diversifying both its tenant mix and asset mix and
conducting credit assessments for new and renewing tenants. As at March 31,
2009;

    - Excluding Sobeys (which accounts for 33.1% of Crombie's minimum rent),
      no other tenant accounts for more than 2.2% of Crombie's minimum rent,
      and
    - Over the next five years, no more than 9.1% of the gross leaseable area
      of Crombie will expire in any one year.

    As outlined in Note 19, Crombie earned rental revenue of $14,560 for the
three months ended March 31, 2009 (three months ended March 31, 2008 - $6,362)
from subsidiaries of Empire Company Limited.

    Interest rate risk

    Interest rate risk is the potential for financial loss arising from
increases in interest rates. Crombie mitigates interest rate risk by utilizing
staggered debt maturities, limiting the use of permanent floating rate debt
and utilizing interest rate swap agreements. As at March 31, 2009:

    - Crombie's weighted average term to maturity of the fixed rate mortgages
      was 6.1 years, and
    - Crombie's exposure to floating rate debt, including the impact of the
      fixed rate swap agreements discussed below, was 24.8% of the total
      commercial property debt. Excluding the floating rate term facility,
      which is to be replaced with permanent fixed rate financing during the
      next seven months, the exposure to floating rate debt is 9.1%.

    From time to time, Crombie has entered into interest rate swap agreements
to manage the interest rate profile of its current or future debts without an
exchange of the underlying principal amount. Recent turmoil in the financial
markets has materially affected interest swap rates. This effect was
especially pronounced during the fourth quarter of 2008 and the first quarter
of 2009. The interest swap rates are based on Canadian bond yields, plus a
premium, called the swap spread, which reflects the risk of trading with a
private counterparty as opposed to the Canadian government. During the fourth
quarter 2008, the swap spread turned negative and remained negative throughout
the first quarter of 2009. The effect of the negative swap spreads, combined
with the decline in the Canadian bond yields to levels not seen since the late
1940's, has resulted in a significant deterioration of the mark-to-market
values for the interest rate swap agreements. At March 31, 2009, the
mark-to-market exposure on the interest rate swap agreements was approximately
$49,389. There is no immediate cash impact from the mark-to-market adjustment.
The unfavourable difference in the mark-to-market amount of these interest
rate swap agreements is reflected in other comprehensive income (loss) rather
than net income as the swaps are all designated and effective hedges. The
breakdown of the swaps in place as part of the interest rate management
program, and their associated mark-to-market amounts are as follows:

    - Crombie has entered into a fixed interest rate swap to fix the amount
      of interest to be paid on $50,000 of the revolving credit facility. The
      fair value of the fixed interest rate swap at March 31, 2009, had an
      unfavourable mark-to-market exposure of $4,231 (March 31, 2008 -
      unfavourable $1,222) compared to its face value. The change in this
      amount has been recognized in other comprehensive income (loss). The
      mark-to-market amount of fixed interest rate swaps reduce to $Nil upon
      maturity of the swaps.

    - Crombie has entered into a number of delayed interest rate swap
      agreements of a notional amount of $100,334 (March 31, 2008 - $118,689)
      with settlement dates between February 1, 2010 and July 2, 2011,
      maturing between February 1, 2019 and July 2, 2021 to mitigate exposure
      to interest rate increases for mortgages maturing in 2010 and 2011. The
      fair value of these delayed interest rate swap agreements had an
      unfavourable mark-to-market exposure of $21,330 compared to the face
      value March 31, 2009 (March 31, 2008 - unfavourable $8,401). The change
      in these amounts has been recognized in other comprehensive income
      (loss).

    - In relation to the acquisition of a portfolio of 61 retail properties
      from subsidiaries of Empire Company Limited, Crombie has entered into a
      number of delayed interest rate swap agreements of a notional amount of
      $138,000 (March 31, 2008 - $280,000)with a settlement date of August 1,
      2009 to mitigate exposure to interest rate increases prior to replacing
      the floating rate term facility with long-term financing. The fair
      value of these agreements had an unfavourable mark-to-market exposure
      of $23,828 compared to their face value on March 31, 2009 (March 31,
      2008 - $4,439). The change in these amounts has been recognized in
      other comprehensive income (loss).

    During the three months ended March 31, 2009, Crombie settled an interest
rate swap agreement related to a notional amount of $42,000 for a settlement
amount of $4,535. This settlement amount has been recognized in other
comprehensive income (loss) since the inception of the interest rate swap
agreements. This loss will be reclassified to interest expense using the
effective interest rate method.
    Crombie estimates that $1,352 of other comprehensive income (loss) will be
reclassified to interest expense during the remaining three quarters of 2009
based on interest rate swap agreements settled to March 31, 2009.
    A fluctuation in interest rates would have an impact on Crombie's net
earnings and other comprehensive income (loss) items. Based on the previous
year's rate changes, a 0.5% interest rate change would reasonably be
considered possible. The changes would have had the following impact:

                                   Three months ended     Three months ended
                                      March 31, 2009        March 31, 2008
                                  -------------------------------------------
                                     0.5%        0.5%        0.5%        0.5%
                                increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on net income of
     interest rate changes
     on the floating rate
     revolving credit facility     $(270)       $270        $(25)        $25
    -------------------------------------------------------------------------


                                      March 31, 2009        March 31, 2008
                                  -------------------------------------------
                                     0.5%        0.5%        0.5%        0.5%
                                increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on other compre-
     hensive income and non-
     controlling interest items
     due to changes in fair
     value of derivatives
     designated as a cash flow
     hedge                       $10,024     $(9,577)    $18,360    $(19,166)
    -------------------------------------------------------------------------

    Crombie does not enter into these interest rate swap transactions on a
speculative basis. Crombie is prohibited by its Declaration of Trust in
purchasing, selling or trading in interest rate future contracts other than
for hedging purposes.

    Liquidity risk

    The real estate industry is highly capital intensive. Liquidity risk is
the risk that Crombie may not have access to sufficient debt and equity
capital to fund the growth program and/or refinance the debt obligations as
they mature.
    Cash flow generated from operating the property portfolio represents the
primary source of liquidity used to service the interest on debt, fund general
and administrative expenses, reinvest into the portfolio through capital
expenditures, as well as fund tenant improvement costs and make distributions
to Unitholders. Debt repayment requirements are primarily funded from
refinancing Crombie's maturing debt obligations. Property acquisition funding
requirements are funded through a combination of accessing the debt and equity
capital markets.
    There is a risk that the debt capital markets may not refinance maturing
debt on terms and conditions acceptable to Crombie or at any terms at all.
These risks have heightened during the fourth quarter of 2008 and the first
quarter of 2009 due to the turmoil in the financial markets. Crombie seeks to
mitigate this risk by staggering the debt maturity dates (see Note 8). There
is also a risk that the equity capital markets may not be receptive to an
equity issue from Crombie with financial terms acceptable to Crombie. As
discussed in Note 22, Crombie mitigates its exposure to liquidity risk
utilizing a conservative approach to capital management.
    Access to the revolving credit facility is also limited to the amount
utilized under the facility, plus any negative mark-to-market position on the
interest rate swap agreements, not exceeding the security provided by Crombie.
The mark-to-market adjustment on the interest rate swap agreements reached an
out-of-the-money position of approximately $49,389 at March 31, 2009. The
deterioration in the mark-to-market position had the impact of reducing
Crombie's available credit in the revolving credit facility.
    Crombie has secured a $13,800 floating rate demand credit facility with
Empire Company Limited under essentially the same terms and conditions that
govern the revolving credit facility. This demand facility has been put in
place to ensure Crombie maintains adequate liquidity in order to fund its
daily operating activities while the volatility in the financial markets
continues, while also mitigating the risk of Crombie not being in compliance
with covenants under the revolving credit facility.
    Crombie has no mortgages maturing in fiscal 2009. In regard to the
floating rate term facility that expires in October 2009, Crombie has
successfully refinanced approximately half of the facility at March 31, 2009,
and continues to have positive discussions with a number of lenders to
refinance the remaining balance. While management can provide no assurances of
refinancing, and while the current credit market remains very challenging,
management remains confident it will refinance the remaining floating rate
term facility with suitable long-term financing prior to it's maturity or be
able to extend the maturity.

    21) ASSET HELD FOR SALE AND DISCONTINUED OPERATIONS

    (a) During the second quarter of 2008, Crombie and a potential purchaser
signed a purchase and sale agreement for a commercial property. The purchase
and sale agreement closed on October 24, 2008.

    (b) During the fourth quarter of 2008, Crombie defeased the mortgage
associated with the discontinued operations. The transaction did not qualify
for defeasance accounting, therefore the defeased loan and related asset have
not been removed from the balance sheet. The defeased loan is payable in
monthly payments of $42 and bears interest at 5.46%, was originally amortized
over 25 years and is due April 1, 2014. Crombie purchased Government of Canada
bonds and treasury bills and Canada mortgage bonds and pledged them as
security to the mortgage company. The bonds mature between January 22, 2009
and September 15, 2013, have a weighted average interest rate of 3.56% and
have been placed in escrow. The assets and liabilities related to discontinued
operations are measured at amortized cost using the effective interest rate
method, until April 1, 2014 at which time the debt will be extinguished.
    The following tables set forth the balance sheets associated with the
income property classified as held for sale as at March 31, 2009 and December
31, 2008 and the statements of income for the property held for sale for the
three months ended March 31, 2009 and March 31, 2008.

    Balance Sheets
                                                      March 31,  December 31,
                                                          2009          2008
                                                     ------------------------
    Assets
      Assets related to discontinued operations         $7,162        $7,184
                                                     ------------------------
                                                         7,162         7,184
                                                     ------------------------
    Liabilities
      Accounts payable and accrued liabilities               -            30
      Liabilities related to discontinued operations     6,450         6,487
                                                     ------------------------
                                                         6,450         6,517
                                                     ------------------------
    Net investment in asset held for sale                 $712          $667
                                                     ------------------------
                                                     ------------------------

    Statements of Income

                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2009          2008
                                                     ------------------------
    Property revenue
      Rental revenue contractually due from tenants         $-          $808
      Below market lease amortization                        -             5
      Above market lease amortization                        -           (17)
                                                     ------------------------
                                                             -           796
                                                     ------------------------

    Expenses
      Property expenses                                       -          366
      Interest                                                -           89
      Depreciation of commercial properties                   -           35
      Amortization of tenant improvements/lease costs         -           14
      Amortization of intangible assets                       -           29
                                                     ------------------------
                                                              -          533
                                                     ------------------------
    Income from discontinued operations                      $-         $263
                                                     ------------------------
                                                     ------------------------

    22) CAPITAL MANAGEMENT

    Crombie's objective when managing capital on a long-term basis is to
maintain overall indebtedness in the range of 50% to 55% of gross book value
(as defined in the credit facility agreement), utilize staggered debt
maturities, minimize long-term exposure to floating rate debt and maintain
conservative payout ratios. Crombie's capital structure consists of the
following:

                                                      March 31,  December 31,
                                                          2009          2008
                                                     ------------------------
                                                                    Restated
                                                                     (Note 3)
    Commercial property debt                          $812,342      $808,971
    Convertible debentures                              29,029        28,968
    Non-controlling interest                           197,115       199,163
    Unitholders' equity                                213,351       215,558
                                                     ------------------------
                                                    $1,251,837    $1,252,660
                                                     ------------------------
                                                     ------------------------

    At a minimum, Crombie's capital structure is managed to ensure that it
complies with the restrictions pursuant to Crombie's Declaration of Trust, the
criteria contained in the Income Tax Act (Canada) in regard to the definition
of a REIT and existing debt covenants. Some of the restrictions pursuant to
Crombie's Declaration of Trust would include, among other items:

    - A restriction that Crombie shall not incur indebtedness (other than by
      the assumption of existing indebtedness) where the indebtedness would
      exceed 75% of the market value of the individual property; and
    - A restriction that Crombie shall not incur indebtedness of more than
      60% of gross book value (65% including any convertible debentures)

    Crombie's debt to gross book ratio as defined in Crombie's Declaration of
Trust is as follows:

                                                      March 31,  December 31,
                                                          2009          2008
                                                     ------------------------
                                                                    Restated
                                                                     (Note 3)
    Mortgages payable                                 $565,980      $531,970
    Convertible debentures                              30,000        30,000
    Term facility                                      140,323       178,824
    Revolving credit facility                          111,400        93,400
    Demand credit facility                                   -        10,000
                                                     ------------------------
    Total debt outstanding                             847,703       844,194
    Less: Applicable fair value debt adjustment        (10,032)      (10,818)
                                                     ------------------------
    Debt                                              $837,671      $833,376
                                                     ------------------------
                                                     ------------------------

    Total assets                                    $1,466,045    $1,483,219
    Add:
    Deferred financing charges                           6,332         6,255
    Accumulated depreciation of commercial
     properties                                         51,796        45,865
    Accumulated amortization of intangible assets       60,836        53,505
    Less:
    Assets held related to discontinued operations      (7,162)       (7,184)
    Interest rate subsidy                              (10,032)      (10,818)
    Fair value adjustment to future taxes              (39,245)      (39,245)
                                                     ------------------------
    Gross book value                                $1,528,570    $1,531,597
                                                     ------------------------
                                                     ------------------------
    Debt to gross book value                              54.8%         54.4%
                                                     ------------------------
                                                     ------------------------

    Under the amended terms governing the revolving credit facility Crombie is
entitled to borrow a maximum of 70% of the fair market value of assets subject
to a first security position and 60% of the excess fair market value over
first mortgage financing of assets subject to a second security position or a
negative pledge. The terms of the revolving credit facility also require that
Crombie must maintain certain covenants:

    - annualized net operating income for the prescribed properties must be a
      minimum of 1.4 times the coverage of the related annualized debt
      service requirements;
    - annualized net operating income on all properties must be a minimum of
      1.4 times the coverage of all annualized debt service requirements;
    - access to the revolving credit facility is limited by the amount
      utilized under the facility, and any negative mark-to-market position
      on the interest rate swap agreements, not to exceed the security
      provided by Crombie; and
    - distributions to Unitholders are limited to 100% of Distributable
      Income as defined in the revolving credit facility.

    The revolving credit facility also contains a covenant of Crombie that ECL
must maintain a minimum 40% voting interest in Crombie. If ECL reduces its
voting interest below this level, Crombie will be required to renegotiate the
revolving credit facility or obtain alternative financing. Pursuant to an
exchange agreement and while such covenant remains in place, ECL will be
required to give Crombie at least six months' prior written notice of its
intention to reduce its voting interest below 40%.
    As at March 31, 2009, Crombie is in compliance with all externally imposed
capital requirements and all covenants relating to its debt facilities.

    23) SUBSEQUENT EVENT

    On April 22, 2009, Crombie declared distributions of 7.417 cents per unit
for the period from April 1, 2009 to, and including, April 30, 2009. The
distribution will be payable on May 15, 2009 to Unitholders of record as at
April 30, 2009.

    24) SEGMENT DISCLOSURE

    Crombie owns and operates primarily retail real estate assets located in
Canada. Management, in measuring Crombie's performance or making operating
decisions, does not distinguish or group its operations on a geographical or
other basis. Accordingly, Crombie has a single reportable segment for
disclosure purposes in accordance with GAAP.

    25) COMPARATIVE FIGURES

    Comparative figures have been reclassified, where necessary, to reflect
the current period's presentation.

    Management Discussion and Analysis

    (In thousands of dollars, except per unit amounts)

    The following is Management's Discussion and Analysis ("MD&A") of the
consolidated financial condition and results of operations of Crombie Real
Estate Investment Trust ("Crombie") for the quarter ended March 31, 2009, with
a comparison to the financial condition and results of operations for the
comparable period in 2008.
    This MD&A should be read in conjunction with Crombie's interim
consolidated financial statements and accompanying notes for the period ended
March 31, 2009, and the audited consolidated financial statements and
accompanying notes for the year ended December 31, 2008 and the related MD&A.
Information about Crombie can be found on SEDAR at www.sedar.com.

    FORWARD-LOOKING INFORMATION

    This MD&A contains forward-looking statements that reflect the current
expectations of management of Crombie about Crombie's future results,
performance, achievements, prospects and opportunities. Wherever possible,
words such as "may", "will", "estimate", "anticipate", "believe", "expect",
"intend" and similar expressions have been used to identify these
forward-looking statements. These statements reflect current beliefs and are
based on information currently available to management of Crombie.
Forward-looking statements necessarily involve known and unknown risks and
uncertainties. A number of factors, including those discussed under "Risk
Management" could cause actual results, performance, achievements, prospects
or opportunities to differ materially from the results discussed or implied in
the forward-looking statements. These factors should be considered carefully
and a reader should not place undue reliance on the forward-looking
statements. There can be no assurance that the expectations of management of
Crombie will prove to be correct.
    In particular, certain statements in this document discuss Crombie's
anticipated outlook of future events. These statements include, but are not
limited to:

    (i) the development of new properties under a development agreement, which
development activities are undertaken by a related party and thus are not
under the direct control of Crombie and whose activities could be impacted by
real estate market cycles, the availability of labour and general economic
conditions;

    (ii) the acquisition of accretive properties and the anticipated extent of
the accretion of any acquisitions, which could be impacted by demand for
properties and the effect that demand has on acquisition capitalization rates
and changes in interest rates;

    (iii) reinvesting to make improvements to existing properties, which could
be impacted by the availability of labour and capital resource allocation
decisions;

    (iv) generating improved rental income and occupancy levels, which could
be impacted by changes in demand for Crombie's properties, tenant
bankruptcies, the effects of general economic conditions and competitive
supply of competitive locations in proximity to Crombie locations;

    (v) overall indebtedness levels, which could be impacted by the level of
acquisition activity Crombie is able to achieve and future financing
opportunities;

    (vi) tax exempt status, which can be impacted by regulatory changes
enacted by governmental authorities;

    (vii) anticipated subsidy payments from ECL Developments Limited ("ECL"),
which are dependent on tenant leasing and construction activity;

    (viii) anticipated distributions and payout ratios, which could be
impacted by seasonality of capital expenditures, results of operations and
capital resource allocation decisions;

    (ix) anticipated placement of long-term debt financing relating to a
portfolio acquisition which is dependent on liquidity risks;

    (*) the effect that any contingencies would have on Crombie's financial
statements;

    (xi) the continued investment in training and resources throughout the
international financial reporting standards transition;

    (xii) the assumed estimated impact per unit upon future settlement of the
interest rate swap agreements which may be impacted by changes in Canadian
bond yields and swap spreads, as well as the timing and type of financing
available and the related amortization period thereon; and

    (xiii) estimated loss that will be reclassified to interest expenses
during the remaining three quarters of 2009.

    Readers are cautioned that such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from these statements. Crombie can give no assurance that actual
results will be consistent with these forward-looking statements.

    NON-GAAP FINANCIAL MEASURES

    There are financial measures included in this MD&A that do not have a
standardized meaning under Canadian generally accepted accounting principles
("GAAP") as prescribed by the Canadian Institute of Chartered Accountants.
These measures are property net operating income ("NOI"), adjusted funds from
operations ("AFFO"), debt to gross book value, funds from operations ("FFO")
and earnings before interest, taxes, depreciation and amortization ("EBITDA").
Management includes these measures because it believes certain investors use
these measures as a means of assessing relative financial performance.

    INTRODUCTION

    Financial and Operational Summary

    -------------------------------------------------------------------------
                                                       Quarter       Quarter
                                                         Ended         Ended
    (in thousands of dollars, except                  March 31,     March 31,
     per unit amounts and as otherwise noted)             2009          2008
    -------------------------------------------------------------------------
    Property revenue                                   $52,992       $37,262
    Net income                                          $4,192        $2,783
    Basic and diluted net income per unit                $0.15         $0.13
    -------------------------------------------------------------------------
    FFO                                                $20,739       $13,839
    FFO per unit(1)                                      $0.40         $0.33
    FFO payout ratio (%)                                  56.2%         64.1%
    AFFO                                               $16,026        $8,096
    AFFO per unit(1)                                     $0.31         $0.19
    AFFO payout ratio (%)                                 72.7%        109.5%
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Debt to gross book value(2)                           54.8%         48.2%
    Total assets                                    $1,466,045    $1,007,105
    Total commercial property debt and
     convertible debentures                           $841,371      $502,199
    -------------------------------------------------------------------------
    (1) FFO and AFFO per unit are calculated by FFO or AFFO, as the case may
        be, divided by the diluted weighted average of the total Units and
        Special Voting Units outstanding of 52,351,464 for the quarter ended
        March 31, 2009 and 41,728,561 for the quarter ended March 31, 2008.
    (2) See "Borrowing Capacity and Debt Covenants" for detailed calculation.

    Overview of the Business and Recent Developments

    Crombie is an unincorporated, open-ended real estate investment trust
established pursuant to a Declaration of Trust dated January 1, 2006, as
amended and restated (the "Declaration of Trust") under, and governed by, the
laws of the Province of Ontario. The units of Crombie trade on the Toronto
Stock Exchange under the symbol CRR.UN.
    Crombie invests in income-producing retail, office and mixed-use
properties in Canada, with a future growth strategy focused primarily on the
acquisition of retail properties. At March 31, 2009, Crombie owned a portfolio
of 113 commercial properties in seven provinces, comprising approximately 11.2
million square feet of gross leaseable area ("GLA").
    On April 22, 2008, Crombie closed an acquisition of a 61 retail property
portfolio representing approximately 3.3 million square feet of GLA (the
"Portfolio Acquisition") from certain affiliates of Empire Company Limited
("Empire Subsidiaries"). The cost of the Portfolio Acquisition to Crombie was
$428,500, excluding closing and transaction costs. The portfolio consists of
40 single-use freestanding Sobeys grocery stores of various Sobeys banners, 20
Sobeys anchored retail strip centres and one Sobeys anchored partially
enclosed centre. The GLA of the portfolio is as follows: Atlantic Canada -
78%; Quebec - 7%; and Ontario - 15%.
    In order to partially finance the Portfolio Acquisition, on March 20,
2008, Crombie completed a public offering of 5,727,750 subscription receipts,
including the over-allotment option, at a price of $11.00 per subscription
receipt (each subscription receipt converted into one Unit of Crombie upon
closing) and $30,000 of convertible extendible unsecured subordinated
debentures (the "Debentures") for aggregate gross proceeds of $93,005.
    Empire Subsidiaries took $55,000 of the purchase price in Class B LP Units
of Crombie Limited Partnership at the $11.00 offering price. Empire Company
Limited ("Empire") holds a 47.9% economic and voting interest in Crombie as of
March 31, 2009.
    The remainder of the purchase price was satisfied with a $280,000, 18
month floating rate term financing ("Term Facility") and a draw on Crombie's
revolving credit facility. On September 30, 2008, Crombie completed a
refinancing of $100,000 of the Term Facility with fixed rate mortgages. On
February 12, 2009, Crombie completed mortgage refinancing on an additional
$39,000 of the Term Facility (see "Commercial Property Debt"). It is Crombie's
intention to replace the remaining Term Facility with suitable long-term
financing.
    On October 24, 2008, Crombie completed the sale of West End Mall in
Halifax, Nova Scotia. Under GAAP, the financial position and operating results
have been reclassified on the financial statements for Crombie as assets and
liabilities related to discontinued operations on a retroactive basis. The
operating results tables in this MD&A also reflect the sale of the property on
Crombie's results.

    Business Strategy and Outlook

    The objectives of Crombie are threefold:

    1. Generate reliable and growing cash distributions;

    2. Enhance the value of Crombie's assets and maximize long-term unit
       value through active management; and

    3. Expand the asset base of Crombie and increase its cash available for
       distribution through accretive acquisitions.

    Generate reliable and growing cash distributions: Management focuses on
improving both the same-asset results while expanding the asset base with
accretive acquisitions to grow the cash distributions to unitholders. As at
March 31, 2009, after three years of operations, Crombie has increased its
distributions by 11.25% while achieving its annual AFFO payout ratio targets.
    Enhance value of Crombie's assets: Crombie anticipates reinvesting
approximately 3% to 5% of its property revenue each year into its properties
to maintain their productive capacity and thus overall value.
    Crombie's internal growth strategy focuses on generating greater rental
income from its existing properties. Crombie plans to achieve this by
strengthening its asset base through judicious expansion and improvement of
existing properties, leasing vacant space at competitive market rates with the
lowest possible transaction costs, and maintaining good relations with
tenants. Management will continue to conduct regular reviews of properties
and, based on its experience and market knowledge, will assess ongoing
opportunities within the portfolio.
    Expand asset base with accretive acquisitions: Crombie's external growth
strategy focuses primarily on acquisitions of income-producing retail
properties. Crombie pursues two sources of acquisitions which are third party
acquisitions and the relationship with ECL. All acquisitions completed to date
have been purchased at costs which ensure they will be immediately accretive
to cash available for distribution. The relationship with ECL includes
currently owned and future development properties, as well as opportunities
through the rights of first refusal that one of Empire's subsidiaries has
negotiated in many of their leases. Crombie will seek to identify future
property acquisitions using investment criteria that focus on the strength of
anchor tenancies, market demographics, terms of tenancies, proportion of
revenue from national tenants, opportunities for expansion, security of cash
flow, potential for capital appreciation and potential for increasing value
through more efficient management of the assets being acquired, including
expansion and repositioning.
    Crombie plans to work closely with ECL to identify development
opportunities that further Crombie's external growth strategy. The
relationship is governed by a development agreement described in the Material
Contracts section of Crombie's Annual Information Form for the year ended
December 31, 2008. Through this relationship, Crombie expects to have the
benefits associated with development while limiting its exposure to the
inherent risks of development, such as real estate market cycles, cost
overruns, labour disputes, construction delays and unpredictable general
economic conditions. The development agreement will also enable Crombie to
avoid the uncertainties associated with property development, including paying
the carrying costs of land, securing construction financing, obtaining
development approvals, managing construction projects, marketing in advance of
and during construction and earning no return during the construction period.
    The development agreement provides Crombie with a preferential right to
acquire retail properties developed by ECL, subject to approval by the
independent trustees. The history of the relationship between Crombie and ECL
continues to provide promising opportunities for growth through future
development opportunities on both new and existing sites in Crombie's
portfolio.
    ECL currently owns approximately 1.6 million square feet in 18 development
properties that can be offered to Crombie on a preferential right through the
development agreement when the properties are sufficiently developed to meet
Crombie's acquisition criteria. The properties are primarily retail plazas and
approximately 50% of the GLA of the 18 properties is located outside of
Atlantic Canada. These properties are anticipated to be made available to
Crombie over the next five years.

    Business Environment

    During 2008, credit markets experienced a dramatic reduction in liquidity.
As the credit crisis deepened during the second half of 2008, both the ability
and willingness of financial institutions to lend money was greatly reduced as
financial institutions became increasingly risk adverse. This reduced credit
availability continues to be a major risk to the capital intensive real estate
investment trust ("REIT") business environment. This reduction in available
credit, combined with overall volatility in North American stock markets, has
negatively impacted the unit price of many REITs.
    The turmoil in the financial markets also caused bond yields to materially
decline and reduced interest rate swap spreads to unprecedented levels during
the fourth quarter of 2008 and continuing through the first quarter of 2009.
This resulted in a significant deterioration of the mark-to-market values for
the interest rate swap agreements Crombie has entered into to hedge its
exposure to potential increases in Canadian bond yields associated with future
debt issuances. The impact is more fully explained under the "Borrowing
Capacity and Debt Covenants" and "Risk Management" sections of this MD&A.
    In light of the widening credit spreads, a limited liquidity credit
environment and the recent deterioration in the unit price of many REITs,
capitalization rates have begun to expand. As it is very challenging to source
accretive acquisitions under these current market conditions, Crombie does not
presently anticipate any further third party acquisitions to occur in 2009.
Crombie only intends to pursue acquisitions in the long-term that provide an
acceptable return, including any acquisitions that may result from the
relationship between Crombie and ECL.
    In terms of occupancy rates, while both the retail and office markets
where Crombie has a prominent presence remain relatively stable, the business
environment outlook has become decidedly pessimistic, influenced by the
pronounced recession in the U.S. and Canadian economies. One offsetting factor
to the economic slowdown is that many of Crombie's retail locations are
anchored by food stores, which typically are less affected by swings in
consumer spending.

    2009 FIRST QUARTER HIGHLIGHTS

    - Crombie completed leasing activity on 47.4% of its 2009 expiring leases
      as at March 31, 2009.
    - Occupancy for the properties was 94.2% at March 31, 2009 compared with
      94.9% at December 31, 2008.
    - Property revenue for the quarter ended March 31, 2009 increased by
      $15,730, or 42.2%, to $52,992 compared to $37,262 for the quarter ended
      March 31, 2008.
    - Same-asset NOI of $21,920 decreased by $30 or 0.1%, compared to $21,950
      for the quarter ended March 31, 2008.
    - The FFO payout ratio for the quarter ended March 31, 2009 was 56.2%
      which was below the target annual payout ratio of 70% and below the
      payout ratio of 64.1% for the same period in 2008.
    - The AFFO payout ratio for the quarter ended March 31, 2009 was 72.7%
      which was below the target annual AFFO payout ratio of 95% and was
      below the payout ratio of 109.5% for the same period in 2008.
    - Debt to gross book value increased slightly to 54.8% at March 31, 2009
      compared to 54.4% at December 31, 2008.
    - Crombie's interest service coverage ratio for the quarter ended
      March 31, 2009 was 2.93 times EBITDA and debt service coverage ratio
      was 2.08 times EBITDA, compared to 3.08 times EBITDA and 1.98 times
      EBITDA, respectively, for the same period in 2008.

    OVERVIEW OF THE PROPERTY PORTFOLIO

    Property Profile

    At March 31, 2009 the property portfolio consisted of 113 commercial
properties that contain approximately 11.2 million square feet of GLA. The
properties are located in seven provinces: Nova Scotia, New Brunswick,
Newfoundland and Labrador, Prince Edward Island, Ontario, Quebec and
Saskatchewan.

    As at March 31, 2009, the portfolio distribution of the GLA by province
was as follows:

    -------------------------------------------------------------------------
                  Number                                   % of
                      of                                 Annual
                  Proper-         GLA         % of      Minimum
    Province        ties      (sq. ft.)        GLA         Rent  Occupancy(1)
    -------------------------------------------------------------------------
    Nova Scotia       41    5,065,000         45.3%        41.0%        94.0%
    Ontario           22    1,645,000         14.7%        16.9%        95.4%
    New Brunswick     20    1,647,000         14.7%        12.5%        90.0%
    Newfoundland
     and Labrador     13    1,468,000         13.1%        17.0%        94.5%
    Quebec            13      821,000          7.3%         7.9%        99.5%
    Prince Edward
     Island            3      385,000          3.5%         3.2%        96.3%
    Saskatchewan       1      160,000          1.4%         1.5%        97.8%
    -------------------------------------------------------------------------
    Total            113   11,191,000        100.0%       100.0%        94.2%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For purposes of calculating occupancy percentage, Crombie considers
        GLA covered by the head lease agreement in favour of ECL as occupied
        as there is head lease revenue being earned on the GLA

    During the first quarter of 2009 there was an increase in GLA due to
expansion of retail space at Downsview Plaza and Mill Cove Plaza, both located
in Nova Scotia, at Brampton, Ontario and at Valley Mall, Newfoundland and
Labrador.
    Overall occupancy has reduced from 94.9% at December 31, 2008 to 94.2% at
March 31, 2009 due primarily to the expiry of the Sobeys lease at Loch Lomond
Mall in New Brunswick, and a number of smaller tenant lease expirations or
bankruptcies, totalling approximately 94,000 square feet of GLA. This decrease
has been partially offset by new tenancies occupying approximately 26,000
square feet of GLA during the first quarter of 2009. The remaining 146,000
square feet in GLA of new tenancies, as shown in the "2009 Portfolio Lease
Expiries and Leasing Activity" table, is related to future quarters in 2009.
This additional new leasing represents approximately 1.3% of Crombie's GLA.
    Crombie looks to diversify its geographic composition through growth
opportunities, as indicated by the seven acquisitions in Ontario, one
acquisition in Quebec and one acquisition in Saskatchewan, plus the Portfolio
Acquisition since Crombie's initial public offering (the "IPO"). As well, the
properties are located in rural and urban locations, which Crombie believes
adds stability to the portfolio, while reducing vulnerability to economic
fluctuations that may affect any particular region.

    Largest Tenants

    The following table illustrates the ten largest tenants in Crombie's
portfolio of income-producing properties as measured by their percentage
contribution to total annual minimum base rent as at March 31, 2009.

    -------------------------------------------------------------------------
                                                                     Average
                                                   % of Annual     Remaining
    Tenant                                        Minimum Rent    Lease Term
    -------------------------------------------------------------------------
    Sobeys (1)                                            33.1%   16.8 years
    Empire Theatres                                        2.2%    9.0 years
    Zellers                                                2.2%    8.7 years
    Shoppers Drug Mart                                     2.0%    7.1 years
    Nova Scotia Power Inc                                  1.9%    2.0 years
    CIBC                                                   1.6%   17.9 years
    Province of Nova Scotia                                1.5%    6.3 years
    Bell (Aliant)                                          1.4%    9.4 years
    Public Works Canada                                    1.3%    2.1 years
    Sears Canada Inc.                                      1.2%   15.7 years
    -------------------------------------------------------------------------
    Total                                                 48.4%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excludes Lawtons and Fast Fuel locations.

    Crombie's portfolio is leased to a wide variety of tenants. Other than
Sobeys, that accounts for 33.1% of the annual minimum rent, no other tenant
accounts for more than 2.2% of Crombie's minimum rent.

    Lease Maturities

    The following table sets out as of March 31, 2009 the number of leases
relating to the properties subject to lease maturities during the periods
indicated (assuming tenants do not holdover on a month-to-month basis or
exercise renewal options or termination rights), the renewal area, the
percentage of the total GLA of the properties represented by such maturities
and the estimated average net rent per square foot at the time of expiry. The
weighted average remaining term of all leases is approximately 10.6 years.

    -------------------------------------------------------------------------
                                                                     Average
                                                                         Net
                                             Renewal                Rent per
                                  Number        Area        % of  Sq. Ft. at
    Year                       of Leases     (sq. ft.) Total GLA   Expiry ($)
    -------------------------------------------------------------------------
    Remaining 2009                   198     480,000         4.3%     $15.29
    2010                             197     646,000         5.8%     $13.47
    2011                             208   1,023,000         9.1%     $14.49
    2012                             154     837,000         7.5%     $11.82
    2013                             153     868,000         7.8%     $11.90
    Thereafter                       403   6,688,000        59.7%     $12.63
    -------------------------------------------------------------------------
    Total                          1,313  10,542,000        94.2%     $12.93
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    2009 Portfolio Lease Expiries and Leasing Activity

    As at March 31, 2009, portfolio lease expiries and leasing activity for
the year ending December 31, 2009 were as follows:

    -------------------------------------------------------------------------
                Retail -
                 Free-    Retail -    Retail -               Mixed-
              standing    Plazas    Enclosed    Office         use     Total
    -------------------------------------------------------------------------
    Expiries
     (sq. ft.)       -   160,000     220,000   103,000     220,000   703,000
    Average
     net rent
     per sq. ft.    $-    $16.28      $13.97    $12.66      $11.64    $13.58
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Committed
     renewals
     (sq. ft.)       -    36,000      51,000    10,000      64,000   161,000
    Average net
     rent per
     sq. ft.        $-    $15.29       $5.40    $13.38       $7.71     $9.03
    New leasing
     (sq. ft.)       -    31,000      90,000    25,000      26,000   172,000
    Average net
     rent per
     sq. ft.        $-    $15.99       $8.78    $16.57      $11.75    $11.66
    -------------------------------------------------------------------------
    Total rene-
     wals/new
     leasing (sq.
     ft.)            -    67,000     141,000    35,000      90,000   333,000
    Total average
     net rent per
     sq. ft.        $-    $15.62       $7.57    $15.62       $8.88    $10.39
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    During the quarter ended March 31, 2009, Crombie had renewals or entered
into new leases in respect of approximate 333,000 square feet at an rent
$10.39 per square foot, compared with expiries for 2009 of approximately
703,000 square feet at an average net rent of $13.58 per square foot. Of the
703,000 square feet of expiries, approximately 105,000 square feet involve
tenants that are still paying property revenues on a holdover basis. Rent per
square foot for the completed leasing activity in retail plaza properties is
below the average expiry rate due to the leasing of space during the first
quarter of 2009 with limited access in smaller rural locations. Rent per
square foot for the completed new leasing activity in the retail enclosed
properties is below the average net rent per square foot of total expiries in
2009 due primarily to one relatively large lease in a small rural location to
replace the last vacant SAAN store location that went into bankruptcy in 2008
plus two new anchor leases to complete the Highland Square renovation in New
Glasgow. Rent per square foot for the renewals in the retail enclosed
properties and in the mixed-use properties was lower than the average expiry
rate due to the renewal of three long term tenants at previously negotiated
terms favourable to the tenants. Excluding the impact of these six new/renewal
deals, average net rent per square foot for all remaining leases of
approximately 190,000 square feet was $13.77, an increase of 1.4% over the
average net rent per square foot for the 2009 expiring rents.

    Sector Information

    While Crombie does not distinguish or group its operations on a
geographical or other basis, Crombie provides the following sector information
as supplemental disclosure.
    As at March 31, 2009, the portfolio distribution of the GLA by asset type
was as follows:

    -------------------------------------------------------------------------
                  Number                                   % of
                      of                                 Annual
    Asset            Pro-         GLA         % of      Minimum
    Type         perties      (sq. ft.)        GLA         Rent  Occupancy(1)
    -------------------------------------------------------------------------
    Retail -
     Freestanding     42    1,696,000         15.2%        15.8%       100.0%
    Retail -
     Plazas           44    3,981,000         35.6%        37.3%        96.4%
    Retail -
     Enclosed         14    2,759,000         24.6%        24.5%        89.2%
    Office             5    1,049,000          9.4%         8.8%        87.6%
    Mixed-Use          8    1,706,000         15.2%        13.6%        95.4%
    -------------------------------------------------------------------------
    Total            113   11,191,000        100.0%       100.0%        94.2%
    -------------------------------------------------------------------------
    (1) For purposes of calculating occupancy percentage, Crombie considers
        GLA covered by the head lease agreement in favour of ECL as occupied

    The following table sets out as of March 31, 2009, the square feet under
lease subject to lease maturities during the periods indicated.

    -------------------------------------------------------------------------
                    Retail -
    Year            Freestanding      Retail -  Plazas      Retail - Enclosed
    -------------------------------------------------------------------------
                   (sq.
                    ft.)      (%)    (sq. ft.)      (%)    (sq. ft.)      (%)
    -------------------------------------------------------------------------
    Remaining
     2009            -         -%    124,000       3.1%    152,000       5.5%
    2010             -         -%    285,000       7.2%    103,000       3.8%
    2011         1,000       0.1%    324,000       8.1%    120,000       4.3%
    2012         5,000       0.3%    277,000       7.0%    144,000       5.2%
    2013             -         -%    386,000       9.7%    219,000       7.9%
    There-
     after   1,690,000      99.6%  2,442,000      61.3%  1,724,000      62.5%
    -------------------------------------------------------------------------
    Total    1,696,000     100.0%  3,838,000      96.4%  2,462,000      89.2%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Year               Office             Mixed-Use               Total
    -------------------------------------------------------------------------

               (sq. ft.)      (%)    (sq. ft.)      (%)    (sq. ft.)      (%)
    -------------------------------------------------------------------------
    Remaining
     2009       71,000       6.8%    133,000       7.8%    480,000       4.3%
    2010        75,000       7.1%    183,000      10.7%    646,000       5.8%
    2011       360,000      34.3%    218,000      12.8%  1,023,000       9.1%
    2012       110,000      10.5%    301,000      17.6%    837,000       7.5%
    2013        95,000       9.1%    168,000       9.9%    868,000       7.8%
    There-
     after     207,000      19.8%    625,000      36.6%  6,688,000      59.7%
    -------------------------------------------------------------------------
    Total      918,000      87.6%  1,628,000      95.4% 10,542,000      94.2%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The following table sets out the average net rent per square foot expiring
during the periods indicated.

    -------------------------------------------------------------------------
                  Retail -
                    Free-      Retail -     Retail -
    Year        standing       Plazas     Enclosed       Office    Mixed-Use
    -------------------------------------------------------------------------
    Remaining
     2009             $-       $16.40       $17.42       $12.01       $13.56
    2010              $-       $13.61       $18.61       $11.52       $11.15
    2011          $37.50       $14.20       $22.08       $14.20       $11.12
    2012          $25.00       $12.98       $18.70        $9.70        $8.03
    2013              $-        $9.66       $14.46       $13.25       $12.91
    Thereafter    $13.32       $13.69       $11.47       $11.81       $11.27
    -------------------------------------------------------------------------
    Total         $13.37       $13.35       $13.36       $12.63       $10.99
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    2009 RESULTS OF OPERATIONS

    Acquisitions

    The following table outlines the acquisitions made which affected the
results of operations when compared to the previous year's results. The
following acquisitions took place between January 2008 and March 2009.

    -------------------------------------------------------------------------
                       Date                                GLA   Acquisition
    Property       Acquired         Property Type     (sq. ft.)       Cost(1)
    -------------------------------------------------------------------------
    Portfolio      April 22,             Retail -
     Acquisition       2008          Freestanding    1,589,000      $428,500
                                   Retail - Plaza    1,571,000
                                Retail - Enclosed      128,000
    -------------------------------------------------------------------------
    River City      June 12,       Retail - Plaza      160,000       $27,200
     Centre,           2008
     Saskatoon,
     Saskatchewan
    -------------------------------------------------------------------------
    Total                                            3,448,000      $455,700
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excluding closing and transaction costs.

    Comparison to Previous Year


                                                   Quarter Ended
                                        ------------------------------------
    (In thousands of dollars, except    March 31,     March 31,
    where otherwise noted)                  2009          2008      Variance
    -------------------------------------------------------------------------
    Property revenue                     $52,992       $37,262       $15,730
    Property expenses                     19,971        15,312        (4,659)
    -------------------------------------------------------------------------
    Property NOI                          33,021        21,950        11,071
    -------------------------------------------------------------------------
    NOI margin percentage                   62.3%         58.9%          3.4%
    -------------------------------------------------------------------------
    Expenses:
    -------------------------------------------------------------------------
      General and administrative           1,644         1,952           308
      Interest                            10,730         6,500        (4,230)
      Depreciation and amortization       12,491         7,995        (4,496)
    -------------------------------------------------------------------------
                                          24,865        16,447        (8,418)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Income from continuing operations
     before other items, income taxes
     and non-controlling interest          8,156         5,503         2,653
    Other items                               92             -            92
    -------------------------------------------------------------------------
    Income from continuing operations
     before income taxes and
     non-controlling interest              8,248         5,503         2,745
    Income taxes expense - Future            200           400           200
    -------------------------------------------------------------------------
    Income from continuing operations
     before non-controlling interest       8,048         5,103         2,945
    Income from discontinued operations        -           263          (263)
    -------------------------------------------------------------------------
    Income before non-controlling
     interest                              8,048         5,366         2,682
    Non-controlling interest               3,856         2,583        (1,273)
    -------------------------------------------------------------------------
    Net income                            $4,192        $2,783        $1,409
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and diluted net income per Unit  $0.15         $0.13         $0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic weighted average Units
     outstanding (in 000's)               27,147        21,544
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted weighted average Units
     outstanding (in 000's)               27,272        21,649
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income for the quarter ended March 31, 2009 of $4,192 increased by
$1,409 from $2,783 for the quarter ended March 31, 2008. The increase was
primarily due to:

    - higher property NOI from the individual property acquisition after
      January 1, 2008 and the Portfolio Acquisition; offset in part by
    - higher interest and depreciation charges, due primarily to the
      individual property acquisition after January 1, 2008 and the Portfolio
      Acquisition.

    Property Revenue and Property Expenses

    -------------------------------------------------------------------------
                                               Quarter Ended
                                    --------------------------
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property revenue          $38,048       $37,262          $786
    Acquisition property revenue          14,944             -        14,944
    -------------------------------------------------------------------------
    Property revenue                     $52,992       $37,262       $15,730
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset property revenue of $38,048 for the quarter ended March 31,
2009 was 2.1% higher than the quarter ended March 31, 2008 due primarily to
the increased average rent per square foot ($12.45 in 2009 and $12.22 in 2008)
and increased revenue from higher recoverable common area expenses.

    -------------------------------------------------------------------------
                                               Quarter Ended
                                    --------------------------
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property expenses         $16,128       $15,312          $816
    Acquisition property expenses          3,843             -         3,843
    -------------------------------------------------------------------------
    Property expenses                    $19,971       $15,312        $4,659
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset property expenses of $16,128 for the quarter ended March 31,
2009 were 5.3% higher than the quarter ended March 31, 2008 due to increased
recoverable common area expenses primarily from increased property taxes,
utility and snow removal costs.

    -------------------------------------------------------------------------
                                              Quarter Ended
                                    --------------------------
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property NOI              $21,920       $21,950          $(30)
    Acquisition property NOI              11,101             -        11,101
    -------------------------------------------------------------------------
    Property NOI                         $33,021       $21,950       $11,071
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset NOI for the quarter ended March 31, 2009 decreased by 0.1% over
the quarter ended March 31, 2008.

    Property NOI for the quarter ended March 31, 2009 by region was as
follows:

    -------------------------------------------------------------------------
    (In                            2009                          2008
    thous-       ---------------------------------------
    ands of      Property   Property  Property  NOI % of  NOI % of
    dollars)      Revenue   Expenses       NOI   revenue   revenue  Variance
    -------------------------------------------------------------------------
    Nova Scotia   $23,521     $9,720   $13,801      58.7%     56.1%      2.6%
    Newfoundland
     and Labrador   8,584      2,856     5,728      66.7%     64.2%      2.5%
    New Brunswick   6,645      2,895     3,750      56.4%     49.1%      7.3%
    Ontario         8,392      2,800     5,592      66.6%     64.1%      2.5%
    Prince Edward
     Island         1,283        372       911      71.0%     71.7%    (0.7)%
    Quebec          3,869      1,129     2,740      70.8%     72.6%    (1.8)%
    Saskatchewan      698        199       499      71.5%        -%        -%
    -------------------------------------------------------------------------
    Total         $52,992    $19,971   $33,021      62.3%     58.9%      3.4%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The overall 3.4% increase in NOI as a % of revenue, as well as specific
provincial increases in Nova Scotia, Newfoundland and Labrador, New Brunswick
and Ontario was primarily due to the Portfolio Acquisition. Prince Edward
Island's and Quebec's decrease in NOI % of revenue is attributable to the
relatively smaller number of properties in these provinces and the timing and
nature of expenses occurring during any particular quarter.

    General and Administrative Expenses

    The following table outlines the major categories of general and
administrative expenses.

    -------------------------------------------------------------------------
                                               Quarter Ended
                                    --------------------------
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008     Variance
    -------------------------------------------------------------------------
    Salaries and benefits                   $569          $898        $(329)
    Professional fees                        453           339          114
    Public company costs                     285           252           33
    Rent and occupancy                       188           183            5
    Other                                    149           280         (131)
    -------------------------------------------------------------------------
    General and administrative costs      $1,644        $1,952        $(308)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    As a percentage of revenue               3.1%          5.2%        (2.1)%
    -------------------------------------------------------------------------

    General and administrative expenses decreased by 15.8% for the quarter
ended March 31, 2009 to $1,644 compared to $1,952 for the quarter ended March
31, 2008. The decrease in expenses was primarily due to reduced incentive
payments partially offset by increased salaries and increased legal and
information technology professional fees.

    Interest Expense

    -------------------------------------------------------------------------
                                               Quarter Ended
                                    --------------------------
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset interest expense           $6,762        $6,500          $262
    Acquisition interest expense           3,968             -         3,968
    -------------------------------------------------------------------------
    Interest expense                     $10,730        $6,500        $4,230
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset interest expense of $6,762 for the quarter ended March 31, 2009
increased by 4.0% when compared to the quarter ended March 31, 2008 due to the
amortization of payments made on the settlement of interest rate swap
agreements of $207 and slightly higher average interest rates on mortgages
entered into during 2008 for properties held since the IPO, offset in part by
a decrease in the floating interest rate on the revolving credit facility.
    There is an agreement between ECL and Crombie whereby ECL provides a
monthly interest rate subsidy to Crombie to reduce the effective interest
rates to 5.54% on certain mortgages that were assumed at Crombie's IPO for
their remaining term. Over the term of this agreement, management expects this
subsidy to aggregate to the amount of approximately $20,564. The amount of the
interest rate subsidy received during the quarter ended March 31, 2009 was
$786 (quarter ended March 31, 2008 - $866). The interest rate subsidy is
received by Crombie through monthly repayments by ECL of amounts due under one
of the demand notes issued by ECL to Crombie Developments Limited ("CDL").

    Depreciation and Amortization

    -------------------------------------------------------------------------
                                               Quarter Ended
                                    --------------------------
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset depreciation and
     amortization                         $8,265        $7,995          $270
    Acquisition depreciation and
     amortization                          4,226             -         4,226
    -------------------------------------------------------------------------
    Depreciation and amortization        $12,491        $7,995        $4,496
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset depreciation and amortization of $8,265 for the quarter ended
March 31, 2009 was 3.4% higher than the quarter ended March 31, 2008 due
primarily to depreciation on fixed asset additions and amortization on tenant
improvement and lease costs incurred since March 31, 2008, combined with the
expenses resulting from the reallocation of $3,946 of costs to commercial
properties from other assets due to the retroactive implementation of
accounting guidelines as discussed in "Changes in Accounting Policies and
Estimates". Depreciation and amortization consists of:

    -------------------------------------------------------------------------
                                               Quarter Ended
                                    --------------------------
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Depreciation of commercial
     properties                           $4,800        $3,403        $1,397
    Amortization of tenant
     improvements/lease costs              1,131           768           363
    Amortization of intangible assets      6,560         3,824         2,736
    -------------------------------------------------------------------------
    Depreciation and amortization        $12,491        $7,995        $4,496
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Future Income Taxes

    A trust that satisfies the criteria of a REIT throughout its taxation year
will not be subject to income tax in respect of distributions to its
unitholders or be subject to the restrictions on its growth that would
otherwise apply to trusts classified as specified investment flow-through
entities ("SIFTs").
    Crombie's management and their advisors have completed an extensive review
of Crombie's organizational structure and operations to support Crombie's
assertion that it currently satisfies the technical tests contained in the
Income Tax Act (Canada) in regard to the definition of a REIT (and thus is not
a SIFT). However, the relevant tests apply throughout the taxation year of
Crombie and, as such, the actual status of Crombie for any particular taxation
year can only be ascertained at the end of the year.
    The future income tax expenses represent the future tax provision of the
wholly-owned corporate subsidiary which is subject to income taxes.

    Sector Information

    While Crombie does not distinguish or group its operations on a
geographical or other basis, Crombie provides the following sector information
as supplemental disclosure.

    Retail Freestanding Properties
    -------------------------------------------------------------------------
    (In thousands          Quarter                          Quarter
    of dollars,      ended March 31, 2009           ended March 31, 2008
    except as   -------------------------------------------------------------
    otherwise     Same-    Acqui-                 Same-      Acqui-
    noted)       Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue      $410    $6,562      $6,972      $375          $-      $375
    Property
     expenses       94     1,457       1,551        62           -        62
    -------------------------------------------------------------------------
    Property
     NOI          $316    $5,105      $5,421      $313          $-      $313
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %     77.1%     77.8%       77.8%     83.5%          -%     83.5%
    -------------------------------------------------------------------------
    Occupancy %  100.0%    100.0%      100.0%    100.0%          -%    100.0%
    -------------------------------------------------------------------------

    The improvement in the retail freestanding property NOI was caused by the
Portfolio Acquisition. The same-asset NOI % margin is lower as a result of the
fluctuations that can occur in a single property's results from quarter to
quarter.

    Retail Plaza Properties
    -------------------------------------------------------------------------
    (In thousands          Quarter                          Quarter
    of dollars,      ended March 31, 2009            ended March 31, 2008
    except as  --------------------------------------------------------------
    otherwise     Same-    Acqui-                 Same-      Acqui-
    noted)       Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue   $10,419    $7,901     $18,320   $10,503          $-   $10,503
    Property
     expenses    3,402     2,212       5,614     3,343           -     3,343
    -------------------------------------------------------------------------
    Property
     NOI        $7,017    $5,689     $12,706    $7,160          $-    $7,160
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %     67.3%     72.0%       69.4%     68.2%          -%     68.2%
    -------------------------------------------------------------------------
    Occupancy %   94.9%     98.1%       96.4%     94.3%          -%     94.3%
    -------------------------------------------------------------------------

    The improvement in the retail plaza property NOI was primarily caused by
the Portfolio Acquisition, partially offset by increased non-recoverable
maintenance costs in same-asset properties. Although occupancy in the
same-assets at March 31, 2009 is higher than March 31, 2008, slightly lower
average net rent per square foot results has led to decreased revenue overall
compared to the prior year.

    Retail Enclosed Properties
    -------------------------------------------------------------------------
    (In thousands           Quarter                          Quarter
    of dollars,       ended March 31, 2009            ended March 31, 2008
    except as  --------------------------------------------------------------
    otherwise     Same-    Acqui-                 Same-      Acqui-
    noted)       Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue   $12,427      $481     $12,908   $12,055          $-   $12,055
    Property
     expenses    4,981       174       5,155     4,635           -     4,635
    -------------------------------------------------------------------------
    Property
     NOI        $7,446      $307      $7,753    $7,420          $-    $7,420
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %     59.9%     63.8%       60.1%     61.6%          -%     61.6%
    -------------------------------------------------------------------------
    Occupancy %   89.3%     87.4%       89.2%     91.2%          -%     91.2%
    -------------------------------------------------------------------------

    The improvement in NOI was primarily caused by the improved results at
Avalon Mall in St. John's, Newfoundland and Labrador and the Portfolio
Acquisition. Same-asset NOI margin % is lower than 2008 due to the higher
recoverable expenses in 2009. Occupancy is lower due to ongoing redevelopment
at Fort Edward Mall in Nova Scotia that is expected to be completed during
2009.

    Office Properties
    -------------------------------------------------------------------------
    (In thousands           Quarter                          Quarter
    of dollars,       ended March 31, 2009            ended March 31, 2008
    except as  --------------------------------------------------------------
    otherwise     Same-    Acqui-                 Same-      Acqui-
    noted)       Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue    $5,887        $-      $5,887    $5,516          $-    $5,516
    Property
     expenses    3,228         -       3,228     3,054           -     3,054
    -------------------------------------------------------------------------
    Property
     NOI        $2,659        $-      $2,659    $2,462          $-    $2,462
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %     45.2%        -%       45.2%     44.6%          -%     44.6%
    -------------------------------------------------------------------------
    Occupancy %   87.6%        -%       87.6%     90.8%          -%     90.8%
    -------------------------------------------------------------------------

    Occupancy levels have decreased slightly at the Halifax Developments
Properties and Terminal Centres in Moncton, New Brunswick when compared to the
prior year. Higher net rent per square foot at the Halifax Developments
Properties resulted in the higher revenue, property NOI and NOI margin % for
the office properties in 2009 compared to 2008.

    Mixed-Use Properties
    -------------------------------------------------------------------------
    (In thousands          Quarter                          Quarter
    of dollars,      ended March 31, 2009            ended March 31, 2008
    except as  --------------------------------------------------------------
    otherwise     Same-      Acqui-               Same-      Acqui-
    noted)       Asset     sitions     Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue    $8,905        $-      $8,905    $8,813          $-    $8,813
    Property
     expenses    4,423         -       4,423     4,218           -     4,218
    -------------------------------------------------------------------------
    Property
     NOI        $4,482        $-      $4,482    $4,595          $-    $4,595
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %     50.3%        -%       50.3%     52.1%          -%     52.1%
    -------------------------------------------------------------------------
    Occupancy %   95.4%        -%       95.4%     95.1%          -%     95.1%
    -------------------------------------------------------------------------

    The increase in mixed-use occupancy levels from 95.1% in 2008 to 95.4% in
2009 and improved average net rent per square foot from leasing activity were
offset by higher non-recoverable operating expenses, resulting in the slightly
lower NOI results for the quarter ended March 31, 2009 when compared to the
quarter ended March 31, 2008. The NOI margin has decreased as a result of
increased common area expenses, which are partially recovered from tenants,
and an increase in non-recoverable maintenance expenses in 2009 compared to
2008.

    OTHER 2009 PERFORMANCE MEASURES

    FFO and AFFO are not measures recognized under GAAP and do not have
standardized meanings prescribed by GAAP. As such, these non-GAAP financial
measures should not be considered as an alternative to net income, cash flow
from operations or any other measure prescribed under GAAP. FFO represents a
supplemental non-GAAP industry-wide financial measure of a real estate
organization's operating performance. AFFO is presented in this MD&A because
management believes this non-GAAP measure is relevant to the ability of
Crombie to earn and distribute returns to unitholders. Due to the accounting
changes related to the capitalization of items previously classified as
deferred tenant charges, FFO and AFFO for prior periods have been restated.
FFO and AFFO as computed by Crombie may differ from similar computations as
reported by other REIT's and, accordingly, may not be comparable to other such
issuers.

    Funds from Operations

    FFO represents a supplemental non-GAAP industry-wide financial measure of
a real estate organization's operating performance. Crombie has calculated FFO
in accordance with the recommendations of the Real Property Association of
Canada ("RealPAC") which defines FFO as net income (computed in accordance
with GAAP), excluding gains (or losses) from sales of depreciable real estate
and extraordinary items, plus depreciation and amortization expense, plus
future income taxes, and after adjustments for equity-accounted entities and
non-controlling interests. Crombie's method of calculating FFO may differ from
other issuers' methods and accordingly may not be directly comparable to FFO
reported by other issuers. A calculation of FFO for the quarter ended March
31, 2009 and 2008 is as follows:

    -------------------------------------------------------------------------
                                         Quarter       Quarter
                                           Ended         Ended
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Net income                            $4,192        $2,783        $1,409
    Add:
    Non-controlling interest               3,856         2,583         1,273
    Depreciation and amortization         12,491         7,995         4,496
    Depreciation and amortization on
     discontinued operations                   -            78           (78)
    Future income taxes                      200           400          (200)
    -------------------------------------------------------------------------
    FFO                                  $20,739       $13,839        $6,900
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The improvement in FFO for the quarter ended March 31, 2009 was primarily
due to higher property NOI as a result of the individual acquisition and the
Portfolio Acquisition, offset in part by the increased interest expense
related to the individual and Portfolio acquisitions.

    Adjusted Funds from Operations

    Crombie considers AFFO to be a measure of its distribution-generating
ability. AFFO reflects cash available for distribution after the provision for
non-cash adjustments to revenue, maintenance capital expenditures and
maintenance tenant improvements ("TI") and leasing costs. The calculation of
AFFO for the quarters ended March 31, 2009 and 2008 is as follows:

    -------------------------------------------------------------------------
                                         Quarter       Quarter
                                           Ended         Ended
                                        March 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    FFO                                  $20,739       $13,839        $6,900
    Add:
    Above market lease amortization          771           753            18
    Less:
    Below market lease amortization       (2,145)       (1,185)         (960)
    Straight-line rent adjustment           (883)         (318)         (565)
    Non-cash revenue impacts on
     discontinued operations                   -            12           (12)
    Maintenance capital expenditures      (1,216)       (1,184)          (32)
    Maintenance TI and leasing costs      (1,240)       (3,821)        2,581
    -------------------------------------------------------------------------
    AFFO                                 $16,026        $8,096        $7,930
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The AFFO result for the quarter ended March 31, 2009 was affected by the
increase in FFO for the period and lower maintenance TI and leasing
expenditures. Details of the maintenance TI and capital expenditures are
outlined in the "Tenant Improvement and Capital Expenditures" section of the
MD&A.
    Pursuant to CSA Staff Notice 52-306 "(Revised) Non-GAAP Financial
Measures", non-GAAP measures such as AFFO should be reconciled to the most
directly comparable GAAP measure, which is interpreted to be the cash flow
from operating activities rather than net income. The reconciliation is as
follows:

    -------------------------------------------------------------------------
                                         Quarter       Quarter
                                           Ended         Ended
                                         arch 31,     March 31,
    (In thousands of dollars)               2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                          $10,664        $5,635        $5,029
    Add back (deduct):
    Recoverable/productive capacity
     enhancing TIs                             -           736          (736)
    Change in non-cash operating items     7,276         3,072         4,204
    Unit-based compensation expense          (11)           (9)           (2)
    Amortization of deferred financing
     charges                                (480)         (154)         (326)
    Amortization of swap settlements        (207)            -          (207)
    Maintenance capital expenditures      (1,216)       (1,184)          (32)
    -------------------------------------------------------------------------
    AFFO                                 $16,026        $8,096        $7,930
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIQUIDITY AND CAPITAL RE

SOURCES Sources and Uses of Funds Cash flow generated from operating the property portfolio represents the primary source of liquidity used to service the interest on debt, fund general and administrative expenses, reinvest into the portfolio through capital expenditures, as well as fund TI costs and distributions. In addition, Crombie has the following sources of financing available to finance future growth: secured short-term financing through an authorized revolving credit facility of up to $150,000, of which $111,400 was drawn at March 31, 2009, a demand facility with Empire Company Limited of $13,800, of which $Nil was drawn at March 31, 2009, and the issue of new equity and mortgage debt, pursuant to the Declaration of Trust. ------------------------------------------------------------------------- Quarter Quarter Ended Ended March 31, March 31, (In thousands of dollars) 2009 2008 Variance ------------------------------------------------------------------------- Cash provided by (used in): Operating activities $10,664 $5,635 $5,029 Financing activities $(12,504) $(5,979) $(6,525) Investing activities $(2,020) $(2,364) $344 ------------------------------------------------------------------------- Operating Activities -------------------- ------------------------------------------------------------------------- Quarter Quarter Ended Ended March 31, March 31, (In thousands of dollars) 2009 2008 Variance ------------------------------------------------------------------------- Cash provided by (used in): Net income and non-cash items $19,180 $13,264 $5,916 TI and leasing costs (1,240) (4,557) 3,317 Non-cash working capital (7,276) (3,072) (4,204) ------------------------------------------------------------------------- Cash provided by operating activities $10,664 $5,635 $5,029 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Fluctuations in cash provided by operating activities are largely influenced by the change in non-cash working capital which can be affected by the timing of receipts and payments. The details of the TI and leasing costs during the first quarter of 2009 are outlined in the "Tenant Improvements and Capital Expenditures" section of the MD&A. Financing Activities -------------------- ------------------------------------------------------------------------- Quarter Quarter Ended Ended arch 31, March 31, (In thousands of dollars) 2009 2008 Variance ------------------------------------------------------------------------- Cash provided by (used in): Net issue of convertible debentures $- $28,624 $(28,624) Settlement of interest rate swap agreement (4,535) - (4,535) Net issue (repayment) of commercial property debt 2,952 (27,157) 30,109 Payment of distributions (11,649) (8,867) (2,782) Other items (net) 728 1,421 (693) ------------------------------------------------------------------------- Cash used in financing activities $(12,504) $(5,979) $(6,525) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash used in financing activities for the quarter ended March 31, 2009 was $6,525 higher than the quarter ended March 31, 2008 primarily due to the increase in distributions of $2,782 and the $4,535 for the settlement of an interest rate swap agreement in the first quarter of 2009. Investing Activities -------------------- Cash used in investing activities for the quarter ended March 31, 2009 was $2,020. Of this, $1,730 was used for additions to commercial properties. Cash used in investing activities for the quarter ended March 31, 2008 of $2,364 was primarily due to additions to commercial properties. Included in the 2008 additions to commercial properties is approximately $305 for the commercial properties covered by non-interest bearing demand notes from ECL. Tenant Improvement and Capital Expenditures ------------------------------------------- There are two types of TI and capital expenditures: - maintenance TI and capital expenditures that maintain existing productive capacity; and - productive capacity enhancement expenditures. Maintenance TI and capital expenditures are reinvestments in the portfolio to maintain the productive capacity of the existing assets. These costs are capitalized and depreciated over their useful lives and deducted when calculating AFFO. Productive capacity enhancement expenditures are costs incurred that increase the property level NOI, or expand the GLA of a property by a minimum threshold and thus enhance the property's overall value. These costs are then evaluated to ensure they are fully financeable. Productive capacity enhancement expenditures are capitalized and depreciated over their useful lives, but not deducted when calculating AFFO as they are considered financeable rather than having to be funded from operations. Expenditures for TI's occur when renewing existing tenant leases or for new tenants occupying a new space. Typically, leasing costs for existing tenants are lower on a per square foot basis than for new tenants. However, new tenants may provide more overall cash flow to Crombie through higher rents or improved traffic to a property. The timing of such expenditures fluctuates depending on the satisfaction of contractual terms contained in the leases. ------------------------------------------------------------------------- Quarter Quarter Ended Ended March 31, March 31, (In thousands of dollars) 2009 2008 ------------------------------------------------------------------------- Total additions to commercial properties $1,730 $1,712 Less: amounts recoverable from ECL - (305) ------------------------------------------------------------------------- Net additions to commercial properties 1,730 1,407 Less: productive capacity enhancements (514) (223) ------------------------------------------------------------------------- Maintenance capital expenditures $1,216 $1,184 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Quarter Quarter Ended Ended March 31, March 31, (In thousands of dollars) 2009 2008 ------------------------------------------------------------------------- Total additions to TI and leasing costs $1,240 $4,557 Less: amounts recoverable from ECL - (285) ------------------------------------------------------------------------- Net additions to TI and leasing costs 1,240 4,272 Less: productive capacity enhancements - (451) ------------------------------------------------------------------------- Maintenance TI and leasing costs $1,240 $3,821 ------------------------------------------------------------------------- ------------------------------------------------------------------------- The lower maintenance TI expenditures during the first quarter of 2009, when compared to the same period in 2008, was primarily due to early renegotiation in the first quarter of 2008 of lease renewals that were scheduled to expire in 2009 at a cost of $2,823. Productive capacity enhancements during the quarter consisted of additional costs associated with the continued construction of the pad site at TD Bank at Brampton, Ontario. Capital Structure ------------------------------------------------------------------------- (In thou- sands of Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, dollars) 2009 2009 2008 2008 2008 ------------------------------------------------------------------------- Commercial property debt $812,342 $808,971 $820,634 $812,016 $466,977 Conver- tible deben- tures $29,029 $28,968 $28,907 $28,847 $28,624 Non-con- trolling interest $197,115 $199,163 $218,205 $224,871 $172,249 Unit- holders' equity $213,351 $215,558 $236,241 $243,472 $184,740 ------------------------------------------------------------------------- Bank Credit Facilities and Commercial Property Debt Crombie has in place an authorized floating rate revolving credit facility of up to $150,000 (the "Revolving Credit Facility"), $111,400 of which was drawn as at March 31, 2009. The Revolving Credit Facility is secured by a pool of first and second mortgages and negative pledges on certain properties. The floating interest rate is based on specified margins over prime rate or bankers acceptance rates. The specified margin increases as Crombie's overall debt leverage increases. Funds available for drawdown pursuant to the Revolving Credit Facility are determined with reference to the value of the Borrowing Base (as defined under "Borrowing Capacity and Debt Covenants") relative to certain financial covenants of Crombie. As at March 31, 2009, Crombie had sufficient Borrowing Base to permit $150,000 of funds to be drawn down pursuant to the Revolving Credit Facility, subject to certain other financial covenants. See "Borrowing Capacity and Debt Covenants". As of March 31, 2009, Crombie had fixed rate mortgages outstanding of $555,846 ($565,980 after including the marked-to-market adjustment of $10,134), carrying a weighted average interest rate of 5.51% (after giving effect to the interest rate subsidy from ECL under an omnibus subsidy agreement) and a weighted average term to maturity of 6.1 years. In April of 2008, Crombie entered into an 18 month floating rate Term Facility of $280,000 to partially finance the Portfolio Acquisition. The floating interest rate is based on a specified margin over prime rate or bankers acceptance rate, which margin increases over time. As security for the Term Facility, Crombie has granted a charge on all or certain of the acquired properties together with an assignment of leases. The Term Facility contains financial and non-financial covenants that are customary for a credit facility of this nature and which mirror the covenants set forth in the Revolving Credit Facility. On September 30, 2008, Crombie completed a mortgage financing on certain of the properties acquired pursuant to the Portfolio Acquisition in order to refinance $100,000 of the Term Facility. On February 12, 2009, Crombie completed $39,000 of additional fixed rate mortgage financings for eight of the properties acquired pursuant to the Portfolio Acquisition in order to refinance the Term Facility. A third party provided $32,800 of fixed rate first mortgage financing, while $6,200 of fixed rate second mortgage financing was provided by Empire. As of March 31, 2009, the Term Facility has a remaining balance of $140,323. Crombie has secured a $13,800 floating rate demand credit facility with Empire (the "Empire Demand Facility") on substantially the same terms and conditions that govern the Revolving Credit Facility. This Empire Demand Facility was put in place to ensure that Crombie maintains adequate liquidity in order to fund its daily operating activities while volatility in the financial markets continues while also mitigating the risk of Crombie not being in compliance with certain covenants under the Revolving Credit Facility (see "Borrowing Capacity and Debt Covenants"). Crombie had $Nil drawn against the Empire Demand Facility as at March 31, 2009. From time to time, Crombie has entered into interest rate swap agreements to manage the interest rate profile of its current or future debts without an exchange of the underlying principal amount (see "Risk Management"). Principal repayments of the debt are scheduled as follows: ------------------------------------------------------------------------- Fixed Rate Debt Maturing Payments of during Floating Total % of Year Principal Year Rate Debt Maturity Total ------------------------------------------------------------------------- Remaining 2009 $14,098 $- $140,323 $154,421 19.1% 2010 15,410 106,079 - 121,489 15.0% 2011 15,308 26,786 111,400 153,494 19.0% 2012 15,863 - - 15,863 2.0% 2013 16,656 30,042 - 46,698 5.8% Thereafter 58,848 256,756 - 315,604 39.1% ------------------------------------------------------------------------- Total(1) $136,183 $419,663 $251,723 $807,569 100.0% ------------------------------------------------------------------------- (1) Excludes fair value debt adjustment of $10,134 and the deferred financing costs of $5,361 Convertible debentures ---------------------- On March 20, 2008, Crombie issued $30,000 in Debentures related to the Portfolio Acquisition. Each Debenture will be convertible into units of Crombie at the option of the Debenture holder up to the maturity date of March 20, 2013 at a conversion price of $13 per unit. The Debentures bear interest at an annual fixed rate of 7%, payable semi-annually, on June 30 and December 31 in each year. The Debentures are not redeemable prior to March 20, 2011. From March 20, 2011 to March 20, 2012, the Debentures may be redeemed, in whole or in part, on not more than 60 days' and not less than 30 days' prior notice, at a redemption price equal to the principal amount thereof plus accrued and unpaid interest, provided that the volume-weighted average trading price of the Units on the Toronto Stock Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice on redemption is given exceeds 125% of the conversion price. After March 20, 2012, and prior to March 20, 2013, the Debentures may be redeemed, in whole or in part, at anytime at the redemption price equal to the principal amount thereof plus accrued and unpaid interest. Provided that there is not a current event of default, Crombie will have the option to satisfy its obligation to pay the principal amount of the Debentures at maturity or upon redemption, in whole or in part, by issuing the number of units equal to the principal amount of the Debentures then outstanding divided by 95% of the volume-weighted average trading price of the units for a stipulated period prior to the date of redemption or maturity, as applicable. Upon change of control of Crombie, Debenture holders have the right to put the Debentures to Crombie at a price equal to 101% of the principal amount plus accrued and unpaid interest. Crombie will also have an option to pay interest on any interest payment date by selling units and applying the proceeds to satisfy its interest obligation. Transaction costs related to the Debentures have been deferred and are being amortized into interest expense over the term of the Debentures using the effective interest rate method. Unitholders' Equity ------------------- In April 2009 there were 43,408 Units awarded as part of the Employee Unit Purchase Plan (April 2008 - 34,053). Total units outstanding at May 7, 2009 were as follows: ------------------------------------------------------------------------- Units 27,315,296 Special Voting Units (1) 25,079,576 ------------------------------------------------------------------------- (1) Crombie Limited Partnership, a subsidiary of Crombie, has also issued 25,079,576 Class B LP Units. These Class B LP units accompany the Special Voting Units, are the economic equivalent of a Unit, and are convertible into Units on a one-for-one basis. Taxation of Distributions Crombie, through its subsidiaries, has a large asset base that is depreciable for Canadian income tax purposes. Consequently, certain of the distributions from Crombie are treated as returns of capital and are not taxable to Canadian resident unitholders for Canadian income tax purposes. The composition for tax purposes of distributions from Crombie may change from year to year, thus affecting the after-tax return to unitholders. The following table summarizes the history of the taxation of distributions from Crombie: ------------------------------------------------------------------------- Return of Investment Capital Taxation Year Capital Income Gains ------------------------------------------------------------------------- 2006 per $ of distribution 40.0% 60.0% - 2007 per $ of distribution 25.5% 74.4% 0.1% 2008 per $ of distribution 27.2% 72.7% 0.1% ------------------------------------------------------------------------- Borrowing Capacity and Debt Covenants Under the amended terms governing the Revolving Credit Facility, Crombie is entitled to borrow a maximum of 70% of the fair market value of assets subject to a first security position and 60% of the excess of fair market value over first mortgage financing of assets subject to a second security position or a negative pledge (the "Borrowing Base"). The Revolving Credit Facility provides Crombie with flexibility to add or remove properties from the Borrowing Base, subject to compliance with certain conditions. The terms of the Revolving Credit Facility also require that Crombie must maintain certain coverage ratios above prescribed levels: - annualized NOI for the prescribed properties must be a minimum of 1.4 times the coverage of the related annualized debt service requirements; and - annualized NOI on all properties must be a minimum of 1.4 times the coverage of all annualized debt service requirements. The Revolving Credit Facility also contains a covenant of Crombie that ECL must maintain a minimum 40% voting interest in Crombie. If ECL reduces its voting interest below this level, Crombie will be required to renegotiate the Revolving Credit Facility or obtain alternative financing. Pursuant to an exchange agreement and while such covenant remains in place, ECL will be required to give Crombie at least six months' prior written notice of its intention to reduce its voting interest below 40%. The Revolving Credit Facility also contains a covenant limiting the amount which may be utilized under the Revolving Credit Facility at any time. This covenant provides that the aggregate of amounts drawn under the Revolving Credit Facility plus any negative mark-to-market position on any interest rate swap agreements or other hedging instruments may not exceed the "Aggregate Coverage Amount", which is based on a modified calculation of the Borrowing Base, as defined in the Revolving Credit Facility. In order to hedge its interest rate risk on various debt commitments maturing through 2011, Crombie has entered into a series of interest rate swap agreements on notional principal amounts totalling approximately $288,334 at March 31, 2009 that have settlement dates between August 1, 2009 and July 4, 2011. The unprecedented volatility in the capital markets has caused the mark-to-market adjustment on these interest rate swap agreements to reach an out-of-the-money position of approximately $49,389 at March 31, 2009. There is no immediate cash impact from this mark-to-market adjustment. The unfavourable difference in the mark-to-market amount of these interest rate swap agreements is reflected in other comprehensive income (loss) rather than net income as the swaps are all designated and effective hedges. However, the deterioration in the mark-to-market position has the impact of reducing Crombie's available credit pursuant to the Revolving Credit Facility. At March 31, 2009, the amount available under the Revolving Credit Facility was $12,254 after calculation of the Aggregate Coverage Amount. At March 31, 2009, Crombie remained in compliance with all debt covenants. As previously discussed, Crombie has secured a $13,800 floating rate Empire Demand Facility. The Empire Demand Facility ensures that Crombie maintains adequate liquidity in order to fund its daily operating activities as the volatility in the financial markets continues while also mitigating the risk of Crombie not being in compliance with the Aggregate Coverage Amount which had available capacity of $12,254 at March 31, 2009. Debt to Gross Book Value Ratio When calculating debt to gross book value, debt is defined under the terms of the Declaration of Trust as bank loans plus commercial property debt. Gross book value means, at any time, the book value of the assets of Crombie and its consolidated subsidiaries plus deferred financing charges, accumulated depreciation and amortization in respect of Crombie's properties (and related intangible assets) less (i) the amount of any receivable reflecting interest rate subsidies on any debt assumed by Crombie and (ii) the amount of future income tax liability arising out of the fair value adjustment in respect of the indirect acquisitions of certain properties. If approved by a majority of the independent trustees, the appraised value of the assets of Crombie and its consolidated subsidiaries may be used instead of book value. The debt to gross book value ratio was 54.8% at March 31, 2009 compared to 54.4% at December 31, 2008. This leverage ratio is still below the maximum 60%, or 65% including convertible debentures, as outlined by Crombie's Declaration of Trust. On a long-term basis, Crombie intends to maintain overall indebtedness in the range of 50% to 55% of gross book value, depending upon Crombie's future acquisitions and financing opportunities. ------------------------------------------------------------------------- (In thousands of dollars, except as As at As at As at As at As at otherwise Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, noted) 2009 2008 2008 2008 2008 ------------------------------------------------------------------------- Mortgages payable $565,980 $531,970 $524,307 $425,945 $421,013 Convertible debentures 30,000 30,000 30,000 30,000 30,000 Term finan- cing 140,323 178,824 180,000 280,000 - Revolving credit facility payable 111,400 93,400 121,585 111,475 48,038 Demand credit facility payable - 10,000 - - - ------------------------------------------------------------------------- Total debt out- standing 847,703 844,194 855,892 847,420 499,051 Less: Applicable fair value debt adjustment (10,032) (10,818) (11,615) (12,433) (13,285) ------------------------------------------------------------------------- Debt $837,671 $833,376 $844,277 $834,987 $485,766 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total assets $1,466,045 $1,483,219 $1,501,186 $1,501,754 $1,007,105 Add: Deferred financing charges 6,332 6,255 6,351 6,728 3,648 Accumulated depreciation of commercial properties 51,796 45,865 40,105 34,339 29,222 Accumulated amortization of intangible Assets 60,836 53,505 45,995 38,454 32,053 Less: Assets related to discon- tinued operations (7,162) (7,184) (9,673) (10,951) (10,983) Interest rate subsidy (10,032) (10,818) (11,615) (12,433) (13,285) Fair value adjustment to future taxes (39,245) (39,245) (39,245) (39,245) (39,245) ------------------------------------------------------------------------- Gross book value $1,528,570 $1,531,597 $1,533,104 $1,518,646 $1,008,515 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Debt to gross book value 54.8% 54.4% 55.1% 55.0% 48.2% Maximum borrowing capacity(1) 65% 65% 65% 65% 65% ------------------------------------------------------------------------- (1) Maximum permitted by the Declaration of Trust Debt and Interest Service Coverage Ratios Crombie's interest and debt service coverage ratios for the quarter ended March 31, 2009 were 2.93 times EBITDA and 2.08 times EBITDA. This compares to 3.08 times EBITDA and 1.98 times EBITDA respectively for the quarter ended March 31, 2008. EBITDA should not be considered an alternative to net income, cash flow from operations or any other measure of operations or liquidity as prescribed by Canadian GAAP. EBITDA is not a GAAP financial measure; however Crombie believes it is an indicative measure of its ability to service debt requirements, fund capital projects and acquire properties. EBITDA may not be calculated in a comparable measure reported by other entities. ------------------------------------------------------------------------- Quarter Quarter Ended Ended March 31, March 31, (In thousands of dollars) 2009 2008 ------------------------------------------------------------------------- Property revenue $52,992 $37,262 Amortization of above-market leases 771 753 Amortization of below-market leases (2,145) (1,185) ------------------------------------------------------------------------- Adjusted property revenue 51,618 36,830 Property expenses (19,971) (15,312) General and administrative expenses (1,644) (1,952) ------------------------------------------------------------------------- EBITDA (1) $30,003 $19,566 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Interest expense $10,730 $6,500 Amortization of deferred financing charges (480) (154) ------------------------------------------------------------------------- Adjusted interest expense (2) $10,250 $6,346 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Debt repayments $53,491 $27,319 Debt repayments on discontinued operations - (37) Amortization of fair value debt premium (1) (20) Payments relating to interest rate subsidy (786) (866) Payments relating to Term Facility (38,501) - Payments relating to revolving credit facility - (22,862) Payments relating to demand credit facility (10,000) - ------------------------------------------------------------------------- Adjusted debt repayments (3) $4,203 $3,534 ------------------------------------------------------------------------- Interest service coverage ratio ((1)/(2)) 2.93 3.08 ------------------------------------------------------------------------- Debt service coverage ratio ((1)/((2)+(3))) 2.08 1.98 ------------------------------------------------------------------------- Distributions and Distribution Payout Ratios Distribution Policy ------------------- Pursuant to Crombie's Declaration of Trust, it is required, at a minimum, to make distributions to Unitholders equal to the amount of net income and net realized capital gains of Crombie as is necessary to ensure that Crombie will not be liable for income taxes. Within these guidelines, Crombie has reduced its annual target payout ratios and intends to make monthly cash distributions to Unitholders equal to approximately 70% of its FFO and 95% of its AFFO on an annual basis. Details of distributions to Unitholders are as follows: ------------------------------------------------------------------------- Quarter Quarter Ended Ended (Distribution amounts represented March 31, March 31, in thousands of dollars) 2009 2008 ------------------------------------------------------------------------- Distributions to Unitholders $6,068 $4,599 Distributions to Special Voting Unitholders 5,581 4,268 ------------------------------------------------------------------------- Total distributions $11,649 $8,867 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Number of diluted Units 27,271,888 21,648,985 Number of diluted Special Voting Units 25,079,576 20,079,576 ------------------------------------------------------------------------- Total diluted weighted average Units 52,351,464 41,728,561 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Distributions per unit $0.22 $0.21 FFO payout ratio (target ratio equals 70%) 56.2% 64.1% AFFO payout ratio (target ratio equals 95%) 72.7% 109.5% ------------------------------------------------------------------------- The FFO payout ratio of 56.2% was below the target ratio as the improved FFO reflected the stronger same-asset results as well as the individual property acquisition and the Portfolio Acquisition. The AFFO payout ratio of 72.7% was below the target ratio as a result of the higher FFO and lower overall TI and maintenance capital expenditures as previously discussed. CHANGES IN ACCOUNTING POLICIES Effective January 1, 2009 Crombie has adopted two new accounting standards that were issued by the CICA in 2008 and the Emerging Committee Abstract issued by the CICA in January 2009. These accounting policy changes have been adopted in accordance with the transitional provisions. The new standards and accounting policy changes are as follows: Goodwill and Intangible Assets ------------------------------ Effective January 1, 2009, the accounting and disclosure requirements of the CICA's two new accounting standards were adopted: "Handbook Section 3064, Goodwill and Intangible Assets" and "Handbook Section 3450, Research and Development Costs." These standards are effective for annual and interim financial statements related to fiscal years beginning on or after October 1, 2008 and are applicable for Crombie's first quarter of fiscal 2009. Section 3064 states that intangible assets may be recognized as assets only if they meet the definition of an intangible asset. Section 3064 also provides further information on the recognition of internally generated intangible assets, (including research and development). These standards have been applied retrospectively with restatement of prior periods. The adoption of these new standards resulted in an increase of $229 to depreciation of commercial properties and a decrease of $229 to property expenses in the consolidated Statements of Income for the three months ended March 31, 2008. In the consolidated Balance Sheets, there was an increase of $3,946 to commercial properties, an increase of $38 to receivables, a decrease of $4,246 to prepaid expenses, a decrease of $220 to payables and accruals at December 31, 2008, a decrease of $20 to non-controlling interest and a decrease of $22 to opening unitholders' equity at January 1, 2008. Financial instruments - recognition and measurement --------------------------------------------------- In January 2009, the CICA issued Emerging Issue Committee Abstract 173 ("EIC 173"), "Credit Risk and the Fair Value of Financial Assets and Financial Liabilities". EIC 173 requires that a company take into account its own credit risk and the credit risk of its counterparty in determining the fair value of financial assets and financial liabilities. This Abstract must be applied retrospectively without restatement of prior periods to all financial assets and liabilities measured at fair value in interim and annual financial statements for periods ending on or after January 20, 2009. The adoption of EIC 173 did not have a significant impact on the Crombie's financial results, position or disclosures. EFFECT OF NEW ACCOUNTING POLICIES NOT YET IMPLEMENTED International Financial Reporting Standards ------------------------------------------- On February 13 2008, the Accounting Standards Board of Canada announced that GAAP for publicly accountable enterprises will be replaced by International Financial Reporting Standards (IFRS). IFRS must be adopted for interim and annual financial statements related to fiscal years beginning on or after January 1, 2011, with retroactive adoption and restatement of the comparative fiscal year ended December 31, 2010. Accordingly, the conversion from Canadian GAAP to IFRS will be applicable to Crombie's reporting for the first quarter of fiscal 2011 for which the current and comparative information will be prepared under IFRS. Crombie, with the assistance of its external advisors, have launched an internal initiative to govern the conversion process and is currently evaluating the potential impact of the conversion to IFRS on its financial statements. At this time, the impact on Crombie's future financial position and results of operations is not reasonably determinable or estimatable. Crombie expects the transition to IFRS to impact accounting, financial reporting, internal control over financial reporting, information systems and business processes. Crombie has developed a formal project governance structure, and is providing regular progress reports to senior management and the audit committee. Crombie has also completed a diagnostic impact assessment, which involved a high level review of the major differences between current GAAP and IFRS, as well as establishing an implementation guideline. In accordance with this guideline Crombie has established a staff training program and is in the process of completing analysis of the key decision areas and making recommendations on the same. Crombie will continue to assess the impact of the transition to IFRS and to review all of the proposed and ongoing projects of the International Accounting Standards Board to determine their impact on Crombie. Additionally, Crombie will continue to invest in training and resources throughout the transition period to facilitate a timely conversion. RELATED PARTY TRANSACTIONS As at March 31, 2009, Empire, through its wholly-owned subsidiary ECL, holds a 47.9% indirect interest in Crombie. Crombie uses the exchange amount as the measurement basis for the related party transactions. For a period of five years commencing March 23, 2006, certain executive management individuals and other employees of Crombie will provide general management, financial, leasing, administrative, and other administration support services to certain real estate subsidiaries of Empire on a cost sharing basis. The costs assumed by Empire pursuant to the arrangement during the quarter ended March 31, 2009 were $297 (quarter ended March 31, 2008 - $455) and were netted against general and administrative expenses owing by Crombie to Empire. For a period of five years, commencing on March 23, 2006, certain on-site maintenance and management employees of Crombie will provide property management services to certain real estate subsidiaries of Empire on a cost sharing basis. In addition, for various periods, ECL has an obligation to provide rental income and interest rate subsidies. The costs assumed by Empire pursuant to the arrangement during the quarter ended March 31, 2009 were $376 (quarter ended March 31, 2008 - $689) and were netted against property expenses owing by Crombie to Empire. The head lease subsidy during the quarter ended March 31, 2009 was $250 (quarter ended March 31, 2008 - $398). Crombie also earned rental revenue of $14,560 for the quarter ended March 31, 2009 (quarter ended March 31, 2008 - $6,362) from Sobeys Inc., Empire Theatres and ASC Commercial Leasing Limited ("ASC"). These companies were all subsidiaries of Empire until September 8, 2008 when ASC was sold. Property revenue from ASC is included in this note disclosure until the sale date. Empire has provided Crombie with a $13,800 floating rate Empire Demand Facility on substantially the same terms and conditions that govern the Revolving Credit Facility. The amount borrowed under the Empire Demand Facility at March 31, 2009 is $Nil. During the first quarter of 2009, $10,000 outstanding at December 31, 2008 was repaid to the Empire Demand Facility. CRITICAL ACCOUNTING ESTIMATES Critical accounting estimates are discussed under the section "Critical Accounting Estimates" in the 2008 Annual Report. COMMITMENTS AND CONTINGENCIES There are various claims and litigation, which Crombie is involved with, arising out of the ordinary course of business operations. In the opinion of management, any liability that would arise from such contingencies would not have a significant adverse effect on these financial statements. Crombie has agreed to indemnify, in certain circumstances, the trustees and officers of Crombie. Crombie has entered into a management cost sharing agreement with a subsidiary of Empire. Crombie has land leases on certain properties. These leases have annual payments of $969 per year over the next five years. The land leases have terms of between 12 and 76 years remaining, including renewal options. Crombie obtains letters of credit to support our obligations with respect to construction work on our commercial properties and defeasing commercial property debt. In connection with the defeasance of the discontinued operations commercial property debt, Crombie has issued a standby letter of credit in the amount of $1,715 in favour of the mortgage lender. In addition, Crombie has $145 in standby letters of credit for construction work that is being performed on its commercial properties. Crombie does not believe that any of these standby letters of credit are likely to be drawn upon. RISK MANAGEMENT In the normal course of business, Crombie is exposed to a number of financial risks that can affect its operating performance. These risks, and the action taken to manage them, are as follows: Credit risk ----------- Credit risk arises from the possibility that tenants may experience financial difficulty and be unable to fulfill their lease commitments. Crombie's credit risk is limited to the recorded amount of tenant receivables. An allowance for doubtful accounts is taken for all anticipated problem accounts. Crombie mitigates credit risk by geographical diversification, utilizing staggered lease maturities, diversifying both its tenant mix and asset mix and conducting credit assessments for new and renewing tenants. As at March 31, 2009; - Excluding Sobeys (which accounts for 33.1% of Crombie's minimum rent), no other tenant accounts for more than 2.2% of Crombie's minimum rent, and - Over the next five years, no more than 9.1% of the gross leaseable area of Crombie will expire in any one year. Crombie earned rental revenue of $14,560 for the three months ended March 31, 2009 (three month ended March 31, 2008 - $6,362) from subsidiaries of Empire. Interest rate risk ------------------ Interest rate risk is the potential for financial loss arising from increases in interest rates. Crombie mitigates interest rate risk by utilizing staggered debt maturities, limiting the use of permanent floating rate debt and utilizing interest rate swap agreements. As at March 31, 2009: - Crombie's weighted average term to maturity of the fixed rate mortgages was 6.1 years, and - Crombie's exposure to floating rate debt, including the impact of the fixed rate swap agreements discussed below, was 24.8% of the total commercial property debt. Excluding the floating rate term facility, which is to be replaced with permanent fixed rate financing during the next seven months, the exposure to floating rate debt is 9.1%. From time to time, Crombie has entered into interest rate swap agreements to manage the interest rate profile of its current or future debts without an exchange of the underlying principal amount. Recent turmoil in the financial markets has materially affected interest swap rates. This effect was especially pronounced during the fourth quarter of 2008 and the first quarter of 2009. The interest swap rates are based on Canadian bond yields, plus a premium, called the swap spread, which reflects the risk of trading with a private counterparty as opposed to the Canadian government. During the fourth quarter 2008, the swap spread turned negative and remained negative throughout the first quarter of 2009. The effect of the negative swap spreads, combined with the decline in the Canadian bond yields to levels not seen since the late 1940's, has resulted in a significant deterioration of the mark-to-market values for the interest rate swap agreements. At March 31, 2009, the mark-to-market exposure on the interest rate swap agreements was approximately $49,389. There is no immediate cash impact from the mark-to-market adjustment. The unfavourable difference in the mark-to-market amount of these interest rate swap agreements is reflected in other comprehensive income (loss) rather than net income as the swaps are all designated and effective hedges. The breakdown of the swaps in place as part of the interest rate management program, and their associated mark-to-market amounts are as follows: - Crombie has entered into a fixed interest rate swap to fix the amount of interest to be paid on $50,000 of the revolving credit facility. The fair value of the fixed interest rate swap at March 31, 2009, had an unfavourable mark-to-market exposure of $4,231 (March 31, 2008 - unfavourable $1,222) compared to its face value. The change in this amount has been recognized in other comprehensive income (loss). The mark-to-market amount of fixed interest rate swaps reduce to $Nil upon maturity of the swaps. - Crombie has entered into a number of delayed interest rate swap agreements of a notional amount of $100,334 (March 31, 2008 - $118,689) with settlement dates between February 1, 2010 and July 2, 2011, maturing between February 1, 2019 and July 2, 2021 to mitigate exposure to interest rate increases for mortgages maturing in 2010 and 2011. The fair value of these delayed interest rate swap agreements had an unfavourable mark-to-market exposure of $21,330 compared to the face value March 31, 2009 (March 31, 2008 - unfavourable $8,401). The change in these amounts has been recognized in other comprehensive income (loss). Assuming no change in the mark-to-market values upon settlement of these swap agreements, the estimated annual dilutive effect to FFO, AFFO and net income would be approximately $0.05 per unit. - In relation to the Portfolio Acquisition, Crombie has entered into a number of delayed interest rate swap agreements of a notional amount of $138,000 (March 31, 2008 - $280,000) with a settlement date of August 1,2009 to mitigate exposure to interest rate increases prior to replacing the Term Facility with long-term financing. The fair value of these agreements had an unfavourable mark- to-market exposure of $23,828 compared to their face value on March 31, 2009 (March 31, 2008 - $4,439). The change in these amounts has been recognized in other comprehensive income (loss). Assuming no change in the mark-to-market values upon settlement of these swap agreements, the estimated annual dilutive effect to FFO, AFFO and net income would be approximately $0.07 per unit. During the three months ended March 31, 2009, Crombie settled an interest rate swap agreement related to a notional amount of $42,000 for a settlement amount of $4,535. This settlement amount has been recognized in other comprehensive income (loss) since the inception of the interest rate swap agreements. This loss will be reclassified to interest expense using the effective interest rate method. Crombie estimates that $1,352 of other comprehensive income (loss) will be reclassified to interest expense during the remaining three quarters of 2009 based on interest rate swap agreements settled to March 31, 2009. A fluctuation in interest rates would have an impact on Crombie's net earnings and other comprehensive income (loss) items. Based on the previous year's rate changes, a 0.5% interest rate change would reasonably be considered possible. The changes would have had the following impact: ------------------------------------------------------------------------- Quarter ended Quarter ended March 31, 2009 March 31, 2008 ------------------------------------------- 0.5% 0.5% 0.5% 0.5% increase decrease increase decrease ------------------------------------------------------------------------- Impact on net income of interest rate changes the floating rate Revolving Credit Facility $(270) $270 $(25) $25 ------------------------------------------------------------------------- March 31, 2009 March 31, 2008 ------------------------------------------- 0.5% 0.5% 0.5% 0.5% increase decrease increase decrease ------------------------------------------------------------------------- Impact on other compre- hensive income and non- controlling interest items due to changes in fair value of derivatives designated as a cash flow hedge $10,024 $(9,577) $18,360 $(19,166) ------------------------------------------------------------------------- Crombie does not enter into these interest rate swap transactions on a speculative basis. Crombie is prohibited by its Declaration of Trust in purchasing, selling or trading in interest rate future contracts other than for hedging purposes. Liquidity risk -------------- The real estate industry is highly capital intensive. Liquidity risk is the risk that Crombie may not have access to sufficient debt and equity capital to fund the growth program and/or refinance the debt obligations as they mature. Cash flow generated from operating the property portfolio represents the primary source of liquidity used to service the interest on debt, fund general and administrative expenses, reinvest into the portfolio through capital expenditures, as well as fund tenant improvement costs and make distributions to Unitholders. Debt repayment requirements are primarily funded from refinancing Crombie's maturing debt obligations. Property acquisition funding requirements are funded through a combination of accessing the debt and equity capital markets. There is a risk that the debt capital markets may not refinance maturing debt on terms and conditions acceptable to Crombie or at any terms at all. These risks have heightened during the fourth quarter of 2008 and the first quarter of 2009 due to the turmoil in the financial markets. Crombie seeks to mitigate this risk by staggering the debt maturity dates. There is also a risk that the equity capital markets may not be receptive to an equity issue from Crombie with financial terms acceptable to Crombie. Crombie mitigates its exposure to liquidity risk utilizing a conservative approach to capital management. Access to the revolving credit facility is also limited to the amount utilized under the facility, plus any negative mark-to-market position on the interest rate swap agreement, not exceeding the security provided by Crombie. The mark-to-market adjustment on the interest rate swap agreements reached an out-of-the-money position of approximately $49,389 at March 31, 2009. The deterioration in the mark-to-market position had the impact of reducing Crombie's available credit in the revolving credit facility. Crombie has secured a $13,800 floating rate demand credit facility with Empire Company Limited under essentially the same terms and conditions that govern the revolving credit facility. This demand facility has been put in place to ensure Crombie maintains adequate liquidity in order to fund its daily operating activities while the volatility in the financial markets continues, while also mitigating the risk of Crombie not being in compliance with covenants under the revolving credit facility. Crombie has no mortgages maturing in fiscal 2009. In regard to the floating rate term facility that expires in October 2009, Crombie has successfully refinanced approximately half of the facility at March 31, 2009, and continues to have positive discussions with a number of lenders to refinance the remaining balance. While management can provide no assurances of refinancing, and while the current credit market remains very challenging, management remains confident it will refinance the remaining floating rate term facility with suitable long-term financing prior to it maturity or be able to extend the maturity date. SUBSEQUENT EVENT On April 22, 2009, Crombie declared distributions of 7.417 cents per unit for the period from April 1, 2009 to, and including, April 30, 2009. The distribution will be payable on May 15, 2009 to Unitholders of record as at April 30, 2009. INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate control over financial reporting ("ICFR") to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The control framework Management used to design ICFR is COSO, which is the Committee of Sponsoring Organizations of the Treadway Commission. The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Crombie's ICFR and have concluded as at March 31, 2009 that Crombie's ICFR were designed and operated effectively, and that there are no material weaknesses relating to the design or operation of Crombie's ICFR. There were no changes to Crombie's ICFR for the quarter ended March 31, 2009 that have materially affected, or are reasonably likely to materially affect Crombie's ICFR. DISCLOSURE CONTROLS AND PROCEDURES Management is responsible for establishing and maintaining disclosure controls and procedures ("DC&P") to provide reasonable assurance that material information relating to Crombie is made known to Management by others, particularly during the period in which the annual filings are being prepared, and that information required to be disclosed by Crombie in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported with the time periods specified in securities legislation. The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Crombie's DC&P and have concluded as at March 31, 2009 that these DC&P were designed and operated effectively, and that there are no material weaknesses relating to the design or operation of Crombie's DC&P. QUARTERLY INFORMATION The following table shows information for revenues, net income, AFFO, FFO, distributions and per unit amounts for the eight most recently completed quarters. --------------------------------------------- Quarter Ended --------------------------------------------- (In thou- sands of dollars, except per Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, unit amounts) 2009 2008 2008 2008 2008 ------------------------------------------------------------------------- Property revenue $52,992 $52,522 $51,044 $47,315 $37,262 Property expenses 19,971 19,649 18,634 16,776 15,312 ------------------------------------------------------------------------- Property net operating income 33,021 32,873 32,410 30,539 21,950 ------------------------------------------------------------------------- Expenses: General and adminis- trative 1,644 2,701 2,004 1,979 1,952 Interest 10,730 11,318 11,449 9,965 6,500 Depreciation and amorti- zation 12,491 12,499 12,535 10,757 7,995 ------------------------------------------------------------------------- 24,865 26,518 25,988 22,701 16,447 ------------------------------------------------------------------------- Income from continuing operations before other items, income taxes and non- controlling interest 8,156 6,355 6,422 7,838 5,503 Other items 92 55 27 97 - ------------------------------------------------------------------------- Income from continuing operations before income taxes and non- controlling interest 8,248 6,410 6,449 7,935 5,503 Income taxes expense - Future 200 (3,450) 859 701 400 ------------------------------------------------------------------------- Income from continuing operations before non-con- trolling interest 8,048 9,860 5,590 7,234 5,103 Gain/(loss) on sale of discontinued operations - 487 (895) - - Income from discontinued operations - 24 226 136 263 ------------------------------------------------------------------------- Income before non-con- trolling interest 8,048 10,371 4,921 7,370 5,366 Non-con- trolling interest 3,856 4,968 2,358 3,531 2,583 ------------------------------------------------------------------------- Net income $4,192 $5,403 $2,563 $3,839 $2,783 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted net income per unit $0.15 $0.20 $0.09 $0.15 $0.13 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Quarter Ended ------------------------------------------------------------------------- (In thou- sands of dollars, except per unit Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, amounts) 2009 2008 2008 2008 2008 ------------------------------------------------------------------------- ------------------------------------------------------------------------- AFFO $16,026 $14,681 $12,457 $11,916 $8,096 ------------------------------------------------------------------------- ------------------------------------------------------------------------- FFO $20,739 $18,933 $19,200 $18,812 $13,839 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Distribu- tions $11,649 $11,649 $11,649 $11,879 $8,867 ------------------------------------------------------------------------- ------------------------------------------------------------------------- AFFO per unit(1) $0.31 $0.28 $0.24 $0.24 $0.19 ------------------------------------------------------------------------- ------------------------------------------------------------------------- FFO per unit(1) $0.40 $0.36 $0.37 $0.38 $0.33 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Distribu- tions per unit(1) $0.22 $0.22 $0.22 $0.23 $0.21 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Quarter Ended ------------------------------------------------------------------------- (In thousands of dollars, Dec. 31, Sep. 30, Jun. 30, except per unit amounts) 2007 2007 2007 ------------------------------------------------------------------------- Property revenue $36,455 $35,068 $34,636 Property expenses 14,336 14,682 13,775 ------------------------------------------------------------------------- Property net operating income 22,119 20,386 20,861 ------------------------------------------------------------------------- Expenses: General and administrative 2,492 1,843 2,224 Interest 6,577 6,413 6,080 Depreciation and amortization 8,352 7,575 7,268 ------------------------------------------------------------------------- 17,421 15,831 15,572 ------------------------------------------------------------------------- Income from continuing operations before other items, income taxes and non-controlling interest 4,698 4,555 5,289 Other items - - - ------------------------------------------------------------------------- Income from continuing operations before income taxes and non-controllin interest 4,698 4,555 5,289 Income taxes expense - Future (2,994) 718 2,978 ------------------------------------------------------------------------- Income from continuing operations before non-controlling interest 7,692 3,837 2,311 Gain/(loss) on sale of discontinued operations - - - Income from discontinued operations 132 108 108 ------------------------------------------------------------------------- Income before non-controlling interest 7,824 3,945 2,419 Non-controlling interest 3,766 1,899 1,164 ------------------------------------------------------------------------- Net income $4,058 $2,046 $1,255 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted net income per unit $0.19 $0.10 $0.06 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Quarter Ended ------------------------------------------------------------------------- (In thousands of dollars, Dec. 31, Sep. 30, Jun. 30, except per unit amounts) 2007 2007 2007 ------------------------------------------------------------------------- AFFO $7,761 $6,273 $10,513 ------------------------------------------------------------------------- ------------------------------------------------------------------------- FFO $13,257 $12,310 $12,736 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Distributions $8,867 $8,867 $8,798 ------------------------------------------------------------------------- ------------------------------------------------------------------------- AFFO per unit(1) $0.19 $0.15 $0.25 ------------------------------------------------------------------------- ------------------------------------------------------------------------- FFO per unit(1) $0.32 $0.30 $0.31 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Distributions per unit(1) $0.21 $0.21 $0.21 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) AFFO, FFO and distributions per unit are calculated by AFFO, FFO or distributions, as the case maybe, divided by the diluted weighted average of the total Units and Special Voting Units outstanding of 52,351,464 for the quarter ended March 31, 2009, 52,351,464 for the quarter ended December 31, 2008, 52,351,464 for the quarter ended September 30, 2008, 49,954,256 for the quarter ended June 30, 2008, 41,728,561 for the quarter ended March 31, 2008, 41,728,561 for the quarter ended December 31, 2007, 41,728,561 for the quarter ended September 30, 2007, 41,728,561 for the quarter ended June 30, 2007. The quarterly results of these calculations may not add to the annual calculations due to rounding. Additional information relating to Crombie, including its latest Annual Information Form, can be found on the SEDAR web site for Canadian regulatory filings at www.sedar.com. Dated: May 7, 2009 Stellarton, Nova Scotia, Canada

For further information:

For further information: Scott Ball, C.A., Vice President, Chief
Financial Officer and Secretary, Crombie REIT, (902) 755-8100


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890