Note for H&R Unit Holders Who Acquired H&R Stapled Units From The Primaris Takeover

For unit holders of H&R stapled units who did not acquire any H&R units from the takeover of Primaris REIT, the ACB calculation is straightforward, with the exception of the sale H&R units acquired prior to the reorganization of October 1, 2008 as described in the accompanying notes. For unit holders who acquired some or all of their H&R stapled units from the takeover of Primaris REIT, the following point is important. These units of H&R were acquired on a substantially tax-deferred basis. The portion of the H&R stapled units so acquired that was attributed to H&R Finance Trust (3.788% of the aggregate fair market value of the total unit consideration) is taxable. This is not reflected in the ACB Tracking calculation and we therefore recommend that a manual adjustment to the calculation be made to account for this. This is explained in H&R's press release dated April 4, 2013, which can be found on their website. You may wish to consult with your tax preparer regarding this.