First Capital Realty Announces 2009 Year End Results

Strong Core Operating Performance; Completed Dividend-in-kind

TORONTO, March 11 /CNW/ - First Capital Realty Inc. ("First Capital Realty") (TSX:FCR) Canada's leading owner, developer and operator of supermarket and drugstore-anchored neighbourhood and community shopping centres, located predominantly in growing metropolitan areas, announced today strong financial results for the year ended December 31, 2009.

    
    YEAR HIGHLIGHTS
    -------------------------------------------------------------------------
                                                           $ millions
    Year Ended December 31                          -------------------------
                                                       2009         2008
    -------------------------------------------------------------------------
    Enterprise value                                $     4,508  $     4,111
    -------------------------------------------------------------------------
    Debt to aggregate assets                              50.3%        53.5%
    -------------------------------------------------------------------------
    Debt to total market capitalization                   45.9%        52.6%
    -------------------------------------------------------------------------
    Property rental revenue                         $     442.1  $     410.2
    -------------------------------------------------------------------------
    Net operating income (NOI)                      $     285.2  $     261.0
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Year Ended December 31      $ millions                 per share
                          ---------------------------------------------------
                             2009         2008         2009         2008
    -------------------------------------------------------------------------
      Funds from operations
       (FFO) - Core
       Operations         $     144.4  $     133.3  $      1.54  $      1.53
    -------------------------------------------------------------------------
      FFO - EQY and Other
       Non-Recurring
       Items(1)           $       7.6  $      12.6  $      0.08  $      0.14
    -------------------------------------------------------------------------
    Total FFO             $     152.0  $     145.9  $      1.62  $      1.67
    -------------------------------------------------------------------------
    Weighted average
     diluted shares for
     FFO (000's)               93,869       87,260
    -------------------------------------------------------------------------
      Adjusted funds from
       operations (AFFO) -
       Core Operations    $     143.4  $     132.3  $      1.40  $      1.38
    -------------------------------------------------------------------------
      AFFO - EQY and
       Other Non-Recurring
       Items(1)           $       8.4  $       8.4  $      0.08  $      0.09
    -------------------------------------------------------------------------
    Total AFFO            $     151.8  $     140.7  $      1.48  $      1.47
    -------------------------------------------------------------------------
    Weighted average
     diluted shares for
     AFFO (000's)             102,935       95,587
    -------------------------------------------------------------------------

    (1) Excludes the Company's share of Equity One's non cash impairment loss
        and dilution gain (losses). See Funds from Operations section of this
        press release.


    2009 HIGHLIGHTS

    -   Invested $285 million in development activities, property
        improvements and acquisitions
    -   Added 1.0 million square feet of gross leasable area from development
        and redevelopment coming on line, and acquisitions
    -   Acquired five income-producing properties totalling 225,000 square
        feet, two properties adjacent to existing shopping centres totalling
        31,000 square feet, one land site and four land parcels adjacent to
        existing properties comprising a total of 9.7 acres
    -   6.8% same property NOI growth; 2.7% excluding redevelopment and
        expansion space
    -   13.1% increase on rate per square foot on 1.2 million square feet of
        renewal leases
    -   Occupancy of 96.2% compares to 96.0% at September 30, 2009 and 96.4%
        at December 31, 2008. Vacancy includes 0.7% of space held for
        redevelopment
    -   Gross new leasing totalled 1.2 million square feet including
        development and redevelopment coming on line; lease closures totalled
        632,000 square feet and closures for redevelopment totalled 174,000
        square feet
    -   Average lease rate per occupied square foot increased by 3.6% from
        December 31, 2008 to $15.71 at December 31, 2009.
    -   Completed new leasing on existing space totalling 493,000 square feet
        at an average rate of $18.89 per square foot, representing a 20.4%
        increase over expiring rates
    -   Completed approximately $1.1 billion of financing activities
    -   Completed dividend-in-kind transaction resulting in the Company no
        longer having an ownership interest in Equity One effective August
        14, 2009.


    FOURTH QUARTER HIGHLIGHTS

    -------------------------------------------------------------------------
    Three Months                $ millions                 per share
     Ended December 31    ---------------------------------------------------
                             2009         2008         2009         2008
    -------------------------------------------------------------------------
    Property rental
     revenue              $     113.2  $     105.7
    -------------------------------------------------------------------------
    Net operating income
     (NOI)                $      73.7  $      67.9
    -------------------------------------------------------------------------
      FFO - Core
       Operations         $      36.7  $      35.9  $      0.38  $      0.40
    -------------------------------------------------------------------------
      FFO - EQY and Other
       Non-Recurring
       Items(1)           $      (0.5) $       2.1  $     (0.01) $      0.02
    -------------------------------------------------------------------------
    Total FFO             $      36.2  $      38.0  $      0.37  $      0.42
    -------------------------------------------------------------------------
    Weighted average
     diluted shares for
     FFO (000's)               97,007       90,424
    -------------------------------------------------------------------------
    AFFO - Core
     Operations           $      35.0  $      34.5  $      0.33  $      0.35
    -------------------------------------------------------------------------
    AFFO - EQY and Other
     Non-Recurring
     Items(1)             $       3.7  $       3.2  $      0.03  $      0.03
    -------------------------------------------------------------------------
    Total AFFO            $      38.7  $      37.7  $      0.36  $      0.38
    -------------------------------------------------------------------------
    Weighted average
     diluted shares for
     AFFO (000's)             108,947       99,053
    -------------------------------------------------------------------------

    (1) Excludes the Company's share of Equity One's non cash impairment loss
        and dilution gain on Equity One investment. See Funds from
        Operations section of this press release.


    FOURTH QUARTER 2009 OPERATING HIGHLIGHTS

    -   Invested $88 million in development activities, property improvements
        and acquisitions
    -   Added 271,000 square feet of gross leasable area from development and
        redevelopment coming on line and acquisitions
    -   Acquired one income-producing property totalling 80,000 square feet,
        two properties adjacent to existing shopping centres totalling 31,000
        square feet and two land parcels adjacent to existing properties for
        future development
    -   5.9% same property NOI growth; 3.2% excluding redevelopment and
        expansion space
    -   17.7% increase on 382,000 square feet of renewal leases
    -   Gross new leasing totalled 266,000 square feet including development
        and redevelopment coming on line; lease closures totalled 81,000
        square feet and closures for redevelopment totalled 49,000 square
        feet
    

"I am very pleased with where our business is and where its headed coming out of 2009," said Dori J. Segal, President & CEO, "Our overall results reflect continued good core operating performance and gains on securities offset by the impact of the dividend-in-kind, higher debt and equity financing costs and certain one-time charges."

FINANCING AND CAPITAL MARKET HIGHLIGHTS

The Company completed the following financing activities in the twelve months ended December 31, 2009:

    
    -   $450 million secured revolving credit facility maturing March 2012
        with a syndicate of ten banks jointly led by RBC Capital Markets, TD
        Securities, and BMO Capital Markets. The new facility was used to
        replace the Company's existing three year $350 million senior
        unsecured revolving credit facility, which had a maturity date of
        March 2010.
    -   $75 million secured revolving credit facility with the Bank of Nova
        Scotia maturing January 2012.
    -   $187.3 million from thirteen secured financing transactions at a
        weighted average interest rate of 6.21% and a weighted average term
        to maturity of 8.5 years.
    -   $75 million principal amount of 6.25% cashless convertible unsecured
        subordinated debentures maturing December 2016 at a conversion price
        of $22.90 per common share. The Company's convertible debentures are
        considered to be cashless as it is the current intention of the
        Company to satisfy its obligations to pay principal and interest on
        its convertible debentures by the issuance of common shares.
    -   $125 million principal amount senior unsecured debentures, Series G,
        with 5.95% interest rate maturing June, 2015. The Company
        subsequently reduced the availability of the syndicated secured
        revolving credit facility to $375 million and unwound $20 million
        notional principle amount of hedges.
    -   $50 million principal amount of 5.70% cashless convertible unsecured
        subordinated debentures maturing June 2017 at a conversion price of
        $30.00 per common share. The Company's convertible debentures are
        considered to be cashless as it is the current intention of the
        Company to satisfy its obligations to pay principal and interest on
        its convertible debentures by the issuance of common shares. The
        Company further reduced the availability of the syndicated secured
        revolving credit facility to $285 million.
    -   $1.5 million of unamortized deferred financing costs were recorded as
        a loss on settlement of debt in Q4, 2009 as a result of the
        reductions of the syndicated revolving credit facility. The Company
        also recorded a net loss on the settlement of hedges totalling
        $1.2 million.
    -   Subsequent to year end, the Company completed $125 million principal
        amount senior unsecured debentures, Series H, with 5.85% interest
        rate maturing January, 2017. The Company further reduced the
        availability of the syndicated secured revolving credit facility to
        $250 million. The Company also reduced its $75 million secured
        revolving credit facility to $50 million.
    -   $0.5 million of unamortized deferred financing costs will be recorded
        as a loss on settlement of debt in Q1, 2010 as a result of the
        reductions of the revolving credit facilities.

    In addition, the Company completed the following equity issuances in the
twelve months ended December 31, 2009:

    -   On February 17, 2009 the Company issued 1.4 million common shares to
        acquire 1.8 million shares of Allied Properties REIT at a ratio of
        0.81 First Capital Realty shares per Allied Properties REIT Trust
        Unit.
    -   The Company issued 772,000 common shares as payment of the interest
        due to holders of the 5.50% cashless convertible debentures.
    -   Convertible debentures totalling $6.3 million in principal were
        converted at the option of the holder at a conversion price of $27.00
        per common share resulting in the issuance of approximately 231,000
        common shares.
    -   In 2009, the Company raised gross proceeds of $59 million of equity
        issuing 3.45 million common shares (including 2.3 million warrants)
        through an equity offering at an average gross price of $17.10 per
        share
    

On August 14, 2009, First Capital Realty completed the dividend-in-kind of the Company's interest in Gazit America. The Company calculated the fair market value of the Gazit America shares distributed to shareholders to be $41.5 million, or approximately $0.45 per First Capital Realty common share outstanding. As a result of this dividend-in-kind, First Capital Realty no longer has any ownership interest in Equity One.

For the year ended December 31, 2009, the following dividends were distributed to the Company's shareholders:

    
              --------------------------------------------------------
              Year Ended December 31(per share)      2009        2008
              --------------------------------------------------------
              Regular dividends                    $ 1.28      $ 1.28
              Dividend-in-kind                       0.45           -
              --------------------------------------------------------
              Total Dividends                      $ 1.73      $ 1.28
              --------------------------------------------------------
    

FINANCIAL RESULTS SUMMARY

FFO and AFFO presented herein are key financial measures used by the real estate industry to measure and compare the operating performance of real estate organizations. FFO and AFFO are supplemental non-GAAP financial measures and a complete reconciliation containing adjustments from GAAP net income to FFO and AFFO is included in this press release.

    
    Funds from Operations (FFO)

    -------------------------------------------------------------------------
    (thousands of dollars, except
     per share amounts)                    Year ended December 31, 2009
    -------------------------------------------------------------------------
                                                       FFO - EQY
                                                       and Other
                                                            Non-
                                        FFO - Core     recurring
                                        Operations        Items    Total FFO
    -------------------------------------------------------------------------

    Net operating income                $  285,177   $        -   $  285,177
    Interest expense - Canadian
     operations                           (120,101)           -     (120,101)
    Interest expense - US operations             -       (5,364)      (5,364)
    Corporate expense                      (22,122)           -      (22,122)
    Interest and other income                5,612            -        5,612
    Other (losses) gains and (expenses)          -       (1,475)      (1,475)
    Funds from operations from Equity
     One(3)                                      -       15,009       15,009
    Amortization of non-real estate
     assets                                 (4,207)           -       (4,207)
    Current income taxes                         -         (533)        (533)
    -------------------------------------------------------------------------
    FFO(2)                                 144,359        7,637      151,996
    -------------------------------------------------------------------------
    Add: the Company's share of
     Equity One's non-cash impairment
     loss                                        -            -            -
    Add: Dilution (loss) gain on Equity
     One investment                              -         (676)        (676)
    -------------------------------------------------------------------------
    FFO - Realpac                          144,359        6,961      151,320
    -------------------------------------------------------------------------

    FFO per diluted share               $     1.54   $     0.08   $     1.62
    -------------------------------------------------------------------------
    Add: the Company's share of Equity
     One's non-cash impairment loss              -            -            -
    Add: Dilution (loss) gain on Equity
     One investment                              -        (0.01)       (0.01)
    -------------------------------------------------------------------------
    FFO per diluted share - Realpac     $     1.54   $     0.07   $     1.61
    -------------------------------------------------------------------------
    Weighted average diluted shares
     - FFO                              93,868,815   93,868,815   93,868,815
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (thousands of dollars, except
     per share amounts)                    Year ended December 31, 2008
    -------------------------------------------------------------------------
                                                       FFO - EQY
                                                       and Other
                                                            Non-
                                        FFO - Core     recurring
                                        Operations        Items    Total FFO
    -------------------------------------------------------------------------
    Net operating income                $  261,040   $        -   $  261,040
    Interest expense - Canadian
     operations                           (105,541)           -     (105,541)
    Interest expense - US operations             -       (8,144)      (8,144)
    Corporate expense                      (21,577)           -      (21,577)
    Interest and other income                1,559            -        1,559
    Other (losses) gains and (expenses)          -        2,752        2,752
    Funds from operations from Equity
     One(3)                                      -       20,005       20,005
    Amortization of non-real estate
     assets                                 (2,159)           -       (2,159)
    Current income taxes                         -       (1,985)      (1,985)
    -------------------------------------------------------------------------
    FFO(2)                                 133,322       12,628      145,950
    -------------------------------------------------------------------------
    Add: the Company's share of
     Equity One's non-cash impairment
     loss                                        -       (7,503)      (7,503)
    Add: Dilution (loss) gain on Equity
     One investment                              -        2,898        2,898
    -------------------------------------------------------------------------
    FFO - Realpac                          133,322        8,023      141,345
    -------------------------------------------------------------------------

    FFO per diluted share               $     1.53   $     0.14   $     1.67
    -------------------------------------------------------------------------
    Add: the Company's share of Equity
     One's non-cash impairment loss              -        (0.09)       (0.09)
    Add: Dilution (loss) gain on Equity
     One investment                              -         0.04         0.04
    -------------------------------------------------------------------------
    FFO per diluted share - Realpac     $     1.53   $     0.09   $     1.62
    -------------------------------------------------------------------------
    Weighted average diluted shares
     - FFO                              87,260,224   87,260,224   87,260,224
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (thousands of dollars, except
     per share amounts)                 Three months ended December 31, 2009
    -------------------------------------------------------------------------
                                                       FFO - EQY
                                                       and Other
                                                            Non-
                                        FFO - Core     recurring
                                        Operations        Items    Total FFO
    -------------------------------------------------------------------------

    Net operating income                $   73,708   $        -   $   73,708
    Interest expense - Canadian
     operations                            (32,343)           -      (32,343)
    Interest expense - US operations             -            -            -
    Corporate expense                       (5,801)           -       (5,801)
    Interest and other income                2,549            -        2,549
    Other (losses) gains and (expenses)          -       (2,165)      (2,165)
    Funds from operations from Equity
     One                                         -            -            -
    Amortization of non-real estate
     assets                                 (1,451)           -       (1,451)
    Current income taxes                         -        1,662        1,662
    -------------------------------------------------------------------------

    FFO(2)                                  36,662         (503)      36,159
    -------------------------------------------------------------------------
    Add: the Company's share of Equity
     One's non-cash impairment loss              -            -            -
    Add: Dilution gain on Equity One
     investment                                  -            -            -
    -------------------------------------------------------------------------
    FFO - Realpac                       $   36,662   $     (503)  $   36,159
    -------------------------------------------------------------------------

    FFO per diluted share               $     0.38   $    (0.01)  $     0.37
    -------------------------------------------------------------------------
    Add: the Company's share of Equity
     One's non-cash impairment loss              -            -            -
    Add: Dilution gain on Equity One
     investment                                  -            -            -
    -------------------------------------------------------------------------
    FFO per diluted share - Realpac     $     0.38   $    (0.01)  $     0.37
    -------------------------------------------------------------------------
    Weighted average diluted shares
     - FFO                              97,007,411   97,007,411   97,007,411
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (thousands of dollars, except
     per share amounts)               Three months ended December 31, 2008(1)
    -------------------------------------------------------------------------
                                                       FFO - EQY
                                                       and Other
                                                            Non-
                                        FFO - Core    recurring
                                        Operations        Items    Total FFO
    -------------------------------------------------------------------------

    Net operating income                $   67,911   $        -   $   67,911
    Interest expense - Canadian
     operations                            (26,177)           -      (26,177)
    Interest expense - US operations             -       (2,444)      (2,444)
    Corporate expense                       (5,614)           -       (5,614)
    Interest and other income                  347            -          347
    Other (losses) gains and (expenses)          -         (613)        (613)
    Funds from operations from Equity
     One                                         -        4,776        4,776
    Amortization of non-real estate
     assets                                   (592)           -         (592)
    Current income taxes                         -          380          380
    -------------------------------------------------------------------------

    FFO(2)                                  35,875        2,099       37,974
    -------------------------------------------------------------------------
    Add: the Company's share of Equity
     One's non-cash impairment loss              -       (1,023)      (1,023)
    Add: Dilution gain on Equity One
     investment                                  -        2,898        2,898
    -------------------------------------------------------------------------
    FFO - Realpac                       $   35,875   $    3,974   $   39,849
    -------------------------------------------------------------------------

    FFO per diluted share               $     0.40   $     0.02   $     0.42
    -------------------------------------------------------------------------
    Add: the Company's share of Equity
     One's non-cash impairment loss              -        (0.01)       (0.01)
    Add: Dilution gain on Equity One
     investment                                  -         0.03         0.03
    -------------------------------------------------------------------------
    FFO per diluted share - Realpac     $     0.40   $     0.04   $     0.44
    -------------------------------------------------------------------------
    Weighted average diluted shares
     - FFO                              90,423,576   90,423,576   90,423,576
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Prior year comparative figures have been restated for a change in
        accounting standards.
    (2) Excluding Equity One's non-cash impairment loss and dilution gains
        and losses on the Equity One investment.
    (3) To August 14, 2009.
    

The Company's funds from operations - core operations for the year ended December 31, 2009 totalled $144.4 million or $1.54 per diluted common share which compares to $133.3 million or $1.53 per diluted common share for the year ended December 31, 2008. FFO - core operations, was positively affected by same property NOI growth and the effect of acquisitions and development coming on line. This was offset by increased interest and amortization expense. The increase in interest and amortization expense is primarily attributed to the increased cost of the new secured revolving credit facilities. The increased credit facility costs were only partially offset by the effect of the reduced interest rate environment. In addition, the number of weighted average shares outstanding increased by 7.6% over the prior year.

FFO - EQY and other non-recurring items includes the effect of Equity One and its related interest expense, current income taxes arising from the Company's U.S. operations and other gains and losses. For the year ended December 31, 2009, FFO - EQY and other non-recurring items totalled $7.6 million or $0.08 per diluted common share which compares to $12.6 million or $0.14 per diluted common share in the prior year. FFO - EQY and other non-recurring items included the results of Equity One up to August 14, 2009 compared to 2008 which included the results for the full year.

In addition, FFO - EQY and other non-recurring items included items such as gains on marketable securities offset by losses on debt extinguishment, losses on terminations of hedges, one-time severance payments and one time property management internalization costs, specifically:

    
    -------------------------------------------------------------------------
                                 Year ended           Three months ended
    ($ in thousands)            December 31               December 31
                          --------------------------------------------------
                             2009         2008         2009         2008
    -------------------------------------------------------------------------
    (Losses) gains on debt
     extinguishment            (2,394)         438       (1,497)         438
    Realized loss on
     termination of hedges     (1,160)           -       (1,181)           -
    Unrealized loss on
     interest rate swaps
     not designated as
     hedges                    (1,203)           -       (1,203)           -
    Gains (losses) on
     marketable securities      6,194       (1,978)       4,535       (1,033)
    Gains on sales of land        118        3,945            -            -
    Severance costs
     (including non-cash
     compensation)             (2,000)           -       (2,000)           -
    Costs related to
     acquisition of
     remaining 40% interest
     in FCB                      (752)           -         (752)           -
    Other items, net             (278)         347          (67)         (18)
    -------------------------------------------------------------------------
    Total                      (1,475)       2,752       (2,165)        (613)
    -------------------------------------------------------------------------
    

The Company's funds from operations - core operations for the three months ended December 31, 2009 totalled $36.7 million or $0.38 per diluted common share compared to $35.9 million or $0.40 per diluted common share in the same period in 2008. FFO - core operations, was positively affected by same property NOI growth and the effect of acquisitions and development coming on line. This was largely offset by increased interest and amortization expense.

For the three months ended December 31, 2009, FFO - EQY and other non-recurring items consisted of a net loss of $0.5 million or $0.01 per diluted common share which compares to a net gain of $2.1 million or $0.02 per diluted common share. FFO - EQY and other non-recurring items included one time items which consist of gains on marketable securities offset by losses on debt extinguishment, losses on termination of hedges, one-time severance payment and one time property management internalization costs, which are in the table above.

    
    Adjusted Funds from Operations (AFFO)

    -------------------------------------------------------------------------
    (thousands of dollars, except per
     share amounts)                         Year ended December 31, 2009
    -------------------------------------------------------------------------
                                                     AFFO - EQY
                                                      and Other
                                                           Non-
                                       AFFO - Core    recurring
                                        Operations        Items   Total AFFO
    -------------------------------------------------------------------------

    FFO excluding dilution loss on
     Equity One investment and the
     Company's share of Equity One's
     non-cash impairment loss           $  144,359   $    7,637   $  151,996
        Add/(deduct):
        Interest expense payable in
         shares                             15,342            -       15,342
        Rental revenue recorded on a
         straight-line basis and
         market rent adjustments            (7,376)           -       (7,376)
        Non-cash compensation expense        3,609          600        4,209
        Revenue sustaining capital
         expenditures and leasing
         costs(2)                          (12,171)           -      (12,171)
        Funds from operations from
         Equity One excluding non-cash
         impairment loss                         -      (15,009)     (15,009)
        Dividends from Equity One (regular)      -       12,452       12,452
        Return of capital portion of
         marketable securities, net           (299)           -         (299)
        Change in cumulative unrealized
         (gain) loss on marketable
         securities                              -       (1,952)      (1,952)
        Loss (gain) on extinguishment
         of debt                                 -        2,394        2,394
        Realized losses on termination
         of hedge                                -        1,160        1,160
        Unrealized losses on interest
         rate swaps not designated as
         hedges                                  -        1,203        1,203
        Gain on disposition of land              -         (118)        (118)
    -------------------------------------------------------------------------
    Adjusted funds from operations
     ("AFFO")                           $  143,464   $    8,367   $  151,831
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    AFFO per diluted share              $     1.40   $     0.08   $     1.48
    -------------------------------------------------------------------------
    Weighted average diluted shares
     for AFFO                          102,934,634  102,934,634  102,934,634
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (thousands of dollars, except per
     share amounts)                       Year ended December 31, 2008(1)
    -------------------------------------------------------------------------
                                                     AFFO - EQY
                                                      and Other
                                                           Non-
                                       AFFO - Core    recurring
                                        Operations        Items   Total AFFO
    -------------------------------------------------------------------------

    FFO excluding dilution loss on
     Equity One investment and the
     Company's share of Equity One's
     non-cash impairment loss           $  133,322   $   12,628   $  145,950
        Add/(deduct):
        Interest expense payable in
         shares                             14,031            -       14,031
        Rental revenue recorded on a
         straight-line basis and
         market rent adjustments            (7,627)           -       (7,627)
        Non-cash compensation expense        3,899            -        3,899
        Revenue sustaining capital
         expenditures and leasing
         costs(2)                          (11,866)           -      (11,866)
        Funds from operations from
         Equity One excluding non-cash
         impairment loss                         -      (20,005)     (20,005)
        Dividends from Equity One (regular)      -       18,193       18,193
        Return of capital portion of
         marketable securities, net            623            -          623
        Change in cumulative unrealized
         (gain) loss on marketable
         securities                              -        1,638        1,638
        Loss (gain) on extinguishment
         of debt                                 -         (438)        (438)
        Realized losses on termination
         of hedge                                -          290          290
        Unrealized losses on interest
         rate swaps not designated as
         hedges                                  -            -            -
        Gain on disposition of land              -       (3,945)      (3,945)
    -------------------------------------------------------------------------
    Adjusted funds from operations
     ("AFFO")                           $  132,382   $    8,361   $  140,743
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    AFFO per diluted share              $     1.38   $     0.09   $     1.47
    -------------------------------------------------------------------------
    Weighted average diluted shares
     for AFFO                           95,586,511   95,586,511   95,586,511
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    (thousands of dollars, except per
     share amounts)                     Three months ended December 31, 2009
    -------------------------------------------------------------------------
                                                     AFFO - EQY
                                                      and Other
                                                           Non-
                                       AFFO - Core    recurring
                                        Operations        Items   Total AFFO
    -------------------------------------------------------------------------

    FFO excluding dilution loss on
     Equity One investment and the
     Company's share of Equity One's
     non-cash impairment loss           $   36,662   $     (503)  $   36,159
        Add/(deduct):
        Interest expense payable in
         shares                              4,819            -        4,819
        Rental revenue recorded on a
         straight-line basis and market
         rent adjustments                   (2,731)           -       (2,731)
        Non-cash compensation expense          882          600        1,482
        Revenue sustaining capital
         expenditures and leasing costs     (3,329)           -       (3,329)
        Funds from operations from
         Equity One excluding non-cash
         impairment loss                         -            -            -
        Dividends from Equity One
         (regular)                               -            -            -
        Return of capital portion of
         marketable securities, net         (1,273)           -       (1,273)
        Change in cumulative unrealized
         (gain) loss on marketable
         securities                              -         (314)        (314)
        Loss (gain) on extinguishment
         of debt                                 -        1,497        1,497
        Realized losses on termination
         of hedge                                -        1,181        1,181
        Unrealized losses on interest
         rate swaps not designated as
         hedges                                  -         1203         1203
        Gain on disposition of land              -            -            -
    -------------------------------------------------------------------------
    Adjusted funds from operations
     ("AFFO")                           $   35,030   $    3,664   $   38,694
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    AFFO per diluted share              $     0.33   $     0.03   $     0.36
    -------------------------------------------------------------------------
    Weighted average diluted shares
     for AFFO                          108,946,987  108,946,987  108,946,987
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (thousands of dollars, except per
     share amounts)                   Three months ended December 31. 2008(1)
    -------------------------------------------------------------------------
                                                     AFFO - EQY
                                                      and Other
                                                           Non-
                                       AFFO - Core    recurring
                                        Operations        Items   Total AFFO
    -------------------------------------------------------------------------

    FFO excluding dilution loss on
     Equity One investment and the
     Company's share of Equity One's
     non-cash impairment loss           $   35,875   $    2,099   $   37,974
        Add/(deduct):
        Interest expense payable in
         shares                              3,540            -        3,540
        Rental revenue recorded on a
         straight-line basis and market
         rent adjustments                   (1,461)           -       (1,461)
        Non-cash compensation expense          928            -          928
        Revenue sustaining capital
         expenditures and leasing costs     (4,779)           -       (4,779)
        Funds from operations from
         Equity One excluding non-cash
         impairment loss                         -       (4,776)      (4,776)
        Dividends from Equity One
         (regular)                               -        5,145        5,145
        Return of capital portion of
         marketable securities, net            409            -          409
        Change in cumulative unrealized
         (gain) loss on marketable
         securities                              -          850          850
        Loss (gain) on extinguishment
         of debt                                 -         (438)        (438)
        Realized losses on termination
         of hedge                                -          290          290
        Unrealized losses on interest
         rate swaps not designated as
         hedges                                  -            -            -
        Gain on disposition of land              -           (3)          (3)
    -------------------------------------------------------------------------
    Adjusted funds from operations
     ("AFFO")                           $   34,512   $    3,167   $   37,679
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    AFFO per diluted share              $     0.35   $     0.03   $     0.38
    -------------------------------------------------------------------------
    Weighted average diluted shares
     for AFFO                           99,053,205   99,053,205   99,053,205
    -------------------------------------------------------------------------

    (1) Prior year comparative figures have been restated for a change in
        accounting standards.

    (2) Estimated at $0.60 per square foot per annum on gross leasable area
        for 2009 ($0.50 per square foot per annum in 2008)
    

Management views AFFO as an effective measure of cash generated from operations. AFFO is calculated by adjusting FFO for actual costs incurred for capital expenditures and leasing costs for maintaining shopping centre infrastructure, current lease revenues, and non-cash items including straight-line and market rent adjustments, non-cash compensation expenses, interest paid in shares, gains or losses on debt and hedges. Land sales are excluded from AFFO. The Company's proportionate share of Equity One FFO is excluded and only the regular cash dividends received are included in AFFO. The weighted average diluted shares outstanding for AFFO is adjusted to assume conversion of the outstanding convertible debentures. Non-recurring AFFO items primarily consists of dividends from Equity One, net of the associated interest expense, realized gains on marketable securities, cash severance costs and the costs associated with the acquisition of 40% of FCB that the Company did not already own.

    
    Net Income

    -------------------------------------------------------------------------
                             Three months ended            Year ended
                                December 31               December 31
    -------------------------------------------------------------------------
    ($ thousands, except
     per share amounts)      2009        2008(1)       2009        2008(1)
    -------------------------------------------------------------------------
    Net income            $    14,736  $    10,574  $    41,913  $    37,341
    -------------------------------------------------------------------------
    Earnings per share
     (diluted)            $      0.15  $      0.12  $      0.45  $      0.43
    -------------------------------------------------------------------------
    Weighted average
     common shares -
     diluted (000's)           97,007       90,424       93,869       87,260
    -------------------------------------------------------------------------

    (1) Prior year comparative figures have been restated for a change in
        accounting standards
    

Net income for the three and twelve months ended December 31, 2009 was $14.7 million or $0.15 per share (basic and diluted) and $41.9 million or $0.45 per share (basic and diluted). This compares to $10.6 million or $0.12 per share (basic and diluted) and $37.3 million or $0.43 per share (basic and diluted), respectively, for the three and twelve months ended December 31, 2008. The increase in net income is primarily due to the increase in NOI resulting from development projects coming on line and same property NOI growth, increased interest and other income, offset by increased interest expense, increased amortization expense, decreased other gains(losses) and (expenses) and decreased income from Equity One, as a result of the dividend-in-kind. In addition, there was an increase in the basic and weighted average diluted shares outstanding compared to the same prior year periods.

DEVELOPMENT and ACQUISITION ACTIVITIES

During the fourth quarter of 2009, the Company invested $49 million in active development projects and improvements to existing properties bringing the year-to-date total investment to $209 million. Development and redevelopment of 160,000 square feet was brought on line in the fourth quarter, space leased was at an average rate of $23.01 per square foot. Year-to-date the Company brought on line 754,000 square feet of development and redevelopment space leased at an average rate of $22.79 per square foot.

In addition, during the fourth quarter of 2009 the Company invested $39 million in the acquisition of an income-producing property adding 80,000 square feet of gross leasable area, two properties adjacent to existing shopping centres totalling 31,000 square feet and two parcels adjacent to existing properties. For the year ended December 31, 2009, the Company invested $76 million on five income-producing properties comprising 225,000 square feet, two properties adjacent to existing shopping centres totalling 31,000 square feet, one land site and four land parcels adjacent to existing properties comprising a total of 9.7 acres of commercial land for future development.

OPERATING SUMMARY

Net operating income for the year ended December 31, 2009 totalled $285.2 million, compared to $261.0 million for year ended December 31, 2008, an increase of $24.2 million or 9.3%. Same property NOI increased by 6.8% in 2009, compared to the same prior year period, generating NOI growth of $16.7 million, primarily attributed to redevelopment and expansion space coming on line, lease termination payments and increases in lease rates and occupancy. Same property NOI for the year, excluding expansion or redevelopment space, increased by $6.4 million or 2.7% over the same prior year period.

Acquisitions completed in 2009 and 2008 contributed $5.0 million to NOI in 2009, while greenfield development activities contributed a further $10.8 million in 2009.

The lease termination fees for the year ended December 31, 2009 are from three tenants (two are non-retail tenants) at separate locations where 94,500 square feet with an annualized NOI of $1.5 million was vacated. 20,200 square feet has been re-leased replacing one half of the total NOI. The Company is currently negotiating the lease up of the remaining two locations.

Net operating income for the three months ended December 31, 2009 totalled $73.7 million, compared to $67.9 million in the fourth quarter of 2008, an increase of $5.8 million or 8.5%. Same property NOI increased by 5.9% generating NOI growth of $3.7 million in the fourth quarter 2009 over the fourth quarter of 2008, due primarily to redevelopment and expansion space and increases in lease rates and occupancy. Same property NOI in the fourth quarter of 2009, excluding expansion or redevelopment space, increased by $1.9 million or 3.2% over the same prior year period.

Acquisitions completed in 2009 and 2008 contributed $1.7 million to NOI in the fourth quarter of 2009, while greenfield development activities contributed a further $2.5 million.

Gross new leasing in the fourth quarter of 2009 totalled 266,000 square feet including development and redevelopment space coming on line. The Company achieved a 17.7% increase on 382,000 square feet of renewal leases over the expiring rates. For the year ended December 31, 2009, gross new leasing totalled 1.2 million square feet. Renewal leasing totalled 1.2 million square feet with a 13.1% increase over expiring lease rates.

The average rate per occupied square foot at December 31, 2009 increased to $15.71. This compares to an average rate of $15.17 per square foot at December 31, 2008 and $15.54 at September 30, 2009.

Portfolio occupancy at December 31, 2009 of 96.2% compares to 96.0% at September 30, 2009 and 96.4% at December 31, 2008. Closures for redevelopment totalled 174,000 square feet for 2009 providing potential for future income growth through leasing and redevelopment activities.

SUBSEQUENT EVENT HIGHLIGHTS

Acquisitions

The Company invested $61 million in the acquisition of one income-producing property totalling 66,000 square feet in Victoria, BC, one property adjacent to an existing shopping centre totalling 15,000 square feet, two properties held for future development and two land parcels adjacent to existing properties comprising a total of 5.0 acres of commercial land for future development.

Interest on Convertible Debentures

On February 18, 2010, the Company announced that it will pay the interest due on March 31, 2010 to holders of both classes of its 5.50% convertible unsecured subordinated debentures, due September 30, 2017 and to holders of its 6.25% convertible unsecured subordinated debentures due December 31, 2016, by the issuance of common shares. The number of common shares to be issued per $1,000 principal amount of debentures will be calculated by dividing the dollar amount of interest payable by an amount equal to 97% of the volume-weighted average trading price of the common shares of First Capital Realty on the Toronto Stock Exchange, calculated for the 20 consecutive trading days ending on March 24, 2010. The interest payment due is approximately $8.7 million.

It is the current intention of the Company to satisfy its obligations to pay principal and interest on its convertible debentures by the issuance of common shares. Since issuance, all interest payments on the Company's convertible debentures have been made using shares.

Quarterly Dividend

The Company announced that it will pay a first quarter dividend of $0.32 per common share on April 13, 2010 to shareholders of record on March 26, 2010.

2009 ACTUAL RESULTS COMPARED TO 2009 Guidance

Projections involve numerous assumptions such as rental income (including assumptions on timing of lease-up, development coming on line and levels of percentage rent), interest rates, tenant defaults, corporate expenses, level and timing of acquisitions of income-producing properties, the Company's share price, number of shares outstanding and numerous other factors. Not all factors which affect our range of projected funds from operations and adjusted funds from operations are determinable at this time and actual results may vary from the projected results in a material respect, and may be above or below the range presented in a material respect.

The purpose of the Company's guidance is to provide readers with Management's view as to the expected financial performance of the Company using factors that are commonly accepted and viewed as meaningful indicators of financial performance in the real estate industry. A reconciliation of the Company's year end 2009 results to the previously updated guidance follows.

    
    -------------------------------------------------------------------------
    (per share amounts, except for projected      2009 Guidance       2009
     FFO, AFFO and shares outstanding)           Provided in Q3      Actual
    -------------------------------------------------------------------------
                                                 Low       High      Actual
    -------------------------------------------------------------------------
                                FFO Guidance
    -------------------------------------------------------------------------
    Projected diluted net income before
     taxes, per share                            $0.57      $0.59      $0.54
      Projected current taxes                    (0.02)     (0.02)     (0.01)
      Projected future taxes                     (0.16)     (0.16)     (0.08)
    -------------------------------------------------------------------------
    Projected diluted net income per share       $0.39      $0.41      $0.45
    -------------------------------------------------------------------------
    Adjustments
      Projected FFO from Equity One               0.16       0.16       0.16
      Projected equity income from Equity One    (0.09)     (0.09)     (0.08)
      Projected amortization and future
       income taxes                               1.18       1.19       1.09
    -------------------------------------------------------------------------
    Projected FFO per share(1)                   $1.64      $1.67      $1.62
    -------------------------------------------------------------------------
    Projected FFO(1)                           $153.9M    $157.3M    $152.0M
    -------------------------------------------------------------------------
    Projected weighted average shares
     outstanding for per share FFO
     calculations                                     94.0M            93.9M
    -------------------------------------------------------------------------
                               AFFO Guidance
    -------------------------------------------------------------------------
    Projected FFO(1)                           $153.9M    $157.3M    $152.0M
    -------------------------------------------------------------------------
    Projected weighted average shares
     outstanding for per share AFFO
     calculations (including conversion of
     convertible debentures)                         103.2M           102.9M
    -------------------------------------------------------------------------
    Projected FFO per share (using weighted
     average AFFO shares outstanding)(1)         $1.49      $1.52      $1.48
    -------------------------------------------------------------------------
      Projected dividend income - return of
       capital portion                           (0.00)     (0.01)     (0.00)
      Projected dividends from Equity One,
       net of FFO from Equity One                (0.02)     (0.02)     (0.02)
      Projected revenue sustaining capital
       expenditures                              (0.12)     (0.12)     (0.12)
      Projected non cash items, net               0.11       0.11       0.14
    -------------------------------------------------------------------------
    Projected AFFO per share(1)                  $1.46      $1.48      $1.48
    -------------------------------------------------------------------------
    (1) Excludes the Company's share of Equity One's non cash
        impairment loss and the dilution loss. See Funds from Operations
        section.
    

The net income variance was primarily driven by:

    
    -   the decrease in future income taxes which was primarily attributed to
        a change in the future income tax rate, not anticipated in the
        guidance;
    -   the effect of Equity One tax matters which resulted in an adjustment
        in current income taxes arising from the Company's U.S. operations
        greater than the amount in the guidance; and
    -   non-recurring items as outlined below, which were the result of
        financing transactions that were not anticipated in the guidance, and
        the departure of two senior executives.

    -------------------------------------------------------------------------
                                                        2009         2009
                                                    ($ millions) (Per share)
    -------------------------------------------------------------------------
    Losses on debt extinguishment                        (1,497)       (0.02)
    Realized loss on termination of hedges               (1,160)       (0.01)
    Unrealized loss on interest rate swaps not
     designated as hedges                                (1,203)       (0.01)
    Severance costs (including non-cash compensation)    (2,000)       (0.02)
    -------------------------------------------------------------------------
    Total                                                (5,860)       (0.06)
    -------------------------------------------------------------------------
    

OUTLOOK

Over the past several years First Capital Realty has made significant progress in growing its business and generating accretive growth in funds from operations while enhancing the quality of its portfolio.

The current environment remains competitive with little transaction activity. Both debt and equity markets are accessible but continue to be challenging relative to pricing currently being asked by property vendors. The Company will continue to selectively acquire properties that are well-located and of high quality, where they add strategic value and/or operating synergies provided they will be accretive to FFO over the long term, and equity and debt capital can be priced and committed to maintain conservative leverage.

Development and redevelopment activities continue to provide the Company with opportunities to grow within its existing portfolio of assets. Once completed, these activities typically generate higher returns on investment.

With respect to acquisitions of both income-producing and development properties, the Company will continue to focus on maintaining the sustainability and growth potential of rental income to ensure that among other things, refinancing risk is minimized. This is particularly important given the current cost of capital.

Specifically, Management will focus on the following five areas to achieve its objectives in 2010:

    
    -   same property net operating income growth, taking into account
        maintaining high occupancy;
    -   development and redevelopment activities;
    -   selective acquisitions;
    -   increasing efficiency and productivity of operations; and
    -   improving the cost of capital, for both debt and equity.
    

Overall, Management is confident that the quality of the Company's balance sheet, the defensive nature of its assets and operations will continue to serve it well in the current environment.

    
    2010 GUIDANCE
    -------------------------------------------------------------------------
    (per share amounts, except for projected
     FFO and shares outstanding)                            Low       High
    -------------------------------------------------------------------------
                               FFO Guidance
    -------------------------------------------------------------------------
    Projected diluted net income per share                  $0.38      $0.41
    Adjustments
      Projected amortization and future income taxes         1.14       1.16
    -------------------------------------------------------------------------
    Projected FFO per share                                 $1.52      $1.57
    -------------------------------------------------------------------------
    Projected FFO                                         $150.5M    $155.0M
    -------------------------------------------------------------------------
    Projected weighted average shares outstanding for
     per share FFO calculations                                  99.0M
    -------------------------------------------------------------------------
                              AFFO Guidance
    -------------------------------------------------------------------------
    Projected FFO                                         $150.5M    $155.0M
    -------------------------------------------------------------------------
    Projected weighted average shares outstanding for
     per share AFFO calculations (including conversion
     of convertible debentures)                                  112.4
    -------------------------------------------------------------------------
    Projected FFO per share (using weighted average AFFO
     shares outstanding)                                    $1.34      $1.38
      Projected revenue sustaining capital expenditures     (0.12)     (0.12)
      Projected non-cash items, net                          0.13       0.15
    -------------------------------------------------------------------------
    Projected AFFO per share                                $1.35      $1.41
    -------------------------------------------------------------------------
    

Projections involve numerous assumptions such as rental income (including assumptions on timing of lease-up, development coming on line and levels of percentage rent), interest rates, tenant defaults, corporate expenses, the level and timing of acquisitions of income-producing properties, the Company's share price, the number of shares outstanding and numerous other factors. Not all factors which affect our range of projected funds from operations and adjusted funds from operations are determinable at this time, actual results may vary from the projected results in a material respect, and may be above or below the range presented in a material respect.

Guidance is based on specific assumptions including:

    
    -   Same property NOI growth of 1.0% to 1.5% (excluding redevelopment and
        expansion);
    -   Development, redevelopment and expansion coming on-line of 450,000 to
        550,000 square feet with approximate gross book value of $100 to
        $120 million;
    -   Income-producing property acquisitions totalling $100 million
        (includes $31 million invested to-date);
    -   Development property acquisitions totalling $30 million, acquired in
        the first quarter of 2010;
    -   Refinancing the credit facility to current market rates;
    -   Revenue sustaining capital expenditure is expected to be
        approximately $0.65 per average square foot; and
    -   Other non-recurring (losses) gains and expenses totalled net loss of
        $0.5 million consisting of;
        -  gains on marketable securities - $1.2 million
        -  loss on termination of hedges - $1.2 million
        -  loss on debt extinguishment - $0.5 million
    

The ranges presented represent Management's estimate of results based upon these assumptions as of the date of this press release. The purpose of the Company's guidance is to provide readers with Management's view as to the expected financial performance of the Company for 2010, using factors that are commonly accepted and viewed as meaningful indicators of financial performance in the real estate industry.

Readers should refer to the section below titled "Forward Looking Statements" for important information relating to our guidance, including risk factors.

MANAGEMENT CONFERENCE CALL AND WEBCAST

First Capital Realty invites you to participate at its live conference call with senior management announcing our 2009 year end results on Friday, March 12, 2010 at 10:00 a.m. E.S.T.

Year end financial results will be released prior to the call and made available on First Capital Realty's website in the Pressroom section. The Supplemental Package link will be on our Home Page at www.firstcapitalrealty.ca or click on Investor Relations, investor downloads.

Teleconference:

You may participate in the live conference toll free at 866-299-6657 or at 416-641-6135. To ensure your participation, please call five minutes prior to the scheduled start of the call. The call will be archived through March 19, 2010 and can be accessed by dialing toll free 800-408-3053 or 416-695-5800 with access code 5030774.

Webcast:

To access the webcast, go to First Capital Realty's website at www.firstcapitalrealty.ca, and click on the link for the webcast at the bottom of our Home Page. The webcast will be archived on our Home Page for 30 days and can be accessed, thereafter, in the Conference Calls section of our website.

Slide Presentation:

A slide presentation to accompany Management's comments during the conference call will be available. To view the slides, please go to First Capital Realty's website at www.firstcapitalrealty.ca and click on the link for the Conference Call at the top of our Home Page.

Management's presentation will be followed by a question and answer period. To ask a question, press '1' followed by '4' on a touch-tone phone. The conference call coordinator is immediately notified of all requests in the order in which they are made, and will introduce each questioner. To cancel your request, press '1' followed by '3'. If you hang up, you can reconnect by dialing 866-299-6657 or 416-641-6135. For assistance at any point during the call, press '*0'.

ABOUT First Capital Realty (TSX:FCR)

First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore-anchored neighbourhood and community shopping centres, located predominantly in growing metropolitan areas. The Company currently owns interests in 176 properties, including three under development, totalling approximately 20.9 million square feet of gross leasable area and six land sites in the planning stage for future retail development.

Forward Looking Statements

This press release and in particular the "Outlook" and "2010 Guidance" section, contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can generally be identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", "outlook", "objective", "may", "will", "should", "continue" and similar expressions. The forward-looking statements are not historical facts but reflect the Company's current expectations regarding future results or events and are based on information currently available to Management. Certain material factors and assumptions were applied in providing these forward-looking statements. All forward-looking statements in this press release are qualified by these cautionary statements.

Management believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, Management can give no assurance that actual results will be consistent with these forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks and Uncertainties" in the Company's current Management's Discussion and Analysis.

Factors that could cause actual results or events to differ materially from those expressed, implied or projected by forward-looking statements in addition to those described in the "Risk and Uncertainties" section include, but are not limited to, general economic conditions, the availability of new competitive supply of retail properties which may become available either through construction or sublease, First Capital Realty's ability to maintain occupancy and to lease or re-lease space at current or anticipated rents, tenant bankruptcies, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, financial difficulties and defaults, changes in interest rates and credit spreads, changes in the U.S.-Canadian foreign currency exchange rate, changes in operating costs, First Capital Realty's ability to obtain insurance coverage at a reasonable cost and the availability of financing. The assumptions underlying the Company's forward-looking statements contained in the "Outlook" and "2010 Guidance" section of this press release include that consumer demand will remain stable, demographic trends will continue and there will continue to be barriers to entry in the markets in which the Company operates.

Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. First Capital Realty undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by security laws.

These forward-looking statements are made as of March 11, 2010.

NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES

Funds from Operations and Adjusted Funds from Operations

In Management's view, funds from operations ("FFO") and adjusted funds from operations ("AFFO") are commonly accepted and meaningful indicators of financial performance in the real estate industry. First Capital Realty believes that financial analysts, investors and shareholders are better served when the clear presentation of comparable period operating results generated from FFO and AFFO disclosures supplement Canadian generally accepted accounting principles ("GAAP") disclosure. These measures are the primary methods used in analyzing real estate organizations in Canada. The Company's method of calculating FFO and AFFO may be different from methods used by other corporations or REITs (real estate investment trusts) and, accordingly, may not be comparable to such other corporations or REITs. FFO and AFFO are presented to assist investors in analyzing the Company's performance. FFO and AFFO: (i) do not represent cash flow from operating activities as defined by GAAP, (ii) are not indicative of cash available to fund all liquidity requirements, including payment of dividends and capital for growth and (iii) are not to be considered as alternatives to GAAP net income for the purpose of evaluating operating performance.

Funds from Operations ("FFO")

First Capital Realty calculates FFO in accordance with the recommendations of the Real Property Association of Canada ("RealPac"). The definition is meant to standardize the calculation and disclosure of FFO across real estate entities in Canada, modelled on the definition adopted by the National Association of Real Estate Investment Trusts ("NAREIT") in the United States. FFO as defined by RealPac differs in two respects from the definition adopted by NAREIT. Under the RealPac definition, future income taxes are excluded from FFO, whereas under the NAREIT definition, they are included. In addition, impairment losses on depreciable assets are excluded from the RealPac FFO definition, whereas the NAREIT definition includes them. As a result, when calculating FFO, the Company adjusts the FFO reported by Equity One to comply with the RealPac definition, when appropriate.

FFO is considered a meaningful additional measure of operating performance, as it excludes amortization of real estate assets. Amortization expense assumes that the value of real estate assets diminishes predictably over time, which is clearly not a valid assumption. FFO also adjusts for certain items included in GAAP net income that may not be the most appropriate determinants of the long-term operating performance of the Company including gains and losses on depreciable real estate assets.

Net Operating Income

NOI is defined as property rental revenue less property operating costs. In Management's opinion, NOI is useful in analyzing the operating performance of the Company's shopping centre portfolio. NOI is not a measure defined by GAAP and as such there is no standard definition. As a result, NOI may not be comparable with similar measures presented by other entities. NOI is not to be construed as an alternative to net income or cash flow from operating activities determined in accordance with GAAP.

    
    CONSOLIDATED BALANCE SHEETS

    -------------------------------------------------------------------------
                                                    December 31  December 31
    (thousands of dollars)                                 2009       2008(1)
    -------------------------------------------------------------------------
                                                                   (restated)
    ASSETS
    Real Estate Investments
    Shopping centres                                $ 3,288,759  $ 3,040,257
    Land and shopping centres under development         224,772      281,959
    Deferred leasing costs                               17,471       16,146
    Intangible assets                                    22,549       29,312
    -------------------------------------------------------------------------
                                                      3,553,551    3,367,674
    Investment in Equity One, Inc.                            -      227,259
    Loans, mortgages and other real estate assets        59,220       32,480
    -------------------------------------------------------------------------
                                                      3,612,771    3,627,413
    Other assets                                         28,726       27,448
    Amounts receivable                                   45,598       45,501
    Cash and cash equivalents                             4,548        7,263
    -------------------------------------------------------------------------
                                                    $ 3,691,643  $ 3,707,625
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Mortgages, loans and credit facilities          $ 1,354,668  $ 1,573,530
    Accounts payable and other liabilities              137,658      166,507
    Intangible liabilities                               13,193       17,264
    Senior unsecured debentures                         717,040      593,288
    Convertible debentures                              329,739      218,247
    Future income tax liabilities                        43,502       43,643
    -------------------------------------------------------------------------
                                                      2,595,800    2,612,479
    SHAREHOLDERS' EQUITY                              1,095,843    1,095,146
    -------------------------------------------------------------------------
                                                    $ 3,691,643  $ 3,707,625
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Prior year comparative figures have been restated for a change in
        accounting standards.



    CONSOLIDATED STATEMENTS OF EARNINGS

    -------------------------------------------------------------------------
                             Three months ended            Year ended
    -------------------------------------------------------------------------
    (thousands of dollars,
     except per share     December 31  December 31  December 31  December 31
     amounts)                    2009       2008(1)        2009       2008(1)
    -------------------------------------------------------------------------
                                         (restated)                (restated)

    REVENUE
    Property rental
     revenue              $   113,232  $   105,695  $   442,131  $   410,192
    Interest and other
     income                     2,549          347        5,612        1,559
    -------------------------------------------------------------------------
                              115,781      106,042      447,743      411,751
    -------------------------------------------------------------------------
    EXPENSES
    Property operating
     costs                     39,524       37,784      156,954      149,152
    Interest expense           32,343       28,621      125,465      113,685
    Amortization
      Shopping centres         20,594       18,950       83,342       74,406
      Deferred leasing costs      946          881        3,662        3,396
      Intangible assets         1,482        1,706        7,497        7,783
      Deferred financing fees     644          226        2,202          854
      Other assets                807          366        2,005        1,305
    Corporate expenses          5,801        5,614       22,122       21,577
    -------------------------------------------------------------------------
                              102,141       94,148      403,249      372,158
    -------------------------------------------------------------------------
    Income before the
     undernoted items          13,640       11,894       44,494       39,593
    -------------------------------------------------------------------------

    Equity (loss) income
     from Equity One, Inc.     (1,287)       1,405        7,066        8,716
    Other (losses) gains and
     (expenses)                (1,639)       3,916       (1,414)       7,281
    -------------------------------------------------------------------------
    Income before income
     taxes                     10,714       17,215       50,146       55,590
    -------------------------------------------------------------------------
    Income taxes (recovery):
      Current                  (1,662)        (380)         533        1,985
      Future                   (2,360)       7,021        7,700       16,264
    -------------------------------------------------------------------------
                               (4,022)       6,641        8,233       18,249
    -------------------------------------------------------------------------
    Net income            $    14,736  $    10,574  $    41,913  $    37,341
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per common
     share, basic and
     diluted              $      0.15  $      0.12  $      0.45  $      0.43
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Prior year comparative figures have been restated for a change in
        accounting standards.



    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

    -------------------------------------------------------------------------
                             Three months ended            Year ended
    -------------------------------------------------------------------------
                          December 31  December 31  December 31  December 31
    (thousands of dollars)       2009       2008(1)        2009       2008(1)
    -------------------------------------------------------------------------
                                         (restated)                (restated)

    NET INCOME            $    14,736  $    10,574  $    41,913  $    37,341
    -------------------------------------------------------------------------

    OTHER COMPREHENSIVE
     (LOSS) INCOME

    Unrealized foreign
     currency gains on
     translating
     self-sustaining
     foreign operations
      Gains (losses)
       arising during the
       period                       -        8,680       (6,156)      12,043
      Reclassification
       adjustment for
       dilution (gain) loss
       on investment in
       Equity One, Inc.             -         (724)       1,669         (724)
      Reclassification
       adjustment for
       dividend-in-kind             -            -       17,288            -
    -------------------------------------------------------------------------
                                    -        7,956       12,801       11,319
    -------------------------------------------------------------------------
    Other comprehensive
     (losses) income of
     Equity One, Inc.
      (Losses) gains
       arising during the
       period                       -       (3,021)       4,346       (1,933)
      Reclassification
       adjustment for
       dilution (gain)
       loss included in
       net income                   -          (11)          29          (11)
      Reclassification
       adjustment for
       dividend-in-kind             -            -       (1,124)           -
    -------------------------------------------------------------------------
                                    -       (3,032)       3,251       (1,944)
    -------------------------------------------------------------------------
    Unrealized gains (losses)
     on cash flow hedges of
     interest rates
      Unrealized gains
       (losses) arising
       during the period        1,102      (16,003)      10,182      (16,443)
      Reclassification
       adjustments for
       losses included in
       net income               2,642            -        2,621            -
      Reclassification
       adjustment for
       dividend-in-kind             -            -        4,407            -
    -------------------------------------------------------------------------
                                3,744      (16,003)      17,210      (16,443)
    -------------------------------------------------------------------------
    Change in cumulative
     unrealized (losses)
     gains on available-
     for-sale marketable
     securities
      Unrealized gains
       (losses) arising
       during the period        1,524       (4,591)      13,687       (6,645)
      Reclassification
       adjustments for
       (gains) losses
       included in net
       income                  (4,568)           -       (6,038)          55
    -------------------------------------------------------------------------
                               (3,044)      (4,591)       7,649       (6,590)
    -------------------------------------------------------------------------
    Other comprehensive
     income (loss) before
     income taxes                 700      (15,670)      40,911      (13,658)
    Future income tax
     expense (recovery)           701       (4,957)       6,202       (5,832)
    -------------------------------------------------------------------------
    Other comprehensive
     (loss) income                 (1)     (10,713)      34,709       (7,826)
    -------------------------------------------------------------------------

    COMPREHENSIVE INCOME
     (LOSS)               $    14,735  $      (139)  $   76,622  $    29,515
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Prior year comparative figures have been restated for a change in
        accounting standards.



    CONSOLIDATED STATEMENTS OF CASH FLOWS

    -------------------------------------------------------------------------
                             Three months ended            Year ended
    -------------------------------------------------------------------------
                          December 31  December 31  December 31  December 31
    (thousands of dollars)       2009       2008(1)        2009       2008(1)
    -------------------------------------------------------------------------
                                         (restated)                (restated)

    CASH FLOW PROVIDED BY
     (USED IN):
    OPERATING ACTIVITIES
    Net income            $    14,736  $    10,574  $    41,913  $    37,341
    Items not affecting
     cash
      Amortization             24,473       22,129       98,708       87,744
      Amortization of
       above- and
       below-market leases       (578)        (574)      (2,323)      (2,253)
      Rent revenue recognized
       on a straight-line
       basis                   (2,153)        (887)      (5,053)      (5,374)
      Gain on disposition
       of income-producing
       property                  (526)      (1,631)        (737)      (1,631)
      Gains on disposition
       of land                      -           (3)        (118)      (3,945)
      Realized (gains)
       losses on sale of
       marketable securities   (3,340)         160       (4,242)         212
      Change in cumulative
       unrealized (gains)
       losses on marketable
       securities
       held-for-trading          (314)         850       (1,952)       1,638
      Loss (gain) on
       settlement of debt       1,497         (438)       2,394         (438)
      Non-cash compensation
       expense                  1,482          928        4,209        3,899
        Less settlement of
         restricted shares
         units                 (2,463)      (1,275)      (2,463)      (1,275)
        Less settlement of
         deferred shares
         units                   (514)           -         (514)           -
      Interest paid in
       excess of effective
       interest on assumed
       mortgages                 (294)        (294)      (1,189)      (1,436)
      Effective interest
       rate in excess of
       coupon rate on
       senior unsecured and
       convertible debentures     306          225          984          864
      Convertible debenture
       interest paid in
       common shares                -            -       12,613       12,891
      Other non-cash
       interest expense           749          617        2,769        2,466
      Equity income from
       Equity One, Inc.         1,287       (1,405)      (7,066)      (8,716)
      Dilution (gain) loss
       on Equity One, Inc.
       investment                   -       (2,898)         676       (2,898)
      Future income taxes      (2,360)       7,021        7,700       16,264
      Loss on foreign
       exchange currency           67            -          278            -
      Unrealized loss on
       interest rate swaps
       not designated as
       hedges                   1,203            -        1,203            -
    Deferred leasing costs     (1,517)      (1,021)      (5,022)      (4,033)
    Dividends received from
     Equity One, Inc.               -        5,145       12,452       18,193
    Net change in non-cash
     operating items           18,695       20,911       (6,592)      (1,994)
    -------------------------------------------------------------------------
    Cash provided by
     operating activities      50,436       58,134      148,628      147,519
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Acquisition of
     shopping centres         (35,633)     (10,757)     (59,039)     (56,704)
    Acquisition of land and
     shopping centres held
     for development             (886)        (284)     (10,273)     (11,887)
    Proceeds from
     disposition of
     shopping centre            4,756            -        4,756            -
    Proceeds from
     disposition of land
     held for development           -          433           70       10,581
    Expenditures on
     shopping centres         (12,886)     (11,935)     (35,309)     (26,619)
    Expenditures on land
     and shopping centres
     under development        (33,733)     (77,179)    (168,110)    (227,775)
    Changes in accounts
     payable and accrued
     liabilities related
     to investing activities  (11,671)      19,372      (15,595)      32,908
    Investment in common
     shares of Equity One,
     Inc.                           -       (1,263)           -       (1,263)
    Increase in loans and
     mortgages receivable      (2,324)        (227)      (3,714)      (1,507)
    Investment in
     marketable securities     (3,631)     (14,869)      (6,743)     (37,110)
    Return of capital from
     investments in
     marketable securities        264          304        2,030          623
    Proceeds from
     disposition of
     marketable securities     31,305        5,292       59,067        7,474
    -------------------------------------------------------------------------
    Cash used in investing
     activities               (64,439)     (91,113)    (232,860)    (311,279)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Mortgage financings,
     loans and credit
     facilities
      Borrowings, net of
       financing costs         72,250      207,363      621,208      552,708
      Principal instalment
       payments                (8,422)      (9,835)     (38,917)     (38,139)
      Other repayments on
       maturity              (210,000)    (134,248)    (685,930)    (452,273)
    Purchase of senior
     unsecured debentures           -       (2,543)      (1,145)      (2,543)
    Issuance of senior
     unsecured debentures,
     net of issue costs       124,000            -      124,000            -
    Issuance of convertible
     debentures, net of
     issue costs               47,996            -      120,071            -
    Issuance of common
     shares, net of issue
     costs                      2,791        1,306       57,771      149,797
    Issuance of warrants,
     net of issue costs             -            -        1,821            -
    Cash balance included
     in dividend-in-kind          (65)           -         (492)           -
    Payment of dividends      (29,399)     (28,682)    (118,192)     (49,312)
    -------------------------------------------------------------------------
    Cash provided by
     financing activities        (849)      33,361       80,195      160,238
    -------------------------------------------------------------------------
    Effect of currency rate
     movement on cash
     balances                       -          379        1,322          334
    -------------------------------------------------------------------------
    Increase in cash and
     cash equivalents         (14,852)         761       (2,715)      (3,188)
    Cash and cash
     equivalents,
     beginning of the
     period                    19,400        6,502        7,263       10,451
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     the period           $     4,548  $     7,263  $     4,548  $     7,263
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    SUPPLEMENTARY
     INFORMATION
    Cash income taxes
     paid                 $         -  $       611  $     1,358  $     2,251
    -------------------------------------------------------------------------
    Cash interest paid    $    30,065  $    30,774  $   126,695  $   120,183
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Prior year comparative figures have been restated for a change in
        accounting standards.



    CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS

    -------------------------------------------------------------------------
    (thousands of dollars,
     except per share
     amounts                 Three months ended            Year ended
    -------------------------------------------------------------------------
                          December 31  December 31  December 31  December 31
                                 2009       2008(1)        2009       2008(1)
    -------------------------------------------------------------------------
                                         (restated)                (restated)

    Net income for the
     period               $    14,736  $    10,574  $    41,913  $    37,341

    Add (deduct):
      Amortization of
       shopping centres,
       deferred costs and
       intangible assets       23,022       21,537       94,501       85,585
      Gain on disposition
       of income-producing
       shopping centre           (526)      (1,631)        (737)      (1,631)
      Equity income (loss)
       from Equity One(2)       1,287       (1,405)      (7,066)      (8,716)
      Funds from operations
       from Equity One(2)           -        3,753       15,009       12,502
      Future income taxes
       (recovery)              (2,360)       7,021        7,700       16,264
    -------------------------------------------------------------------------
    Funds from operations
     ("FFO")                   36,159       39,849      151,320      141,345
    Deduct: the Company's
     share of Equity One's
     non-cash impairment loss       -        1,023            -        7,503
    Deduct: dilution (gain)
     loss on Equity One
     investment                     -       (2,898)         676       (2,898)
    -------------------------------------------------------------------------
    FFO excluding dilution
     (gain) loss on Equity
     One investment and
     the Company's share
     of Equity One's
     non-cash impairment
     loss                 $    36,159  $    37,974  $   151,996  $   145,950
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FFO per diluted share $      0.37  $      0.44  $      1.61  $      1.62
    Deduct: the Company's
     share of Equity
     One's non-cash
     impairment loss                -         0.01            -         0.09
    Deduct: dilution
     (gain) loss on Equity
     One investment                 -        (0.03)        0.01        (0.04)
    -------------------------------------------------------------------------
    FFO per diluted share
     excluding dilution
     loss on Equity One
     investment and the
     Company's share of
     Equity One's
     non-cash impairment
     loss                 $      0.37  $      0.42  $      1.62  $      1.67
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average
     diluted shares - FFO  97,007,411   90,423,576   93,868,815   87,260,224
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Prior year comparative figures have been restated for a change in
        accounting standards.
    (2) Current year amounts cover period to August 14, 2009.
    

SOURCE First Capital Realty Inc.

For further information: For further information: Dori J. Segal, President & C.E.O., or Karen H. Weaver, Executive Vice President & C.F.O., First Capital Realty Inc., 85 Hanna Avenue, Suite 400, Toronto, Ontario, Canada, M6K 3S3, Tel: (416) 504-4114, Fax: (416) 941-1655, www.firstcapitalrealty.ca


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