First Capital Realty announces record 2007 results



    Strong portfolio fundamentals, redevelopment and expansion activities
    drive 4.9% same property NOI growth.

    TORONTO, March 6 /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
record financial results for the year ended December 31, 2007.

    
    YEAR HIGHLIGHTS:
    -------------------------------------------------------------------------
                                         Year Ended December 31
    -------------------------------------------------------------------------
    ($ millions, except per share                                 Percentage
     amounts)                                 2007         2006       Change
    -------------------------------------------------------------------------
    Enterprise value                     $   4,218    $   4,080         3.4%
    -------------------------------------------------------------------------
    Property rental revenue              $   376.9    $   326.0        15.6%
    -------------------------------------------------------------------------
    Net operating income (NOI)           $   242.4    $   205.6        17.9%
    -------------------------------------------------------------------------
    Funds from operations (FFO)          $   125.4    $   117.2         7.0%
    -------------------------------------------------------------------------
    FFO per diluted share                $    1.60    $    1.58         1.3%
    -------------------------------------------------------------------------
    Adjusted funds from operations
     (AFFO)                              $   122.3    $   106.7        14.6%
    -------------------------------------------------------------------------
    AFFO per diluted share               $    1.42    $    1.36         4.4%
    -------------------------------------------------------------------------
    Debt to Aggregate Assets
    (Properties at 8.4% Cap rate and
     EQY at $14 USD per share)               56.4%        55.4%
    -------------------------------------------------------------------------
    Debt to market capitalization            48.9%        43.7%
    -------------------------------------------------------------------------
    Weighted average number of shares
     for FFO (000's)                        78,428       74,322         5.5%
    -------------------------------------------------------------------------
    Weighted average number of shares
     for AFFO (000's)                       86,305       78,272        10.3%
    -------------------------------------------------------------------------


    OPERATIONS HIGHLIGHTS FOR THE YEAR 2007:

    -   Invested $490 million in acquisitions, development activities and
        property improvements
    -   Added 1.6 million square feet of gross leasable area from
        acquisitions and development coming on line
    -   Acquired eight development land sites and five land parcels adjacent
        to existing properties comprising a total of 90.3 acres
    -   3.4% same property NOI growth; 4.9% same property NOI growth
        including redevelopment and expansion
    -   13% increase on renewal leases
    -   Occupancy of 95.3% compares to 95.0% at September 30, 2007 and 95.7%
        at December 31, 2006. Acquisitions throughout the year had average
        occupancy rate of 91%
    -   Net new leasing totalled 605,000 square feet including development
        and redevelopments coming on line; renewal leasing totalled 1,081,000
        square feet
    -   Average lease rate per occupied square foot increased by 4.4% to
        $14.56 at December 31, 2007
    -   Completed new leasing on existing space totalling 521,000 square feet
        at an average rate of $18.58 per square foot, representing a 53.3%
        increase versus lost leases


    FOURTH QUARTER HIGHLIGHTS:
    -------------------------------------------------------------------------
                                           Three months ended
                                              December 31
    -------------------------------------------------------------------------
    ($ millions, except per share                                 Percentage
     amounts)                                 2007         2006       Change
    -------------------------------------------------------------------------
    Property rental revenue              $    96.6    $    87.8        10.0%
    -------------------------------------------------------------------------
    Net operating income (NOI)           $    63.8    $    57.3        11.3%
    -------------------------------------------------------------------------
    Funds from operations (FFO)          $    32.9    $    32.7         0.6%
    -------------------------------------------------------------------------
    FFO per diluted share                $    0.41    $    0.43        (4.7%)
    -------------------------------------------------------------------------
    Adjusted funds from operations
     (AFFO)                              $    33.0    $    30.5         8.2%
    -------------------------------------------------------------------------
    AFFO per diluted share               $    0.37    $    0.38        (2.6%)
    -------------------------------------------------------------------------
    Weighted average number of shares
     for FFO (000's)                        80,003       76,025         5.2%
    -------------------------------------------------------------------------
    Weighted average number of shares
     for AFFO (000's)                       88,807       81,017         9.6%
    -------------------------------------------------------------------------


    -   Invested $100 million in acquisitions, development and property
        improvements
    -   Added 268,000 square feet of gross leasable area from acquisitions
        and development coming on line
    -   3.2% same property NOI growth; 5.8% same property NOI growth
        including redevelopment and expansion
    -   19.7% increase on renewal leases
    -   Net new leasing totalled 192,000 square feet, including development
        and redevelopments coming on line; renewal leasing totalled
        261,000 square feet
    

    "We continue to focus our efforts in our well-located shopping centre and
land portfolio which we believe will remain the main driver of FFO growth"
said Dori J. Segal, President & CEO. "I am confident that owning a property
portfolio with good fundamentals combined with continued proactive management
and development activities is a good place to be in today's challenging
environment, while we cautiously keep our eyes open for opportunities that may
present themselves."

    FINANCIAL HIGHLIGHTS

    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 for the fourth quarter of 2007 rose 0.6% to $32.9 million or $0.41
per diluted common share, from $32.7 million or $0.43 per diluted common share
in the same period in 2006. The increase in FFO was primarily associated with
increased net operating income resulting from same property NOI growth as well
as acquisitions and development projects coming on line and decreased
corporate expenses in the quarter partially offset by an increase in interest
expense of $4.2 million, a decline in interest and other income of
$ 3.3 million and a decline in the US dollar exchange rate.
    FFO for the fourth quarter of 2007 included non-recurring items amounting
to approximately $0.5 million or $0.01 per share compared to approximately
$2.0 million or $0.03 per share in the same period in 2006.
    For the year ended December 31, 2007, FFO rose 7.0% to $125.4 million or
$1.60 per diluted common share from $117.2 million or $1.58 per diluted common
share in 2006. The increase in FFO was primarily due to increased net
operating income resulting from same property NOI growth as well as
acquisitions and development projects coming on line, partially offset by an
increase in interest expense of $22.2 million, a decline in FFO from Equity
One of $1.7 million and increase in corporate expenses associated with
transaction costs of $2.3 million related to unsuccessful and unfeasible
acquisitions and increase in non-cash compensation of $1.8 million.
    FFO for the year ended December 31, 2007 included non-recurring items
amounting to approximately $1.9 million or $0.02 per diluted common share
compared to approximately $2.6 million or $0.03 per diluted common share in
2006.
    Management also looks at FFO on a comparable basis in order to further
analyze its core Canadian operations. FFO on a comparable basis was $1.60 per
share in 2007 vs $1.52 per share in 2006, an increase of 5.3%. This is derived
by eliminating non-recurring items in 2007 and 2006, as well as eliminating
Equity One FFO variances.


    Adjusted Funds from Operations

    Management views AFFO as an effective measure of cash generated from
operations. For the year ended December 31, 2007, AFFO rose 4.4% to $1.42 per
diluted common share from $1.36 per diluted common share in 2006. AFFO is
calculated by adjusting FFO for amortization of non-cash financing costs,
accretion of debt discounts, straight-line and market rent adjustments,
non-cash compensation expenses, interest payable in shares, non-cash gains or
losses on debt and hedges and actual costs incurred for capital expenditures
and leasing costs for maintaining shopping centre infrastructure and revenues
from current leases. The Company's proportionate share of Equity One FFO is
reversed and only the regular cash dividends received are included in AFFO.

    
    Net Income

    -------------------------------------------------------------------------
    ($ thousands, except per      Three months ended          Year ended
     share amounts)                    Dec. 31                  Dec. 31
    -------------------------------------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Net income                    $9,252     $12,035     $30,353     $45,959
    -------------------------------------------------------------------------
    Earnings per share
     (diluted)                     $0.12       $0.16       $0.39       $0.62
    -------------------------------------------------------------------------
    Weighted average commons
     shares - diluted (000's)     80,003      76,025      78,428      74,322
    -------------------------------------------------------------------------
    

    Net income in the fourth quarter of 2007 totalled $9.3 million or $0.12
per diluted common share compared to $12.0 million or $0.16 per diluted common
share in the same period in 2006.
    For the year ended December 31, 2007, net income was $30.4 million or
$0.39 per diluted common share compared to $46.0 million or $0.62 per diluted
common share in 2006.
    The decrease in net income for the fourth quarter and the year is
primarily attributed to the decrease in equity income from Equity One, Inc.
associated with the disposition of their Texas portfolio from both the sale
and reduced portfolio (approximately $19.4 million gain, net of taxes). Net
income also decreased due to an increase in amortization expense of
$11.4 million, increased interest expense of $22.2 million and a decline in
the US$ exchange rate, and was somewhat offset by increased net operating
income attributed to same property NOI growth along with NOI from acquisitions
and development coming on-line.

    ACQUISITION AND DEVELOPMENT HIGHLIGHTS

    During the fourth quarter of 2007, the Company acquired an interest in
one income-producing shopping centre comprising 106,000 square feet in
Nanaimo, British Columbia. The aggregate acquisition amount of $29.6 million,
including closing costs, was funded in cash. The Company also invested
$14.7 million in acquiring additional space at existing properties and two
land parcels adjacent to existing properties, adding 54,000 square feet of
gross leasable area and 0.6 acres of expansion land to the portfolio.
    For the year ended December 31, 2007, the Company invested a total of
$319.7 million in the acquisition of interests in six income-producing
shopping centres totalling 937,000 square feet; the purchase of additional
space and land parcels adjacent to existing properties, adding 195,000 square
feet of space at ten properties; 90.3 acres at 13 land sites; and the
remaining interest in one of the Company's properties.
    Development of 168,000 square feet was brought on line during the fourth
quarter leased at an average rate of $21.40 per square foot. For the year, the
Company brought on line 521,000 square feet at an average rate of $19.52 per
square foot.
    The Company also invested $35.6 million during the fourth quarter in its
active development projects and improvements to existing properties. For the
year ended December 31, 2007, investment in these activities totalled
$170.9 million.

    OPERATING HIGHLIGHTS

    Acquisitions during 2007, combined with the full impact of acquisitions
in the prior year, contributed $10.4 million to NOI in the quarter, while
development and redevelopment activities contributed a further $8.1 million.
Acquisitions completed in 2007, combined with the full impact of acquisitions
in the prior year contributed $35.6 million to NOI, while development and
redevelopment activities contributed a further $28.8 million. Same property
NOI increased 3.2% and 3.4%, generating growth of $1.4 million and
$5.5 million in the three months and year ended December 31, 2007,
respectively.
    Leasing activity in the fourth quarter, including development coming on
line, resulted in net new leasing of 192,000 square feet. Renewal leasing
totalled 261,000 square feet with a 19.7% increase over expiring rates. For
the year, net new leasing, including development coming on line totalled
605,000 square feet. Renewal leasing totalled 1.1 million square feet with a
13% increase over expiring rates.
    Properties acquired in 2007 had an occupancy of 91.0%, providing
potential for future income growth as vacant space is leased. The average rate
per occupied square foot at December 31, 2007 increased to $14.55 per square
foot, before the impact of 2007 acquisitions and to $14.56 including the 2007
acquisitions from $13.95 at December 31, 2006.
    Portfolio occupancy at December 31, 2007 was 95.3% compared to 95.0% at
September 30, 2007 and 95.7% at December 31, 2006.

    FINANCING AND CAPITAL MARKET HIGHLIGHTS

    During 2007, the Company completed financing transactions to further
enhance the Company's financial flexibility and provide capital for continued
growth.
    During the year the Company issued 4.4 million common shares for total
equity raised of $109.4 million through various financing transactions
including the exercise of warrants and options, the payment of interest on
certain of its convertible debentures in shares and the dividend reinvestment
plan.
    The Company also issued in January and April 2007 two additional series
of senior unsecured debentures totalling $200 million using the proceeds for
acquisition and development activities, payment of maturing mortgages and
general corporate purposes. Series E carries a coupon of 5.36% and matures on
January, 2014. Series F carries a coupon of 5.32% and matures October, 2014.
    The Company completed an unsecured facility for $250 million in March,
2007 with a syndicate of six financial institutions. In October 2007 the
Company completed an expansion of this facility to $350 million with a seventh
bank joining the syndicate. The facility has a term to March 2010.
    In addition, the Company completed a $25 million revolving term credit
facility with a U.S. financial institution. The facility is secured by shares
of Equity One.
    On June 29, 2007 the Company also issued, via private placement,
$50 million 5.50% convertible unsecured subordinated debentures for total
proceeds of $53.5 million. These debentures are in addition to and part of the
issue of $200 million of convertible debentures completed in the prior years.
The 5.50% debentures are due September 30, 2017. It is the current intention
of the Company to continue to satisfy its obligations to pay principal and
interest on these convertible debentures by the issuance of common shares.

    SUBSEQUENT EVENT HIGHLIGHTS

    Interest on Convertible Debentures

    On February 13, 2008, the Company announced that it will pay the interest
due on March 31, 2007 to holders of both classes of its 5.50% convertible
unsecured subordinated debentures due September 30, 2017 by the issuance of
common shares.

    Acquisitions

    Since January 1, 2008, First Capital Realty has invested $15.8 million in
two development sites totalling 15.6 acres of commercial land and three
adjacent land parcels to existing centres totaling 3.2 acres of commercial
land.

    DIVIDENDS

    The Company will pay a first quarter dividend of $0.32 per common share
on April 9th, 2008 to shareholders of record on March 28th, 2008.

    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.
    The current environment remains extremely competitive, however the
competition seems to have shifted to the capital side of our business. Both
debt and equity markets are challenging relative to pricing currently being
asked by the 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.
    Development and redevelopment activities continue to provide the Company
with opportunities to grow within its existing portfolio and to participate in
new growth markets. 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 in
the current environment of low capitalization rates, increasing cost and
scarcity of capital.
    Specifically, Management will focus on the following four areas to
achieve its objectives in 2008:

    
    -   same property net operating income growth;
    -   development and redevelopment activities;
    -   increasing efficiency and productivity of operations; and
    -   capital preservation in order to decrease dependence on capital
        markets.

    Overall, Management is confident that the quality of the Company's real
estate will continue to generate sustainable and growing cash flows while
producing superior returns on investment over the long term.

    GUIDANCE

    Guidance for the year ending December 31, 2008 is as follows:

    -------------------------------------------------------------------------
    (per share amounts)                                     Low         High
    -------------------------------------------------------------------------
    Projected diluted net income                          $0.37        $0.39
    -------------------------------------------------------------------------
    Adjustments
    -------------------------------------------------------------------------
      Projected FFO from Equity One                        0.23         0.26
    -------------------------------------------------------------------------
      Projected equity income from Equity One             (0.14)       (0.16)
    -------------------------------------------------------------------------
      Projected amortization and future income taxes       1.16         1.18
    -------------------------------------------------------------------------
    Projected FFO                                         $1.62        $1.67
    -------------------------------------------------------------------------
    


    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, the U.S. - Canadian foreign
currency exchange rate, corporate expenses, level and timing of acquisitions
of income producing properties, participation by shareholders in our Dividend
Reinvestment Plan and numerous other factors. In addition, the projected range
of funds from operations includes Equity One based on publicly available
information. Not all factors which affect our range of projected 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. Specific assumptions include same property
NOI growth of 2-3%, income producing property acquisitions totalling
$50 million, development coming on line of 800,000 to 900,000 square feet with
approximate gross book value of $200 to $230 and the current interest rate
environment and current US-Canadian foreign exchange rate. The range presented
represents Management's estimate of results based upon these assumptions as of
the date of this press release.
    Readers should refer to the section below titled "Forward Looking
Statements" for important information relating to our guidance, including risk
factors.

    2007 actual results compared to 2007 guidance

    The 2007 actual results were consistent with the 2007 Guidance presented
by the Company in the Q3 results press release dated November 8, 2007.

    
    -------------------------------------------------------------------------
                                            Guidance issued
                                           November 8, 2007
    ------------------------------------------------------------      Actual
    (per share amounts)                        Low         High         2007
    -------------------------------------------------------------------------
    Diluted net income                       $0.36        $0.38        $0.39
    -------------------------------------------------------------------------
    Adjustments
    -------------------------------------------------------------------------
      FFO from Equity One net of
       equity income                          0.26         0.27         0.26
    -------------------------------------------------------------------------
      Equity income from Equity One          (0.15)       (0.16)       (0.18)
    -------------------------------------------------------------------------
      Amortization and future income taxes    1.11         1.11         1.13
    -------------------------------------------------------------------------
    FFO                                      $1.58        $1.60        $1.60
    -------------------------------------------------------------------------
    Shopping centre acquisitions                 $250M                 $254M
    -------------------------------------------------------------------------
    Development coming on-line               480,000 sq. ft   521,000 sq. ft.
    -------------------------------------------------------------------------
    


    The company's FFO for the year ended December 31, 2007 was $1.60 per
diluted share compared to guidance of $1.58 to $1.60. The 2007 actual net
income of $0.39 was $0.01 above projected due to lower than forecast corporate
expenses. Income from Equity One was higher than anticipated primarily due to
gains on sale of specific assets. The higher equity income also resulted in
higher future income taxes.

    CONFERENCE CALL

    Management will hold a conference call at 1:00 p.m. ET on Friday,
March 7, 2008 to discuss the Company's 2007 year end results. The call and
supporting slides can be accessed at the Company's website at
www.firstcapitalrealty.ca. 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, downloads.

    TELECONFERENCE:

    You may participate in the live conference toll free at 800-633-8949 or
at 416-641-6700. To ensure your participation, please call five minutes prior
to the scheduled start of the call. The call will be archived through
March 14, 2008 and can be accessed by dialing toll free 800-558-5253 or
416-626-4100 with access code 21372707.

    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 our Conference Calls section of our
website.
    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 800-633-8949 or 416-641-6700. For assistance at any point during the
call, press '(*)0'.

    COMPANY INFORMATION

    The Company's Supplementary Information for the fourth quarter and year
ended 2007 will be posted on the Company's website at
www.firstcapitalrealty.ca.

    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 161 properties, including six under development,
totalling approximately 19.4 million square feet of gross leasable area and
14 land sites in the planning stage for future retail development. In
addition, the Company owns 14 million shares of Equity One (approximately
19%), one of the largest shopping centre REITS in the southern U.S., that
trades on the New York Stock Exchange under the ticker symbol EQY. Including
its investments in Equity One, the Company has interests in 326 properties
totalling approximately 36.5 million square feet of gross leasable area.

    Forward Looking Statements

    Certain statements included in this press release constitute
forward-looking statements, including those identified by the expressions
"anticipate", "believe", "plan", "estimate", "expect", "intend" and similar
expressions to the extent they relate to the Company or its Management. 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.
    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
"Risk Management" in the Management's Discussion and Analysis ("MD&A") which
is available on SEDAR at www.sedar.com.
    Factors that could cause actual results or events to differ materially
from those expressed or implied by forward-looking statements in addition to
those described in the MD&A, 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, financial difficulties
and defaults, changes in interest rates, credit spreads, changes in operating
costs, First Capital Realty's ability to obtain insurance coverage at a
reasonable cost and the availability of financing.
    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.
    These forward-looking statements are made as of March 7, 2008.

    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. 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) should not be considered as
alternatives to GAAP net income for the purpose of evaluating operating
performance.

    Funds from Operations - RealPac Recommendations

    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 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.

    Net Operating Income

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


    
    FIRST CAPITAL REALTY INC.

    CONSOLIDATED BALANCE SHEETS

    -------------------------------------------------------------------------
    December 31 (thousands of dollars)                     2007         2006
    -------------------------------------------------------------------------

    ASSETS
    Real Estate Investments
    Shopping centres                                 $2,718,078   $2,423,801
    Land and shopping centres under development         284,077      178,347
    Deferred costs                                       79,606       74,778
    Intangible assets                                    35,938       31,868
    -------------------------------------------------------------------------
                                                      3,117,699    2,708,794
    Investment in Equity One                            191,536      228,665
    Loans, mortgages and other real estate assets        11,589       24,056
    -------------------------------------------------------------------------
                                                      3,320,824    2,961,515
    Other assets                                         32,395       47,129
    Amounts receivable                                   36,008       28,070
    Cash and cash equivalents                            10,451        6,810
    Future income tax assets                              9,731       17,355
    -------------------------------------------------------------------------
                                                     $3,409,409   $3,060,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Mortgages, loans and credit facilities           $1,471,114   $1,388,650
    Accounts payable and other liabilities              110,006      106,145
    Intangible liabilities                               17,795       18,453
    Senior unsecured debentures                         595,376      399,813
    Convertible debentures                              217,030      192,189
    Future income tax liabilities                        46,757       44,036
    -------------------------------------------------------------------------
                                                      2,458,078    2,149,286
    SHAREHOLDERS' EQUITY                                951,331      911,593
    -------------------------------------------------------------------------
                                                     $3,409,409   $3,060,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF EARNINGS

    -------------------------------------------------------------------------
                                  Three months ended           Years ended
                                       December 31             December 31
    -------------------------------------------------------------------------
    (thousands of dollars,
     except per share amounts)      2007        2006        2007        2006
    -------------------------------------------------------------------------

    REVENUE
    Property rental revenue   $   96,643  $   87,815  $  376,891  $  325,980
    Interest and other income        469       3,746       6,033       6,917
    -------------------------------------------------------------------------
                                  97,112      91,561     382,924     332,897
    -------------------------------------------------------------------------
    EXPENSES
    Property operating costs      32,832      30,481     134,446     120,354
    Interest expense              28,882      25,323     116,043      93,809
    Amortization
      Shopping centres            14,505      12,522      55,118      46,441
      Deferred costs               3,555       3,398      14,629      12,118
      Intangible assets            2,242       1,658       8,217       5,693
      Deferred financing fees        813         905         813       3,178
      Other assets                   264         348       1,051       1,011
    Corporate expenses             5,165       6,238      23,544      19,282
    -------------------------------------------------------------------------
                                  88,258      80,873     353,861     301,886
    -------------------------------------------------------------------------
    Equity income from Equity
     One                           4,455       5,517      14,375      32,696
    Loss on settlement of debt         -           -        (483)          -
    -------------------------------------------------------------------------
    Income before income taxes    13,309      16,205      42,955      63,707
    -------------------------------------------------------------------------
    Income taxes:
      Current                        368         653       1,672       4,155
      Future                       3,689       3,517      10,930      13,593
    -------------------------------------------------------------------------
                                   4,057       4,170      12,602      17,748
    -------------------------------------------------------------------------
    Net income                    $9,252     $12,035     $30,353     $45,959
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per common share
    Basic                          $0.12       $0.16       $0.39       $0.62
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted                        $0.12       $0.16       $0.39       $0.62
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

    -------------------------------------------------------------------------
                                  Three months ended           Years ended
                                         December 31           December 31
    -------------------------------------------------------------------------
    (thousands of dollars)          2007        2006        2007        2006
    -------------------------------------------------------------------------

    NET INCOME                $    9,252  $   12,035  $   30,353  $   45,959

    OTHER COMPREHENSIVE INCOME
    Unrealized foreign
     currency (loss) gain on
     translating self-sustaining
     foreign operations             (138)      2,805      (9,950)        407
    Other comprehensive loss of
     Equity One                        -           -        (320)          -
    Loss on cash flow hedges of
     interest rates               (1,517)          -      (2,300)          -
    Change in cumulative
     unrealized gain (loss)
     on available-for-sale
     marketable securities           103           -        (241)          -
    Reclassification of
     adjustment for gains and
     losses on cash flow hedges
     of interest rates included
     in income                         -           -        (436)          -
    -------------------------------------------------------------------------
    Other comprehensive (loss)
     income before income taxes   (1,552)      2,805     (13,247)        407
    Future income tax recovery      (421)          -      (1,044)          -
    -------------------------------------------------------------------------
    Other comprehensive (loss)
     income                       (1,131)      2,805     (12,203)        407
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    COMPREHENSIVE INCOME      $    8,121  $   14,840  $   18,150  $   46,366
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS

    -------------------------------------------------------------------------
                                  Three months ended           Years ended
                                       December 31             December 31
    -------------------------------------------------------------------------
    (thousands of dollars,
     except per share amounts)      2007        2006        2007        2006
    -------------------------------------------------------------------------

    Net income for the year   $    9,252  $   12,035  $   30,353  $   45,959

    Add (deduct):
      Amortization of shopping
       centres, deferred costs
       and intangible assets      20,302      17,579      77,964      64,252
      Gain on disposition of
       income-producing
       shopping centre                 -           -        (323)          -
      Current income tax on
       Equity One special
       dividend from gain on
       real estate                     -         919           -       3,621
      Equity income from
       Equity One                 (4,455)     (5,517)    (14,375)    (32,696)
      Funds from operations
       from Equity One             4,116       4,155      20,807      22,457
      Future income taxes          3,689       3,517      10,930      13,593
    -------------------------------------------------------------------------
    Funds from operations     $   32,904  $   32,688  $  125,356  $  117,186
    -------------------------------------------------------------------------
    FFO per diluted share     $     0.41  $     0.43  $     1.60  $     1.58
    -------------------------------------------------------------------------
    Weighted average diluted
     shares - FFO             80,002,983  76,024,888  78,427,583  74,321,824
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF ADJUSTED FUNDS FROM OPERATIONS

    -------------------------------------------------------------------------
                                  Three months ended           Years ended
                                       December 31             December 31
    -------------------------------------------------------------------------
    (thousands of dollars,
     except per share amounts)      2007        2006        2007        2006
    -------------------------------------------------------------------------

    FFO                       $   32,904  $   32,688  $  125,356  $  117,186
      Add/(Deduct):
      Amortization of
       deferred financing fees       505         620       2,058       2,329
      Amortization of deferred
       debenture issue costs         315         285       1,235         850
      Rental revenue recorded
       on a straight line
       basis and market rent
       adjustments                (2,091)     (3,602)     (8,875)     (7,482)
      Non-cash compensation
       expense                     1,142         790       4,295       2,543
      Accretion and
       amortization of discount
       on debt                       210          87         696         242
      Interest paid in excess
       of implicit interest on
       assumed mortgages            (507)       (589)     (1,890)     (2,323)
      Interest expense payable
       in shares                   3,299       1,868      12,030       5,981
      Change in cumulative
       unrealized gains on
       marketable securities        (273)          -
      Non-cash loss on
       extinguishment of debt          -           -         483           -
      Revenue sustaining
       capital expenditures
       and leasing costs          (2,551)     (2,340)     (9,292)     (8,892)
      Funds from operations
       from Equity One            (4,116)     (4,155)    (20,807)    (22,457)
      Dividends from Equity
       One (Regular)               4,159       4,757      17,617      18,373
      Non-cash (gain) loss on
       interest rate swaps not
       designated as hedges            -          57        (643)        389
    -------------------------------------------------------------------------
    Adjusted Funds from
     Operations(1)            $   32,996  $   30,466  $  122,263  $  106,739
    -------------------------------------------------------------------------
    Adjusted Funds from
     Operations per diluted
     share                    $     0.37  $     0.38  $     1.42  $     1.36
    -------------------------------------------------------------------------
    Weighted average diluted
     shares for AFFO(2)       88,807,137  81,016,837  86,304,978  78,272,322
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excludes the 2006 Equity One Special Dividend of $1.00 per share or
        $14.9 million and the related tax effect of $3.6 million.
    (2) Includes the weighted average outstanding shares that would result
        from the conversion of the convertible debentures.



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF CASH FLOWS

    -------------------------------------------------------------------------
                                  Three months ended           Years ended
                                       December 31             December 31
    -------------------------------------------------------------------------
    (thousands of dollars)          2007        2006        2007        2006
    -------------------------------------------------------------------------
    CASH FLOW PROVIDED BY
     (USED IN):
    OPERATING ACTIVITIES
    Net income                $    9,252  $   12,035  $   30,353  $   45,959
    Items not affecting cash
      Amortization                21,379      18,831      79,828      68,441
      Amortization of above-
       and below-market leases      (584)       (470)     (2,122)     (1,643)
      Rent revenue recognized
       on a straight-line
       basis                      (1,507)     (3,132)     (6,753)     (5,839)
      Gains on land and
       property sales                  -          (3)       (323)       (137)
      Realized loss (gain) on
       sale of marketable
       securities                    238      (3,297)     (2,504)     (4,221)
      Change in unrealized
       gain on investment in
       marketable securities        (273)          -           -           -
      Loss on settlement of debt       -           -         483           -
      Non-cash compensation
       expense                     1,142         790       4,295       2,543
      Interest paid in excess
       of coupon interest on
       assumed mortgages            (507)       (589)     (1,890)     (2,323)
      Debenture interest expense
       in excess of coupon           210          88         696         242
      Convertible debenture
       interest paid in common
       shares                          -           -      12,048       4,295
      Other non-cash interest
       expense                         7           -       2,480           -
      Equity income from Equity
       One                        (4,455)     (5,517)    (14,375)    (32,696)
      Future income taxes          3,689       3,517      10,930      13,593
      Unrealized losses (gains)
       on interest rate swaps not
       designated as hedges            -          57        (643)        389
    Deferred leasing costs          (702)       (698)     (3,429)     (5,613)
    Settlement  of restricted
     share units                  (1,826)     (1,914)     (1,826)     (1,914)
    Dividends received from
     Equity One                    4,159       4,758      17,617      33,266
    Net change in non-cash
     operating items              15,513      10,780       8,191         831
    -------------------------------------------------------------------------
    Cash provided by operating
     activites                    45,735      35,236     133,056     115,173
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Acquisition of shopping
     centres                     (42,885)   (109,366)   (230,554)   (361,329)
    Acquisition of land for
     development                  (1,150)     (6,262)    (65,562)    (34,227)
    Proceeds from disposition
     of shopping centre                -           -       6,400           -
    Proceeds from disposition of
     land for development              -           -           -       1,236
    Expenditures on shopping
     centres                      (6,597)     (6,906)    (23,718)    (19,429)
    Expenditures on land and
     shopping centres under
     development                 (49,414)    (27,947)   (143,744)    (83,449)
    Investment in common shares
     of Equity One                     -     (16,936)     (2,254)    (16,936)
    (Increase) decrease in
     loans and mortgage
     receivable                     (309)       (216)      1,538       3,560
    Investment in marketable
     securities                        -     (13,617)    (32,556)    (30,627)
    Proceeds from disposition
     of marketable securities      7,399      15,608      45,031      33,635
    -------------------------------------------------------------------------
    Cash used in investing
     activities                  (92,956)   (165,642)   (445,419)   (507,566)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Mortgage financings, loans
     and credit facilities
      Borrowings, net of
       financing costs           143,805      48,901     425,428     280,904
      Principal instalment
       payments                   (9,299)     (9,636)    (39,400)    (36,412)
      Repayments on maturity     (82,257)     (2,641)   (305,554)   (260,446)
    Issuance of common shares,
     net of issue costs            1,667       2,359       5,976      35,867
    Issuance of senior
     unsecured debentures,
     net of issue costs               20         (48)    198,296     297,035
    Issuance of convertible
     debentures, net of issue
     costs                            (3)     99,029      53,299      99,029
    Payment of dividends          (5,853)     (5,634)    (21,066)    (22,466)
    -------------------------------------------------------------------------
    Cash provided by financing
     activities                   48,080     132,330     316,979     393,511
    -------------------------------------------------------------------------
    Effect of currency rate
     movement on cash balances      (590)         27        (975)        357
    -------------------------------------------------------------------------
    Increase in cash and cash
     equivalents                     269       1,951       3,641       1,475
    Cash and cash equivalents,
     beginning of the year        10,182       4,859       6,810       5,335
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of the year          $   10,451  $    6,810  $   10,451  $    6,810
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    SUPPLEMENTARY INFORMATION
    Cash income taxes paid    $       26  $      666  $      787  $    4,051
    -------------------------------------------------------------------------
    Cash interest paid        $   32,010  $   25,516  $  115,948  $   94,293
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: Dori J. Segal, President & C.E.O., or Karen H.
Weaver, 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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