First Capital Realty reports strong Q3 operating results



    Record level of activity in the portfolio

    TORONTO, Nov. 8 /CNW/ - First Capital Realty Inc. ("First Capital
Realty") (TSX:FCR) Canada's leading owner, developer and operator of
supermarket-anchored neighbourhood and community shopping centres, located
predominantly in growing metropolitan areas, today announced strong operating
results for the third quarter ended September 30, 2007.

    
    THIRD QUARTER HIGHLIGHTS:

    -------------------------------------------------------------------------
    ($ millions, except share and   September 30, September 30,   Percentage
     per share amounts)                     2007          2006        Change
    -------------------------------------------------------------------------
    Enterprise value                    $  4,274      $  3,723         14.8%
    -------------------------------------------------------------------------
    Property rental revenue             $   96.2      $   81.6         17.9%
    -------------------------------------------------------------------------
    Net operating income (NOI)          $   61.7      $   52.4         17.7%
    -------------------------------------------------------------------------
    Funds from operations (FFO)         $   31.4      $   28.5         10.2%
    -------------------------------------------------------------------------
    FFO per diluted share               $   0.40      $   0.38          5.3%
    -------------------------------------------------------------------------
    Debt to market capitalization          46.9%         45.7%             -
    -------------------------------------------------------------------------
    Weighted average number of
     shares for FFO (000's)               79,001        74,997          5.3%
    -------------------------------------------------------------------------

    -   Invested $123 million in acquisitions of adjacent space, development
        and redevelopment activities and property improvements.
    -   Added 183,000 square feet of gross leasable area from additions to
        existing shopping centres and development coming on line.
    -   Added six development sites comprising 47.0 acres, and 0.4 acres in
        one land parcel adjacent to an existing property.
    -   1.5% same property NOI growth; 11.0% increase on renewal leases.
    -   Net new leasing totalled 131,000 square feet including development
        coming on line; renewal leasing totalled 196,000 square feet.
    -   Average lease rate per occupied square foot increased by 3.8% to
        $14.35 at September 30, 2007 compared to the prior year third
        quarter.


    NINE MONTHS HIGHLIGHTS:

    -------------------------------------------------------------------------
    ($ millions, except share and   September 30, September 30,   Percentage
     per share amounts)                     2007          2006        Change
    -------------------------------------------------------------------------
    Property rental revenue             $  280.2      $  238.2         17.6%
    -------------------------------------------------------------------------
    Net operating income (NOI)          $  178.6      $  148.3         20.4%
    -------------------------------------------------------------------------
    FFO                                 $   92.5      $   84.5          9.5%
    -------------------------------------------------------------------------
    FFO per diluted share               $   1.19      $   1.15          3.5%
    -------------------------------------------------------------------------
    Weighted average number of shares
     for FFO (000's)                      77,902        73,747          5.6%
    -------------------------------------------------------------------------

    -   Invested $390 million in acquisitions, development activities and
        property improvements.
    -   Added 1.3 million square feet of gross leasable area from
        acquisitions and development coming on line.
    -   Added 89.7 acres from acquisition of eight development sites and
        three parcels adjacent to existing properties.
    -   4.0% same property NOI growth; 10.9% increase on renewal leases.
    -   Occupancy remains at 95%; 1.8% of vacancy is from space held for
        redevelopment.
    -   Acquisitions during the nine months at 91% occupancy; closures for
        redevelopment including demolition totalled 269,000 square feet at an
        average rate of $8.11.
    -   Net new leasing totalled 378,000 square feet including development
        coming on line; renewal leasing totalled 819,000 square feet.
    -   Completed new leasing on existing space totalling 368,000 square feet
        at an average rate of $17.67 per square foot, representing a 37.8%
        increase versus lost leases year-to-date.
    

    "Our solid performance through 2007 is the result of a rigorous and
consistent focus on finding the 'sure thing' - well located properties in
urban markets with good rent growth opportunities and low risk profiles," said
Dori J. Segal, President & CEO. "Looking ahead, we will continue executing our
strategy of disciplined acquisitions, proactive management, and selective
development and redevelopment activities while maintaining a good credit
posture."

    FINANCIAL HIGHLIGHTS

    FFO presented herein is a key financial measurement used by the real
estate industry to measure and compare the operating performance of real
estate organizations. FFO is a supplemental non-GAAP financial measure and a
reconciliation containing adjustments from GAAP net income to FFO is included
in this press release.
    Effective January 1, 2007, the Company adopted certain new Canadian
accounting standards (GAAP). These standards did not require restatement of
prior periods. The effect of the GAAP changes are detailed in the 2007 Third
Quarter Report and the Company's September 30, 2007 Supplemental Information
Package.

    Funds from Operations ("FFO")

    Funds from operations for the three months ended September 30, 2007
totalled $31.4 million, or $0.40 per diluted common share, compared to
$28.5 million, or $0.38 per diluted common share in 2006. FFO for the first
nine months of 2007 totalled $92.5 million or $1.19 per diluted common share
compared to $84.5 million or $1.15 per diluted common share in the first nine
months of 2006. The increase in FFO in the three and nine month periods ended
September 30, 2007 is primarily due to the Company's income-producing property
acquisitions and development projects coming on line in 2007 and to a lesser
degree, realized gains on marketable securities, partially offset by increased
interest and corporate expenses. Corporate expenses include $0.3 million and
$2.5 million in transaction costs related to unsuccessful and unfeasible
acquisitions for the three and nine months ended September 30, 2007,
respectively, which compares to $0.2 million and $0.7 million in the same
periods in 2006.

    
    Net Income

    -------------------------------------------------------------------------
                                  Three months ended       Nine months ended
                                      September 30            September 30
    -------------------------------------------------------------------------
    ($ millions, except share
     and per share amounts)         2007        2006        2007        2006
    -------------------------------------------------------------------------
    Net income                 $     6.9   $     6.5   $    21.1   $  33.9(1)
    -------------------------------------------------------------------------
    Earnings per diluted
     share                     $    0.09   $    0.09   $    0.27   $    0.46
    -------------------------------------------------------------------------
    Weighted average common
     shares (diluted) (000's)     79,001      74,997      77,902      73,747
    -------------------------------------------------------------------------
    (1) Includes the Company's share in the gain (~$13.4 million, net of tax)
        realized by Equity One on the disposition of its Texas portfolio.
    

    Net income for the three and nine months ended September 30, 2007
amounted to $6.9 million or nine cents per share basic and diluted and $21.1
million or 27 cents per share basic and diluted, respectively. This compares
to $6.5 million or nine cents per share basic and diluted, for the three
months ended September 30, 2006 and $33.9 million or 46 cents per share basic
and diluted, respectively. The year-to-date decrease in net income is
primarily due to the Company's share in the gain (approximately $13.4 million,
net of taxes) realized on the disposition of the Texas property portfolio of
Equity One, Inc. in the second quarter of 2006.

    ACQUISITION AND DEVELOPMENT AND OTHER INVESTMENT HIGHLIGHTS

    During the third quarter of 2007, the Company did not acquire any
shopping centres. The Company invested $23.0 million in acquiring additional
space and one land parcel at or adjacent to existing properties adding 46,000
square feet of gross leasable area and 0.4 acres of expansion land to the
portfolio. The Company also invested $40.6 million in the acquisition of
interests in six land sites adding 47.0 acres of commercial land for future
development. In addition, the Company acquired the remaining 50% interest in
an income-producing shopping centre located in Whitby, Ontario. The
acquisition amount of $11.2 million, including closing costs, was funded
through an assumed mortgage of $7.3 million with the balance paid in cash.
    Through the first nine months of 2007, the Company has invested $275.4
million in the acquisition of five income-producing properties totalling
831,000 square feet; acquisition of additional space and land parcels at or
adjacent to existing properties adding 141,000 square feet of space at nine
properties and 4.0 acres of expansion land at three others; acquisition of
85.6 acres of commercial land for future development at eight sites and the
remaining 50% interest in an income-producing shopping centre.
    Development of 137,200 square feet was brought on line during the third
quarter with 100,800 square feet leased at an average rate of $22.79 per
square foot. Through the first nine months of 2007, the Company has brought
on-line 335,800 square feet of space, including three supermarkets and three
drugstores, which was 89.2% occupied at an average lease rate of $18.04 per
occupied square foot.
    In addition to the acquisitions, the Company invested $47.4 million
during the third quarter in its active development projects and improvements
to existing properties in the portfolio. Currently 1,161,000 square feet of
gross leasable area is under development or redevelopment on 103.2 acres of
land sites or parcels of land adjacent to existing properties. In the first
nine months of 2007, investments in these activities totalled $114.2 million.
    At September 30, 2007, the Company owned 337 acres of land sites and
parcels available for future development.

    OPERATING HIGHLIGHTS

    Net operating income for the three months ended September 30, 2007
totalled $61.7 million, compared to $52.4 million in the third quarter of
2006, an increase of $9.3 million or 17.7%. Acquisitions during 2007, combined
with the full impact of acquisitions in the prior year, contributed $9.2
million to net operating income in the quarter, while development and
redevelopment activities contributed a further $7.2 million. Same property net
operating income increased 1.5%, generating growth of $0.6 million in the
third quarter of 2007.
    Year-to-date, acquisitions completed in 2007 and 2006 contributed
$25.2 million, while development and redevelopment activities contributed a
further $20.0 million. Same property net operating income increased 4.0%,
generating growth of $4.9 million in the nine month period ended September 30,
2007.
    Net new leasing in the third quarter totalled 131,100 square feet
including development coming on line, while renewal leasing totalled 195,600
square feet. For the nine months ended September 30, 2007, net new leasing
totalled 377,800 square feet, including development coming on-line, and
renewal leasing totalled 819,300 square feet. The Company achieved a 37.8%
increase in rates on new versus lost leases year-to-date and a 10.9% increase
on renewal lease rates over expiring lease rates.
    The average rate per occupied square foot at September 30, 2007 increased
to $14.35 per square foot including the impact of the 2007 acquisitions, which
had an average lease rate of $14.31 per square foot. This compares to an
average rate of $13.95 per square foot at December 31, 2006 and $13.83 at
September 30, 2006.
    Portfolio occupancy at September 30, 2007 of 95.0% compares to 95.7% at
December 31, 2006 and 95.4% at September 30, 2006. Properties acquired during
the nine month period ended September 30, 2007 were at 91.0% occupancy while
closures for redevelopment totalled 169,200 square feet, providing potential
for future income growth through leasing and redevelopment activities.

    FINANCING AND CAPITAL MARKET HIGHLIGHTS

    In the aggregate, the Company issued approximately 3.4 million common
shares during the nine month period ended September 30, 2007 primarily from
shareholder participation in the Dividend Reinvestment Plan, and to a lesser
degree, payment of interest on convertible debentures, the conversion of
convertible debentures and exercise of warrants and options.
    On October 4, 2007, the Company completed a $100 million increase on its
unsecured revolving credit facility syndicated with seven financial
institutions bringing the total availability to $350 million, with a term to
March 2010.

    SUBSEQUENT EVENT HIGHLIGHTS

    Dividend Reinvestment Plan

    On October 10, 2007, the Company issued 760,135 common shares at a net
price of $25.30 to participants in the DRIP.

    DIVIDENDS

    The Company announced that it will pay a fourth quarter dividend of $0.32
per common share on January 9, 2008 to shareholders of record on December 28,
2007.

    OUTLOOK

    The current environment remains extremely competitive. Nevertheless, 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 and increasing cost of
capital.
    Specifically, Management is focusing on the following four areas to
achieve its objectives in 2007:

    
    -   same property net operating income growth;
    -   development and redevelopment activities;
    -   increasing efficiency and productivity of operations; and
    -   improving the cost of capital.
    

    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, 2007 is updated to reflect
changes in the markets as follows.
    These 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 shopping centre acquisitions totalling
$250 million, development coming on line of approximately 480,000 square feet
and the current interest rate environment and current US-Canadian foreign
exchange environment. The range presented represents Management's estimate of
results based upon these assumptions as of the date of this press release.

    
    -------------------------------------------------------------------------
    (per share amounts)                                    Low          High
    -------------------------------------------------------------------------
    Projected net income per diluted share           $    0.36     $    0.38
    Adjustments
      Projected FFO from Equity One net of equity         0.11          0.11
       income
      Projected amortization and future income
       taxes                                              1.11          1.11
    -------------------------------------------------------------------------
    Projected FFO per diluted share                  $    1.58     $    1.60
    -------------------------------------------------------------------------
    

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

    CONFERENCE CALL

    Management will hold a conference call at 10:00 a.m. ET on Friday,
November 9, 2007 to discuss the Company's third quarter results. The call and
supporting slides can be accessed at the Company's website at
www.firstcapitalrealty.ca. 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 November 16, 2007 and can be accessed by dialing toll free
800-558-5253 or 416-626-4100 with access code 21351951.

    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.
    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 third quarter 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-anchored neighbourhood and community shopping centres, located
predominantly in growing metropolitan areas. The Company currently owns
interests in 163 properties, including six under development, totalling
approximately 19.2 million square feet of gross leasable area and 12 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 339 properties totalling
approximately 37.3 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")
contained in the Company's 2006 Annual Report 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, 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 November 8, 2007

    NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES

    Funds from Operations

    In Management's view, funds from operations ("FFO") is a commonly
accepted and meaningful indicator 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 disclosure supplements Canadian
generally accepted accounting principles ("GAAP") disclosure. The Company's
method of calculating FFO 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 is presented to assist
investors in analyzing the Company's performance. FFO: (i) does not represent
cash flow from operating activities as defined by GAAP (ii) is 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 an
alternative 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 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.

    Comparable Accounting Basis

    Effective January 1, 2007, the Company adopted several new accounting
standards issued by the Canadian Institute of Chartered Accountants including
comprehensive income, financial instruments and hedges. The standards were
applied on a retroactive basis without restatement of prior periods.
    Management, in preparing this press release, has presented results for
the three and nine months ended September 30, 2007 using both the new
accounting standards as well as the accounting standards that applied in 2006
where applicable. Where results for the three and nine months ended
September 30, 2007 using GAAP that was applicable prior to January 1, 2007 are
compared to the results for September 30, 2006 this is referred to as
"comparable accounting basis". This measure should not be construed as an
alternative to net income determined in accordance with current GAAP.


    
    FIRST CAPITAL REALTY INC.

    CONSOLIDATED BALANCE SHEETS

    -------------------------------------------------------------------------
    (unaudited)                                    September 30  December 31
    (thousands of dollars)                                 2007         2006
    -------------------------------------------------------------------------
    ASSETS
    Real Estate Investments
    Shopping centres                                 $2,643,176   $2,423,801
    Land and shopping centres under development         276,546      178,347
    Deferred costs                                       79,429       74,778
    Intangible assets                                    37,404       31,868
    -------------------------------------------------------------------------
                                                      3,036,555    2,708,794
    Investment in Equity One, Inc.                      191,869      228,665
    Loans, mortgages and other real estate assets        18,564       24,056
    -------------------------------------------------------------------------
                                                      3,246,988    2,961,515
    Other assets                                         41,481       47,129
    Amounts receivable                                   37,421       28,070
    Cash and cash equivalents                            10,182        6,810
    Future income tax assets                             12,579       17,355
    -------------------------------------------------------------------------
                                                     $3,348,651   $3,060,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Mortgages and credit facilities                  $1,418,216   $1,388,650
    Accounts payable and other liabilities              105,689      106,145
    Intangible liabilities                               18,318       18,453
    Senior unsecured debentures                         595,128      399,813
    Convertible debentures                              221,393      192,189
    Future income tax liabilities                        46,356       44,036
    -------------------------------------------------------------------------
                                                      2,405,100    2,149,286
    SHAREHOLDERS' EQUITY                                943,551      911,593
    -------------------------------------------------------------------------
                                                     $3,348,651   $3,060,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF EARNINGS
    -------------------------------------------------------------------------
                                Three months ended         Nine months ended
    -------------------------------------------------------------------------
    (unaudited)
    (thousands of dollars,  September    September    September    September
     except per share              30           30           30           30
     amounts)                    2007         2006         2007         2006
    -------------------------------------------------------------------------
    REVENUE
    Property rental
     revenue                  $96,192      $81,592     $280,248     $238,165
    Interest and other
     income                       506          236        5,564        3,171
    -------------------------------------------------------------------------
                               96,698       81,828      285,812      241,336
    -------------------------------------------------------------------------
    EXPENSES

    Property operating
     costs                     34,467       29,236      101,614       89,873
    Interest expense           29,486       24,014       87,161       68,486
    Amortization               20,151       18,052       58,449       49,610
    Corporate expenses          6,016        3,850       18,379       13,044
    -------------------------------------------------------------------------
                               90,120       75,152      265,603      221,013
    -------------------------------------------------------------------------
    Equity income from
     Equity One, Inc.           2,253        2,872        9,920       27,179
    Loss on settlement
     of debt                        -            -         (483)           -
    -------------------------------------------------------------------------
    Income before income
     taxes                      8,831        9,548       29,646       47,502
    -------------------------------------------------------------------------
    Income taxes:
      Current                      37          317        1,304        3,502
      Future                    1,854        2,689        7,241       10,076
    -------------------------------------------------------------------------
                                1,891        3,006        8,545       13,578
    -------------------------------------------------------------------------
    Net income                 $6,940       $6,542      $21,101      $33,924
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings per common
     share
      Basic                     $0.09        $0.09        $0.27        $0.46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Diluted                   $0.09        $0.09        $0.27        $0.46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS

    -------------------------------------------------------------------------
                                Three months ended         Nine months ended
    -------------------------------------------------------------------------
    (unaudited)
    (thousands of dollars,  September    September    September    September
     except per share              30           30           30           30
     amounts)                    2007         2006         2007         2006
    -------------------------------------------------------------------------
    Net income for the
     period                    $6,940       $6,542      $21,101      $33,924
    Add (deduct):
      Amortization of
       shopping centres,
       deferred costs and
       intangible assets       19,852       16,944       57,662       46,673
      Gain on disposition
       of income-producing
       shopping centre              -            -         (323)           -
      Current income tax
       on Equity One
       special dividend
       from gain on real
       estate                       -            -            -        2,702
      Equity income from
       Equity One              (2,253)      (2,872)      (9,920)     (27,179)
      Funds from operations
       from Equity One          4,971        5,237       16,691       18,302
      Future income taxes       1,854        2,689        7,241       10,076
    -------------------------------------------------------------------------
    Funds from operations     $31,364      $28,540      $92,452      $84,498
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FFO per diluted share       $0.40        $0.38        $1.19        $1.15
    Weighted average
     diluted shares
     - FFO                 79,000,640   74,997,493   77,901,917   73,746,633
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

    -------------------------------------------------------------------------
                                Three months ended         Nine months ended
    -------------------------------------------------------------------------
                            September    September    September    September
    (unaudited)                    30           30           30           30
    (thousands of dollars)       2007         2006         2007         2006
    -------------------------------------------------------------------------
    NET INCOME                 $6,940       $6,542      $21,101      $33,924
    -------------------------------------------------------------------------
    OTHER COMPREHENSIVE INCOME
    Unrealized foreign
     currency (loss) gain
     on translating
     self-sustaining
     foreign operations        (3,331)          65       (9,812)      (2,398)
    Other comprehensive
     loss of Equity One,
     Inc.                      (1,211)           -         (320)           -
    Loss on cash flow hedges
     of interest rates         (1,128)           -         (783)           -
    Change in cumulative
     unrealized gain on
     available-for-sale
     marketable securities        260            -         (344)           -
    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              (5,410)          65      (11,695)      (2,398)
    Future income tax
     (recovery)                  (719)           -         (623)           -
    -------------------------------------------------------------------------
    Other comprehensive
     (loss) income             (4,691)          65      (11,072)      (2,398)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    COMPREHENSIVE INCOME       $2,249       $6,607      $10,029      $31,526
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------



    FIRST CAPITAL REALTY INC.

    CONSOLIDATED STATEMENTS OF CASH FLOWS

    -------------------------------------------------------------------------
                                Three months ended         Nine months ended
    -------------------------------------------------------------------------
                            September    September    September    September
    (unaudited)                    30           30           30           30
    (thousands of dollars)       2007         2006         2007         2006
    -------------------------------------------------------------------------
    CASH FLOW PROVIDED BY
     (USED IN):

    OPERATING ACTIVITIES
    Net income                 $6,940       $6,542      $21,101      $33,924
    Items not affecting
     cash
      Amortization             20,151       18,052       58,449       49,610
      Amortization of
       above- and
       below-market leases       (545)        (453)      (1,538)      (1,173)
      Rent revenue
       recognized on a
       straight-line basis     (1,922)        (889)      (5,246)      (2,707)
      Gains on land and
       property sales               -         (134)        (323)        (134)
      Realized loss (gain)
       on sale of
       marketable
       securities                 531         (288)      (2,742)        (924)
      Change in unrealized
       (gain) loss on
       investment in
       marketable
       securities                (548)           -          273            -
      Loss on settlement
       of debt                      -            -          483            -
      Non-cash compensation
       expense                  1,307          624        3,153        1,753
      Interest paid in
       excess of implicit
       interest on assumed
       mortgages                 (562)        (612)      (1,383)      (1,734)
      Debenture interest in
       excess of coupon           206           55          486          154
      Convertible debenture
       interest paid in
       common shares            6,563        2,758       12,048        4,295
      Other non-cash
       interest expense           770            -        2,473            -
      Equity income from
       Equity One, Inc.        (2,253)      (2,872)      (9,920)     (27,179)
      Future income taxes       1,854        2,689        7,241       10,076
      Unrealized losses
       (gains) on certain
       interest rate swaps        122        1,001         (643)         332
    Deferred leasing costs     (1,099)      (1,948)      (2,727)      (4,915)
    Dividends received
     from Equity One, Inc.      4,173        4,474       13,458       28,508
    Net change in non-cash
     operating items           (9,917)      (9,202)      (7,322)      (9,949)
    -------------------------------------------------------------------------
    Cash provided by
     operating activites       25,771       19,797       87,321       79,937
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Acquisition of
     shopping centres         (22,668)     (63,652)    (187,669)    (251,963)
    Acquisition of land
     for development          (44,038)     (16,024)     (64,412)     (27,965)
    Proceeds from
     disposition of
     shopping centre                -            -        6,400            -
    Proceeds from
     disposition of land
     for development                -        1,236            -        1,236
    Expenditures on
     shopping centres          (8,647)      (6,057)     (17,121)     (12,523)
    Expenditures on land
     and shopping centres
     under development        (37,690)     (24,755)     (94,330)     (55,502)
    Investment in common
     shares of Equity One,
     Inc.                           -            -       (2,254)           -
    Decrease (increase) in
     loans and mortgage
     receivable                 2,141          (65)       1,847        3,776
    Investment in
     marketable
     securities                (4,612)      (4,858)     (32,556)     (17,010)
    Proceeds from
     disposition of
     marketable securities     15,143        5,137       37,632       18,027
    -------------------------------------------------------------------------
    Cash used in investing
     activities              (100,371)    (109,038)    (352,463)    (341,924)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Mortgage financings
     and credit
     facilities
      Borrowings, net of
       financing costs        119,736        5,954      281,623      232,003
      Principal instalment
       payments               (10,245)      (9,424)     (30,101)     (26,776)
      Repayments on
       maturity               (55,767)    (104,747)    (223,297)    (257,805)
    Issuance of common
     shares, net of
     issue costs                1,323        2,280        4,309       33,508
    Issuance of senior
     unsecured debentures,
     net of issue costs           (28)     198,359      198,276      297,083
    Issuance of
     convertible debentures,
     net of issue costs            (4)           -       53,302            -
    Payment of dividends       (4,991)      (6,804)     (15,213)     (16,832)
    -------------------------------------------------------------------------
    Cash provided by
     financing activities      50,024       85,618      268,899      261,181
    -------------------------------------------------------------------------
    Effect of currency
     rate movement on
     cash balances                382           35         (385)         330
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (Decrease) increase
     in cash and cash
     equivalents              (24,194)      (3,588)       3,372         (476)
    Cash and cash
     equivalents, beginning
     of the period             34,376        8,447        6,810        5,335
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     the period               $10,182       $4,859      $10,182       $4,859
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    SUPPLEMENTARY
     INFORMATION
    Cash income taxes
     paid (refunded)            $(143)      $2,363         $761       $3,385
    -------------------------------------------------------------------------
    Cash interest paid        $30,449      $24,196      $83,938      $68,777
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





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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