Lease Maturities First Capital Realty’s lease maturities are spread on a property-by-property basis, which helps to generate a more stable cash flow and mitigate risks related to changing market conditions. Lease expirations in each of the next ten years range from 3.7% to 8.9% of the total leased area in the Canadian portfolio. The existing First Capital Realty portfolio is concentrated in Ontario, Québec and Alberta. As a result, economic and real estate conditions in these regions will significantly affect the Company’s revenues and the value of its properties. There is a trade-off between operational efficiencies and market influence that can be achieved by geographic concentration, and vulnerability to local market influences that can be avoided by geographic diversification. First Capital Realty will seek to add properties in areas where it currently owns shopping centres to take advantage of local market knowledge, anchor tenant relationships and synergies in both management and leasing. The Company does this while taking into account local market conditions that can affect occupancy rates and rental income levels.  The Company has outstanding indebtedness in the form of mortgages, credit facilities, and convertible debentures and, as such, is subject to the risks normally associated with debt financing, including the risk that the Company’s cash flow will be insufficient to meet required payments of principal and interest. In particular, the aggregate principal amount of the convertible debentures due and payable in 2007 and 2008 is $359 million. Financial Risk  Geographic Diversification  Annual minimum rent by geographic region Average Percent Annual Percent Annualized of Total Minimum of Total Minimum Annualized Rent per Number Square Square Rent at Minimum Square Foot Date of Stores Feet Feet Expiration Rent at Expiration Month-to-month 92 182,030 1.7% $ 1,542,549 1.2% $ 8.47 2004 139 277,724 2.6% 4,377,828 3.3% 15.76 2005 181 585,457 5.5% 7,759,979 5.8% 13.25 2006 216 742,339 6.9% 10,170,280 7.6% 13.70 2007 267 780,104 7.3% 12,888,598 9.7% 16.52 2008 243 889,777 8.3% 14,027,666 10.5% 15.77 2009 123 547,494 5.1% 9,773,894 7.3% 17.85 2010 80 368,857 3.4% 6,073,761 4.6% 16.47 2011 58 666,198 6.2% 8,019,487 6.0% 12.04 2012 87 634,224 5.9% 9,881,879 7.4% 15.58 2013 82 677,766 6.3% 7,768,642 5.8% 11.46 Thereafter 142 3,615,400 33.9% 41,111,877 30.8% 11.37 Total 1,710 9,967,370 93.1% $ 133,396,440 100.0% $ 13.38 ■  Ontario 52% ■  Quebec  25% ■ Alberta  21% ■  Other 2% 38 First Capital Realty Annual Report 2003 Management’s Discussion and Analysis  continued