18 Segmented Information 19 First Capital Inc. Transaction The Company and its subsidiaries operate in the shopping centre segment of the real estate industry in both Canada and the United States. Operating income by geographic segment for the year ended December 31, 2003, is summarized as follows:  Operating income by geographic segment for the year ended December 31, 2002, is summarized as follows: Effective April 1, 2002, the Company purchased from its largest shareholder, Gazit 1997 Inc. (“Gazit”), all of the issued and outstanding common shares of First Capital Inc. (“FCI”). The Company received a valuation of FCI and an independent opinion as to the fairness, from a financial point of view, of the consideration paid. The acquisition was accounted for using the purchase method. Mortgages payable secured by seven of the eight properties totalled $22.9 million, with a weighted average interest rate of 7.7%. The aggregate purchase price of $31.65 million for the FCI shares was satisfied through the issuance of 601,630 common shares of the Company (at $12.30 a share) and $28.16 million in principal amount of the Company’s 7.25% convertible debentures. The amount of 7.25% convertible debentures was calculated based on a price of $84.34 per $100 principal amount. In addition, in connection with post-closing funding requirements of FCI, the 65 First Capital Realty Annual Report 2003 (thousands of dollars) Canada U.S. Total Property rental revenue $ 125,635 $ – $ 125,635 Property operating costs 47,318 – 47,318 Net operating income 78,317 – 78,317 Equity income from Equity One, Inc. – 21,606 21,606 Interest and other income 2,359 248 2,607 Interest expense 36,276 4,350 40,626 Corporate expenses 5,932 901 6,833 Operating income before amortization 38,468 16,603 55,071 Amortization 9,847 84 9,931 Operating income $ 28,621 $ 16,519 $ 45,140 (thousands of dollars) Canada U.S. Total Property rental revenue $ 154,656 $ – $ 154,656 Property operating costs 58,799 – 58,799 Net operating income 95,857 – 95,857 Equity income from Equity One, Inc. – 19,095 19,095 Interest and other income 2,668 47 2,715 Interest expense 38,931 4,393 43,324 Corporate expenses 8,110 465 8,575 Operating income before amortization 51,484 14,284 65,768 Amortization 12,473 101 12,574 Operating income $ 39,011 $ 14,183 $ 53,194