Mortgages and Credit Facilities The weighted average interest rate on mortgages and credit facilities was 6.9% at December 31, 2003 down from 7.3% at December 31, 2002. 28 First Capital Realty Annual Report 2003 At December 31, 2003, 86% of the outstanding mortgage and credit facility liabilities bore interest at fixed interest rates, compared to 75% in 2002.  In Canada, the Company had fixed rate mortgages outstanding as at December 31, 2003 in the aggregate amount of $639.7 million as compared to $424.7 million at the end of 2002. The increase in the outstanding balance is the net result of $34.5 million in repayments and $249.5 million in new financing, primarily from financing on acquisitions and refinancing on existing properties. The U.S. dollar-denominated credit facilities totalling Cdn$109 million are utilized to finance the Company’s investment in Equity One. The debt service requirements of these credit facilities are funded by the cash flow generated by the dividends from Equity One. This reduces the Company’s exposure to fluctuations in foreign currency exchange rates.  As at December 31, 2003 mortgages and credit facilities represented 51.1% of the gross book value of the Company’s real estate investments as compared to 49.5% at December 31, 2002. This increase was primarily due to the acquisition of shopping centres during the year, which were financed with mortgages and credit facilities, equity and cash.  The weighted average interest rate on mortgages and credit facilities was 6.9% at December 31, 2003 compared to 7.3% at December 31, 2002. The Company’s fixed versus floating mortgages and credit facilities are detailed as follows: Management’s Discussion and Analysis  continued (thousands of dollars) 2003 2002 Mortgages and credit facilities – Canada  $ 677,491 $ 478,312 Credit facilities – U.S. 108,810 108,771 Mortgages and credit facilities 786,301 587,083 Convertible debentures payable  20,234 41,272 Equity component of convertible debentures 337,557 371,330 Other 1,432 3,837 Convertible debentures principal 359,223 416,439 Debentures payable – 15,237 Total debt (debentures as debt) $ 1,145,524 $ 1,018,759 Share capital $ 422,916 $ 200,183 Warrants 6,591 10,303 Options and deferred share units 298 – Cumulative currency translation (8,253) 11,697 Deficit (94,115) (85,757) 327,437 136,426 Equity component of convertible debentures 337,557 371,330 Total shareholders’ equity $ 664,994 $ 507,756 2003 2002 (thousands of dollars) Canada U.S. Total Total Fixed rate $ 639,733 $ 38,895 $ 678,628 $ 440,459 Floating rate 37,758 69,915 107,673 146,624 $ 677,491 $ 108,810 $ 786,301 $ 587,083