Forest City Enterprises (FCEPP) 8-K Results of Operations and Financial Condition

EXHIBIT 99.1

Forest City Enterprises, Inc.

Supplemental Package

Three and Six Months Ended July 31, 2005 and 2004

Forest City Enterprises, Inc. and Subsidiaries
Three and Six Months Ended July 31, 2005 and 2004
Supplemental Package

NYSE: FCEA, FCEB

Index

Corporate Overview	2-3
Supplemental Operating Information
Occupancy Data	4
Comparable Net Operating Income (NOI)	5
Comparable NOI Detail	6-7
Reconciliation of NOI to Net Earnings	8-9
Lease Expirations Schedules	10-11
Schedules of Significant Tenants	12-13
Development Pipeline	14-16
Scheduled Maturities Table	17-18
Supplemental Financial Information
Consolidated Balance Sheet Information	19-20
Consolidated Earnings Information	21-24
Real Estate and Related Nonrecourse Mortgage Debt	25-26
Investment in and Advances to Affiliates	27-28
Results of Operations Summary	28-30
Reconciliation of Net Earnings to EBDT	31-32
Summary of EBDT	33-44

This Supplemental Package, together with other statements and information publicly disseminated by the Company, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ from the results discussed in the forward-looking statements. Risk factors discussed on pages 5-12 of the Company’s Form 10-K for the year ended January 31, 2005 and other factors that might cause differences, some of which could be material, include, but are not limited to, real estate development and investment risks including lack of satisfactory financing, construction and lease-up delays and cost overruns, the effect of economic and market conditions on a nationwide basis as well as regionally in areas where the Company has a geographic concentration of properties, reliance on major tenants, the impact of terrorist acts, the Company’s substantial leverage and the ability to obtain and service debt, guarantees under the Company’s credit facility, the level and volatility of interest rates, continued availability of tax-exempt government financing, the sustainability of substantial operations at the subsidiary level, illiquidity of real estate investments, dependence on rental income from real property, conflicts of interest, financial stability of tenants within the retail industry, which may be impacted by competition and consumer spending, potential liability from syndicated properties, effects of uninsured loss, environmental liabilities, partnership risks, litigation risks, risks associated with an investment in a professional sports franchise, the rate revenue increases versus the rate of expense increases, as well as other risks listed from time to time in the Company’s reports filed with the United States Securities and Exchange Commission. The Company has no obligation to revise or update any forward-looking statements, other than imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.

1

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Corporate Overview
We principally engage in the ownership, development, management and acquisition of commercial and residential real estate throughout the United States. We operate through three strategic business units. The Commercial Group, our largest business unit, owns, develops, acquires and operates regional malls, specialty/urban retail centers, office buildings, hotels and mixed-use projects. The Residential Group owns, develops, acquires and operates residential rental property, including upscale and middle-market apartments, adaptive re-use developments and supported-living communities. New York City operations through our partnership with Forest City Ratner Companies are part of the Commercial Group or Residential Group depending on the nature of the operations. Real Estate Groups are the combined Commercial and Residential Groups. The Land Development Group acquires and sells both land and developed lots to residential, commercial and industrial customers. It also owns and develops land into master-planned communities and mixed-use projects. The Nets, a franchise of the National Basketball Association (“NBA”) in which we are an equity investor, is a reportable segment of the Company.

We have approximately $7.4 billion of assets in 20 states and the District of Columbia at July 31, 2005. Our core markets include New York City/Philadelphia metropolitan area, Denver, Boston, Greater Washington D.C./Baltimore metropolitan area and California. As a result of an ongoing effort to increase property concentration in the core markets, these markets now account for 71 percent of the cost of our portfolio at July 31, 2005. We have offices in Boston, Chicago, Denver, Los Angeles, New York City, San Francisco, Washington, D.C. and our corporate headquarters are in Cleveland, Ohio.

SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION
This supplemental package contains certain measures prepared in accordance with the generally accepted accounting principles (“GAAP”) under the full consolidation accounting method, and certain measures prepared under the pro-rata consolidation method, a non-GAAP measure. Along with net earnings, we use an additional measure, Earnings before Depreciation, Amortization and Deferred Taxes (“EBDT”), to report operating results. EBDT is a non-GAAP measure and may not be directly comparable to similarly-titled measures reported by other companies. The financial measures presented under the pro-rata consolidation method, comparable net operating income (“NOI”) and EBDT, provide supplemental information about our operations. Although these measures are not presented in accordance with GAAP, we believe they are necessary to understand our business and operating results, along with net earnings and other GAAP measures. Our investors can use these non-GAAP measures as supplementary information to evaluate our business. Our non-GAAP measures are not intended to be performance measures that should be regarded as alternatives to, or more meaningful than, our GAAP measures.

Consolidation Methods
We present certain financial amounts under the pro-rata consolidation method because we believe this information is useful to investors as this method reflects the manner in which we operate our business. In line with industry practice, we have made a large number of investments in which our economic ownership is less than 100% as a means of procuring opportunities and sharing risk. Under the pro-rata consolidation method, we generally present our investments proportionate to our economic share of ownership. Under GAAP, the full consolidation method is used to report partnership assets and liabilities consolidated at 100% if deemed to be under our control or if we are deemed to be the primary beneficiary of the variable interest entity (“VIE”), even if our ownership is not 100%. We provide reconciliations from the full consolidation method to the pro-rata consolidation method throughout our supplemental package. Please refer to our property listing for the detail of our consolidated and non-consolidated properties in Form 10-K for the year ended January 31, 2005 on pages 13-24.

EBDT
We believe that EBDT, along with net earnings, provides additional information about our core operations. While property dispositions, acquisitions or other factors can affect net earnings in the short-term, we believe EBDT presents a more consistent view of the overall financial performance of our business from period-to-period. EBDT is used by the chief operating decision maker and management to assess performance and resource allocations by strategic business unit and on a consolidated basis. EBDT is similar to Funds From Operations (“FFO”), a measure of performance used by publicly traded Real Estate Investment Trusts (“REIT”), but may not be directly comparable to similarly titled measures reported by other companies. (See pages 29-44 for additional discussion of EBDT as well as a reconciliation of EBDT to net earnings.)

Supplemental Operating Information
The operating information contained in this document includes: occupancy data, comparable NOI, reconciliation of NOI to net earnings, retail and office lease expirations, significant retail and office tenant listings, our development pipeline and a scheduled maturities table. We believe this information will give interested parties a better understanding and more information about the operating performance of our Company. The term “comparable,” which is used throughout this document, is generally defined as including properties that were open and operated in both the three and six months ended July 31, 2005 and 2004.

2

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

We believe occupancy rates, retail and office lease expirations, base rent, and significant retail and office tenant listings represent meaningful operating statistics about our Company. This information will give interested parties a better understanding and more information about the operating performance of our Company.

Comparable NOI is useful because it measures the performance of the same properties on a period-to-period basis and, along with EBDT (as discussed beginning on page 29), is used to assess operating performance and resource allocation of our strategic business units. While property dispositions, acquisitions or other factors can impact net earnings in the short term, we believe comparable NOI gives a more consistent view of our overall performance from quarter-to-quarter and year-to-year. A reconciliation of net earnings, the most comparable financial measure calculated in accordance with GAAP, to NOI and reconciliation from NOI to comparable NOI are provided on pages 8-9 of this document. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 33-44.

Corporate Headquarters
Forest City Enterprises, Inc.
Terminal Tower
50 Public Square, Suite 1100
Cleveland, Ohio 44113

Annual Report on Form 10-K
A copy of the Annual Report on Form 10-K for the fiscal year ended January 31, 2005 as filed with the Securities and Exchange Commission can be found on our website or may be obtained without charge upon written request to:
     Thomas T. Kmiecik
     Assistant Treasurer
     tomkmiecik@forestcity.net

Website
www.forestcity.net
The information contained on this website is not incorporated herein by reference and does not constitute a part of this supplemental package.

Investor Relations
Thomas G. Smith
Executive Vice President,
Chief Financial Officer and Secretary

Transfer Agent and Registrar
National City Bank
Stock Transfer Department
P.O. Box 92301
Cleveland, OH 44193-0900
(800) 622-6757
www.shareholder.inquiries@nationalcity.com

Stock Exchange Listing
NYSE: FCEA and FCEB

Dividend Reinvestment and Stock Purchase Plan
The Company offers its stockholders the opportunity to purchase additional shares of common stock through the Forest City Enterprises, Inc. Dividend Reinvestment and Stock Purchase Plan (the “Plan”) at 97% of current market value. A copy of the Plan prospectus and an enrollment card may be obtained by contacting National City Bank at (800) 622-6757.

3

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Occupancy Data
July 31, 2005 and 2004

We analyze our occupancy percentages by each of our major product lines as follows:

				Average						Average
	Occupancy			Occupancy			Occupancy			Occupancy
	As of			Year-to-Date			As of			Year-to-Date
	July 31, 2005			July 31, 2005			July 31, 2004			July 31, 2004
Retail
Comparable		93.9	%		93.4	%		92.0	%		91.9	%
Total		93.8	%		93.8	%		90.9	%		91.7	%
Office
Comparable		93.3	%		93.9	%		92.9	%		91.7	%
Total		91.8	%		91.4	%		92.5	%		91.9	%
Residential
Comparable		93.2	%		92.1	%		92.0	%		91.3	%
Total		92.8	%		91.9	%		91.3	%		89.7	%
Hotels
Comparable and Total					72.8	%					73.5	%
ADR				$	176.35					$	159.11

Retail and office occupancy as of July 31, 2005 and 2004 is based on square feet leased at the end of the fiscal quarter. Average Occupancy Year-to-Date as of July 31, 2005 and 2004 for retail and office is calculated by dividing the sum of leased square feet at the beginning and end of the period by two. Residential occupancy as of July 31, 2005 and 2004 represents total units occupied divided by total units available. Average residential occupancy year-to-date for 2005 and 2004 is calculated by dividing gross potential rent less vacancy by gross potential rent. Average Daily Rate (“ADR”) is calculated by dividing revenue by the number of rooms sold for the six months ended July 31, 2005 and 2004.

4

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

We use NOI, along with EBDT as discussed on pages 2-3, to assess operating performance. Comparable NOI is defined as NOI from properties opened and operated in both the three and six months ended July 31, 2005 and 2004. The schedules on pages 6-7 presents comparable NOI for each of our major product lines, as well as each strategic business unit under which those product lines operate. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on pages 8-9. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 33-44.

Comparable Net Operating Income (NOI) (% change over same period, prior year)

	Three Months Ended July 31, 2005						Six Months Ended July 31, 2005
	Full			Pro-Rata			Full			Pro-Rata
	Consolidation			Consolidation			Consolidation			Consolidation
Retail		1.7	%		1.8	%		3.2	%		3.4	%
Office		(0.8	)%		(1.7	)%		1.0	%		0.8	%
Hotel		19.4	%		10.0	%		22.3	%		13.1	%
Residential		2.2	%		2.1	%		4.2	%		2.9	%
Total		2.5	%		1.4	%		3.6	%		2.8	%

5

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

																			��
	Net Operating Income(dollars in thousands)
	Three Months Ended July 31, 2005													Three Months Ended July 31, 2004														% Change
						Plus														Plus
				Less		Unconsolidated			Plus											Unconsolidated			Plus
	Full			Minority		Investments at			Discontinued		Pro-Rata			Full			Less Minority			Investments at			Discontinued		Pro-Rata			Full			Pro-Rata
	Consolidation			Interest		Pro-Rata			Operations		Consolidation			Consolidation			Interest			Pro-Rata			Operations		Consolidation			Consolidation			Consolidation
Commercial Group
Retail
Comparable	$	36,659		$	4,469	$	3,227		$	—	$	35,417		$	36,061		$	4,417		$	3,141		$	—	$	34,785			1.7	%		1.8	%
Total		48,028			5,657		3,328			—		45,699			39,700			4,346			3,548			594		39,496
Office Buildings
Comparable		34,188			4,983		859			—		30,064			34,472			4,908			1,014			—		30,578			(0.8	)%		(1.7	)%
Total		43,887			5,460		933			—		39,360			38,696			4,383			1,116			946		36,375
Hotels
Comparable		10,399			2,607		469			—		8,261			8,709			1,822			623			—		7,510			19.4	%		10.0	%
Total		10,399			2,607		469			—		8,261			8,709			1,822			623			—		7,510
Earnings from Commercial Land Sales		12,017			—		—			—		12,017			367			—			—			—		367
Development Fees and Other		(2,487	)		60		(297	)		—		(2,844	)		16,313			4,316			(192	)		—		11,805
Total Commercial Group
Comparable		81,246			12,059		4,555			—		73,742			79,242			11,147			4,778			—		72,873			2.5	%		1.2	%
Total		111,844			13,784		4,433			—		102,493			103,785			14,867			5,095			1,540		95,553
Residential Group
Apartments
Comparable		22,690			889		6,129			—		27,930			22,203			977			6,127			—		27,353			2.2	%		2.1	%
Total		24,756			1,382		8,133			819		32,326			23,695			1,020			6,901			2,219		31,795
Total Real Estate Groups
Comparable		103,936			12,948		10,684			—		101,672			101,445			12,124			10,905			—		100,226			2.5	%		1.4	%
Total		136,600			15,166		12,566			819		134,819			127,480			15,887			11,996			3,759		127,348
Land Development Group		21,047			1,171		134			—		20,010			18,280			773			222			—		17,729
The Nets		(4,620	)		—		807			—		(3,813	)		—			—			—			—		—
Corporate Activities		(7,393	)		—		—			—		(7,393	)		(7,231	)		—			—			—		(7,231	)
Grand Total	$	145,634		$	16,337	$	13,507		$	819	$	143,623		$	138,529		$	16,660		$	12,218		$	3,759	$	137,846

6

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

	Net Operating Income(dollars in thousands)
	Six Months Ended July 31, 2005													Six Months Ended July 31, 2004													% Change
						Plus													Plus
				Less		Unconsolidated			Plus										Unconsolidated			Plus
	Full			Minority		Investments at			Discontinued		Pro-Rata			Full			Less Minority		Investments at			Discontinued		Pro-Rata			Full			Pro-Rata
	Consolidation			Interest		Pro-Rata			Operations		Consolidation			Consolidation			Interest		Pro-Rata			Operations		Consolidation			Consolidation			Consolidation
Commercial Group
Retail
Comparable	$	76,954		$	9,172	$	6,590		$	—	$	74,372		$	74,542		$	9,096	$	6,492		$	—	$	71,938			3.2	%		3.4	%
Total		89,820			10,539		6,722			—		86,003			76,872			9,077		7,508			1,271		76,574
Office Buildings
Comparable		81,846			10,854		2,040			—		73,032			81,053			10,781		2,159			—		72,431			1.0	%		0.8	%
Total		87,850			10,799		1,984			—		79,035			79,310			10,780		2,166			1,851		72,547
Hotels
Comparable		14,416			3,730		987			—		11,673			11,786			2,709		1,246			—		10,323			22.3	%		13.1	%
Total		14,416			3,730		987			—		11,673			11,786			2,709		1,246			—		10,323
Earnings from Commercial Land Sales		31,369			1,752		—			—		29,617			348			—		—			—		348
Development Fees and Other		(851	)		327		(665	)		—		(1,843	)		20,721			9,039		(425	)		—		11,257
Total Commercial Group
Comparable		173,216			23,756		9,617			—		159,077			167,381			22,586		9,897			—		154,692			3.5	%		2.8	%
Total		222,604			27,147		9,028			—		204,485			189,037			31,605		10,495			3,122		171,049
Residential Group
Apartments
Comparable		45,074			1,887		12,124			—		55,311			43,275			2,023		12,505			—		53,757			4.2	%		2.9	%
Total		50,481			2,477		15,695			1,636		65,335			49,381			2,285		13,891			4,896		65,883
Total Real Estate Groups
Comparable		218,290			25,643		21,741			—		214,388			210,656			24,609		22,402			—		208,449			3.6	%		2.8	%
Total		273,085			29,624		24,723			1,636		269,820			238,418			33,890		24,386			8,018		236,932
Land Development Group		47,495			2,615		239			—		45,119			33,270			1,712		393			—		31,951
The Nets		(13,216	)		—		1,476			—		(11,740	)		—			—		—			—		—
Corporate Activities		(16,303	)		—		—			—		(16,303	)		(14,103	)		—		—			—		(14,103	)
Grand Total	$	291,061		$	32,239	$	26,438		$	1,636	$	286,896		$	257,585		$	35,602	$	24,779		$	8,018	$	254,780

7

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (GAAP)(in thousands):

	Three Months Ended July 31, 2005															Three Months Ended July 31, 2004
							Plus															Plus
				Less			Unconsolidated			Plus									Less			Unconsolidated			Plus
	Full			Minority			Investments at			Discontinued			Pro-Rata			Full			Minority			Investments at			Discontinued			Pro-Rata
	Consolidation			Interest			Pro-Rata			Operations			Consolidation			Consolidation			Interest			Pro-Rata			Operations			Consolidation
Revenues from real estate operations	$	312,501		$	31,737		$	74,621		$	1,554		$	356,939		$	265,972		$	42,479		$	70,472		$	7,417		$	301,382
Exclude straight-line rent adjustment(1)		(3,822	)		—			—			—			(3,822	)		(3,095	)		—			—			(325	)		(3,420	)
Adjusted revenues		308,679			31,737			74,621			1,554			353,117			262,877			42,479			70,472			7,092			297,962
Operating expenses		187,777			15,999			45,737			735			218,250			147,230			25,987			41,297			3,364			165,904
Add back depreciation and amortization for non-Real Estate Groups(b)		279			—			1,683			—			1,962			291			—			7			—			298
Add back amortization of mortgage procurement costs for non-Real Estate Groups(d)		134			—			(22	)		—			112			39			—			64			—			103
Exclude straight-line rent adjustment(2)		(1,835	)		—			—			—			(1,835	)		(2,027	)		—			—			(7	)		(2,034	)
Adjusted operating expenses		186,355			15,999			47,398			735			218,489			145,533			25,987			41,368			3,357			164,271
Add interest income		6,770			599			327			—			6,498			2,213			168			(379	)		24			1,690
Add equity in earnings of unconsolidated entities		9,880			—			(7,383	)		—			2,497			43,650			—			(41,185	)		—			2,465
Remove gain on disposition recorded on equity method		—			—			—			—			—			(31,996	)		—			31,996			—			—
Add back equity method depreciation and amortization expense (see below)		6,660			—			(6,660	)		—			—			7,318			—			(7,318	)		—			—
Net Operating Income		145,634			16,337			13,507			819			143,623			138,529			16,660			12,218			3,759			137,846
Interest expense, including early extinguishment of debt		(72,565	)		(7,326	)		(13,507	)		(535	)		(79,281	)		(58,785	)		(4,429	)		(12,218)			(2,311)			(68,885	)
Gain on disposition of equity method rental properties(e)		—			—			—			—			—			31,996			—			—			—			31,996
Gain on disposition of rental properties and other investments		—			—			—			—			—			—			—			—			1,141			1,141
Provision for decline in real estate		(1,120	)		(46	)		—			—			(1,074	)		—			—			—			—			—
Depreciation and amortization — Real Estate Groups(a)		(42,841	)		(3,665	)		(6,356	)		(433	)		(45,965	)		(37,034	)		(2,182	)		(6,981)			(1,628)			(43,461	)
Amortization of mortgage procurement costs — Real Estate Groups(c)		(3,370	)		(779	)		(304	)		(7	)		(2,902	)		(5,008	)		(1,131	)		(337	)		(75	)		(4,289	)
Straight-line rent adjustment(1) + (2)		1,987			—			—			—			1,987			1,068			—			—			318			1,386
Equity method depreciation and amortization expense (see above)		(6,660	)		—			6,660			—			—			(7,318	)		—			7,318			—			—
Earnings before income taxes		21,065			4,521			—			(156	)		16,388			63,448			8,918			—			1,204			55,734
Income tax provision		3,716			—			—			60			3,776			(21,544	)		—			—			(477	)		(22,021	)
Earnings before minority interest, discontinued operations		24,781			4,521			—			(96	)		20,164			41,904			8,918			—			727			33,713
Minority Interest		(4,521	)		(4,521	)		—			—			—			(8,918	)		(8,918	)		—			—			—
Earnings from continuing operations		20,260			—			—			(96	)		20,164			32,986			—			—			727			33,713
Discontinued operations, net of tax and minority interest:
Operating earnings from Lumber Group		—			—			—			—			—			1,771			—			—			—			1,771
Operating earnings (loss) from rental properties		(96	)		—			—			96			—			36			—			—			(36	)		—
Loss on disposition of division of Lumber Group		—			—			—			—			—			(661	)		—			—			—			(661	)
Gain on disposition of rental properties		—			—			—			—			—			691			—			—			(691	)		—
		(96	)		—			—			96			—			1,837			—			—			(727	)		1,110
Net earnings	$	20,164		$	—		$	—		$	—		$	20,164		$	34,823		$	—		$	—		$	—		$	34,823
(a) Depreciation and amortization — Real Estate Groups	$	42,841		$	3,665		$	6,356		$	433		$	45,965		$	37,034		$	2,182		$	6,981		$	1,628		$	43,461
(b) Depreciation and amortization — Non-Real Estate Groups		279			—			1,683			—			1,962			291			—			7			—			298
Total depreciation and amortization	$	43,120		$	3,665		$	8,039		$	433		$	47,927		$	37,325		$	2,182		$	6,988		$	1,628		$	43,759
(c) Amortization of mortgage procurement costs — Real Estate Groups	$	3,370		$	779		$	304		$	7		$	2,902		$	5,008		$	1,131		$	337		$	75		$	4,289
(d) Amortization of mortgage procurement costs — Non-Real Estate Groups		134			—			(22	)		—			112			39			—			64			—			103
Total amortization of mortgage procurement costs	$	3,504		$	779		$	282		$	7		$	3,014		$	5,047		$	1,131		$	401		$	75		$	4,392

(e)  Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 and therefore are reported in continuing operations when sold. For the three months ended July 31, 2004, three equity method investments were sold,Chapel Hill Mall, Chapel Hill SuburbanandManhattan Town Center Mall, resulting in a pre-tax gain on disposition of $31,996 which is included in Equity in Earnings of Unconsolidated Entities in the Company’s Consolidated Statement of Earnings. For the three months ended July 31, 2005, no equity method investments were sold.

8

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (GAAP)(in thousands):

	Six Months Ended July 31, 2005															Six Months Ended July 31, 2004
							Plus															Plus
				Less			Unconsolidated			Plus									Less			Unconsolidated			Plus
	Full			Minority			Investments at			Discontinued			Pro-Rata			Full			Minority			Investments at			Discontinued			Pro-Rata
	Consolidation			Interest			Pro-Rata			Operations			Consolidation			Consolidation			Interest			Pro-Rata			Operations			Consolidation
Revenues from real estate operations	$	620,314		$	64,423		$	150,046		$	3,044		$	708,981		$	504,495		$	80,055		$	133,106		$	15,261		$	572,807
Exclude straight-line rent adjustment(1)		(8,744	)		—			—			—			(8,744	)		(5,137	)		—			—			(647	)		(5,784	)
Adjusted revenues		611,570			64,423			150,046			3,044			700,237			499,358			80,055			133,106			14,614			567,023
Operating expenses		363,526			33,361			93,015			1,408			424,588			283,939			45,241			78,695			6,666			324,059
Add back depreciation and amortization for non-Real Estate Groups (b)		538			—			9,261			—			9,799			581			—			40			—			621
Add back amortization of mortgage procurement costs for non-Real Estate Groups (d)		202			—			68			—			270			99			—			118			—			217
Exclude straight-line rent adjustment(2)		(3,761	)		—			—			—			(3,761	)		(6,308	)		—			—			(14	)		(6,322	)
Adjusted operating expenses		360,505			33,361			102,344			1,408			430,896			278,311			45,241			78,853			6,652			318,575
Add interest income		13,739			1,177			447			—			13,009			4,052			792			(40	)		56			3,276
Add equity in earnings of unconsolidated entities		29,916			—			(25,370	)		—			4,546			49,894			(4	)		(47,079	)		—			2,819
Remove gain on disposition recorded on equity method		(18,497	)		—			18,497			—			—			(31,996	)		—			31,996			—			—
Add back provision for decline recorded on equity method		704			—			(704	)		—			—			—			—			—			—			—
Add back equity method depreciation and amortization expense (see below)		14,134			—			(14,134	)		—			—			14,588			—			(14,351	)		—			237
Net Operating Income		291,061			32,239			26,438			1,636			286,896			257,585			35,602			24,779			8,018			254,780
Interest expense, including early extinguishment of debt		(143,547	)		(15,263	)		(26,438	)		(1,071	)		(155,793	)		(115,367	)		(14,116	)		(24,779	)		(4,975	)		(131,005	)
Gain on disposition of equity method rental properties(e)		18,497			—			—			—			18,497			31,996			—			—			—			31,996
Gain on disposition of rental properties and other investments		606			—			—			—			606			—			—			—			20,640			20,640
Provision for decline in real estate		(2,620	)		(46	)		—			—			(2,574	)		—			—			—			—			—
Provision for decline in real estate of equity method rental properties		(704	)		—			—			—			(704	)		—			—			—			—			—
Depreciation and amortization — Real Estate Groups(a)		(85,837	)		(7,994	)		(13,531	)		(863	)		(92,237	)		(73,481	)		(4,071	)		(13,787	)		(3,157	)		(86,354	)
Amortization of mortgage procurement costs — Real Estate Groups(c)		(6,560	)		(1,545	)		(603	)		(15	)		(5,633	)		(6,910	)		(1,310	)		(564	)		(149	)		(6,313	)
Straight-line rent adjustment(1) + (2)		4,983			—			—			—			4,983			(1,171	)		—			—			633			(538	)
Equity method depreciation and amortization expense (see above)		(14,134	)		—			14,134			—			—			(14,588	)		—			14,351			—			(237	)
Earnings before income taxes		61,745			7,391			—			(313	)		54,041			78,064			16,105			—			21,010			82,969
Income tax provision		(11,782	)		—			—			121			(11,661	)		(25,067	)		—			—			(8,309	)		(33,376	)
Earnings before minority interest, discontinued operations and cumulative effect of change in accounting principle		49,963			7,391			—			(192	)		42,380			52,997			16,105			—			12,701			49,593
Minority Interest		(7,391	)		(7,391	)		—			—			—			(16,105	)		(16,105	)		—			—			—
Earnings from continuing operations		42,572			—			—			(192	)		42,380			36,892			—			—			12,701			49,593
Discontinued operations, net of tax and minority interest:
Operating earnings from Lumber Group		—			—			—			—			—			4,355			—			—			—			4,355
Operating earnings (loss) from rental properties		(192	)		—			—			192			—			223			—			—			(223	)		—
Loss on disposition of division of lumber group		—			—			—			—			—			(661	)		—			—			—			(661	)
Gain on disposition of rental properties		—			—			—			—			—			12,478			—			—			(12,478	)		—
		(192	)		—			—			192			—			16,395			—			—			(12,701	)		3,694
Cumulative effect of change in accounting principle, net of tax		—			—			—			—			—			(11,261	)		—			—			—			(11,261	)
Net earnings	$	42,380		$	—		$	—		$	—		$	42,380		$	42,026		$	—		$	—		$	—		$	42,026
(a) Depreciation and amortization — Real Estate Groups	$	85,837		$	7,994		$	13,531		$	863		$	92,237		$	73,481		$	4,071		$	13,787		$	3,157		$	86,354
(b) Depreciation and amortization — Non-Real Estate Groups		538			—			9,261			—			9,799			581			—			40			—			621
Total depreciation and amortization	$	86,375		$	7,994		$	22,792		$	863		$	102,036		$	74,062		$	4,071		$	13,827		$	3,157		$	86,975
(c) Amortization of mortgage procurement costs — Real Estate Groups	$	6,560		$	1,545		$	603		$	15		$	5,633		$	6,910		$	1,310		$	564		$	149		$	6,313
(d) Amortization of mortgage procurement costs — Non-Real Estate Groups		202			—			68			—			270			99			—			118			—			217
Total amortization of mortgage procurement costs	$	6,762		$	1,545		$	671		$	15		$	5,903		$	7,009		$	1,310		$	682		$	149		$	6,530

(e)  Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 and therefore are reported in continuing operations when sold. For the six months ended July 31, 2005, two equity method investments were sold includingShowcase andColony Place, resulting in a gain on disposition of $18,497. For the six months ended July 31, 2004, three equity method investments were sold,Chapel Hill Mall, Chapel Hill Suburban,andManhattan Town Center Mall, resulting in a pre-tax gain of $31,996 which is included in Equity in Earnings of Unconsolidated Entities in the Company’s Consolidated Statement of Earnings.

9

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Retail Lease Expirations
As of July 31, 2005

													AVERAGE
													BASE
	NUMBER OF		SQUARE FEET		PERCENTAGE			NET		PERCENTAGE			RENT PER
	EXPIRING		OF EXPIRING		OF TOTAL			BASE RENT		OF TOTAL BASE			SQUARE FEET
EXPIRATION YEAR	LEASES		LEASES(3)		LEASED GLA(1)			EXPIRING(2)		RENT			EXPIRING(3)
2005		105		230,179		2.41	%	$	5,107,923		2.93	%	$	26.93
2006		206		499,126		5.22			10,866,194		6.23			28.28
2007		165		574,746		6.01			9,145,188		5.24			21.68
2008		159		573,840		6.00			10,186,120		5.84			24.02
2009		223		756,188		7.90			12,625,508		7.23			23.70
2010		130		496,372		5.19			9,268,061		5.31			24.42
2011		241		1,062,835		11.11			25,013,343		14.33			28.55
2012		116		640,383		6.69			12,997,023		7.45			25.43
2013		140		599,067		6.26			14,910,353		8.54			27.95
2014		160		686,677		7.18			12,626,004		7.23			26.87
2015		54		304,375		3.18			6,798,082		3.90			27.54
Thereafter		89		3,143,769		32.85			44,980,095		25.77			18.53
Total		1,788		9,567,557		100.00	%	$	174,523,894		100.00	%	$	23.52

(1)	GLA = Gross Leasable Area.
(2)	Net base rent expiring is an operating statistic and is not comparable to rental revenue, a GAAP financial measure. The primary differences arise because net base rent is determined using the tenant’s contractual rental agreements at the Company’s ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of straight-line rent and contingent rental payments, which are not reasonably estimatable.
(3)	Square feet of expiring leases and average base rent per square feet are operating statistics that represent 100% of the square footage and base rental income per square foot from expiring leases.

10

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Office Lease Expirations
As of July 31, 2005

													AVERAGE
													BASE
	NUMBER OF		SQUARE FEET		PERCENTAGE			NET		PERCENTAGE			RENT PER
	EXPIRING		OF EXPIRING		OF TOTAL			BASE RENT		OF TOTAL			SQUARE FEET
EXPIRATION YEAR	LEASES		LEASES(3)		LEASED GLA(1)			EXPIRING(2)		BASE RENT			EXPIRING(3)
2005		42		297,237		3.53	%	$	5,057,305		2.68	%	$	22.33
2006		58		660,627		7.84			11,675,803		6.19			25.23
2007		50		393,675		4.67			6,978,704		3.70			23.21
2008		63		515,364		6.11			9,457,720		5.02			21.84
2009		42		371,403		4.41			7,737,669		4.11			25.42
2010		31		974,771		11.57			14,195,033		7.53			22.48
2011		10		231,177		2.74			6,878,975		3.65			31.39
2012		13		692,821		8.22			19,083,959		10.12			31.24
2013		17		695,574		8.25			14,485,590		7.68			24.86
2014		9		579,167		6.87			12,482,134		6.62			27.82
2015		2		11,809		0.14			134,095		0.07			17.74
Thereafter		29		3,005,226		35.65			80,386,942		42.63			31.69
Total		366		8,428,851		100.00	%	$	188,553,929		100.00	%	$	27.62

(1)	GLA = Gross Leasable Area.
(2)	Net base rent expiring is an operating statistic and is not comparable to rental revenue, a GAAP financial measure. The primary differences arise because net base rent is determined using the tenant’s contractual rental agreements at the Company’s ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of straight-line rent and contingent rental payments, which are not reasonably estimatable.
(3)	Square feet of expiring leases and average base rent per square feet are operating statistics that represent 100% of the square footage and base rental income per square foot from expiring leases.

11

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Schedule of Significant Retail Tenants
As of July 31, 2005

(Based on net base rent 1% or greater of the Company’s ownership share)

			PERCENTAGE
			OF TOTAL
	LEASED		RETAIL
TENANT	SQUARE FEET		SQUARE FEET
Regal Entertainment Group		451,072		4.72	%
AMC Entertainment, Inc.		325,563		3.40
The Gap		289,509		3.03
The Home Depot		282,000		2.95
TJX Companies		272,554		2.85
Dick’s Sporting Goods		226,408		2.37
The Limited		218,312		2.28
Circuit City Stores, Inc.		164,842		1.72
Lowe’s Home Center, Inc.		151,273		1.58
Abercrombie & Fitch Stores, Inc.		136,227		1.42
Footlocker, Inc.		123,638		1.29
Pathmark Stores, Inc.		123,500		1.29
Ahold USA (Stop & Shop)		115,861		1.21
DSW Shoe Warehouse, Inc.		112,040		1.17
Subtotal		2,992,799		31.28
All Others		6,574,758		68.72
Total		9,567,557		100.00	%

12

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Schedule of Significant Office Tenants
As of July 31, 2005

(Based on net base rent 2% or greater of the Company’s ownership share)

			PERCENTAGE
			OF TOTAL
	LEASED		RETAIL
TENANT	SQUARE FEET		SQUARE FEET
City of New York		855,008		10.14	%
U.S. Government		732,032		8.68
Millennium Pharmaceuticals, Inc.		725,833		8.61
Morgan Stanley & Co.		444,685		5.28
Securities Industry Automation Corp.		428,786		5.09
Wellchoice, Inc.		392,514		4.66
Keyspan Energy		357,740		4.24
Forest City Enterprises, Inc.		322,979		3.83
Bank of New York		317,572		3.77
Bear Stearns		275,244		3.27
Alkermes, Inc.		210,248		2.49
Partners Health Care System, Inc.		136,150		1.62
University of Pennsylvania		121,630		1.44
Subtotal		5,320,421		63.12
All Others		3,108,430		36.88
Total		8,428,851		100.00	%

13

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
July 31, 2005
Openings and Acquisitions (4)

														Cost at FCE
				FCE Legal			Pro-Rata			Cost at Full		Total Cost		Pro-Rata Share
		Dev.(D)	Date Opened/	Ownership%(i)			FCE %(i)			Consolidation		at 100%		(Non-GAAP)(b)		Square Feet/ Number of
Property	Location	Acq.(A)	Acquired	(1)			(2)			(GAAP)(a)		(3)		(2)X(3)		Units
										(in millions)
Retail Centers:
Saddle Rock Village	Aurora, CO	D	Q1-05		80.0	%		100.0	%	$	35.0	$	35.0	$	35.0		378,000
Office:
Ballston Common Office Center	Arlington, VA	A	Q2-05		50.0	%		100.0	%	$	63.0	$	63.0	$	63.0		176,000
Residential:
23 Sidney Street	Cambridge, MA	D	Q1-05		100.0	%		100.0	%	$	17.8	$	17.8	$	17.8		51
Metro 417(m)	Los Angeles, CA	D	Q2-05		100.0	%		100.0	%		78.0		78.0		78.0		277
										$	95.8	$	95.8	$	95.8		328
Total 2005 Openings(b)										$	193.8	$	193.8	$	193.8
Residential Phased-In Unit(c)(e)																Opened in ’05 / Total
Newport Landing	Coventry, OH	D	2002-05		50.0	%		50.0	%	$	0.0	$	16.0	$	8.0		60/336
Arbor Glen	Twinsburg, OH	D	2004-07		50.0	%		50.0	%		0.0		18.4		9.2		48/288
Woodgate/Evergreen Farms	Olmsted Township, OH	D	2004-07		33.0	%		33.0	%		0.0		22.9		7.6		120 / 348
Total(b)(f)										$	0.0	$	57.3	$	24.8		228 / 972

See attached July 31, 2005 footnotes.

14

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
July 31, 2005
Under Construction (15)

				FCE										Cost at FCE
				Legal			Pro-Rata			Cost at Full		Total Cost		Pro-Rata Share		Square Feet/
		Dev.(D)	Anticipated	Ownership%(i)			FCE %(i)			Consolidation		at 100%		(Non-GAAP)(b)		Number of
Property	Location	Acq.(A)	Opening	(1)			(2)			(GAAP)(a)		(3)		(2)X(3)		Units			Pre-Leased %
										(in millions)
Retail Centers:
Simi Valley Town Center	Simi Valley, CA	D	Q3-05		85.0	%		100.0	%	$	151.4	$	151.4	$	151.4		660,000			90	%
Short Pump Expansion	Richmond, VA	D	Q3-05		50.0	%		100.0	%		27.3		27.3		27.3		88,000			84	%
Northfield at Stapleton(p)	Denver, CO	D	Q4-05/Q1-06/ Q3-06		95.0	%		100.0	%		176.7		176.7		176.7		1,140,000	(n)		65	%
San Francisco Centre-Emporium(c)(j)	San Francisco, CA	D	Q3-06		50.0	%		50.0	%		0.0		425.0		212.5		964,000	(o)		36	%
Bolingbrook South	Bolingbrook, IL	D	Q1-07		100.0	%		100.0	%		108.7		108.7		108.7		698,000			30	%
										$	464.1	$	889.1	$	676.6		3,550,000
Office:
New York Times(c)	Manhattan, NY	D	Q2-07		28.0	%		40.0	%	$	0.0	$	415.0	$	166.0		734,000			0	%
Residential:
Ashton Mill	Providence, RI	D	Q3-05		100.0	%		100.0	%	$	44.8	$	44.8	$	44.8		193
Sterling Glen of Lynbrook(g)(k)	Lynbrook, NY	D	Q3-05		80.0	%		80.0	%		29.4		29.4		23.5		100
100 Landsdowne Street	Cambridge, MA	D	Q4-05		100.0	%		100.0	%		66.3		66.3		66.3		203
Met Lofts(c)	Los Angeles, CA	D	Q4-05		50.0	%		50.0	%		0.0		64.5		32.3		264
1255 S. Michigan (Central Station)	Chicago, IL	D	Q2-06		100.0	%		100.0	%		125.6		125.6		125.6		502
Sterling Glen of Roslyn(l)(g)	Roslyn, NY	D	Q2-06		80.0	%		80.0	%		71.0		71.0		56.8		158
Ohana Military Communities(c)(e)	Honolulu, HI	D	2005-2008		7.0	%		7.0	%		0.0		316.5		22.2		1,952
										$	337.1	$	718.1	$	371.5		3,372
Condominiums:
1100 Wilshire Condominiums(c)	Los Angeles, CA	D	Q4-05		40.0	%		40.0	%	$	0.0	$	118.2	$	47.3		228
3800 Wilshire Condominiums(c)	Los Angeles, CA	D	Q3-06		40.0	%		40.0	%		0.0		125.4		50.2		238
										$	0.0	$	243.6	$	97.5		466
Total Under Construction(b)(h)										$	801.2	$	2,265.8	$	1,311.6
* LESS: Above properties to be sold as condominiums										$	0.0	$	243.6	$	97.5
Under Construction less Condominiums										$	801.2	$	2,022.2	$	1,214.1
Residential Phased-In Units Under Construction:(c)(e)																Under Const./Total
Arbor Glen	Twinsburg, OH	D	2004-07		50.0	%		50.0	%		0.0		18.4		9.2		96 / 288
Woodgate/Evergreen Farms	Olmsted Township, OH	D	2004-07		33.0	%		33.0	%		0.0		22.9		7.6		228 / 348
Pine Ridge Expansion	Willoughby Hills, OH	D	2005-06		50.0	%		50.0	%		0.0		16.4		8.2		162 / 162
Total(b)(q)										$	0.0	$	57.7	$	25.0		486 / 798

See attached July 31, 2005 footnotes.

15

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline

July 31, 2005 Footnotes

(a)	Amounts are presented on the full consolidation method of accounting, a GAAP measure. Under full consolidation, costs are reported as consolidated at 100 percent if we are deemed to have control or to be the primary beneficiary of our investments in the variable interest entity (“VIE”).
(b)	Cost at pro-rata share represents Forest City’s share of cost, based on the Company’s pro-rata ownership of each property (a non-GAAP measure). Under the pro-rata consolidation method of accounting the Company determines its pro-rata share by multiplying its pro-rata ownership by the total cost of the applicable property.
(c)	Reported under the equity method of accounting. This method represents a GAAP measure for investments in which the Company is not deemed to have control or to be the primary beneficiary of our investments in a VIE.
(d)	Not used.
(e)	Phased-in openings. Costs are representative of the total project.
(f)	The difference between the full consolidation amount (GAAP) of $0.0 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $24.8 million of cost consists of the Company’s share of cost for unconsolidated investments of $24.8 million.
(g)	Supported-living property.
(h)	The difference between the full consolidation amount (GAAP) of $801.2 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $1,311.6 million of cost consists of a reduction to full consolidation for minority interest of $20.1 million of cost and the addition of its share of cost for unconsolidated investments of $530.5 million.
(i)	As is customary within the real estate industry, the Company invests in certain real estate projects through joint ventures. For these projects, the Company provides funding for certain of its partners’ equity contributions. The Company consolidates its investments in these projects in accordance with FIN No. 46 (R) at a consolidation percentage that is reflected in the Pro-Rata FCE % column. These advances entitle the Company to a preferred return on investment, which is payable from cash flows of each respective property. At the point the Company is no longer entitled to a preferred return on a particular joint venture because the partner’s advance has been repaid in full, the Company’s net assets will be adjusted to its intended ownership percentage (reflected in the FCE Legal Ownership % column) by recording a minority interest to reflect the amount of the partner’s claim on those net assets.
(j)	This project will also include the acquisition of an adjacent retail center totaling 508,000 square feet.
(k)	Formerly Tanglewood Crest.
(l)	Formerly Bryant Landing.
(m)	Formerly Subway Terminal.
(n)	Includes 30,000 square feet of office space.
(o)	Includes 235,000 square feet of office space.
(p)	Phased opening: Phase I opens Q4-05, Phase II opens Q1-06, Phase III opens Q3-06.
(q)	The difference between the full consolidation amount (GAAP) of $0.0 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $25.0 million of cost consists of Forest City’s share of cost for unconsolidated investments of $25.0 million.

16

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt(dollars in thousands)
As of July 31, 2005

	Period Ending January 31,												Fiscal Year Ending January 31,
	2006												2007
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	61,601		$	4,431		$	27,871		$	85,041		$	331,931		$	22,821		$	32,934		$	342,044
Weighted average rate		7.04	%		7.39	%		6.19	%		6.75	%		7.04	%		8.89	%		7.77	%		6.99	%
UDAG		10,770			47			10,728			21,451			8,169			118			1,350			9,401
Weighted average rate		3.94	%		0.00	%		8.00	%		5.98	%		0.09	%		1.35	%		1.00	%		0.21	%
Total fixed-rate debt		72,371			4,478			38,599			106,492			340,100			22,939			34,284			351,445
Variable:
Variable-rate debt		160,195			7,024			36,578			189,749			322,839			91,340			80,144			311,643
Weighted average rate		5.83	%		5.29	%		5.96	%		5.87	%		5.94	%		6.26	%		5.85	%		5.82	%
Tax-Exempt		92,390			5,568			5,076			91,898			51,000			300			31,705			82,405
Weighted average rate		3.96	%		3.03	%		3.69	%		4.01	%		2.86	%		2.93	%		3.68	%		3.17	%
Total variable-rate debt		252,585			12,592			41,654			281,647			373,839			91,640			111,849			394,048
Total Nonrecourse Mortgage Debt	$	324,956		$	17,070		$	80,253		$	388,139		$	713,939		$	114,579		$	146,133		$	745,493
Weighted Average Rate		5.46	%		5.08	%		6.17	%		5.63	%		6.17	%		6.77	%		5.77	%		6.00	%

													��
	Fiscal Year Ending January 31,												Fiscal Year Ending January 31,
	2008												2009
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	153,400		$	26,614		$	99,139		$	225,925		$	179,667		$	18,222		$	91,009		$	252,454
Weighted average rate		6.78	%		6.87	%		7.49	%		7.08	%		7.22	%		7.06	%		6.85	%		7.09	%
UDAG		589			145			—			444			581			151			948			1,378
Weighted average rate		2.16	%		2.33	%		—	%		2.10	%		2.06	%		2.41	%		0.00	%		0.61	%
Total fixed-rate debt		153,989			26,759			99,139			226,369			180,248			18,373			91,957			253,832
Variable:
Variable-rate debt		208,147			38,690			25,877			195,334			35,922			—			39,938			75,860
Weighted average rate		5.76	%		5.58	%		5.22	%		5.72	%		5.58	%		—	%		6.26	%		5.94	%
Tax-Exempt		127,670			2,400			2,594			127,864			16,000			—			—			16,000
Weighted average rate		3.81	%		3.86	%		2.33	%		3.78	%		3.89	%		—	%		—	%		3.89	%
Total variable-rate debt		335,817			41,090			28,471			323,198			51,922			—			39,938			91,860
Total Nonrecourse Mortgage Debt	$	489,806		$	67,849		$	127,610		$	549,567		$	232,170		$	18,373		$	131,895		$	345,692
Weighted Average Rate		5.57	%		6.02	%		6.93	%		5.83	%		6.72	%		7.02	%		6.62	%		6.67	%

17

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt(dollars in thousands)(continued)

As of July 31, 2005

	Fiscal Year Ending January 31,
	2010												Thereafter
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	249,823		$	56,886		$	97,482		$	290,419		$	2,326,062		$	279,883		$	208,691		$	2,254,870
Weighted average rate		7.08	%		7.46	%		7.10	%		7.01	%		6.32	%		6.71	%		6.33	%		6.28	%
UDAG		573			158			—			415			83,116			18,768			—			64,348
Weighted average rate		1.96	%		2.48	%		—	%		1.76	%		1.55	%		1.32	%		—	%		1.62	%
Total fixed-rate debt		250,396			57,044			97,482			290,834			2,409,178			298,651			208,691			2,319,218
Variable:
Variable-rate debt		2,097			—			7,928			10,025			64,247			—			58,166			122,413
Weighted average rate		5.07	%		—	%		4.74	%		4.81	%		5.10	%		—	%		5.14	%		5.12	%
Tax-Exempt		—			—			40,000			40,000			399,620			34,378			44,000			409,242
Weighted average rate		—	%		—	%		2.84	%		2.84	%		3.46	%		3.47	%		3.26	%		3.43	%
Total variable-rate debt		2,097			—			47,928			50,025			463,867			34,378			102,166			531,655
Total Nonrecourse Mortgage Debt	$	252,493		$	57,044		$	145,410		$	340,859		$	2,873,045		$	333,029		$	310,857		$	2,850,873
Weighted Average Rate		7.05	%		7.45	%		5.80	%		6.45	%		5.76	%		6.07	%		5.67	%		5.71	%
	Total
							Plus
							Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	3,302,484		$	408,857		$	557,126		$	3,450,753
Weighted average rate		6.54	%		6.97	%		6.83	%		6.53	%
UDAG		103,798			19,387			13,026			97,437
Weighted average rate		1.70	%		1.34	%		6.69	%		2.43	%
Total fixed-rate debt		3,406,282			428,244			570,152			3,548,190
Variable:
Variable-rate debt		793,447			137,054			248,631			905,024
Weighted average rate		5.78	%		6.02	%		5.67	%		5.71	%
Tax-Exempt		686,680			42,646			123,375			767,409
Weighted average rate		3.56	%		3.43	%		3.23	%		3.51	%
Total variable-rate debt		1,480,127			179,700			372,006			1,672,433
Total Nonrecourse Mortgage Debt	$	4,886,409		$	607,944		$	942,158		$	5,220,623
Weighted Average Rate		5.89	%		6.33	%		6.05	%		5.87	%

18

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

As discussed on page 2, we present certain financial amounts under the pro-rata consolidation method (a non-GAAP measure). This information is useful to our investors because we believe that it more accurately reflects the manner in which we operate our business. This is because, in line with industry practice, we have a large number of investments in which our economic ownership is less than 100% as a means of procuring opportunities and sharing risk. The tables below present amounts for both full consolidation, a GAAP measure, and pro-rata consolidation, providing a reconciliation of the difference between the two methods. Under the pro-rata consolidation method, we present our partnership investments proportionate to our share of ownership for each line item of our consolidated financial statements. Under full consolidation, partnership assets and liabilities are reported as consolidated at 100% if deemed to be under our control or if we are deemed to be the primary beneficiary for our investments in a VIE. Partnership assets and liabilities are reported on the equity or cost method of accounting if we do not have control, or, in the case of investments in VIEs, the Company is not deemed the primary beneficiary.

Consolidated Balance Sheet Information — July 31, 2005 (unaudited)

							Plus
	Full						Unconsolidated			Pro-Rata
	Consolidation			Less Minority			Investments at			Consolidation
	(GAAP)			Interest			Pro-Rata			(Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties	$	5,978,279		$	759,375		$	904,598		$	6,123,502
Projects under development		841,403			57,108			338,584			1,122,879
Land held for development or sale		82,617			2,833			105,773			185,557
Total Real Estate		6,902,299			819,316			1,348,955			7,431,938
Less accumulated depreciation		(935,617	)		(139,646	)		(264,407	)		(1,060,378	)
Real Estate, net		5,966,682			679,670			1,084,548			6,371,560
Cash and equivalents		124,100			18,031			11,405			117,474
Restricted cash		324,056			35,041			63,113			352,128
Notes and accounts receivable, net		201,894			42,853			(17,399	)		141,642
Investments in and advances to affiliates		391,742			—			(148,208	)		243,534
Other assets		438,932			35,557			93,842			497,217
Total Assets	$	7,447,406		$	811,152		$	1,087,301		$	7,723,555
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse	$	4,886,409		$	607,944		$	942,158		$	5,220,623
Notes payable		80,233			15,548			64,508			129,193
Senior and subordinated debt		599,400			—			—			599,400
Accounts payable and accrued expenses		590,981			99,495			80,635			572,121
Deferred income taxes		358,536			—			—			358,536
Total Liabilities		6,515,559			722,987			1,087,301			6,879,873
Minority Interest		88,165			88,165			—			—
Total Shareholders’ Equity		843,682			—			—			843,682
Total Liabilities and Shareholders’ Equity	$	7,447,406		$	811,152		$	1,087,301		$	7,723,555

19

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Balance Sheet Information — January 31, 2005 (unaudited)

	Full						Plus Unconsolidated			Pro-Rata
	Consolidation			Less Minority			Investments at			Consolidation
	(GAAP)			Interest			Pro-Rata			(Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties	$	5,708,558		$	843,631		$	929,275		$	5,794,202
Projects under development		634,441			20,300			255,124			869,265
Land held for development or sale		94,907			3,577			93,755			185,085
Total Real Estate		6,437,906			867,508			1,278,154			6,848,552
Less accumulated depreciation		(865,562	)		(141,674	)		(255,221	)		(979,109	)
Real Estate, net		5,572,344			725,834			1,022,933			5,869,443
Cash and equivalents		276,492			24,090			11,956			264,358
Restricted cash		347,267			28,478			57,296			376,085
Notes and accounts receivable, net		212,868			51,127			854			162,595
Investments in and advances to affiliates		415,234			—			(166,337	)		248,897
Other assets		497,880			48,581			99,463			548,762
Total Assets	$	7,322,085		$	878,110		$	1,026,165		$	7,470,140
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse	$	4,787,191		$	649,959		$	892,617		$	5,029,849
Notes payable		93,432			16,529			51,706			128,609
Senior and subordinated debt		599,400			—			—			599,400
Accounts payable and accrued expenses		587,274			115,849			81,842			553,267
Deferred income taxes		354,490			—			—			354,490
Total Liabilities		6,421,787			782,337			1,026,165			6,665,615
Minority Interest		95,773			95,773			—			—
Total Shareholders’ Equity		804,525			—			—			804,525
Total Liabilities and Shareholders’ Equity	$	7,322,085		$	878,110		$	1,026,165		$	7,470,140

20

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Three Months Ended July 31, 2005 (unaudited)

							Plus
	Full			Less			Unconsolidated						Pro-Rata
	Consolidation			Minority			Investments at			Plus Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	312,501		$	31,737		$	74,621		$	1,554		$	356,939
Expenses
Operating expenses		187,777			15,999			45,737			735			218,250
Interest expense, including early extinguishment of debt		72,565			7,326			13,507			535			79,281
Amortization of mortgage procurement costs		3,504			779			282			7			3,014
Provision for decline in real estate		1,120			46			—			—			1,074
Depreciation and amortization		43,120			3,665			8,039			433			47,927
		308,086			27,815			67,565			1,710			349,546
Interest income		6,770			599			327			—			6,498
Equity in earnings of unconsolidated entities (Note 1)		9,880			—			(7,383	)		—			2,497
Earnings before income taxes		21,065			4,521			—			(156	)		16,388
Income tax expense (benefit)
Current		(1,587	)		—			—			(19	)		(1,606	)
Deferred		(2,129	)		—			—			(41	)		(2,170	)
		(3,716	)		—			—			(60	)		(3,776	)
Earnings before minority interest and discontinued operations		24,781			4,521			—			(96	)		20,164
Minority interest		(4,521	)		(4,521	)		—			—			—
Earnings from continuing operations		20,260			—			—			(96	)		20,164
Discontinued operations, net of tax and minority interest
Loss from operations from rental properties		(96	)		—			—			96			—
Net earnings	$	20,164		$	—		$	—		$	—		$	20,164

Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the three months ended July 31, 2005, no equity method investments were sold.

21

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Six Months Ended July 31, 2005 (unaudited)

							Plus
	Full			Less			Unconsolidated						Pro-Rata
	Consolidation			Minority			Investments at			Plus Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	620,314		$	64,423		$	150,046		$	3,044		$	708,981
Expenses
Operating expenses		363,526			33,361			93,015			1,408			424,588
Interest expense, including early extinguishment of debt		143,547			15,263			26,438			1,071			155,793
Amortization of mortgage procurement costs		6,762			1,545			671			15			5,903
Provision for decline in real estate		2,620			46			704			—			3,278
Depreciation and amortization		86,375			7,994			22,792			863			102,036
		602,830			58,209			143,620			3,357			691,598
Interest income		13,739			1,177			447			—			13,009
Equity in earnings of unconsolidated entities (Note 1)		29,916			—			(25,370	)		—			4,546
Gain on disposition of rental properties and other investments		606			—			18,497			—			19,103
Earnings before income taxes		61,745			7,391			—			(313	)		54,041
Income tax expense (benefit)
Current		4,709			—			—			(37	)		4,672
Deferred		7,073			—			—			(84	)		6,989
		11,782			—			—			(121	)		11,661
Earnings before minority interest and discontinued operations		49,963			7,391			—			(192	)		42,380
Minority interest		(7,391	)		(7,391	)		—			—			—
Earnings from continuing operations		42,572			—			—			(192	)		42,380
Discontinued operations, net of tax and minority interest
Loss from operations from rental properties		(192	)		—			—			192			—
Net earnings	$	42,380		$	—		$	—		$	—		$	42,380

Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the six months ended July 31, 2005, two equity method investments were sold,Colony PlaceandShowcase, resulting in a pre-tax gain on disposition of $18,497 ($11,349 net of tax). This gain has been reported in equity in earnings of unconsolidated entities in the Consolidated Statement of Earnings, and therefore is included in Earnings from Continuing Operations.

22

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Three Months Ended July 31, 2004 (unaudited)

	Full						Plus Unconsolidated						Pro-Rata
	Consolidation			Less Minority			Investments at			Plus Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	265,972		$	42,479		$	70,472		$	7,417		$	301,382
Expenses
Operating expenses		147,230			25,987			41,297			3,364			165,904
Interest expense, including early extinguishment of debt		58,785			4,429			12,218			2,311			68,885
Amortization of mortgage procurement costs		5,047			1,131			401			75			4,392
Depreciation and amortization		37,325			2,182			6,988			1,628			43,759
		248,387			33,729			60,904			7,378			282,940
Interest income		2,213			168			(379	)		24			1,690
Equity in earnings of unconsolidated entities (Note 1)		43,650			—			(41,185	)		—			2,465
Gain on disposition of rental properties		—			—			31,996			1,141			33,137
Earnings before income taxes		63,448			8,918			—			1,204			55,734
Income tax expense (benefit)
Current		(2,125	)		—			—			435			(1,690	)
Deferred		23,669			—			—			42			23,711
		21,544			—			—			477			22,021
Earnings before minority interest, discontinued operations, and cumulative effect of change in accounting principle		41,904			8,918			—			727			33,713
Minority interest		(8,918	)		(8,918	)		—			—			—
Earnings from continuing operations(Note 1)		32,986			—			—			727			33,713
Discontinued operations, net of tax and minority interest
Operating earnings from Lumber Group		1,771			—			—			—			1,771
Operating earnings from rental properties		36			—			—			(36	)		—
Loss on disposition of division of Lumber Group		(661	)		—			—			—			(661	)
Gain on disposition of rental properties		691			—			—			(691	)		—
		1,837			—			—			(727	)		1,110
Net earnings	$	34,823		$	—		$	—		$	—		$	34,823

Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the three months ended July 31, 2004, three equity method investments were sold,Chapel Hill Mall, Chapel Hill Suburban,andManhattan Town Center Mall.A pre-tax gain of $31,996 ($19,341 net of tax) has been reported in equity in earnings of unconsolidated entities in the Consolidated Statement of Earnings, and therefore is included in Earnings from Continuing Operations.

23

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Six Months Ended July 31, 2004 (unaudited)

							Plus
	Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	504,495		$	80,055		$	133,106		$	15,261		$	572,807
Expenses
Operating expenses		283,939			45,241			78,695			6,666			324,059
Interest expense, including early extinguishment of debt		115,367			14,116			24,779			4,975			131,005
Amortization of mortgage procurement costs		7,009			1,310			682			149			6,530
Depreciation and amortization		74,062			4,071			13,827			3,157			86,975
		480,377			64,738			117,983			14,947			548,569
Interest income		4,052			792			(40	)		56			3,276
Equity in earnings (loss) of unconsolidated entities (Note 1)		49,894			(4	)		(47,079	)		—			2,819
Gain on disposition of rental properties		—			—			31,996			20,640			52,636
Earnings before income taxes		78,064			16,105			—			21,010			82,969
Income tax expense (benefit)
Current		(1,163	)		—			—			490			(673	)
Deferred		26,230			—			—			7,819			34,049
		25,067			—			—			8,309			33,376
Earnings before minority interest, discontinued operations, and cumulative effect of change in accounting principle		52,997			16,105			—			12,701			49,593
Minority interest		(16,105	)		(16,105	)		—			—			—
Earnings from continuing operations(Note 1)		36,892			—			—			12,701			49,593
Discontinued operations, net of tax and minority interest
Operating earnings from Lumber Group		4,355			—			—			—			4,355
Operating earnings from rental properties		223			—			—			(223	)		—
Loss on disposition of division of Lumber Group		(661	)		—			—			—			(661	)
Gain on disposition of rental properties		12,478			—			—			(12,478	)		—
		16,395			—			—			(12,701	)		3,694
Cumulative effect of change in accounting principle, net of tax		(11,261	)		—			—			—			(11,261	)
Net earnings	$	42,026		$	—		$	—		$	—		$	42,026

Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the six months ended July 31, 2004, three equity method investments were sold,Chapel Hill Mall, Chapel Hill Suburban,andManhattan Town Center Mall.A pre-tax gain of $31,996 ($19,341 net of tax) has been reported in equity in earnings of unconsolidated entities in the Consolidated Statement of Earnings, and therefore is included in Earnings from Continuing Operations.

24

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Real Estate and Related Nonrecourse Mortgage Debt — July 31, 2005

			Less				Nonrecourse
			Accumulated				Mortgage
	Total Cost		Depreciation		Net Cost		Debt
	(in thousands)
Full Consolidation:
Completed rental properties
Residential	$	1,547,734	$	180,990	$	1,366,744	$	1,106,640
Commercial
Retail centers		2,031,426		255,004		1,776,422		1,653,991
Office and other buildings		2,383,137		495,373		1,887,764		1,695,361
Corporate and other equipment		15,982		4,250		11,732		—
		5,978,279		935,617		5,042,662		4,455,992
Projects under development
Residential		384,189		—		384,189		298,294
Commercial
Retail centers		301,717		—		301,717		42,801
Office and other buildings		155,497		—		155,497		69,098
		841,403		—		841,403		410,193
Land held for development or sale		82,617		—		82,617		20,224
Total real estate and mortgage debt	$	6,902,299	$	935,617	$	5,966,682	$	4,886,409
Less Minority Interest:
Completed rental properties
Residential	$	109,204	$	9,436	$	99,768	$	80,701
Commercial
Retail centers		217,858		24,275		193,583		210,428
Office and other buildings		432,313		105,935		326,378		282,482
		759,375		139,646		619,729		573,611
Projects under development
Residential		10,367		—		10,367		18,569
Commercial
Retail centers		7,363		—		7,363		2,162
Office and other buildings		39,378		—		39,378		13,439
		57,108		—		57,108		34,170
Land held for development or sale		2,833		—		2,833		163
Total real estate and mortgage debt	$	819,316	$	139,646	$	679,670	$	607,944

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Real Estate and Related Nonrecourse Mortgage Debt(continued)— July 31, 2005

			Less				Nonrecourse
			Accumulated				Mortgage
	Total Cost		Depreciation		Net Cost		Debt
	(in thousands)
Plus Unconsolidated Investments at Pro-Rata:
Completed rental properties
Residential	$	599,873	$	164,321	$	435,552	$	492,854
Commercial
Retail centers		147,946		44,508		103,438		169,337
Office and other buildings		156,779		55,578		101,201		97,246
		904,598		264,407		640,191		759,437
Projects under development
Residential		103,425		—		103,425		73,653
Commercial
Retail centers		118,420		—		118,420		28,497
Office and other buildings		116,739		—		116,739		23,308
		338,584		—		338,584		125,458
Land held for development or sale		105,773		—		105,773		57,263
Total real estate and mortgage debt	$	1,348,955	$	264,407	$	1,084,548	$	942,158
Pro-Rata Consolidation (Non-GAAP):
Completed rental properties
Residential	$	2,038,403	$	335,875	$	1,702,528	$	1,518,793
Commercial
Retail centers		1,961,514		275,237		1,686,277		1,612,900
Office and other buildings		2,107,603		445,016		1,662,587		1,510,125
Corporate and other equipment		15,982		4,250		11,732		—
		6,123,502		1,060,378		5,063,124		4,641,818
Projects under development
Residential		477,247		—		477,247		353,378
Commercial
Retail centers		412,774		—		412,774		69,136
Office and other buildings		232,858		—		232,858		78,967
		1,122,879		—		1,122,879		501,481
Land held for development or sale		185,557		—		185,557		77,324
Total real estate and mortgage debt	$	7,431,938	$	1,060,378	$	6,371,560	$	5,220,623

26

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

The following schedules on pages 27-28 present information on investments in and advances to affiliates.

Investments in and Advances to Affiliates

Included in Investments in and Advances to Affiliates in the Consolidated Balance Sheet Information tables are unconsolidated investments in entities that we do not control or are not the primary beneficiary and that are accounted for under the equity method of accounting, as well as advances to other partners.

Following is a reconciliation of members’ and partners’ equity to our carrying value in the accompanying Consolidated Balance Sheet Information:

	July 31,		January 31,
	2005		2005
	(in thousands)
Members’ and Partners’ equity, as below	$	622,751	$	619,670
Equity of other members and partners		474,543		453,333
Company’s investment in partnerships		148,208		166,337
Advances to other affiliates(1)		243,534		248,897
Investments in and advances to affiliates	$	391,742	$	415,234

(1) As is customary within the real estate industry, we invest in certain projects through joint ventures. We often provide funding of certain of our partners’ equity contributions. The most significant partnership for which we provide funding is related to Forest City Ratner Companies, representing the Commercial Group’s New York City operations. We consolidate our investments in these projects. Our partner is the President and Chief Executive Officer of Forest City Ratner Companies who is the cousin to five executive officers of our Company. At July 31, 2005 and January 31, 2005, amounts advanced for projects on behalf of this partner, collateralized solely by each respective partnership interest, were $57,365 and $63,213, respectively, of the $243,534 and $248,897 presented above for “Advances to other affiliates.” These advances entitle us to a preferred return on and of the outstanding balances, which are payable solely from cash flows of each respective property.

Summarized financial information for the equity method investments is as follows:

	Combined (100%)						Pro-Rata Share
	(GAAP)						(non-GAAP)
	July 31,			January 31,			July 31,			January 31,
	2005			2005			2005			2005
	(in thousands)						(in thousands)
Balance Sheet:
Completed rental properties	$	1,798,858		$	1,879,706		$	904,598		$	929,275
Projects under development		757,118			564,712			338,584			255,124
Land held for development or sale		198,782			177,080			105,773			93,755
Accumulated depreciation		(511,378	)		(497,566	)		(264,407	)		(255,221	)
Restricted cash		352,327			362,583			63,113			57,646
Other assets		513,637			542,567			87,848			112,273
Total Assets	$	3,109,344		$	3,029,082		$	1,235,509		$	1,192,852
Mortgage debt, nonrecourse	$	2,054,780		$	2,012,578		$	942,158		$	892,967
Other liabilities		431,813			396,834			145,143			133,548
Members’ and partners’ equity		622,751			619,670			148,208			166,337
Total Liabilities and Members’/Partners’ Equity	$	3,109,344		$	3,029,082		$	1,235,509		$	1,192,852

27

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Investments in and Advances to Affiliates(continued)

	Combined (100%)						Pro-Rata Share
	(GAAP)						(non-GAAP)
Three Months Ended July 31,	2005			2004			2005			2004
	(in thousands)
Operations:
Revenues	$	157,765		$	134,372		$	74,621		$	70,472
Equity in earnings of unconsolidated entities on a pro-rata basis		—			—			2,497			2,465
Operating expenses		(96,667	)		(76,527	)		(45,737	)		(41,297	)
Interest expense		(39,602	)		(24,164	)		(13,507	)		(12,218	)
Provision for decline in real estate		—			—			—			—
Depreciation and amortization		(18,391	)		(14,503	)		(8,321	)		(7,389	)
Interest income		4,463			332			327			(379	)
Gain of disposition of operating properties(2)		—			61,427			—			31,996
Net Earnings (pre-tax)	$	7,568		$	80,937		$	9,880		$	43,650

	Combined (100%)						Pro-Rata Share
	(GAAP)						(non-GAAP)
Six Months Ended July 31,	2005			2004			2005			2004
	(in thousands)
Operations:
Revenues	$	329,255		$	254,824		$	150,046		$	133,106
Equity in earnings of unconsolidated entities on a pro-rata basis		—			—			4,546			2,819
Operating expenses		(203,260	)		(145,533	)		(93,015	)		(78,695	)
Interest expense		(65,926	)		(48,972	)		(26,438	)		(24,779	)
Provision for decline in real estate		(704	)		—			(704	)		—
Depreciation and amortization		(58,255	)		(28,348	)		(23,463	)		(14,509	)
Interest income		6,950			637			447			(40	)
Gain of disposition of operating properties(2)		81,708			61,427			18,497			31,996
Net Earnings (pre-tax)	$	89,768		$	94,035		$	29,916		$	49,898

(2) The following table shows the detail of gain on disposition of rental properties:

	Combined (100%)				Pro-Rata Share				Combined (100%)				Pro-Rata Share
	(GAAP)				(non-GAAP)				(GAAP)				(non-GAAP)
	Three Months Ended July 31,								Six Months Ended July 31,
	2005		2004		2005		2004		2005		2004		2005		2004
	(in thousands)								(in thousands)
Colony Place (Apartments) Fort Myers, Florida	$	—	$	—	$	—	$	—	$	10,703	$	—	$	5,351	$	—
Showcase (Specialty Retail Center) Las Vegas, Nevada		—		—		—		—		71,005		—		13,146		—
Chapel Hill Mall (Regional Mall) Akron, Ohio		—		56,455		—		27,943		—		56,455		—		27,943
Chapel Hill Suburban (Specialty Retail Center) Akron, Ohio		—		1,831		—		915		—		1,831		—		915
Manhattan Town Center Mall (Regional Mall) Manhattan, Kansas		—		3,141		—		3,138		—		3,141		—		3,138
Total	$	—	$	61,427	$	—	$	31,996	$	81,708	$	61,427	$	18,497	$	31,996

Results of Operations

Net Earnings —Net earnings for the three months ended July 31, 2005 were $20,164,000 versus $34,823,000 for the three months ended July 31, 2004. This current quarter variance compared to last year is primarily attributable to the 2004 gains on dispositions of three equity method investments recorded during the three months ended July 31, 2004 that did not recur in the current year. Gains on disposition of $31,996,000, or of $19,341,000 net of tax, were recorded for the dispositions ofManhattan Town Center Malla regional mall located in Manhattan, Kansas,Chapel Hill Suburbana specialty retail center located in Akron, Ohio andChapel Hill Mall, a regional mall located in Akron, Ohio. We also recorded a current quarter loss of $2,912,000, net of tax, on our equity investment in the Nets which we did not own during the second quarter of 2004, a one-time expense related to our enterprise resource planning project of $1,856,000, net of tax, an increase in interest expense of $1,496,000, net of tax, as a result of the issuance of $150,000,000 senior notes in January of 2005 and the Lumber Group reported net earnings in the second quarter of last year of $1,110,000 with no corresponding amount in the current quarter due to the sale of Lumber Group in

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

November of 2004. These unfavorable variances were partially offset by a favorable change in our effective tax rate due to a change in the rate in the State of Ohio resulting in a one-time reduction of deferred income taxes of approximately $10,000,000 recorded in the three months ended July 31, 2005.

Net earnings for the six months ended July 31, 2005 were $42,380,000 versus $42,046,000 for the six months ended July 31, 2004. The favorable variance for this year compared to the prior year is primarily attributable to an increase in earnings from Commercial Group land sales and development fees of $15,114,000, net of tax and minority interest, primarily atGalleria at Sunsetin Las Vegas,Twelve MetroTech Center in Brooklyn andSimi Valley Town Centerin Simi Valley, California, $8,106,000 related to land sales reported in the Land Development Group, a favorable change in our effective tax rate due to a change in the rate in the State of Ohio resulting in a one-time reduction of deferred income taxes of approximately $10,000,000 and the prior year charge for cumulative effect of change in accounting principle as a result of our implementation of FIN No. 46 (R) of $11,261,000, net of tax, which did not recur. These favorable variances are offset by the current year loss on our equity investment in the Nets of $8,108,000, net of tax, which we did not own during the first half of 2004, a one-time expense related to our enterprise resource planning project of $1,856,000, net of tax, an increase in interest expense of $2,991,000, net of tax, as a result of the issuance of $150,000,000 senior notes in January of 2005, the 2004 gains on disposition of $12,478,000, net of tax, of two properties,Hunting Parka specialty retail center located in Philadelphia, Pennsylvania andWoodlake, a 534-unit apartment community located in Silver Spring, Maryland, development fee revenue of $4,114,000 at Twelve MetroTech Center that was recognized in 2004 and the Lumber Group net earnings in the first half of last year of $3,694,000 with no corresponding amount in the current year due to the sale of Lumber Group in November of 2004. Also included in net earnings is a decrease of $7,992,000, net of tax, compared to the same period last year as a result of the first quarter 2005 dispositions of two equity method properties ofShowcase, a specialty retail center located in Las Vegas Nevada, andColony Place, an apartment community located in Fort Myers, Florida at a gain of $11,349,000, which only partially offset prior year gains of $19,341,000 related to sales of three equity method properties,Manhattan Town Center Mall, Chapel Hill SuburbanandChapel Hill Mall.

Net Operating Income (NOI) from Real Estate Groups —NOI, a non-GAAP measure, is defined as revenues (excluding straight-line rent adjustments) less operating expenses (including depreciation and amortization for non-real estate groups) plus interest income plus equity in earnings of unconsolidated entities (excluding gain on disposition of equity method operating properties) plus equity method depreciation and amortization. We believe NOI provides us, as well as our investors, additional information about our core business operations and, along with earnings, is necessary to understand our business and operating results. Under the full consolidation method (GAAP), NOI from the combination of the Commercial Group and the Residential Group (“Real Estate Groups”) for the three months ended July 31, 2005 was $136,600,000 compared to $127,480,000 for the three months ended July 31, 2004, a 7.0% increase. NOI for the six months ended July 31, 2005 was $273,085,000 versus $238,418,000 for the six months ended July 31, 2004, a 15.0% increase. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on page 8-9. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 33-44.

Management also analyzes property NOI using the pro-rata consolidation method because it provides operating data at our ownership share, and we publicly disclose and discuss our performance using this method of consolidation to complement our GAAP disclosures. Under the pro-rata consolidation method, NOI from the Real Estate Groups for the three months ended July 31, 2005 was $134,819,000 compared to $127,348,000 for the three months ended July 31, 2004, a 6.0% increase. NOI from Real Estate Groups for the six months ended July 31, 2005 was $269,820,000 versus $236,932,000 for the six months ended July 31, 2004, a 14.0% increase. This increase over the comparable period in the prior year is primarily attributable the gain on land sales in our Commercial Group of $17,600,000 in 2005, as well as NOI generated from new properties which include three residential communities, three office buildings and four retail centers opened during the year ended January 31, 2005. Comparable NOI increased 2.8% compared to an increase of 1.8% for the prior year. Comparable NOI for our retail portfolio is up 3.4% from the prior year and our residential portfolio has generated an increase of 2.9%.

EBDT— We use an additional measure, along with net earnings, to report our operating results. This non-GAAP measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”), is not a measure of operating results or cash flows from operations as defined by GAAP and may not be directly comparable to similarly-titled measures reported by other companies.

We believe that EBDT provides additional information about our core operations and, along with net earnings, is necessary to understand our operating results. EBDT is used by the chief operating decision maker and management in assessing operating performance and to consider capital requirements and allocation of resources by segment and on a consolidated basis. We believe EBDT is important to investors because it provides another method for the investor to measure our long-term operating performance as net earnings can vary from year to year due to property dispositions, acquisitions and other factors that have a short-term impact.

EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of rental properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) non-cash

29

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

charges from real estate operations of Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., for depreciation, amortization, amortization of mortgage procurement costs and deferred income taxes; iv) provision for decline in real estate (net of tax); v) extraordinary items (net of tax); and vi) cumulative effect of change in accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment equals net earnings.

EBDT is reconciled to net earnings, the most comparable financial measure calculated in accordance with GAAP, below. The adjustment to recognize rental revenues and rental expenses on the straight-line method is excluded because it is management’s opinion that rental revenues and expenses should be recognized when due from the tenants or due to the landlord. We exclude depreciation and amortization expense related to real estate operations from EBDT because we believe the values of our properties, in general, have appreciated over time in excess of their original cost. Deferred taxes from real estate operations, which are the result of timing differences of certain net expense items deducted in a future year for federal income tax purposes, are excluded until the year in which they are reflected in our current tax provision. The provision for decline in real estate is excluded from EBDT because it varies from year to year based on factors unrelated to our overall financial performance and is related to the ultimate gain on dispositions of operating properties. Our EBDT may not be directly comparable to similarly-titled measures reported by other companies.

EBDT for the second quarter of 2005 was $64,927,000 or $0.63 per share, a $6,068,000 decrease, or 10.0% decrease on a per share basis over second quarter 2004 EBDT of $0.70 per share. The decrease was mostly attributed to a loss of $2,912,000 in the quarter for The Nets with no corresponding loss in 2004, as well as a decrease of $1,771,000 for Lumber Trading Group representing EBDT in the second quarter of last year with no corresponding EBDT in 2005.

On a year-to-date basis EBDT was $132,589,000 or $1.29 per share, a $6,500,000 increase, or 4.0% increase on a per share basis over the comparable period in 2004 EBDT of $1.24 per share. The increase was mostly attributed to land sales in our Land Development Group (approximately $8,900,000) as well as the sale of land and a development project in our Commercial SBU (approximately $13,300,000). These increases over the prior year were partially offset by a loss of $8,108,000 in the first half for The Nets with no corresponding loss in 2004, and a decrease of $4,355,000 for Lumber Trading Group representing EBDT in the first half of last year with no corresponding EBDT in 2005.

Summary of EBDT— The information in the tables on pages 33-44 present amounts for both full consolidation and pro-rata consolidation, providing a reconciliation of the difference between the two methods, as well as reconciliation from NOI to EBDT to net earnings. Under the pro-rata consolidation method, we present our partnership investments proportionate to our pro-rata share for each line item of our consolidated financial statements. Under full consolidation, partnership assets and liabilities are reported as consolidated at 100% if deemed under our control or if we are deemed to be the primary beneficiary for investments in the VIEs, or on the equity method of accounting if we do not have control or are not the primary beneficiary for investments in VIEs.

30

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Reconciliation of Net Earnings to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)⁽²⁾

	Three Months Ended July 31,						Six Months Ended July 31,
	2005			2004			2005			2004
	(in thousands)						(in thousands)
Net earnings	$	20,164		$	34,823		$	42,380		$	42,026
Depreciation and amortization — Real Estate Groups(5)		45,965			43,461			92,237			86,354
Depreciation and amortization — equity method investments(3)		—			—			—			237
Amortization of mortgage procurement costs — Real Estate Groups		2,902			4,289			5,633			6,313
Deferred income tax expense — Real Estate Groups(6)		(2,998	)		22,331			4,986			31,409
Deferred income tax expense — Non Real-Estate Groups:(6)
Gain on disposition of other investments		(4	)		—			174			—
Gain on disposition of Lumber Group		—			89			—			89
Current income tax expense on non-operating earnings:(6)
Gain on disposition of other investments		(2	)		—			60			—
Gain on disposition included in discontinued operations		—			(359	)		—			(359	)
Gain on disposition recorded on equity method		(187	)		(209	)		7,927			(209	)
Straight-line rent adjustment(4)		(1,987	)		(1,386	)		(4,983	)		538
Provision for decline in real estate, net of minority interest		1,074			—			2,574			—
Provision for decline in real estate recorded on equity method		—			—			704			—
Gain on disposition recorded on equity method		—			(31,996	)		(18,497	)		(31,996	)
Gain on disposition of other investments		—			—			(606	)		—
Discontinued operations:(1)
Gain on disposition of rental properties		—			(1,807	)		—			(21,306	)
Gain on disposition of a division		—			1,093			—			1,093
Minority interest — Gain on sale		—			666			—			666
Cumulative effect of change in accounting principle, net of tax		—			—			—			11,261
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)(2)	$	64,927		$	70,995		$	132,589		$	126,116

1)	Pursuant to the definition of a component of an entity of SFAS No. 144, assuming no significant continuing involvement, all earnings of properties and a division which have been sold or held for sale are reported as discontinued operations.
2)	The Company uses an additional measure, along with net earnings, to report its operating results. This measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”), is not a measure of operating results as defined by generally accepted accounting principles and may not be directly comparable to similarly-titled measures reported by other companies. The Company believes that EBDT provides additional information about its operations, and along with net earnings, is necessary to understand its operating results. EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of operating properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) noncash charges from Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., for depreciation, amortization (including amortization of mortgage procurement costs) and deferred income taxes; iv) provision for decline in real estate (net of tax); v) extraordinary items (net of tax); and vi) cumulative effect of change in accounting principle (net of tax).
3)	Amount represents depreciation expense for certain properties accounted for on the equity method of accounting under both full consolidation and pro-rata consolidation (a non-GAAP financial measure). See our discussion of pro-rata consolidation in the news release. See Investments in and Advances to Affiliates on pages 27-28 for discussion of these properties.
4)	The Company recognizes minimum rents on a straight-line basis over the term of the related lease pursuant to the provision of SFAS No. 13, “Accounting for Leases.” The straight-line rent adjustment is recorded as an increase or decrease to revenue from Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., with the applicable offset to either accounts receivable or accounts payable, as appropriate.
5)	The following table provides detail of depreciation and amortization and amortization of mortgage procurement costs. The Company’s Real Estate Groups are owned by Forest City Rental Properties Corporation, a wholly-owned subsidiary engaged in the ownership, development, acquisition and management of real estate projects, including apartment complexes, regional malls and retail centers, hotels, office buildings and mixed-use facilities, as well as large land development projects.

	Depreciation and Amortization												Amortization of Mortgage Procurement Costs
	Three Months Ended July 31,						Six Months Ended July 31,						Three Months Ended July 31,						Six Months Ended July 31,
	2005			2004			2005			2004			2005			2004			2005			2004
Full Consolidation	$	43,120		$	37,325		$	86,375		$	74,062		$	3,504		$	5,047		$	6,762		$	7,009
Non-Real Estate Groups		(279	)		(291	)		(538	)		(581	)		(134	)		(39	)		(202	)		(99	)
Real Estate Groups Full Consolidation		42,841			37,034			85,837			73,481			3,370			5,008			6,560			6,910
Real Estate Groups related to minority interest		(3,665	)		(2,182	)		(7,994	)		(4,071	)		(779	)		(1,131	)		(1,545	)		(1,310	)
Real Estate Groups Equity Method		6,356			6,981			13,531			13,787			304			337			603			564
Real Estate Groups Discontinued Operations		433			1,628			863			3,157			7			75			15			149
Real Estate Groups Pro-Rata Consolidation.	$	45,965		$	43,461		$	92,237		$	86,354		$	2,902		$	4,289		$	5,633		$	6,313

31

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Reconciliation of Net Earnings to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)⁽²⁾(continued)

(6) The following table provides detail of Income Tax Expense (Benefit):

	Three Months Ended July 31,						Six Months Ended July 31,
	2005			2004			2005			2004
	(in thousands)						(in thousands)
(A) Operating earnings
Current	$	(1,398	)	$	(1,916	)	$	(3,278	)	$	(954	)
Deferred		(1,749	)		10,805			8,945			13,366
		(3,147	)		8,889			5,667			12,412
(B) Provision for decline in real estate
Deferred		(402	)		—			(995	)		—
Deferred-Equity method investment		7			—			(272	)		—
		(395	)		—			(1,267	)		—
(C) Gain on disposition of other investments
Current — Non-Real Estate Groups		(2	)		—			60			—
Deferred — Real Estate Groups		(4	)		—			174			—
		(6	)		—			234			—
(D) Gain on disposition recorded on equity method
Current		(187	)		(209	)		7,927			(209	)
Deferred		19			12,864			(779	)		12,864
		(168	)		12,655			7,148			12,655
Subtotal (A) (B) (C) (D)
Current		(1,587	)		(2,125	)		4,709			(1,163	)
Deferred		(2,129	)		23,669			7,073			26,230
Income tax expense		(3,716	)		21,544			11,782			25,067
(E) Discontinued operations — Rental Properties
Operating earnings
Current		(19	)		273			(37	)		328
Deferred		(41	)		(246	)		(84	)		(181	)
		(60	)		27			(121	)		147
Gain on disposition of rental properties
Current		—			162			—			162
Deferred		—			288			—			8,000
		—			450			—			8,162
		(60	)		477			(121	)		8,309
Subtotal (A) (B) (C) (D) (E)
Current		(1,606	)		(1,690	)		4,672			(673	)
Deferred		(2,170	)		23,711			6,989			34,049
		(3,776	)		22,021			11,661			33,376
(F) Discontinued operations — Lumber Group
Operating earnings
Current		—			1,231			—			1,923
Deferred		—			25			—			1,120
		—			1,256			—			3,043
Gain on disposition of a division
Current		—			(521	)		—			(521	)
Deferred		—			89			—			89
		—			(432	)		—			(432	)
		—			824			—			2,611
Subtotal (E)(F)		(60	)		1,301			(121	)		10,920
Grand Total (A) (B) (C) (D) (E) (F)
Current		(1,606	)		(980	)		4,672			729
Deferred		(2,170	)		23,825			6,989			35,258
	$	(3,776	)	$	22,845		$	11,661		$	35,987
Recap of Grand Total:
Real Estate Groups
Current		1,246			378			12,424			3,386
Deferred		(2,998	)		22,331			4,986			31,409
		(1,752	)		22,709			17,410			34,795
Non-Real Estate Groups
Current		(2,852	)		(1,358	)		(7,752	)		(2,657	)
Deferred		828			1,494			2,003			3,849
		(2,024	)		136			(5,749	)		1,192
Grand Total	$	(3,776	)	$	22,845		$	11,661		$	35,987

32

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2005(in thousands)

	Commercial Group 2005													Residential Group 2005
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata			Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued		Consolidation			Consolidation			Minority		Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata			Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	233,838		$	26,511	$	28,299		$	—	$	235,626		$	54,843		$	3,751	$	30,289		$	1,554		$	82,935
Exclude straight-line rent adjustment		(3,831	)		—		—			—		(3,831	)		9			—		—			—			9
Adjusted revenues		230,007			26,511		28,299			—		231,795			54,852			3,751		30,289			1,554			82,944
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		129,823			12,866		15,095			—		132,052			36,626			2,380		16,913			735			51,894
Exclude straight-line rent adjustment		(1,835	)		—		—			—		(1,835	)		—			—		—			—			—
Adjusted operating expenses		127,988			12,866		15,095			—		130,217			36,626			2,380		16,913			735			51,894
Add interest income		904			139		(227	)		—		538			798			11		460			—			1,247
Add equity in earnings of unconsolidated entities		6,452			—		(6,075	)		—		377			1,541			—		(1,512	)		—			29
Remove gain on disposition recorded on equity method		—			—		—			—		—			—			—		—			—			—
Add back provision for decline in real estate recorded on equity method		—			—		—			—		—			—			—		—			—			—
Add back equity method depreciation and amortization expense		2,469			—		(2,469	)		—		—			4,191			—		(4,191	)		—			—
Net operating income		111,844			13,784		4,433			—		102,493			24,756			1,382		8,133			819			32,326
Interest expense, including early extinguishment of debt		47,387			6,032		4,433			—		45,788			12,052			1,143		8,133			535			19,577
Income tax expense (benefit)		3,274			—		—			—		3,274			(2,941	)		—		—			(19	)		(2,960	)
Minority interest in earnings before depreciation and amortization		7,752			7,752		—			—		—			239			239		—			—			—
Add: EBDT from discontinued operations		—			—		—			—		—			303			—		—			(303	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	53,431		$	—	$	—		$	—	$	53,431		$	15,709		$	—	$	—		$	—		$	15,709
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	53,431		$	—	$	—		$	—	$	53,431		$	15,709		$	—	$	—		$	—		$	15,709
Depreciation and amortization — Real Estate Groups		(31,841	)		—		—			—		(31,841	)		(13,637	)		—		—			(433	)		(14,070	)
Amortization of mortgage procurement costs — Real Estate Groups		(2,201	)		—		—			—		(2,201	)		(694	)		—		—			(7	)		(701	)
Deferred taxes — Real Estate Groups		893			—		—			—		893			1,250			—		—			(41	)		1,209
Straight-line rent adjustment		1,996			—		—			—		1,996			(9	)		—		—			—			(9	)
Gain on disposition of rental properties and other investments, net of tax		—			—		119			—		119			—			—		49			—			49
Provision for decline in real estate, net of tax and minority interest		(13	)		—		(7	)		—		(20	)		(659	)		—		—			—			(659	)
Gain on disposition recorded on equity method, net of tax		119			—		(119	)		—		—			49			—		(49	)		—			—
Provision for decline in real estate recorded on equity method, net of tax		(7	)		—		7			—		—			—			—		—			—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—			—		—			(433	)		—		—			433			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—			—		—			(7	)		—		—			7			—
Deferred taxes — Real Estate Groups		—			—		—			—		—			(41	)		—		—			41			—
Net earnings	$	22,377		$	—	$	—		$	—	$	22,377		$	1,479		$	—	$	—		$	—		$	1,479

33

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2005(in thousands)(continued)

	Land Development Group 2005													The Nets 2005
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata			Full			Less		Unconsolidated		Plus		Pro-Rata
	Consolidation			Minority		Investments at			Discontinued		Consolidation			Consolidation			Minority		Investments at		Discontinued		Consolidation
	(GAAP)			Interest		Pro-Rata			Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	23,820		$	1,475	$	11,230		$	—	$	33,575		$	—		$	—	$	4,803	$	—	$	4,803
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Adjusted revenues		23,820			1,475		11,230			—		33,575			—			—		4,803		—		4,803
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		13,895			753		6,717			—		19,859			—			—		8,673		—		8,673
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Adjusted operating expenses		13,895			753		6,717			—		19,859			—			—		8,673		—		8,673
Add interest income		4,615			449		37			—		4,203			—			—		57		—		57
Add equity in earnings of unconsolidated entities		6,507			—		(4,416	)		—		2,091			(4,620	)		—		4,620		—		—
Remove gain on disposition recorded on equity method		—			—		—			—		—			—			—		—		—		—
Add back provision for decline in real estate recorded on equity method		—			—		—			—		—			—			—		—		—		—
Add back equity method depreciation and amortization expense		—			—		—			—		—			—			—		—		—		—
Net operating income		21,047			1,171		134			—		20,010			(4,620	)		—		807		—		(3,813	)
Interest expense, including early extinguishment of debt		1,848			151		134			—		1,831			—			—		807		—		807
Income tax expense (benefit)		8,191			—		—			—		8,191			(1,708	)		—		—		—		(1,708	)
Minority interest in earnings before depreciation and amortization		1,020			1,020		—			—		—			—			—		—		—		—
Add: EBDT from discontinued operations		—			—		—			—		—			—			—		—		—		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	9,988		$	—	$	—		$	—	$	9,988		$	(2,912	)	$	—	$	—	$	—	$	(2,912	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	9,988		$	—	$	—		$	—	$	9,988		$	(2,912	)	$	—	$	—	$	—	$	(2,912	)
Depreciation and amortization — Real Estate Groups		(54	)		—		—			—		(54	)		—			—		—		—		—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Deferred taxes — Real Estate Groups		1,723			—		—			—		1,723			—			—		—		—		—
Straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Provision for decline in real estate, net of tax and minority interest		—			—		—			—		—			—			—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Deferred taxes — Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Net earnings	$	11,657		$	—	$	—		$	—	$	11,657		$	(2,912	)	$	—	$	—	$	—	$	(2,912	)

34

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2005(in thousands)(continued)

	Corporate Activities 2005												Total 2005
						Plus												Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata			Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at		Discontinued		Consolidation			Consolidation			Minority		Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	—		$	—	$	—	$	—	$	—		$	312,501		$	31,737	$	74,621		$	1,554		$	356,939
Exclude straight-line rent adjustment					—		—		—		—			(3,822	)		—		—			—			(3,822	)
Adjusted revenues		—			—		—		—		—			308,679			31,737		74,621			1,554			353,117
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		7,846			—		—		—		7,846			188,190			15,999		47,398			735			220,324
Exclude straight-line rent adjustment		—			—		—		—		—			(1,835	)		—		—			—			(1,835	)
Adjusted operating expenses		7,846			—		—		—		7,846			186,355			15,999		47,398			735			218,489
Add interest income		453			—		—		—		453			6,770			599		327			—			6,498
Add equity in earnings of unconsolidated entities		—			—		—		—		—			9,880			—		(7,383	)		—			2,497
Remove gain on disposition recorded on equity method		—			—		—		—		—			—			—		—			—			—
Add back provision for decline in real estate recorded on equity method		—			—		—		—		—			—			—		—			—			—
Add back equity method depreciation and amortization expense		—			—		—		—		—			6,660			—		(6,660	)		—			—
Net operating income		(7,393	)		—		—		—		(7,393	)		145,634			16,337		13,507			819			143,623
Interest expense, including early extinguishment of debt		11,278			—		—		—		11,278			72,565			7,326		13,507			535			79,281
Income tax expense (benefit)		(7,382	)		—		—		—		(7,382	)		(566	)		—		—			(19	)		(585	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—			9,011			9,011		—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—			303			—		—			(303	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(11,289	)	$	—	$	—	$	—	$	(11,289	)	$	64,927		$	—	$	—		$	—		$	64,927
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(11,289	)	$	—	$	—	$	—	$	(11,289	)	$	64,927		$	—	$	—		$	—		$	64,927
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(45,532	)		—		—			(433	)		(45,965	)
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(2,895	)		—		—			(7	)		(2,902	)
Deferred taxes — Real Estate Groups		(1,154	)		—		—		—		(1,154	)		2,663			—		—			(41	)		2,622
Straight-line rent adjustment		—			—		—		—		—			1,987			—		—			—			1,987
Gain on disposition of rental properties and other investments, net of tax		6			—		—		—		6			6			—		168			—			174
Provision for decline in real estate, net of tax and minority interest		—			—		—		—		—			(672	)		—		(7	)		—			(679	)
Gain on disposition recorded on equity method, net of tax		—			—		—		—		—			168			—		(168	)		—			—
Provision for decline in real estate recorded on equity method, net of tax		—			—		—		—		—			(7	)		—		7			—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(433	)		—		—			433			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(7	)		—		—			7			—
Deferred taxes — Real Estate Groups		—			—		—		—		—			(41	)		—		—			41			—
Net earnings	$	(12,437	)	$	—	$	—	$	—	$	(12,437	)	$	20,164		$	—	$	—		$	—		$	20,164

35

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2005(in thousands)

	Commercial Group 2005													Residential Group 2005
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata			Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued		Consolidation			Consolidation			Minority		Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata			Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	453,537		$	53,088	$	49,869		$	—	$	450,318		$	107,303		$	7,686	$	60,575		$	3,044		$	163,236
Exclude straight-line rent adjustment		(8,758	)		—		—			—		(8,758	)		14			—		—			—			14
Adjusted revenues		444,779			53,088		49,869			—		441,560			107,317			7,686		60,575			3,044			163,250
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		241,608			26,236		27,364			—		242,736			70,462			5,235		33,582			1,408			100,217
Exclude straight-line rent adjustment		(3,761	)		—		—			—		(3,761	)		—			—		—			—			—
Adjusted operating expenses		237,847			26,236		27,364			—		238,975			70,462			5,235		33,582			1,408			100,217
Add interest income		2,261			295		(458	)		—		1,508			1,689			26		719			—			2,382
Add equity in earnings of unconsolidated entities		20,103			—		(19,711	)		—		392			8,904			—		(8,984	)		—			(80	)
Remove gain on disposition recorded on equity method		(13,145	)		—		13,145			—		—			(5,352	)		—		5,352			—			—
Add back provision for decline in real estate recorded on equity method		704			—		(704	)		—		—			—			—		—			—			—
Add back equity method depreciation and amortization expense		5,749			—		(5,749	)		—		—			8,385			—		(8,385	)		—			—
Net operating income		222,604			27,147		9,028			—		204,485			50,481			2,477		15,695			1,636			65,335
Interest expense, including early extinguishment of debt		93,389			12,733		9,028			—		89,684			24,437			2,283		15,695			1,071			38,920
Income tax expense (benefit)		7,260			—		—			—		7,260			(5,024	)		—		—			(37	)		(5,061	)
Minority interest in earnings before depreciation and amortization		14,414			14,414		—			—		—			194			194		—			—			—
Add: EBDT from discontinued operations		—			—		—			—		—			602			—		—			(602	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	107,541		$	—	$	—		$	—	$	107,541		$	31,476		$	—	$	—		$	—		$	31,476
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	107,541		$	—	$	—		$	—	$	107,541		$	31,476		$	—	$	—		$	—		$	31,476
Depreciation and amortization — Real Estate Groups		(64,989	)		—		—			—		(64,989	)		(26,280	)		—		—			(863	)		(27,143	)
Amortization of mortgage procurement costs — Real Estate Groups		(4,286	)		—		—			—		(4,286	)		(1,332	)		—		—			(15	)		(1,347	)
Deferred taxes — Real Estate Groups		(5,435	)		—		—			—		(5,435	)		(653	)		—		—			(84	)		(737	)
Straight-line rent adjustment		4,997			—		—			—		4,997			(14	)		—		—			—			(14	)
Gain on disposition of rental properties and other investments, net of tax		—			—		8,064			—		8,064			—			—		3,285			—			3,285
Provision for decline in real estate, net of tax and minority interest		(920	)		—		(432	)		—		(1,352	)		(659	)		—		—			—			(659	)
Gain on disposition recorded on equity method, net of tax		8,064			—		(8,064	)		—		—			3,285			—		(3,285	)		—			—
Provision for decline in real estate recorded on equity method, net of tax		(432	)		—		432			—		—			—			—		—			—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—			—		—			(863	)		—		—			863			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—			—		—			(15	)		—		—			15			—
Deferred taxes — Real Estate Groups		—			—		—			—		—			(84	)		—		—			84			—
Net earnings	$	44,540		$	—	$	—		$	—	$	44,540		$	4,861		$	—	$	—		$	—		$	4,861

36

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2005(in thousands)(continued)

	Land Development Group 2005													The Nets 2005
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata			Full			Less		Unconsolidated		Plus			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued		Consolidation			Consolidation			Minority		Investments at		Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata			Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata		Operations			(Non-GAAP)
Revenues from real estate operations	$	59,474		$	3,649	$	22,330		$	—	$	78,155		$	—		$	—	$	17,272	$	—		$	17,272
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—			—
Adjusted revenues		59,474			3,649		22,330			—		78,155			—			—		17,272		—			17,272
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		34,921			1,890		12,286			—		45,317			—			—		29,112		—			29,112
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—			—
Adjusted operating expenses		34,921			1,890		12,286			—		45,317			—			—		29,112		—			29,112
Add interest income		8,817			856		71			—		8,032			—			—		115		—			115
Add equity in earnings of unconsolidated entities		14,125			—		(9,876	)		—		4,249			(13,216	)		—		13,201		—			(15	)
Remove gain on disposition recorded on equity method		—			—		—			—		—			—			—		—		—	��		—
Add back provision for decline in real estate recorded on equity method		—			—		—			—		—			—			—		—		—			—
Add back equity method depreciation and amortization expense		—			—		—			—		—			—			—		—		—			—
Net operating income		47,495			2,615		239			—		45,119			(13,216	)		—		1,476		—			(11,740	)
Interest expense, including early extinguishment of debt		4,135			247		239			—		4,127			—			—		1,476		—			1,476
Income tax expense (benefit)		16,293			—		—			—		16,293			(5,108	)		—		—		—			(5,108	)
Minority interest in earnings before depreciation and amortization		2,368			2,368		—			—		—			—			—		—		—			—
Add: EBDT from discontinued operations		—			—		—			—		—			—			—		—		—			—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	24,699		$	—	$	—		$	—	$	24,699		$	(8,108	)	$	—	$	—	$	—		$	(8,108	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	24,699		$	—	$	—		$	—	$	24,699		$	(8,108	)	$	—	$	—	$	—		$	(8,108	)
Depreciation and amortization — Real Estate Groups		(105	)		—		—			—		(105	)		—			—		—		—			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—			—		—			—			—		—		—			—
Deferred taxes — Real Estate Groups		960			—		—			—		960			—			—		—		—			—
Straight-line rent adjustment		—			—		—			—		—			—			—		—		—			—
Gain on disposition of rental properties and other investments, net of tax		—			—		—			—		—			—			—		—		—			—
Provision for decline in real estate, net of tax and minority interest		—			—		—			—		—			—			—		—		—			—
Gain on disposition recorded on equity method, net of tax		—			—		—			—		—			—			—		—		—			—
Provision for decline in real estate recorded on equity method, net of tax		—			—		—			—		—			—			—		—		—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—			—		—			—			—		—		—			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—			—		—			—			—		—		—			—
Deferred taxes — Real Estate Groups		—			—		—			—		—			—			—		—		—			—
Net earnings	$	25,554		$	—	$	—		$	—	$	25,554		$	(8,108	)	$	—	$	—	$	—		$	(8,108	)

37

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2005(in thousands)(continued)

	Corporate Activities 2005												Total 2005
						Plus												Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata			Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at		Discontinued		Consolidation			Consolidation			Minority		Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	—		$	—	$	—	$	—	$	—		$	620,314		$	64,423	$	150,046		$	3,044		$	708,981
Exclude straight-line rent adjustment		—			—		—		—		—			(8,744	)		—		—			—			(8,744	)
Adjusted revenues		—			—		—		—		—			611,570			64,423		150,046			3,044			700,237
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		17,275			—		—		—		17,275			364,266			33,361		102,344			1,408			434,657
Exclude straight-line rent adjustment		—			—		—		—		—			(3,761	)		—		—			—			(3,761	)
Adjusted operating expenses		17,275			—		—		—		17,275			360,505			33,361		102,344			1,408			430,896
Add interest income		972			—		—		—		972			13,739			1,177		447			—			13,009
Add equity in earnings of unconsolidated entities		—			—		—		—		—			29,916			—		(25,370	)		—			4,546
Remove gain on disposition recorded on equity method		—			—		—		—		—			(18,497	)		—		18,497			—			—
Add back provision for decline in real estate recorded on equity method		—			—		—		—		—			704			—		(704	)		—			—
Add back equity method depreciation and amortization expense		—			—		—		—		—			14,134			—		(14,134	)		—			—
Net operating income		(16,303	)		—		—		—		(16,303	)		291,061			32,239		26,438			1,636			286,896
Interest expense, including early extinguishment of debt		21,586			—		—		—		21,586			143,547			15,263		26,438			1,071			155,793
Income tax expense (benefit)		(14,870	)		—		—		—		(14,870	)		(1,449	)		—		—			(37	)		(1,486	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—			16,976			16,976		—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—			602			—		—			(602	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(23,019	)	$	—	$	—	$	—	$	(23,019	)	$	132,589		$	—	$	—		$	—		$	132,589
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(23,019	)	$	—	$	—	$	—	$	(23,019	)	$	132,589		$	—	$	—		$	—		$	132,589
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(91,374	)		—		—			(863	)		(92,237	)
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(5,618	)		—		—			(15	)		(5,633	)
Deferred taxes — Real Estate Groups		(1,820	)		—		—		—		(1,820	)		(6,948	)		—		—			(84	)		(7,032	)
Straight-line rent adjustment		—			—		—		—		—			4,983			—		—			—			4,983
Gain on disposition of rental properties and other investments, net of tax		372			—		—		—		372			372			—		11,349			—			11,721
Provision for decline in real estate, net of tax and minority interest		—			—		—		—		—			(1,579	)		—		(432	)		—			(2,011	)
Gain on disposition recorded on equity method, net of tax		—			—		—		—		—			11,349			—		(11,349	)		—			—
Provision for decline in real estate recorded on equity method, net of tax		—			—		—		—		—			(432	)		—		432			—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(863	)		—		—			863			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(15	)		—		—			15			—
Deferred taxes — Real Estate Groups		—			—		—		—		—			(84	)		—		—			84			—
Net earnings	$	(24,467	)	$	—	$	—	$	—	$	(24,467	)	$	42,380		$	—	$	—		$	—		$	42,380

38

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2004(in thousands)

	Commercial Group 2004														Residential Group 2004
						Plus															Plus
	Full			Less		Unconsolidated			Plus			Pro-Rata			Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued			Consolidation			Consolidation			Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)			(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	194,625		$	37,349	$	25,922		$	2,597		$	185,795		$	49,459		$	3,773		$	28,873		$	4,820		$	79,379
Exclude straight-line rent adjustment		(3,120	)		—		—			(325	)		(3,445	)		25			—			—			—			25
Adjusted revenues		191,505			37,349		25,922			2,272			182,350			49,484			3,773			28,873			4,820			79,404
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		95,945			22,532		15,339			760			89,512			32,605			2,752			15,691			2,604			48,148
Exclude straight-line rent adjustment		(2,027	)		—		—			(7	)		(2,034	)		—			—			—			—			—
Adjusted operating expenses		93,918			22,532		15,339			753			87,478			32,605			2,752			15,691			2,604			48,148
Add interest income		354			50		(177	)		21			148			568			(1	)		(235	)		3			337
Add equity in earnings of unconsolidated entities		34,515			—		(33,982	)		—			533			2,255			—			(2,053	)		—			202
Remove gain on disposition recorded on equity method		(31,996	)		—		31,996			—			—			—			—			—			—			—
Add back equity method depreciation and amortization expense		3,325			—		(3,325	)		—			—			3,993			—			(3,993	)		—			—
Net operating income		103,785			14,867		5,095			1,540			95,553			23,695			1,020			6,901			2,219			31,795
Interest expense, including early extinguishment of debt		38,918			3,496		5,095			685			41,202			8,943			847			6,901			1,626			16,623
Income tax expense (benefit)		1,690			—		—			185			1,875			(1,821	)		—			—			88			(1,733	)
Minority interest in earnings before depreciation and amortization		11,371			11,371		—			—			—			173			173			—			—			—
Add: EBDT from discontinued operations		670			—		—			(670	)		—			505			—			—			(505	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	52,476		$	—	$	—		$	—		$	52,476		$	16,905		$	—		$	—		$	—		$	16,905
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	52,476		$	—	$	—		$	—		$	52,476		$	16,905		$	—		$	—		$	—		$	16,905
Depreciation and amortization — Real Estate Groups		(28,509	)		—		—			(277	)		(28,786	)		(13,408	)		—			—			(1,351	)		(14,759	)
Amortization of mortgage procurement costs — Real Estate Groups		(3,413	)		—		—			(56	)		(3,469	)		(801	)		—			—			(19	)		(820	)
Deferred taxes — Real Estate Groups		(7,613	)		—		—			(148	)		(7,761	)		(1,400	)		—			—			394			(1,006	)
Straight-line rent adjustment		1,093			—		—			318			1,411			(25	)		—			—			—			(25	)
Gain on disposition of rental properties and other investments, net of tax		—			—		—			691			691			—			—			—			—			—
Gain on disposition recorded on equity method, net of tax		19,341			—		—			—			19,341			—			—			—			—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		(277	)		—		—			277			—			(1,351	)		—			—			1,351			—
Amortization of mortgage procurement costs — Real Estate Groups		(56	)		—		—			56			—			(19	)		—			—			19			—
Deferred taxes — Real Estate Groups		(148	)		—		—			148			—			394			—			—			(394	)		—
Straight-line rent adjustment		318			—		—			(318	)		—			—			—			—			—			—
Loss on disposition of division of Lumber Group		—			—		—			—			—			—			—			—			—			—
Gain on disposition of rental properties		691			—		—			(691	)		—			—			—			—			—			—
Net earnings	$	33,903		$	—	$	—		$	—		$	33,903		$	295		$	—		$	—		$	—		$	295

39

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2004(in thousands)(continued)

	Land Development Group 2004											Lumber Group 2004
					Plus												Plus
	Full		Less		Unconsolidated			Plus		Pro-Rata		Full			Less		Unconsolidated		Plus		Pro-Rata
	Consolidation		Minority		Investments at			Discontinued		Consolidation		Consolidation			Minority		Investments at		Discontinued		Consolidation
	(GAAP)		Interest		Pro-Rata			Operations		(Non-GAAP)		(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	21,888	$	1,357	$	15,677		$	—	$	36,208	$	—		$	—	$	—	$	—	$	—
Exclude straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Adjusted revenues		21,888		1,357		15,677			—		36,208		—			—		—		—		—
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		11,759		703		10,338			—		21,394		—			—		—		—		—
Exclude straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Adjusted operating expenses		11,759		703		10,338			—		21,394		—			—		—		—		—
Add interest income		1,271		119		33			—		1,185		—			—		—		—		—
Add equity in earnings of unconsolidated entities		6,880		—		(5,150	)		—		1,730		—			—		—		—		—
Add back equity method depreciation and amortization expense		—		—		—			—		—		—			—		—		—		—
Net operating income		18,280		773		222			—		17,729		—			—		—		—		—
Interest expense, including early extinguishment of debt		1,863		86		222			—		1,999		—			—		—		—		—
Income tax expense (benefit)		7,996		—		—			—		7,996		—			—		—		—		—
Minority interest in earnings before depreciation and amortization		687		687		—			—		—		—			—		—		—		—
Add: EBDT from discontinued operations		—		—		—			—		—		1,771			—		—		—		1,771
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	7,734	$	—	$	—		$	—	$	7,734	$	1,771		$	—	$	—	$	—	$	1,771
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	7,734	$	—	$	—		$	—	$	7,734	$	1,771		$	—	$	—	$	—	$	1,771
Depreciation and amortization — Real Estate Groups		84		—		—			—		84		—			—		—		—		—
Amortization of mortgage procurement costs — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Deferred taxes — Real Estate Groups		1,711		—		—			—		1,711		—			—		—		—		—
Straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Gain on disposition of rental properties and other investments, net of tax		—		—		—			—		—		—			—		—		—		—
Gain on disposition recorded on equity method, net of tax		—		—		—			—		—		—			—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Amortization of mortgage procurement costs — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Deferred taxes — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Loss on disposition of division of Lumber Group		—		—		—			—		—		(661	)		—		—		—		(661	)
Gain on disposition of rental properties		—		—		—			—		—		—			—		—		—		—
Net earnings	$	9,529	$	—	$	—		$	—	$	9,529	$	1,110		$	—	$	—	$	—	$	1,110

40

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2004(in thousands)(continued)

	Corporate Activities 2004												Total 2004
						Plus												Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata			Full			Less		Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at		Discontinued		Consolidation			Consolidation			Minority		Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	—		$	—	$	—	$	—	$	—		$	265,972		$	42,479	$	70,472		$	7,417		$	301,382
Exclude straight-line rent adjustment		—			—		—		—		—			(3,095	)		—		—			(325	)		(3,420	)
Adjusted revenues		—			—		—		—		—			262,877			42,479		70,472			7,092			297,962
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		7,251			—		—		—		7,251			147,560			25,987		41,368			3,364			166,305
Exclude straight-line rent adjustment		—			—		—		—		—			(2,027	)		—		—			(7	)		(2,034	)
Adjusted operating expenses		7,251			—		—		—		7,251			145,533			25,987		41,368			3,357			164,271
Add interest income		20			—		—		—		20			2,213			168		(379	)		24			1,690
Add equity in earnings of unconsolidated entities		—			—		—		—		—			43,650			—		(41,185	)		—			2,465
Remove gain on disposition recorded on equity method		—			—		—		—		—			(31,996	)		—		31,996			—			—
Add back equity method depreciation and amortization expense		—			—		—		—		—			7,318			—		(7,318	)		—			—
Net operating income		(7,231	)		—		—		—		(7,231	)		138,529			16,660		12,218			3,759			137,846
Interest expense, including early extinguishment of debt		9,061			—		—		—		9,061			58,785			4,429		12,218			2,311			68,885
Income tax expense (benefit)		(8,401	)		—		—		—		(8,401	)		(536	)		—		—			273			(263	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—			12,231			12,231		—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—			2,946			—		—			(1,175	)		1,771
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(7,891	)	$	—	$	—	$	—	$	(7,891	)	$	70,995		$	—	$	—		$	—		$	70,995
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(7,891	)	$	—	$	—	$	—	$	(7,891	)	$	70,995		$	—	$	—		$	—		$	70,995
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(41,833	)		—		—			(1,628	)		(43,461	)
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(4,214	)		—		—			(75	)		(4,289	)
Deferred taxes — Real Estate Groups		(2,123	)		—		—		—		(2,123	)		(9,425	)		—		—			246			(9,179	)
Straight-line rent adjustment		—			—		—		—		—			1,068			—		—			318			1,386
Gain on disposition of rental properties and other investments, net of tax		—			—		—		—		—			—			—		—			691			691
Gain on disposition recorded on equity method, net of tax		—			—		—		—		—			19,341			—		—			—			19,341
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(1,628	)		—		—			1,628			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(75	)		—		—			75			—
Deferred taxes — Real Estate Groups		—			—		—		—		—			246			—		—			(246	)		—
Straight-line rent adjustment		—			—		—		—		—			318			—		—			(318	)		—
Loss on disposition of division of Lumber Group		—			—		—		—		—			(661	)		—		—			—			(661	)
Gain on disposition of rental properties		—			—		—		—		—			691			—		—			(691	)		—
Net earnings	$	(10,014	)	$	—	$	—	$	—	$	(10,014	)	$	34,823		$	—	$	—		$	—		$	34,823

41

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2004(in thousands)

	Commercial Group 2004															Residential Group 2004
							Plus															Plus
	Full			Less			Unconsolidated			Plus			Pro-Rata			Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority			Investments at			Discontinued			Consolidation			Consolidation			Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)			(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	356,039		$	69,617		$	50,828		$	5,195		$	342,445		$	95,239		$	7,171		$	58,455		$	10,066		$	156,589
Exclude straight-line rent adjustment		(5,205	)		—			—			(647	)		(5,852	)		68			—			—			—			68
Adjusted revenues		350,834			69,617			50,828			4,548			336,593			95,307			7,171			58,455			10,066			156,657
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		179,432			38,675			30,577			1,477			172,811			59,926			4,883			32,258			5,189			92,490
Exclude straight-line rent adjustment		(6,308	)		—			—			(14	)		(6,322	)		—			—			—			—			—
Adjusted operating expenses		173,124			38,675			30,577			1,463			166,489			59,926			4,883			32,258			5,189			92,490
Add interest income		1,214			667			(324	)		37			260			1,163			(3	)		233			19			1,418
Add equity in earnings of unconsolidated entities		35,862			(4	)		(35,181	)		—			685			4,496			—			(4,435	)		—			61
Remove gain on disposition recorded on equity method		(31,996	)		—			31,996			—			—			—			—			—			—			—
Add back equity method depreciation and amortization expense		6,247			—			(6,247	)		—			—			8,341			—			(8,104	)		—			237
Net operating income		189,037			31,605			10,495			3,122			171,049			49,381			2,285			13,891			4,896			65,883
Interest expense, including early extinguishment of debt		76,716			12,510			10,495			1,396			76,097			18,703			1,520			13,891			3,579			34,653
Income tax expense (benefit)		3,244			—			—			366			3,610			(2,403	)		—			—			(38	)		(2,441	)
Minority interest in earnings before depreciation and amortization		19,095			19,095			—			—			—			765			765			—			—			—
Add: EBDT from discontinued operations		1,360			—			—			(1,360	)		—			1,355			—			—			(1,355	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	91,342		$	—		$	—		$	—		$	91,342		$	33,671		$	—		$	—		$	—		$	33,671
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	91,342		$	—		$	—		$	—		$	91,342		$	33,671		$	—		$	—		$	—		$	33,671
Depreciation and amortization — Real Estate Groups		(58,306	)		—			—			(631	)		(58,937	)		(25,178	)		—			—			(2,526	)		(27,704	)
Amortization of mortgage procurement costs — Real Estate Groups		(4,666	)		—			—			(111	)		(4,777	)		(1,498	)		—			—			(38	)		(1,536	)
Deferred taxes — Real Estate Groups		(8,927	)		—			—			(273	)		(9,200	)		(3,178	)		—			—			454			(2,724	)
Straight-line rent adjustment		(1,103	)		—			—			633			(470	)		(68	)		—			—			—			(68	)
Gain on disposition of rental properties and other investments, net of tax		—			—			—			691			691			—			—			—			11,787			11,787
Gain on disposition recorded on equity method, net of tax		19,341			—			—			—			19,341			—			—			—			—			—
Cumulative effect of change in accounting principle, net of tax		(477	)		—			—			—			(477	)		(10,784	)		—			—			—			(10,784	)
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		(631	)		—			—			631			—			(2,526	)		—			—			2,526			—
Amortization of mortgage procurement costs — Real Estate Groups		(111	)		—			—			111			—			(38	)		—			—			38			—
Deferred taxes — Real Estate Groups		(273	)		—			—			273			—			454			—			—			(454	)		—
Straight-line rent adjustment		633			—			—			(633	)		—			—			—			—			—			—
Loss on disposition of division of Lumber Group		—			—			—			—			—			—			—			—			—			—
Gain on disposition of rental properties		691			—			—			(691	)		—			11,787			—			—			(11,787	)		—
Net earnings	$	37,513		$	—		$	—		$	—		$	37,513		$	2,642		$	—		$	—		$	—		$	2,642

42

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2004(in thousands)(continued)

	Land Development Group 2004											Lumber Group 2004
					Plus												Plus
	Full		Less		Unconsolidated			Plus		Pro-Rata		Full			Less		Unconsolidated		Plus		Pro-Rata
	Consolidation		Minority		Investments at			Discontinued		Consolidation		Consolidation			Minority		Investments at		Discontinued		Consolidation
	(GAAP)		Interest		Pro-Rata			Operations		(Non-GAAP)		(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)
Revenues from real estate operations	$	53,217	$	3,267	$	23,823		$	—	$	73,773	$	—		$	—	$	—	$	—	$	—
Exclude straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Adjusted revenues		53,217		3,267		23,823			—		73,773		—			—		—		—		—
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		31,064		1,683		16,018			—		45,399		—			—		—		—		—
Exclude straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Adjusted operating expenses		31,064		1,683		16,018			—		45,399		—			—		—		—		—
Add interest income		1,581		128		51			—		1,504		—			—		—		—		—
Add equity in earnings of unconsolidated entities		9,536		—		(7,463	)		—		2,073		—			—		—		—		—
Add back equity method depreciation and amortization expense		—		—		—			—		—		—			—		—		—		—
Net operating income		33,270		1,712		393			—		31,951		—			—		—		—		—
Interest expense, including early extinguishment of debt		2,719		86		393			—		3,026		—			—		—		—		—
Income tax expense (benefit)		13,087		—		—			—		13,087		—			—		—		—		—
Minority interest in earnings before depreciation and amortization		1,626		1,626		—			—		—		—			—		—		—		—
Add: EBDT from discontinued operations		—		—		—			—		—		4,355			—		—		—		4,355
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	15,838	$	—	$	—		$	—	$	15,838	$	4,355		$	—	$	—	$	—	$	4,355
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	15,838	$	—	$	—		$	—	$	15,838	$	4,355		$	—	$	—	$	—	$	4,355
Depreciation and amortization — Real Estate Groups		50		—		—			—		50		—			—		—		—		—
Amortization of mortgage procurement costs — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Deferred taxes — Real Estate Groups		1,560		—		—			—		1,560		—			—		—		—		—
Straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Gain on disposition of rental properties and other investments, net of tax		—		—		—			—		—		—			—		—		—		—
Gain on disposition recorded on equity method, net of tax		—		—		—			—		—		—			—		—		—		—
Cumulative effect of change in accounting principle, net of tax		—		—		—			—		—		—			—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Amortization of mortgage procurement costs — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Deferred taxes — Real Estate Groups		—		—		—			—		—		—			—		—		—		—
Straight-line rent adjustment		—		—		—			—		—		—			—		—		—		—
Loss on disposition of division of Lumber Group		—		—		—			—		—		(661	)		—		—		—		(661	)
Gain on disposition of rental properties		—		—		—			—		—		—			—		—		—		—
Net earnings	$	17,448	$	—	$	—		$	—	$	17,448	$	3,694		$	—	$	—	$	—	$	3,694

43

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2004(in thousands)(continued)

	Corporate Activities 2004												Total 2004
						Plus													Plus
	Full			Less		Unconsolidated		Plus		Pro-Rata			Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority		Investments at		Discontinued		Consolidation			Consolidation			Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest		Pro-Rata		Operations		(Non-GAAP)			(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	—		$	—	$	—	$	—	$	—		$	504,495		$	80,055		$	133,106		$	15,261		$	572,807
Exclude straight-line rent adjustment		—			—		—		—		—			(5,137	)		—			—			(647	)		(5,784	)
Adjusted revenues		—			—		—		—		—			499,358			80,055			133,106			14,614			567,023
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		14,197			—		—		—		14,197			284,619			45,241			78,853			6,666			324,897
Exclude straight-line rent adjustment		—			—		—		—		—			(6,308	)		—			—			(14	)		(6,322	)
Adjusted operating expenses		14,197			—		—		—		14,197			278,311			45,241			78,853			6,652			318,575
Add interest income		94			—		—		—		94			4,052			792			(40	)		56			3,276
Add equity in earnings of unconsolidated entities		—			—		—		—		—			49,894			(4	)		(47,079	)		—			2,819
Remove gain on disposition recorded on equity method		—			—		—		—		—			(31,996	)		—			31,996			—			—
Add back equity method depreciation and amortization expense		—			—		—		—		—			14,588			—			(14,351	)		—			237
Net operating income		(14,103	)		—		—		—		(14,103	)		257,585			35,602			24,779			8,018			254,780
Interest expense, including early extinguishment of debt		17,229			—		—		—		17,229			115,367			14,116			24,779			4,975			131,005
Income tax expense (benefit)		(12,242	)		—		—		—		(12,242	)		1,686			—			—			328			2,014
Minority interest in earnings before depreciation and amortization		—			—		—		—		—			21,486			21,486			—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—			7,070			—			—			(2,715	)		4,355
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(19,090	)	$	—	$	—	$	—	$	(19,090	)	$	126,116		$	—		$	—		$	—		$	126,116
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(19,090	)	$	—	$	—	$	—	$	(19,090	)	$	126,116		$	—		$	—		$	—		$	126,116
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(83,434	)		—			—			(3,157	)		(86,591	)
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(6,164	)		—			—			(149	)		(6,313	)
Deferred taxes — Real Estate Groups		(181	)		—		—		—		(181	)		(10,726	)		—			—			181			(10,545	)
Straight-line rent adjustment		—			—		—		—		—			(1,171	)		—			—			633			(538	)
Gain on disposition of rental properties and other investments, net of tax		—			—		—		—		—			—			—			—			12,478			12,478
Gain on disposition recorded on equity method, net of tax		—			—		—		—		—			19,341			—			—			—			19,341
Cumulative effect of change in accounting principle, net of tax		—			—		—		—		—			(11,261	)		—			—			—			(11,261	)
Discontinued operations, net of tax and minority interest:
Depreciation and amortization — Real Estate Groups		—			—		—		—		—			(3,157	)		—			—			3,157			—
Amortization of mortgage procurement costs — Real Estate Groups		—			—		—		—		—			(149	)		—			—			149			—
Deferred taxes — Real Estate Groups		—			—		—		—		—			181			—			—			(181	)		—
Straight-line rent adjustment		—			—		—		—		—			633			—			—			(633	)		—
Loss on disposition of division of Lumber Group		—			—		—		—		—			(661	)		—			—			—			(661	)
Gain on disposition of rental properties		—			—		—		—		—			12,478			—			—			(12,478	)		—
Net earnings	$	(19,271	)	$	—	$	—	$	—	$	(19,271	)	$	42,026		$	—		$	—		$	—		$	42,026

44