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

Exhibit 99.1

Forest City Enterprises, Inc.

Supplemental Package

Years Ended January 31, 2005 and 2004

Forest City Enterprises, Inc. and Subsidiaries

Years Ended January 31, 2005 and 2004

Supplemental Package

NYSE: FCEA, FCEB

Index

Corporate Overview			2-4
Supplemental Operating Information
	Occupancy Data		5
	Comparable Net Operating Income (NOI)		6
	Comparable NOI Detail		7
	Reconciliation of NOI to Net Earnings		8
	Lease Expirations Schedules		9-10
	Schedules of Significant Tenants		11-12
	Development Pipeline		13-15
	Scheduled Maturities Table		16
Supplemental Financial Information
	Forest City Enterprises, Inc.
		Consolidated Balance Sheet Information	17-18
		Consolidated Earnings Information	19-20
		Investment in and Advances to Affiliates	21-22
		Real Estate and Related Nonrecourse Mortgage Debt	23-24
	Forest City Rental Properties Corporation
		Consolidated Balance Sheet Information	25-26
		Consolidated Earnings Information	27-28
		Real Estate Activity	29-32
	Results of Operations Summary		33-34
	Reconciliation of Net Earnings to EBDT		35-36
	Summary of EBDT		37-43

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 DESCRIPTION

      Founded in 1920 and publicly traded since 1960, Forest City Enterprises, Inc. (“FCE” or the “Company”) is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate properties in 19 states and the District of Columbia. At January 31, 2005, we had approximately $7.3 billion in total assets. We have a portfolio of real estate assets diversified both geographically and among property types. We operate our business through three strategic business units as follows:

•  Commercial Group, our largest business unit, owns, develops, acquires and operates regional malls, specialty/urban retail centers, office buildings, hotels and mixed-use projects;

•  Residential Group owns, develops, acquires and operates residential rental properties, including upscale and middle-market apartments, adaptive re-use developments and supported-living facilities;

•  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; and

      The Company’s Lumber Group strategic business unit (formerly presented as Lumber Trading Group) was sold on November 12, 2004 to its employees and is no longer a strategic business unit or reportable segment.

New Segment:

      On August 16, 2004, the Company purchased an ownership interest in the National Basketball Association (“NBA”) franchise known as the New Jersey Nets (the “Nets”) that will be reported on the equity method of accounting. Although the Company has legal ownership interest of approximately 15% in the Nets, the Company currently recognized approximately 38% of the economics for 2004 because profits and losses are allocated to each member based on an analysis of the respective member’s claim on the net book equity assuming a liquidation at book value at the end of the accounting period without regard to unrealized appreciation (if any) in the fair value of the Nets.

      The purchase of the interest in the Nets is the first step in the Company’s efforts to pursue development projects at Brooklyn Atlantic Yards, which include a new entertainment arena complex and adjacent urban developments combining housing, offices, shops and public open space. As the result of this investment, the Company has added a new reportable segment, the Nets. The Nets segment is primarily comprised of and will report on the sports operations of the basketball team.

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 in accordance with 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. We believe 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 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 entities (“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.

      Certain amounts in the Consolidated Balance Sheet Information and Consolidated Earnings Information are not comparable to the prior period due to the implementation of FIN No. 46(R) at February 1, 2004, and the consolidation of four properties previously accounted under the equity method due to the acquisitions of our partners’ interest.

2

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

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 37 – 43 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 and our development pipeline. 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 fiscal years ended January 31, 2005 and 2004.

      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 33), 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 7-8 of this document. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 37-43.

3

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Corporate Headquarters

Forest City Enterprises, Inc.

Terminal Tower

50 Public Square, Suite 1100

Cleveland, Ohio 44113

SEC Filing

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.

4

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Occupancy Data – January 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
		January 31, 2005		January 31, 2005		January 31, 2004		January 31, 2004
Retail
	Comparable		93.3%		92.6%		92.0%		90.6%
	Total		92.2%		92.1%		91.8%		91.0%
Office
	Comparable		94.8%		93.4%		92.0%		92.5%
	Total		93.1%		94.9%		92.2%		87.6%
Residential
	Comparable		92.2%		90.8%		90.9%		90.5%
	Total		92.1%		90.7%		90.3%		88.9%
Hotels
	Comparable				75.4%				72.6%
	ADR			$	166.34			$	152.28

Retail and office occupancy as of January 31, 2005 and 2004 is based on square feet leased as of January 31, 2005 and 2004, respectively. Average Occupancy year-to-date as of January 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 January 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 years ended January 31, 2005 and 2004.

5

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

We use NOI, along with EBDT as discussed on pages 3, to assess operating performance. Comparable NOI is defined as NOI from properties opened and operated a full year in both 2004 and 2003. The following schedule on page 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 page 8. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 37-43.

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

	Year Ended January 31, 2005
	Full			Pro-Rata
	Consolidation			Consolidation
Retail		(1.4	)%		1.3	%
Office		1.9	%		2.4	%
Hotel		46.2	%		30.7	%
Residential		(0.7	)%		(1.9	)%
Total		1.9	%		2.1	%

6

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Net Operating Income(in thousands)

			Year Ended January 31, 2005												Year Ended January 31, 2004													% Change
								Plus													Plus
						Less		Unconsolidated		Plus								Less			Unconsolidated		Plus
			Full			Minority		Investments at		Discontinued		Pro-Rata			Full			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	$	121,528		$	15,805	$	8,894	$	—	$	114,617		$	123,220		$	19,316		$	9,228	$	—	$	113,132			(1.4	)%		1.3%
		Total		161,093			15,436		12,592		1,214		159,463			133,109			22,790			21,047		2,398		133,764
	Office Buildings
		Comparable		136,256			20,436		2,010		—		117,830			133,652			20,569			1,981		—		115,064			1.9%			2.4%
		Total		199,411			38,180		4,667		2,165		168,063			156,768			28,567			4,685		3,827		136,713
	Hotels
		Comparable		20,751			3,646		2,473		—		19,578			14,190			1,738			2,532		—		14,984			46.2%			30.7%
		Total		24,201			2,708		2,473		—		23,966			23,075			5,471			2,532		—		20,136
	Other			(3,590	)		604		1,002		—		(3,192	)		(2,123	)		(315	)		7,278		—		5,470
Total Commercial Group
		Comparable		278,535			39,887		13,377		—		252,025			271,062			41,623			13,741		—		243,180			2.8%			3.6%
		Total		381,115			56,928		20,734		3,379		348,300			310,829			56,513			35,542		6,225		296,083
Residential Group
		Comparable		85,271			4,257		12,196		—		93,210			85,878			1,793			10,934		—		95,019			(0.7	)%		(1.9	)%
		Total		102,038			4,516		28,918		5,178		131,618			91,572			2,025			22,169		9,175		120,891
Total Real Estate Groups
		Comparable		363,806			44,144		25,573		—		345,235			356,940			43,416			24,675		—		338,199			1.9%			2.1%
		Total		483,153			61,444		49,652		8,557		479,918			402,401			58,538			57,711		15,400		416,974
Land Development Group				86,982			6,344		548		—		81,186			41,862			2,151			5,388		—		45,099
The Nets				(10,889	)		—		518		—		(10,371	)		—			—			—		—		—
Corporate Activities				(35,503	)		—		—		—		(35,503	)		(25,972	)		—			—		—		(25,972	)
Grand Total			$	523,743		$	67,788	$	50,718	$	8,557	$	515,230		$	418,291		$	60,689		$	63,099	$	15,400	$	436,101

7

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

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

		Year Ended January 31, 2005																Year Ended January 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		$	1,041,851		$	143,894			$	260,844		$	17,226		$	1,176,027		$	848,121		$	147,393		$	260,215		$	30,589		$	991,532
Exclude straight- line rent adjustment(1)			(12,748	)		—				—			(849	)		(13,597	)		(11,891	)		—			—			(793	)		(12,684	)
Adjusted revenues			1,029,103			143,894				260,844			16,377			1,162,430			836,230			147,393			260,215			29,796			978,848
Operating expenses			608,565			80,252				155,898			8,062			692,273			514,934			86,930			144,552			14,521			587,077
Add back depreciation and amortization for non- real estate groups(b)			2,142			—				4,177			—			6,319			2,012			—			241			—			2,253
Exclude straight- line rent adjustment(2)			(10,301	)		—				—			(14	)		(10,315	)		(5,596	)		—			—			(28	)		(5,624	)
Adjusted operating expenses			600,406			80,252				160,075			8,048			688,277			511,350			86,930			144,793			14,493			583,706
Add interest income			44,186			4,146				550			228			40,818			22,712			226			274			97			22,857
Add equity in earnings of unconsolidated entities			54,392			—				(54,370	)		—			22			31,751			—			(15,428	)		—			16,323
Remove (gain) loss on disposition recorded on equity method			(31,996	)		—				31,996			—			—			3,573			—			(3,573	)		—			—
Add back equity method depreciation and amortization expense (see below)			28,464			—				(28,227	)		—			237			35,375			—			(33,596	)		—			1,779
Net Operating Income			523,743			67,788				50,718			8,557			515,230			418,291			60,689			63,099			15,400			436,101
Interest expense, including early extinguishment of debt			(253,410	)		(28,579	)			(50,718	)		(7,584	)		(283,133	)		(196,870	)		(32,329	)		(58,478	)		(9,087	)		(232,106	)
Gain (loss) on disposition of equity method rental properties(c)			31,996			—				—			—			31,996			(3,573	)		—			—			—			(3,573	)
Gain (loss) on disposition of rental properties and other investments			438			—				—			67,645			68,083			(171	)		—			—			6,446			6,275
Provision for decline in real estate			—			—				—			—			—			(2,134	)		(153	)		(4,621	)		(773	)		(7,375	)
Depreciation and amortization — real estate operations(a)			(174,274	)		(14,115	)			(28,227	)		(2,686	)		(191,072	)		(119,416	)		(18,951	)		(33,596	)		(4,678	)		(138,739	)
Straight-line rent adjustment(1) + (2)			2,447			—				—			835			3,282			6,295			—			—			765			7,060
Equity method depreciation and amortization expense (see above)			(28,464	)		—				28,227			—			(237	)		(35,375	)		—			33,596			—			(1,779	)
Earnings before income taxes			102,476			25,094				—			66,767			144,149			67,047			9,256			—			8,073			65,864
Income tax provision			(37,326	)		—				—			(26,402	)		(63,728	)		(23,957	)		—			—			(2,939	)		(26,896	)
Earnings before minority interest, discontinued operations and cumulative effect of change in accounting principle			65,150			25,094				—			40,365			80,421			43,090			9,256			—			5,134			38,968
Minority Interest			(25,094	)		(25,094	)			—			—			—			(9,256	)		(9,256	)		—			—			—
Earnings from continuing operations			40,056			—				—			40,365			80,421			33,834			—			—			5,134			38,968
Discontinued operations, net of tax and minority interest:
	Operating earnings from Lumber Group		4,545			—				—			—			4,545			3,701			—			—			—			3,701
	Operating (loss) earnings from rental properties		(528	)		—				—			528			—			1,237			—			—			(1,237	)		—
	Gain on disposition of Lumber Group		11,501			—				—			—			11,501			—			—			—			—			—
	Gain on disposition of rental properties		40,893			—				—			(40,893	)		—			3,897			—			—			(3,897	)		—
			56,411			—				—			(40,365	)		16,046			8,835			—			—			(5,134	)		3,701
Cumulative effect of change in accounting principle, net of tax			(11,261	)		—				—			—			(11,261	)		—			—			—			—			—
Net earnings		$	85,206		$	—			$	—		$	—		$	85,206		$	42,669		$	—		$	—		$	—		$	42,669
(a) Depreciation and amortization — real estate groups		$	174,274		$	14,115			$	28,227		$	2,686		$	191,072		$	119,416		$	18,951		$	33,596		$	4,678		$	138,739
(b) Depreciation and amortization — non-real estate groups			2,142			—				4,177			—			6,319			2,012			—			241			—			2,253
Total depreciation and amortization		$	176,416		$	14,115			$	32,404		$	2,686		$	197,391		$	121,428		$	18,951		$	33,837		$	4,678		$	140,992

Note c) 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 year ended January 31, 2005, three equity method investments were sold includingChapel Hill Mall, Chapel Hill SuburbanandManhattan Town Center Mall, resulting in a gain on disposition of $31,996. Also, for the year ended January 31, 2004, one equity method investment,Waterford Village, was sold, resulting in a loss on disposition of $3,573. These were included in equity in earnings of unconsolidated real estate entities in the Consolidated Statement of Earnings, and therefore, are included in Earnings from Continuing Operations.

8

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Retail Lease Expirations As of January 31, 2005

														Average
														Base
		Number		Square Feet		Percentage			Net		Percentage			Rent Per
Expiration		of Expiring		of Expiring		of Total			Base Rent		of Total			Square Feet
Year		Leases		Leases(3)		Leased GLA(1)			Expiring(2)		Base Rent			Expiring(3)
2005			138		376,816		3.95	%	$	6,818,218		3.97	%	$	22.67
2006			206		503,656		5.27			10,927,512		6.36			28.48
2007			154		535,324		5.60			8,552,293		4.98			21.74
2008			156		584,473		6.12			10,206,284		5.94			23.83
2009			215		733,882		7.68			12,213,780		7.10			23.40
2010			99		384,805		4.03			7,765,367		4.52			26.43
2011			244		1,062,948		11.13			25,082,837		14.59			28.52
2012			118		703,562		7.37			13,360,706		7.77			28.64
2013			146		629,239		6.59			15,786,591		9.18			28.48
2014			153		677,739		7.09			11,971,902		6.96			25.86
Thereafter			111		3,360,013		35.17			49,221,297		28.63			19.85
	Total		1,740		9,552,457		100.00	%	$	171,906,787		100.00	%	$	23.91

(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.

9

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Office Lease Expirations As of January 31, 2005

														Average
														Base
		Number		Square Feet		Percentage			Net		Percentage			Rent Per
Expiration		of Expiring		of Expiring		of Total			Base Rent		of Total			Square Feet
Year		Leases		Leases(3)		Leased GLA(1)			Expiring(2)		Base Rent			Expiring(3)
2005			69		552,512		6.69	%	$	9,911,907		5.50	%	$	23.77
2006			51		606,996		7.35			9,415,102		5.23			23.14
2007			47		323,133		3.92			5,588,757		3.10			22.57
2008			56		498,498		6.04			9,235,580		5.13			22.21
2009			36		329,716		3.99			6,445,467		3.58			24.94
2010			24		932,545		11.30			13,359,990		7.42			22.52
2011			9		200,209		2.43			6,276,067		3.48			34.11
2012			11		1,074,782		13.02			26,793,202		14.87			31.70
2013			15		625,409		7.58			11,853,396		6.58			23.41
2014			9		573,628		6.95			12,455,653		6.91			27.89
Thereafter			21		2,536,209		30.73			68,826,958		38.20			30.87
	Total		348		8,253,637		100.00	%	$	180,162,079		100.00	%	$	27.21

(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

Schedule of Significant Retail Tenants As of January 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		492,180		5.15	%
AMC Entertainment, Inc.		325,563		3.41
The Gap		287,962		3.02
The Home Depot		282,000		2.95
TJX Companies		272,554		2.85
Dick’s Sporting Goods		226,408		2.37
The Limited		211,424		2.21
Circuit City Stores, Inc.		164,842		1.73
Lowe’s Home Center, Inc.		151,273		1.59
Abercrombie & Fitch Stores, Inc.		136,227		1.43
Pathmark Stores		123,500		1.29
Footlocker, Inc.		117,278		1.23
Ahold USA (Stop & Shop)		115,861		1.21
DSW Shoe Warehouse, Inc.		112,040		1.17
Subtotal		3,019,112		31.61
All Others		6,533,345		68.39
Total		9,552,457		100.00	%

11

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Schedule of Significant Office Tenants As of January 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		816,190		9.89	%
Millennium Pharmaceuticals, Inc.		725,833		8.79
U.S. Government		609,893		7.39
Keyspan Energy		450,004		5.45
Morgan Stanley & Co.		444,685		5.39
Securities Industry Automation Corp.		428,786		5.19
Wellchoice, Inc.		392,514		4.76
Bank of New York		317,572		3.85
Forest City Enterprises, Inc.		302,106		3.66
Bear Stearns		275,244		3.33
Alkermes, Inc.		210,248		2.55
Partners Health Care System		136,150		1.65
University of Pennsylvania		122,299	��	1.48
Subtotal		5,231,524		63.38
All Others		3,022,113		36.62
Total		8,253,637		100.00	%

12

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Development Pipeline

January 31, 2005

Openings/ Acquisitions(10)

										Pro-							Cost at
					Date					Rata			Cost at Full		Total Cost		Pro-Rata Share		Square Feet/
			Dev.(D)		Opened/		Legal			%(l)			Consolidation		at 100%		(Non-GAAP)(b)		Number of
Property	Location		Acq.(A)		Acquired		Ownership%(l)			(1)			(GAAP)(a)		(2)		(1)X(2)		Units
													(in millions)
Retail Centers:
Brooklyn Commons		Brooklyn, NY		D		Q2-04		70.0	%		100.0	%	$	21.5	$	21.5	$	21.5		151,000
Atlantic Terminal		Brooklyn, NY		D		Q2-04		70.0	%		100.0	%		90.1		90.1		90.1		373,000
Quartermaster Plaza		Philadelphia, PA		D		Q3-04		70.0	%		100.0	%		69.7		69.7		69.7		459,000
Victoria Gardens		Rancho Cucamonga, CA		D		Q3-04		80.0	%		80.0	%		183.6		183.6		146.9		1,156,000	(t)
													$	364.9	$	364.9	$	328.2		2,139,000
Office:
2 Hanson Place (Atlantic Terminal)		Brooklyn, NY		D		Q2-04		70.0	%		100.0	%	$	107.4	$	107.4	$	107.4		399,000
Twelve MetroTech Center (330 Jay Street)		Brooklyn, NY		D		Q4-04		80.0	%		80.0	%		52.1		52.1		41.7		177,000	(g)
University of Pennsylvania(m)		Philadelphia, PA		A		Q4-04		100.0	%		100.0	%		56.0		56.0		56.0		123,000
													$	215.5	$	215.5	$	205.1		699,000
Residential:
East 29th Avenue Town Center/ Botanica		Denver, CO		D		Q1-04		90.0	%		90.0	%	$	40.3	$	40.3	$	36.3		144	(h)
Sterling Glen of Rye Brook(i)(o)		Rye Brook, NY		D		Q1-04		40.0	%		40.0	%		57.1		57.1		22.8		166
Emerald Palms Expansion		Miami, FL		D		Q2-04		100.0	%		100.0	%		9.2		9.2		9.2		86
													$	106.6	$	106.6	$	68.3		396
Total 2004 Openings/Acquisitions(b)(d)													$	687.0	$	687.0	$	601.6

														Opened in
														’04/ Total
Residential Phased-In Units:(c)(e)
Settler’s Landing at Greentree	Streetsboro, OH	D	2001-04	50.0	%	50.0	%	$	0.0	$	26.6	$	13.3		104/408
Eaton Ridge	Sagamore Hills, OH	D	2002-04	50.0	%	50.0	%		0.0		14.4		7.2		36/260
Newport Landing	Coventry, OH	D	2002-05	50.0	%	50.0	%		0.0		16.0		8.0		48/336
Woodgate/ Evergreen Farms	Olmsted Township, OH	D	2004-07	33.0	%	33.0	%		0.0		22.9		7.6		120/348
Total(b)(k)								$	0.0	$	79.9	$	36.1		308/1,352

See attached January 31, 2005 footnotes.

13

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Development Pipeline

January 31, 2005

Under Construction(17)

																Cost at
									Pro-Rata			Cost at Full		Total Cost		Pro-Rata Share		Square Feet/
			Dev.(D)	Anticipated		Legal			%(l)			Consolidation		at 100%		(Non-GAAP)(b)		Number of			Pre-Leased
	Location		Acq.(A)	Opening		Ownership%(l)			(1)			(GAAP)(a)		(2)		(1)X(2)		Units			(Wtd. Avg.)
Property
												(in millions)
Retail Centers:
Hispanic Retail Group-Gigante(c)		Inglewood, CA	D		Q1-05		19.0	%		19.0	%	$	0.0	$	9.6	$	1.8		53,000			100%
Saddle Rock		Aurora, CO	D		Q1-05		80.0	%		100.0	%		31.8		31.8		31.8		359,000			33%
Simi Valley Town Center		Simi Valley, CA	D		Q3-05		85.0	%		100.0	%		133.9		133.9		133.9		600,000			75%
Short Pump Expansion		Richmond, VA	D		Q3-05		50.0	%		100.0	%		27.0		27.0		27.0		88,000			73%
Northfield at Stapleton		Denver, CO	D		Q3-06		90.0	%		90.0	%		164.9		164.9		148.4		1,142,000	(s)		52%
San Francisco Centre(c)(n)		San Francisco, CA	D		Q3-06		50.0	%		50.0	%		0.0		416.2		208.1		964,000	(u)		8%
												$	357.6	$	783.4	$	551.0		3,206,000			42%
Office:
New York Times(c)		Manhattan, NY	D		Q2-07		28.0	%		40.0	%	$	0.0	$	415.0	$	166.0		734,000			0%
												$	0.0	$	415.0	$	166.0		734,000			0%
Residential:
23 Sidney Street		Cambridge, MA	D		Q1-05		100.0	%		100.0	%	$	17.9	$	17.9	$	17.9		51
Metro 417(r)		Los Angeles, CA	D		Q1-05		100.0	%		100.0	%		56.9		56.9		56.9		277
Metropolitan Lofts(c)		Los Angeles, CA	D		Q1-05		50.0	%		50.0	%		0.0		62.8		31.4		264
Ashton Mill		Providence, RI	D		Q1-05		100.0	%		100.0	%		28.4		28.4		28.4		193
Sterling Glen of Lynbrook(i)(p)		Lynbrook, NY	D		Q2-05		80.0	%		80.0	%		27.4		27.4		21.9		100
100 Landsdowne		Cambridge, MA	D		Q3-05		100.0	%		100.0	%		63.9		63.9		63.9		203
Central Station Apartments		Chicago, IL	D		Q1-06		100.0	%		100.0	%		115.9		115.9		115.9		502
Sterling Glen of Roslyn(q)(i)		Roslyn, NY	D		Q2-06		80.0	%	��	80.0	%		74.0		74.0		59.2		158
Ohana Military Communities(c)		Honolulu, HI	D		Q1-08		7.0	%		7.0	%		0.0		316.5		22.2		1,952
												$	384.4	$	763.7	$	417.7		3,700
Condominiums:
1100 Wilshire Condominiums(c)		Los Angeles, CA	D		Q2-05		40.0	%		40.0	%	$	0.0	$	117.0	$	46.8		228
Total Under Construction(b)(j)												$	742.0	$	2,079.1	$	1,181.5
* LESS: Above properties to be sold as condominiums												$	0.0	$	117.0	$	46.8
Under Construction less Condominiums												$	742.0	$	1,962.1	$	1,134.7

											Under Const./Total
Residential Phased-In Units Under Construction:(c)(e)
Arbor Glen	Twinsburg, OH	2001-07	50.0	%	50.0	%	$	0.0	$	18.4	$	9.2	144/288
Newport Landing	Coventry, OH	2002-05	50.0	%	50.0	%		0.0		16.0		8.0	60/336
Woodgate/ Evergreen Farms	Olmsted Township, OH	2004-07	33.0	%	33.0	%		0.0		22.9		7.6	108/348
Pine Ridge Expansion	Willoughby, OH	2005-06	50.0	%	50.0	%		0.0		16.4		8.2	162/162
Total(b)(f)							$	0.0	$	73.7	$	33.0	474/1,134

See attached January 31, 2005 footnotes.

14

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Development Pipeline

January 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 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)	The difference between the full consolidation amount (GAAP) of $687.0 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $601.6 million of cost consists of a reduction to full consolidation for minority interest of $85.4 million of cost and the addition of its share of cost for unconsolidated investments of $0.0 million.
(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 $33.0 million of cost consists of the Company’s share of cost for unconsolidated investments of $33.0 million.
(g)	Represents the Company’s portion of this 1.1 million square-foot office condominium.
(h)	Project also includes 141,000 total square feet (57,000 square feet owned/managed by FCE) of retail and 34,000 square feet of office space.
(i)	Supported-living property.
(j)	The difference between the full consolidation amount (GAAP) of $742.0 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $1,181.5 million of cost consists of a reduction to full consolidation for minority interest of $36.8 million of cost and the addition of its share of cost for unconsolidated investments of $476.3 million.
(k)	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 $36.1 million of cost consists of its share of cost for unconsolidated investments of $36.1 million.
(l)	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 % 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 Legal Ownership % column) by recording a minority interest to reflect the amount of the partner’s claim on those net assets.
(m)	The Company exercised its option to acquire this property in the fourth quarter.
(n)	This project will also include the acquisition of an adjacent retail center totaling 508,000 square feet.
(o)	Formerly Stone Gate at Bellefair.
(p)	Formerly Tanglewood Crest.
(q)	Formerly Bryant Landing.
(r)	Formerly Subway Terminal.
(s)	Includes 30,000 square feet of office space.
(t)	Includes 45,000 square feet of office space.
(u)	Includes 235,000 square feet of office space.

15

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

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

As of January 31, 2005

		Year Ending January 31, 2006												Year Ending January 31, 2007												Year Ending January 31, 2008
								Plus												Plus												Plus
					Less			Unconsolidated									Less			Unconsolidated									Less			Unconsolidated
		Full			Minority			Investments at			Pro-Rata			Full			Minority			Investments at			Pro-Rata			Full			Minority			Investments at			Pro-Rata
		Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
	Fixed-rate debt	$	142,486		$	13,765		$	43,539		$	172,260		$	485,747		$	74,140		$	33,346		$	444,953		$	160,957		$	27,797		$	112,961		$	246,121
	Weighted average rate		7.08	%		6.85	%		8.89	%		7.55	%		6.66	%		6.36	%		7.77	%		6.80	%		6.82	%		6.90	%		7.50	%		7.12	%
	UDAG		28,860			94			10,728			39,494			8,169			501			—			7,668			589			145			—			444
	Weighted average rate		1.46	%		0.00	%		8.00	%		3.24	%		0.09	%		0.32	%		—	%		0.08	%		2.16	%		2.33	%		—	%		2.10	%
	Total fixed-rate debt		171,346			13,859			54,267			211,754			493,916			74,641			33,346			452,621			161,546			27,942			112,961			246,565
Variable:
	Variable-rate debt		164,584			8,194			36,269			192,659			273,931			83,062			36,411			227,280			99,136			21,889			16,218			93,465
	Weighted average rate		4.80	%		4.63	%		4.60	%		4.77	%		5.48	%		6.06	%		5.27	%		5.23	%		4.57	%		4.37	%		4.21	%		4.55	%
	Tax-Exempt		182,055			20,970			5,103			166,188			51,000			300			31,705			82,405			127,670			2,400			2,594			127,864
	Weighted average rate		3.17	%		3.28	%		3.24	%		3.16	%		2.37	%		2.44	%		3.14	%		2.66	%		3.33	%		3.37	%		5.26	%		3.37	%
	Total variable- rate debt		346,639			29,164			41,372			358,847			324,931			83,362			68,116			309,685			226,806			24,289			18,812			221,329
Total Nonrecourse Mortgage Debt		$	517,985		$	43,023		$	95,639		$	570,601		$	818,847		$	158,003		$	101,462		$	762,306		$	388,352		$	52,231		$	131,773		$	467,894
Weighted Average Rate			4.67	%		4.67	%		6.86	%		5.04	%		5.93	%		6.17	%		5.42	%		5.82	%		5.09	%		5.66	%		7.05	%		5.58	%

		Year Ending January 31, 2009												Year Ending January 31, 2010												Thereafter
								Plus												Plus												Plus
					Less			Unconsolidated									Less			Unconsolidated									Less			Unconsolidated
		Full			Minority			Investments at			Pro-Rata			Full			Minority			Investments at			Pro-Rata			Full			Minority			Investments at			Pro-Rata
		Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
	Fixed-rate debt	$	217,394		$	19,673		$	91,176		$	288,897		$	252,615		$	57,440		$	91,094		$	286,269		$	2,040,246		$	266,203		$	236,648		$	2,010,691
	Weighted average rate		7.19	%		7.14	%		6.85	%		7.08	%		7.10	%		7.48	%		7.19	%		7.06	%		6.44	%		6.80	%		6.30	%		6.38	%
	UDAG		581			151			967			1,397			573			158			—			415			65,237			18,781			—			46,456
	Weighted average rate		2.06	%		2.41	%		—	%		0.60	%		1.96	%		2.48	%		—	%		1.76	%		1.74	%		1.32	%		—	%		1.91	%
	Total fixed-rate debt		217,975			19,824			92,143			290,924			253,188			57,598			91,094			286,684			2,105,483			284,984			236,648			2,057,147
Variable:
	Variable-rate debt		36,391			3,315			9,960			43,036			2,097			—			2,385			4,482			64,248			—			47,863			112,111
	Weighted average rate		4.70	%		5.13	%		6.89	%		5.17	%		5.35	%		—	%		4.24	%		4.76	%		5.59	%		—	%		3.70	%		4.79	%
	Tax-Exempt		16,000			3,200			—			12,800			—			—			40,000			40,000			366,625			27,781			44,000			382,844
	Weighted average rate		3.39	%		3.39	%		—	%		3.39	%		—	%		—	%		2.41	%		2.41	%		2.87	%		2.76	%		2.75	%		2.86	%
	Total variable- rate debt		52,391			6,515			9,960			55,836			2,097			—			42,385			44,482			430,873			27,781			91,863			494,955
Total Nonrecourse Mortgage Debt		$	270,366		$	26,339		$	102,103		$	346,130		$	255,285		$	57,598		$	133,479		$	331,166		$	2,536,356		$	312,765		$	328,511		$	2,552,102
Weighted Average Rate			6.62	%		6.41	%		6.79	%		6.68	%		7.08	%		7.47	%		5.71	%		6.46	%		5.78	%		6.11	%		5.45	%		5.70	%

		Total
								Plus
					Less			Unconsolidated
		Full			Minority			Investments at			Pro-Rata
		Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
	Fixed-rate debt	$	3,299,445		$	459,018		$	608,764		$	3,449,191
	Weighted average rate		6.62	%		6.83	%		7.00	%		6.65	%
	UDAG		104,009			19,830			11,695			95,874
	Weighted average rate		1.54	%		1.31	%		7.34	%		2.29	%
	Total fixed-rate debt		3,403,454			478,848			620,459			3,545,065
Variable:
	Variable-rate debt		640,387			116,460			149,106			673,033
	Weighted average rate		5.13	%		5.61	%		4.58	%		4.92	%
	Tax-Exempt		743,350			54,651			123,402			812,101
	Weighted average rate		3.00	%		3.02	%		2.81	%		2.97	%
	Total variable- rate debt		1,383,737			171,111			272,508			1,485,134
Total Nonrecourse Mortgage Debt		$	4,787,191		$	649,959		$	892,967		$	5,030,199
Weighted Average Rate			5.75	%		6.13	%		6.02	%		5.74	%

16

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 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 – January 31, 2005

									Plus
									Unconsolidated			Pro-Rata
			Full			Less Minority			Investments at			Consolidation
			Consolidation			Interest			Pro-Rata			(Non-GAAP)
			(GAAP)			(unaudited)			(unaudited)			(unaudited)
			(in thousands)
Assets
Real Estate
	Completed rental properties		$	5,795,057		$	853,737		$	930,319		$	5,871,639
	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		6,524,405			877,614			1,279,198			6,925,989
	Less accumulated depreciation			(874,497	)		(141,736	)		(255,949	)		(988,710	)
		Real Estate, net		5,649,908			735,878			1,023,249			5,937,279
Cash and equivalents				252,302			24,090			36,146			264,358
Restricted cash				347,267			28,478			57,646			376,435
Notes and accounts receivable, net				212,868			51,127			854			162,595
Investments in and advances to affiliates				439,424			—			(190,527	)		248,897
Other assets				387,491			38,537			99,147			448,101
		Total Assets	$	7,289,260		$	878,110		$	1,026,515		$	7,437,665
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse			$	4,787,191		$	649,959		$	892,967		$	5,030,199
Notes payable				93,432			16,529			51,706			128,609
Senior and subordinated debt				599,400			—			—			599,400
Accounts payable and accrued expenses				554,449			115,849			81,842			520,442
Deferred income taxes				354,490			—			—			354,490
		Total Liabilities		6,388,962			782,337			1,026,515			6,633,140
Minority Interest				95,773			95,773			—			—
		Total Shareholders’ Equity		804,525			—			—			804,525
Total Liabilities and Shareholders’ Equity			$	7,289,260		$	878,110		$	1,026,515		$	7,437,665

17

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Consolidated Balance Sheet Information – January 31, 2004

										Plus
										Unconsolidated			Pro-Rata
				Full			Less Minority			Investments at			Consolidation
				Consolidation			Interest			Pro-Rata			(Non-GAAP)
				(GAAP)			(unaudited)			(unaudited)			(unaudited)
				(in thousands)
Assets
Real Estate
Completed rental properties				$	4,504,756		$	706,045		$	996,505		$	4,795,216
	Projects under development				506,985			69,906			104,800			541,879
	Land held for development or sale				70,854			3,093			68,385			136,146
		Total Real Estate			5,082,595			779,044			1,169,690			5,473,241
	Less accumulated depreciation				(715,482	)		(109,941	)		(215,350	)		(820,891	)
		Real Estate, net			4,367,113			669,103			954,340			4,652,350
Cash and equivalents					107,491			16,830			29,413			120,074
Restricted cash					257,795			38,678			23,059			242,176
Notes and accounts receivable, net					217,258			21,440			18,331			214,149
Investments in and advances to affiliates					432,584			—			(78,634	)		353,950
Other assets					285,423			44,455			31,562			272,530
Lumber Group assets – held for sale					256,408			—			—			256,408
			Total Assets	$	5,924,072		$	790,506		$	978,071		$	6,111,637
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse				$	3,634,177		$	618,798		$	910,866		$	3,926,245
Notes payable					86,030			16,529			8,948			78,449
Long-term credit facility					56,250			—			—			56,250
Senior and subordinated debt					349,400			—			—			349,400
Accounts payable and accrued expenses					463,023			106,705			58,257			414,575
Deferred income taxes					294,925			—			—			294,925
Lumber Group liabilities – held for sale					242,882			—			—			242,882
			Total Liabilities		5,126,687			742,032			978,071			5,362,726
Minority Interest					48,474			48,474			—			—
			Total Shareholders’ Equity		748,911			—			—			748,911
Total Liabilities and Shareholders’ Equity				$	5,924,072		$	790,506		$	978,071		$	6,111,637

18

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Consolidated Earnings Information – Year Ended January 31, 2005

								Plus
								Unconsolidated			Plus			Pro-Rata
		Full			Less Minority			Investments at			Discontinued			Consolidation
		Consolidation			Interest			Pro-Rata			Operations			(Non-GAAP)
		(GAAP)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
		(in thousands)
Revenues from real estate operations		$	1,041,851		$	143,894		$	260,844		$	17,226		$	1,176,027
Expenses
	Operating expenses		608,565			80,252			155,898			8,062			692,273
	Interest expense, including early extinguishment of debt		253,410			28,579			50,718			7,584			283,133
	Depreciation and amortization		176,416			14,115			32,404			2,686			197,391
			1,038,391			122,946			239,020			18,332			1,172,797
Interest income			44,186			4,146			550			228			40,818
Equity in earnings of unconsolidated entities (Note 1)			54,392			—			(54,370	)		—			22
Gain on disposition of rental properties and other investments			438			—			31,996			67,645			100,079
Earnings before income taxes			102,476			25,094			—			66,767			144,149
Income tax expense (benefit)
	Current		(15,171	)		—			—			5,469			(9,702	)
	Deferred		52,497			—			—			20,933			73,430
			37,326			—			—			26,402			63,728
Earnings before minority interest, discontinued operations and cumulative effect of change in accounting principle			65,150			25,094			—			40,365			80,421
Minority interest			(25,094	)		(25,094	)		—			—			—
Earnings from continuing operations(Note 1)			40,056			—			—			40,365			80,421
Discontinued operations, net of tax and minority interest
	Operating earnings from Lumber Group		4,545			—			—			—			4,545
	Operating loss from rental properties		(528	)		—			—			528			—
	Gain on disposition of Lumber Group		11,501			—			—			—			11,501
	Gain on disposition of rental properties		40,893			—			—			(40,893	)		—
			56,411			—			—			(40,365	)		16,046
Cumulative effect of change in accounting principle, net of tax			(11,261	)		—			—			—			(11,261	)
Net earnings		$	85,206		$	—		$	—		$	—		$	85,206

Note:

(1) 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 year ended January 31, 2005, three equity method investments were sold includingChapel 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.

19

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Consolidated Earnings Information – Year Ended January 31, 2004

								Plus
								Unconsolidated			Plus			Pro-Rata
		Full			Less Minority			Investments at			Discontinued			Consolidation
		Consolidation			Interest			Pro-Rata			Operations			(Non-GAAP)
		(GAAP)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
		(in thousands)
Revenues from real estate operations		$	848,121		$	147,393		$	260,215		$	30,589		$	991,532
Expenses
	Operating expenses		514,934			86,930			144,552			14,521			587,077
	Interest expense, including early extinguishment of debt		196,870			32,329			58,478			9,087			232,106
	Provision for decline in real estate		2,134			153			4,621			773			7,375
	Depreciation and amortization		121,428			18,951			33,837			4,678			140,992
			835,366			138,363			241,488			29,059			967,550
Interest income			22,712			226			274			97			22,857
Equity in earnings of unconsolidated entities (Note 1)			31,751			—			(15,428	)		—			16,323
(Loss) gain on disposition of rental properties and other investments			(171	)		—			(3,573	)		6,446			2,702
Earnings before income taxes			67,047			9,256			—			8,073			65,864
Income tax expense (benefit)
	Current		(6,246	)		—			—			2,433			(3,813	)
	Deferred		30,203			—			—			506			30,709
			23,957			—			—			2,939			26,896
Earnings before minority interest and discontinued operations			43,090			9,256			—			5,134			38,968
Minority interest			(9,256	)		(9,256	)		—			—			—
Earnings from continuing operations(Note 1)			33,834			—			—			5,134			38,968
Discontinued operations, net of tax and minority interest
	Operating earnings from Lumber Group		3,701			—			—			—			3,701
	Operating earnings from rental properties		1,237			—			—			(1,237	)		—
	Gain on disposition of rental properties		3,897			—			—			(3,897	)		—
			8,835			—			—			(5,134	)		3,701
Net earnings		$	42,669		$	—		$	—		$	—		$	42,669

Note:

(1) 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 year ended January 31, 2004, one equity method investment,Waterford Village, was sold. A pre-tax loss of $3,573 ($2,160 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.

20

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

The following schedules on pages 21-22 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:

	January 31,
	2005		2004
	(in thousands)
Members’ and Partners’ equity, as below	$	536,345	$	169,606
Equity of other members and partners		345,818		51,567
Company’s investment in partnerships		190,527		118,039
Advances to partnerships, as below		—		1,385
Advances to other affiliates(1)		248,897		313,160
Investments in and advances to affiliates	$	439,424	$	432,584

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

		Combined (100%)						Pro-Rata Share
		(GAAP)						(non-GAAP)
		January 31,						January 31,
		2005			2004			2005			2004
		(in thousands)						(in thousands)
Balance Sheet:
Completed rental properties		$	1,932,845		$	2,375,832		$	930,319		$	996,505
Projects under development			564,712			263,687			255,124			104,800
Land held for development or sale			177,080			104,851			93,755			68,385
Investments in and advances to affiliates – syndicated residential partnerships(2)			—			—			—			40,790
Accumulated depreciation			(498,779	)		(499,297	)		(255,949	)		(215,350	)
Restricted cash(3)			362,583			50,503			57,646			23,059
Other assets(4)			407,316			195,765			136,147			79,306
	Total Assets	$	2,945,757		$	2,491,341		$	1,217,042		$	1,097,495
Mortgage debt, nonrecourse		$	2,012,578		$	2,153,443		$	892,967		$	910,866
Advances from general partner			—			1,385			—			—
Other liabilities(4)			396,834			166,907			133,548			67,205
Members’ and partners’ equity(4)			536,345			169,606			190,527			119,424
	Total Liabilities and Members’/ Partners’ Equity	$	2,945,757		$	2,491,341		$	1,217,042		$	1,097,495

21

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Investments in and Advances to Affiliates (continued)

		Combined (100%)						Pro-Rata Share
		(GAAP)						(non-GAAP)
Year Ended January 31,		2005			2004			2005			2004
		(in thousands)						(in thousands)
Operations:
Revenues		$	530,990		$	565,754		$	260,844		$	260,215
Equity in earnings of unconsolidated entities on a pro-rata basis			—			—			22			16,323
Operating expenses			(318,625	)		(305,792	)		(155,898	)		(144,552	)
Interest expense			(106,556	)		(132,062	)		(50,718	)		(58,478	)
Provision for decline in real estate			—			(4,621	)		—			(4,621	)
Depreciation and amortization			(77,985	)		(78,615	)		(32,404	)		(33,837	)
Interest income			3,592			952			550			274
Gain (loss) of disposition of operating properties(5)			61,427			(3,573	)		31,996			(3,573	)
	Net Earnings (pre-tax)	$	92,843		$	42,043		$	54,392		$	31,751

(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 January 31, 2005 and January 31, 2004 amounts advanced for projects on behalf of this partner, collateralized by his partnership interests were $63,213 and $114,164, respectively, of the $248,897 and $313,160 presented above for “Advances to other affiliates.” These advances entitle us to a preferred return on and of the outstanding balances, which are payable from cash flows of each respective property. Effective February 1, 2004, we modified certain provisions of our arrangement with our partner in the New York operations for certain existing and all prospective property partnerships. These modifications had, and are expected to have, an insignificant financial impact on the Company. As a result of these modifications, during the first quarter of 2004, we have reclassified in our Consolidated Balance Sheet a net amount of approximately $30,000 from investments and advances to affiliates to minority interest, which had no impact to our Consolidated Statements of Earnings or Cash Flows.

(2)

We are a general partner in several syndicated residential partnerships that were accounted for on the equity method under both full consolidation and pro-rata consolidation at January 31, 2004. Effective February 1, 2004, these investments were fully consolidated either as the result of the acquisition of our partner’s interest or our adoption of FIN No. 46(R). Summarized balance sheet information as of January 31, 2004 at our economic share is as follows:

Total Assets	$	240,362
Total Liabilities	$	199,572
Partner’s Equity	$	40,790

(3)	The increase in restricted cash from January 31, 2004 to January 31, 2005 primarily relates to escrow deposits for construction loan proceeds for Ohana Military Communities, a 1,952-unit residential development property in Honolulu, Hawaii.
(4)	The increase in other assets, other liabilities and members’ and partners’ equity from January 31, 2004 to January 31, 2005 primarily relates to the Nets acquisition.
(5)	The following table shows the detail of gain (loss) on disposition of rental properties:

		Combined (100%)					Pro-Rata Share
		(GAAP)					(non-GAAP)
		Year Ended					Year Ended
		January 31,					January 31,
		2005		2004			2005		2004
		(in thousands)
Chapel Hill Mall (Akron, Ohio)		$	56,455	$	—		$	27,943	$	—
Chapel Hill Suburban (Akron, Ohio)			1,831		—			915		—
Manhattan Town Center Mall (Manhattan, Kansas)			3,141		—			3,138		—
Waterford Village (Indianapolis, Indiana)			—		(3,573	)		—		(3,573	)
	Our portion of gain (loss) on disposition of rental properties	$	61,427	$	(3,573	)	$	31,996	$	(3,573	)

Upon implementation of FIN No. 46(R) on February 1, 2004, the Company determined that it is the primary beneficiary of 25 previously unconsolidated VIEs that have been consolidated effective February 1, 2004.

22

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Real Estate and Related Nonrecourse Mortgage Debt

		January 31, 2005
				Less				Nonrecourse
				Accumulated				Mortgage
		Total Cost		Depreciation		Net Cost		Debt
		(in thousands)
Full Consolidation:
Completed rental properties
Residential		$	1,448,579	$	163,164	$	1,285,415	$	1,082,053
Commercial
	Retail centers		2,081,113		240,326		1,840,787		1,649,594
	Office and other buildings		2,247,969		466,961		1,781,008		1,627,880
Corporate and other equipment			17,396		4,046		13,350		—
			5,795,057		874,497		4,920,560		4,359,527
Projects under development
Residential			353,397		—		353,397		304,192
Commercial
	Retail centers		204,997		—		204,997		4,224
	Office and other buildings		76,047		—		76,047		22,711
			634,441		—		634,441		331,127
Land held for development or sale			94,907		—		94,907		96,537
Total real estate and mortgage debt		$	6,524,405	$	874,497	$	5,649,908	$	4,787,191
Less Minority Interest:
Completed rental properties
Residential		$	117,452	$	8,709	$	108,743	$	85,441
Commercial
	Retail centers		280,934		22,459		258,475		255,569
	Office and other buildings		455,351		110,568		344,783		278,116
			853,737		141,736		712,001		619,126
Projects under development
Residential			6,510		—		6,510		18,569
Commercial
	Retail centers		480		—		480		—
	Office and other buildings		13,310		—		13,310		4,783
			20,300		—		20,300		23,352
Land held for development or sale			3,577		—		3,577		7,481
Total real estate and mortgage debt		$	877,614	$	141,736	$	735,878	$	649,959

23

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Real Estate and Related Nonrecourse Mortgage Debt (continued)

		January 31, 2005
				Less				Nonrecourse
				Accumulated				Mortgage
		Total Cost		Depreciation		Net Cost		Debt
		(in thousands)
Plus Unconsolidated Investments at Pro-Rata:
Completed rental properties
Residential		$	607,323	$	157,642	$	449,681	$	499,591
Commercial
	Retail centers		166,438		45,214		121,224		177,855
	Office and other buildings		156,558		53,093		103,465		97,423
			930,319		255,949		674,370		774,869
Projects under development
Residential			58,615		—		58,615		48,523
Commercial
	Retail centers		92,556		—		92,556		742
	Office and other buildings		103,953		—		103,953		15,952
			255,124		—		255,124		65,217
Land held for development or sale			93,755		—		93,755		52,881
Total real estate and mortgage debt		$	1,279,198	$	255,949	$	1,023,249	$	892,967
Pro-Rata Consolidation (Non-GAAP):
Completed rental properties
Residential		$	1,938,450	$	312,097	$	1,626,353	$	1,496,203
Commercial
	Retail centers		1,966,617		263,081		1,703,536		1,571,880
	Office and other buildings		1,949,176		409,486		1,539,690		1,447,187
Corporate and other equipment			17,396		4,046		13,350		—
			5,871,639		988,710		4,882,929		4,515,270
Projects under development
Residential			405,502		—		405,502		334,146
Commercial
	Retail centers		297,073		—		297,073		4,966
	Office and other buildings		166,690		—		166,690		33,880
			869,265		—		869,265		372,992
Land held for development or sale			185,085		—		185,085		141,937
Total real estate and mortgage debt		$	6,925,989	$	988,710	$	5,937,279	$	5,030,199

24

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Forest City Rental Properties Corporation (“Rental Properties”) is a wholly-owned subsidiary of Forest City Enterprises, Inc. 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. Consolidated Balance Sheet information and Consolidated Earnings information for Rental Properties and its subsidiaries follow.

Forest City Rental Properties Corporation and Subsidiaries
Consolidated Balance Sheet Information – January 31, 2005

									Plus
									Unconsolidated			Pro-Rata
			Full			Less Minority			Investments at			Consolidation
			Consolidation			Interest			Pro-Rata			(Non-GAAP)
			(GAAP)			(unaudited)			(unaudited)			(unaudited)
			(in thousands)
Assets
Real Estate
	Completed rental properties		$	5,777,660		$	853,737		$	930,319		$	5,854,242
	Projects under development			634,441			20,300			255,124			869,265
	Land for development or sale			40,546			3,577			16,038			53,007
		Total Real Estate		6,452,647			877,614			1,201,481			6,776,514
	Less accumulated depreciation			(870,451	)		(141,736	)		(255,949	)		(984,664	)
		Real Estate, net		5,582,196			735,878			945,532			5,791,850
Cash and equivalents				89,070			24,090			31,141			96,121
Restricted cash				347,158			28,478			57,174			375,854
Notes and accounts receivable, net				193,321			51,127			(1,724	)		140,470
Investments in and advances to affiliates				381,689			—			(147,638	)		234,051
Other assets				325,880			38,537			98,441			385,784
		Total Assets	$	6,919,314		$	878,110		$	982,926		$	7,024,130
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse			$	4,765,467		$	649,959		$	856,294		$	4,971,802
Notes payable				83,662			16,529			50,586			117,719
Senior and subordinated debt				20,400			—			—			20,400
Accounts payable and accrued expenses				848,841			115,850			76,046			809,037
Deferred income taxes				379,305			—			—			379,305
		Total Liabilities		6,097,675			782,338			982,926			6,298,263
Minority Interest				95,772			95,772			—			—
		Total Shareholders’ Equity		725,867			—			—			725,867
Total Liabilities and Shareholders’ Equity			$	6,919,314		$	878,110		$	982,926		$	7,024,130

25

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Forest City Rental Properties Corporation and Subsidiaries
Consolidated Balance Sheet Information – January 31, 2004

									Plus
									Unconsolidated			Pro-Rata
			Full			Less Minority			Investments at			Consolidation
			Consolidation			Interest			Pro-Rata			(Non-GAAP)
			(GAAP)			(unaudited)			(unaudited)			(unaudited)
			(in thousands)
Assets
Real Estate
	Completed rental properties		$	4,495,575		$	706,046		$	996,506		$	4,786,035
	Projects under development			506,582			69,906			104,800			541,476
	Land held for development or sale			37,404			3,093			18,778			53,089
		Total Real Estate		5,039,561			779,045			1,120,084			5,380,600
	Less accumulated depreciation			(710,986	)		(109,941	)		(215,350	)		(816,395	)
		Real Estate, net		4,328,575			669,104			904,734			4,564,205
Cash and equivalents				66,295			16,830			23,562			73,027
Restricted cash				257,685			38,678			22,517			241,524
Notes and accounts receivable, net				183,818			21,440			16,324			178,702
Investments in and advances to affiliates				381,526			—			(47,675	)		333,851
Other assets				232,047			44,454			30,949			218,542
		Total Assets	$	5,449,946		$	790,506		$	950,411		$	5,609,851
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse			$	3,621,162		$	618,798		$	891,089		$	3,893,453
Notes payable				74,856			16,529			6,313			64,640
Long-term credit facility				56,250			—			—			56,250
Senior and subordinated debt				20,400			—			—			20,400
Accounts payable and accrued expenses				655,528			106,705			53,009			601,832
Deferred income taxes				323,163			—			—			323,163
		Total Liabilities		4,751,359			742,032			950,411			4,959,738
Minority Interest				48,474			48,474			—			—
		Total Shareholders’ Equity		650,113			—			—			650,113
Total Liabilities and Shareholders’ Equity			$	5,449,946		$	790,506		$	950,411		$	5,609,851

26

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Forest City Rental Properties Corporation and Subsidiaries
Consolidated Earnings Information – Year Ended January 31, 2005

								Plus
								Unconsolidated			Plus			Pro-Rata
		Full			Less Minority			Investments at			Discontinued			Consolidation
		Consolidation			Interest			Pro-Rata			Operations			(Non-GAAP)
		(GAAP)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
		(in thousands)
Revenues from real estate operations		$	1,018,455		$	143,894		$	233,691		$	17,226		$	1,125,478
Expenses
	Operating expenses		554,907			80,252			135,229			8,062			617,946
	Interest expense, including early extinguishment of debt		249,974			28,579			50,200			7,584			279,179
	Depreciation and amortization		174,273			14,116			32,007			2,686			194,850
			979,154			122,947			217,436			18,332			1,091,975
Interest income			43,508			4,146			444			228			40,034
Equity in earnings of unconsolidated entities (Note 1)			45,136			—			(48,695	)		—			(3,559	)
Gain on disposition of rental properties			—			—			31,996			67,645			99,641
Earnings before income taxes			127,945			25,093			—			66,767			169,619
Income tax expense (benefit)
	Current		(3,489	)		—			—			5,469			1,980
	Deferred		48,945			—			—			20,933			69,878
			45,456			—			—			26,402			71,858
Earnings before minority interest, discontinued operations and cumulative effect of change in accounting principle			82,489			25,093			—			40,365			97,761
Minority interest			(25,093	)		(25,093	)		—			—			—
Earnings from continuing operations(Note 1)			57,396			—			—			40,365			97,761
Discontinued operations, net of tax and minority interest
	Operating loss from rental properties		(528	)		—			—			528			—
	Gain on disposition of rental properties		40,893			—			—			(40,893	)		—
			40,365			—			—			(40,365	)		—
Cumulative effect of change in accounting principle, net of tax			(11,261	)		—			—			—			(11,261	)
Net earnings		$	86,500		$	—		$	—		$	—		$	86,500

Note 1: 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 year ended January 31, 2005, three equity method investments were sold includingChapel 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.

27

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Forest City Rental Properties Corporation and Subsidiaries

Consolidated Earnings Information – Year Ended January 31, 2004

								Plus
					Less			Unconsolidated			Plus			Pro-Rata
		Full			Minority			Investments at			Discontinued			Consolidation
		Consolidation			Interest			Pro-Rata			Operations			(Non-GAAP)
		(GAAP)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
		(in thousands)
Revenues from real estate operations		$	811,823		$	147,393		$	242,872		$	30,589		$	937,891
Expenses
	Operating expenses		467,399			86,932			132,542			14,521			527,530
	Interest expense, including early extinguishment of debt		182,288			32,328			57,710			9,087			216,757
	Provision for decline in real estate		2,134			153			—			773			2,754
	Depreciation and amortization		119,415			18,950			33,597			4,678			138,740
			771,236			138,363			223,849			29,059			885,781
Interest income			21,684			226			(20	)		97			21,535
Equity in earnings of unconsolidated entities (Note 1)			27,573			—			(15,430	)		—			12,143
Gain (loss) on disposition of rental properties and other investments			463			—			(3,573	)		6,446			3,336
Earnings before income taxes			90,307			9,256			—			8,073			89,124
Income tax expense (benefit)
	Current		(514	)		—			—			2,433			1,919
	Deferred		32,042			—			—			506			32,548
			31,528			—			—			2,939			34,467
Earnings before minority interest and discontinued operations			58,779			9,256			—			5,134			54,657
Minority interest			(9,256	)		(9,256	)		—			—			—
Earnings from continuing operations(Note 1)			49,523			—			—			5,134			54,657
Discontinued operations, net of tax and minority interest
	Operating earnings from rental properties		1,237			—			—			(1,237	)		—
	Gain on disposition of rental properties		3,897			—			—			(3,897	)		—
			5,134			—			—			(5,134	)		—
Net earnings		$	54,657		$	—		$	—		$	—		$	54,657

Note 1: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 year ended January 31, 2004, one property accounted for on the equity method was sold,Waterford Village. A pre-tax loss of $3,573 ($2,160 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.

28

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

The following is a summary of the real estate activity of the Company’s Real Estate Groups as presented on pro-rata consolidation including a reconciliation from full consolidation to pro-rata consolidation.

Forest City Rental Properties Corporation – Real Estate Activity⁽¹⁾

				January 31,
				Pro-Rata Consolidation (Non-GAAP)
				2005			2004			2003			2002			2001
				(in thousands)
Forest City Rental Properties Corporation – Real Estate Activity(1)
Real estate – end of year
	Completed rental properties			$	5,854,242		$	4,786,035		$	4,082,080		$	3,614,420		$	3,215,411
	Projects under development				869,265			541,476			575,558			483,730			457,607
	Land held for development or sale				53,007			53,089			51,751			59,375			42,751
		Real estate, at cost			6,776,514			5,380,600			4,709,389			4,157,525			3,715,769
	Less accumulated depreciation				(984,664	)		(816,395	)		(697,055	)		(613,902	)		(569,604	)
		Total real estate		$	5,791,850		$	4,564,205		$	4,012,334		$	3,543,623		$	3,146,165
Real estate activity during the year
	Completed rental properties
		Capital expenditures		$	127,486		$	38,890		$	43,266		$	67,422		$	44,552
		Transferred from projects under development			612,111			377,578			305,982			363,180			281,617
		Acquisitions			115,185			374,305			172,860			78,499			181,394
		Other additions(7)			414,729			—			—			—			—
			Total additions		1,269,511			790,773			522,108			509,101			507,563
		Dispositions			(201,304	)(2)		(86,818	)(3)		(54,448	)(4)		(110,092	)(5)		(159,065	)(6)
	Completed rental properties, net additions				1,068,207			703,955			467,660			399,009			348,498
	Projects under development
		New development			885,320			343,496			397,810			389,303			260,458
		Transferred to completed rental properties			(612,111	)		(377,578	)		(305,982	)		(363,180	)		(281,617	)
		Other additions			54,580			—			—			—			—
	Projects under development, net additions				327,789			(34,082	)		91,828			26,123			(21,159	)
	Land held for development or sale, net change				(82	)		1,338			(7,624	)		16,624			42,751
	Increase in real estate, at cost			$	1,395,914		$	671,211		$	551,864		$	441,756		$	370,090

29

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Forest City Rental Properties Corporation – Real Estate Activity⁽¹⁾ – (Continued)

										Plus
										Unconsolidated			Pro-Rata
				Full			Less Minority			Investments at			Consolidation
Years Ended January 31,				Consolidation			Interest			Pro-Rata			(Non-GAAP)
				(in thousands)
2005
Real estate – end of year
	Completed rental properties			$	5,777,660		$	853,737		$	930,319		$	5,854,242
	Projects under development				634,441			20,300			255,124			869,265
	Land held for development or sale				40,546			3,577			16,038			53,007
		Real estate, at cost			6,452,647			877,614			1,201,481			6,776,514
	Less accumulated depreciation				(870,451	)		(141,736	)		(255,949	)		(984,664	)
		Total real estate		$	5,582,196		$	735,878		$	945,532		$	5,791,850
Real estate activity during the year
	Completed rental properties
		Capital expenditures		$	93,664		$	11,524		$	45,346		$	127,486
		Transferred from projects under development			643,324			39,168			7,955			612,111
		Acquisitions			108,076			(6,201	)		908			115,185
		Other additions(7)			624,672			121,921			(88,022	)		414,729
			Total additions		1,469,736			166,412			(33,813	)		1,269,511
		Dispositions			(187,651	)		(18,721	)		(32,374	)		(201,304	)(2)
		Completed rental properties, net additions			1,282,085			147,691			(66,187	)		1,068,207
	Projects under development
		New development			771,183			44,142			158,279			885,320
		Transferred to completed rental properties			(643,324	)		(39,168	)		(7,955	)		(612,111	)
		Other additions			—			(54,580	)		—			54,580
		Projects under development, net additions			127,859			(49,606	)		150,324			327,789
		Land held for development or sale, net change			3,142			484			(2,740	)		(82	)
	Increase in real estate, at cost			$	1,413,086		$	98,569		$	81,397		$	1,395,914
2004
Real estate – end of year
	Completed rental properties			$	4,495,575		$	706,046		$	996,506		$	4,786,035
	Projects under development				506,582			69,906			104,800			541,476
	Land held for development or sale				37,404			3,093			18,778			53,089
		Real estate, at cost			5,039,561			779,045			1,120,084			5,380,600
	Less accumulated depreciation				(710,986	)		(109,941	)		(215,350	)		(816,395	)
		Total real estate		$	4,328,575		$	669,104		$	904,734		$	4,564,205
Real estate activity during the year
	Completed rental properties
		Capital expenditures		$	36,159		$	4,806		$	7,537		$	38,890
		Transferred from projects under development			304,321			53,599			126,856			377,578
		Acquisitions			382,472			24,021			15,854			374,305
			Total additions		722,952			82,426			150,247			790,773
		Dispositions			(68,179	)		(10,384	)		(29,023	)		(86,818	)(3)
		Completed rental properties, net additions			654,773			72,042			121,224			703,955
	Projects under development
		New development			274,469			48,953			117,980			343,496
		Transferred to completed rental properties			(304,321	)		(53,599	)		(126,856	)		(377,578	)
		Projects under development, net transfers			(29,852	)		(4,646	)		(8,876	)		(34,082	)
		Land held for development or sale, net change			1,362			213		��	189			1,338
	Increase in real estate, at cost			$	626,283		$	67,609		$	112,537		$	671,211

30

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Forest City Rental Properties Corporation – Real Estate Activity⁽¹⁾ – (Continued)

										Plus
										Unconsolidated			Pro-Rata
				Full			Less Minority			Investments at			Consolidation
Years Ended January 31,				Consolidation			Interest			Pro-Rata			(Non-GAAP)
				(in thousands)
2003
Real estate – end of year
	Completed rental properties			$	3,840,802		$	634,004		$	875,282		$	4,082,080
	Projects under development				536,434			74,552			113,676			575,558
	Land held for development or sale				36,042			2,880			18,589			51,751
		Real estate, at cost			4,413,278			711,436			1,007,547			4,709,389
	Less accumulated depreciation				(597,787	)		(96,033	)		(195,301	)		(697,055	)
		Total real estate		$	3,815,491		$	615,403		$	812,246		$	4,012,334
Real estate activity during the year
	Completed rental properties
		Capital expenditures		$	37,909		$	14,539		$	19,896		$	43,266
		Transferred from projects under development			265,720			26,514			66,776			305,982
		Acquisitions			158,872			24			14,012			172,860
			Total additions		462,501			41,077			100,684			522,108
		Dispositions			(53,268	)		(61	)		(1,241	)		(54,448	)(4)
		Completed rental properties, net additions			409,233			41,016			99,443			467,660
	Projects under development
		New development			383,459			61,947			76,298			397,810
		Transferred to completed rental properties			(265,720	)		(26,514	)		(66,776	)		(305,982	)
		Projects under development, net additions			117,739			35,433			9,522			91,828
		Land held for development or sale, net change			(6,467	)		(495	)		(1,652	)		(7,624	)
	Increase in real estate, at cost			$	520,505		$	75,954		$	107,313		$	551,864
2002
Real estate – end of year
	Completed rental properties			$	3,431,569		$	592,988		$	775,839		$	3,614,420
	Projects under development				418,695			39,119			104,154			483,730
	Land held for development or sale				42,509			3,375			20,241			59,375
		Real estate, at cost			3,892,773			635,482			900,234			4,157,525
	Less accumulated depreciation				(519,584	)		(80,877	)		(175,195	)		(613,902	)
		Total real estate		$	3,373,189		$	554,605		$	725,039		$	3,543,623
Real estate activity during the year
	Completed rental properties
		Capital expenditures		$	74,881		$	11,232		$	3,773		$	67,422
		Transferred from projects under development			263,428			28,972			128,724			363,180
		Acquisitions			83,830			5,331			—			78,499
			Total additions		422,139			45,535			132,497			509,101
		Dispositions			(100,622	)		(27,122	)		(36,592	)		(110,092	)(5)
		Completed rental properties, net additions			321,517			18,413			95,905			399,009
	Projects under development
		New development			274,978			14,768			129,093			389,303
		Transferred to completed rental properties			(263,428	)		(28,972	)		(128,724	)		(363,180	)
		Projects under development, net additions (transfers)			11,550			(14,204	)		369			26,123
		Land held for development or sale, net change			16,846			1,751			1,529			16,624
	Increase in real estate, at cost			$	349,913		$	5,960		$	97,803		$	441,756

31

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Forest City Rental Properties Corporation – Real Estate Activity⁽¹⁾ – (Continued)

										Plus
										Unconsolidated			Pro-Rata
				Full			Less Minority			Investments at			Consolidation
Years Ended January 31,				Consolidation			Interest			Pro-Rata			(Non-GAAP)
				(in thousands)
2001
Real estate – end of year
	Completed rental properties			$	3,110,052		$	574,575		$	679,934		$	3,215,411
	Projects under development				407,145			53,323			103,785			457,607
	Land held for development or sale				25,663			1,624			18,712			42,751
		Real estate, at cost			3,542,860			629,522			802,431			3,715,769
	Less accumulated depreciation				(480,353	)		(76,301	)		(165,552	)		(569,604	)
		Total real estate		$	3,062,507		$	553,221		$	636,879		$	3,146,165
Real estate activity during the year
	Completed rental properties
		Capital expenditures		$	44,259		$	3,128		$	3,421		$	44,552
		Transferred from projects under development			383,141			143,169			41,645			281,617
		Acquisitions			187,069			5,675			—			181,394
			Total additions		614,469			151,972			45,066			507,563
		Dispositions			(165,375	)		(7,774	)		(1,464	)		(159,065	)(6)
		Completed rental properties, net additions			449,094			144,198			43,602			348,498
	Projects under development
		New development			290,887			70,219			39,790			260,458
		Transferred to completed rental properties			(383,141	)		(143,169	)		(41,645	)		(281,617	)
		Projects under development, net transfers			(92,254	)		(72,950	)		(1,855	)		(21,159	)
		Land held for development or sale, net additions			25,663			1,624			18,712			42,751
	Increase in real estate, at cost			$	382,503		$	72,872		$	60,459		$	370,090

(1)	The table includes only the real estate activity for the Company’s Real Estate Groups 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 development projects.
(2)	Primarily reflects the dispositions ofWoodlake, Regency Towers, Bridgewater, Arboretum Place, Trellis at Lee’s Mill, Silver Hill, Colony Woods, Manhattan Town Center, Chapel Hill Mall, Chapel Hill Suburban, Pavilion, Flatbush Avenue,andHunting Park.Woodlake is a 534-unit apartment community in Silver Spring, Maryland.Regency Towersis a 372-unit apartment community in Jackson, New Jersey.Arboretum Place, Silver Hill, andTrellis at Lee’s Millare apartment communities in Newport News, Virginia with 184, 153 and 176 units, respectively.Bridgewateris a 216-unit apartment community in Hampton, Virginia.Colony Woodsis a 396-unit apartment community in Bellevue, Washington.Chapel Hill MallandChapel Hill Suburban have 860,000 and 117,000 square feet, respectively in Akron, Ohio.Pavilionhas 250,000 square feet in San Jose, California.Flatbush Avenuehas 142,000 square feet in Staten Island, New York.Hunting Parkhas 125,000 square feet in Philadelphia, Pennsylvania.Manhattan Towne Centerhas 392,000 square feet in Manhattan, Kansas.
(3)	Primarily reflects the dispositions ofWaterford Village, LaurelsandVineyards. Waterford Villageis a 576-unit apartment community in Indianapolis, Indiana.Laurelsis a 520-unit apartment community in Justice, Illinois andVineyardsis a 386-unit apartment community in Broadview Heights, Ohio.
(4)	Primarily reflects the dispositions ofCourtland CenterandBay Street. Courtland Centerhas 458,000 square feet in Flint, Michigan.Bay Streethas 16,000 square feet in Staten Island, New York.
(5)	Primarily reflects the dispositions ofTucson Mall, Bowling Green Mall, Newport Plaza, Baymont Inn, Chapel Hills Towers, Palm Villas, Peppertree, Oaks, andWhitehall Terrace.Tucson Mallhas 1,304,000 square feet in Tucson, Arizona.Bowling Green Mallhas 242,000 square feet in Bowling Green, Kentucky.Newport Plazahas 157,000 square feet in Newport, Kentucky.Baymont Innhas 101 rooms in Mayfield Hts., Ohio.Palm Villasis a 350-unit apartment community in Henderson, Nevada.PeppertreeandOaksare apartment communities in Texas with 208 and 248 units, respectively.Chapel Hill TowersandWhitehall Terraceare apartment communities in Ohio with 402 and 188 units, respectively.
(6)	Primarily reflects the dispositions ofTucson Place, Canton Centre Mall, Gallery at Metrotech, Studio ColonyandHighland.Tucson Placehas 276,000 square feet in Tucson, Arizona.Canton Centre Mallhas 680,000 square feet in Canton, Ohio andGallery at Metrotechhas 163,000 square feet in Brooklyn, New York.Studio ColonyandHighlandare apartment communities in California with 369 and 556 units, respectively.
(7)	Primarily relates to the implementation of FIN No. 46 (R) “Consolidation of Variable Interest Entities.”

32

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Results of Operations

     Net Earnings –Net earnings for the Company for the year ended January 31, 2005 were $85,206,000 versus $42,669,000 and $48,831,000 for the years ended January 31, 2004 and 2003, respectively. The increase in the current year is primarily attributable to gains on dispositions. We recorded a gain on the sale of Lumber Group of $20,920,000 ($11,501,000 net of tax) (net of a loss on the sale ofBabinof $1,093,000). A gain of $31,996,000 ($19,341,000 net of tax) was also recorded related to the sale of three equity method properties,Chapel Hill MallandChapel Hill Suburban located in Akron, Ohio andManhattan Town Centerlocated in Manhattan, Kansas. The decrease in net earnings in the year ended January 31, 2004 compared to the year ended January 31, 2003 is primarily the result of a loss on extinguishment of $11,500,000 ($6,942,000 net of tax) related to early redemption of the Company’s $200,000,000, 8.5% senior notes with the proceeds from the public offering of the Company’s $300,000,000, 7.625% senior notes in May 2003.

     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 year ended January 31, 2005 was $483,150,000 compared to $402,401,000 for the year ended January 31, 2004, a 20.1% increase. This increase over the comparable period in the prior year is primarily attributable to NOI generated from new properties, which include nine residential communities, three office buildings and one retail center opened during the year ended January 31, 2004, as well as the three residential communities, three office buildings and four retail centers opened during the year ended January 31, 2005. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on page 8. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 37-43.

      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 year ended January 31, 2005 was $479,918,000 compared to $416,974,000 for the year ended January 31, 2004, a 15.1% increase. Comparable NOI for the year increased 2.1% compared to a decrease of 1.2% for the prior year. Comparable NOI for our retail portfolio is up 1.3% from the prior year. Our office portfolio has generated a year-to-date increase of 2.4%. Including the expected NOI for the twelve months following stabilization for the properties that were opened, expanded or acquired in 2004, net of property disposals, NOI for Real Estate Groups would be approximately $520,000,000 for 2004.

     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 charges from real estate operations of 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). Unlike the real estate segments, EBDT for the Nets segment equals net earnings of the equity method investment.

      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.

33

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

      Our EBDT for the year ended January 31, 2005 grew by 15.4% to $245,032,000 from $212,392,000 for the year ended January 31, 2004. The positive fluctuation is primarily attributable to the 13 project openings and acquisitions that occurred in 2003 and the addition of three residential communities, three office buildings and four retail centers added to our portfolio in 2004. In addition, we received and reported revenue related to our retained interest in a trust holding $145,000,000 of bonds. As a result, EBDT increased by approximately $13,745,000. Of this amount, $12,445,000 was earned by the retained interest in previous fiscal years and deferred until 2004 under the cost recovery method of revenue recognition. The remaining $1,300,000 represents EBDT earned and recognized on the retained interest during the year ended January 31, 2005.

     Summary of EBDT —The information in the tables on pages 37-43 present amounts for both full consolidation and pro-rata consolidation, providing a reconciliation of the difference between the two methods, as well as a 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.

34

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

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

		Years Ended January 31,
		2005			2004
		(in thousands)
Net earnings		$	85,206		$	42,669
Depreciation and amortization — Real Estate Groups(5)			191,072			138,739
Depreciation and amortization — equity method investments(3)			237			1,779
Deferred income tax expense — Real Estate Groups(6)			65,790			32,548
Deferred income tax expense (benefit) — Non Real-Estate Groups:(6)
	(Gain) loss on disposition of other investments		(151	)		(259	)
	Gain on disposition of Lumber Group		4,568			—
	Provision for decline in real estate recorded on equity method		—			(1,828	)
Current income tax expense (benefit) on non-operating earnings:(6)
	Gain on disposition of other investments		324			9
	Gain on disposition included in discontinued operations		11,215			2,549
	(Gain) loss on disposition recorded on equity method		(209	)		(819	)
	Provision for decline in real estate		—			(608	)
Straight-line rent adjustment(4)			(3,282	)		(7,060	)
Provision for decline in real estate, net of minority interest			—			1,981
Provision for decline in real estate recorded on equity method			—			4,621
(Gain) loss on disposition recorded on equity method			(31,996	)		3,573
(Gain) loss on disposition of other investments			(438	)		171
Discontinued operations:(1)
	Gain on disposition of rental properties		(71,325	)		(6,769	)
	Gain on disposition of Lumber Group		(20,920	)		—
	Provision for decline, net of minority interest		—			773
	Minority interest — gain on sale		3,680			323
Cumulative effect of change in accounting principle, net of tax			11,261			—
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)(2)		$	245,032		$	212,392

(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 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 preceding narrative. See Investments in and Advances to Affiliates on pages 21-22 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. 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.

	Year Ended January 31,
	2005			2004
Full Consolidation	$	176,416		$	121,428
Non-Real Estate Groups		(2,142	)		(2,012	)
Real Estate Groups Full Consolidation		174,274			119,416
Real Estate Groups related to minority interest		(14,115	)		(18,951	)
Real Estate Groups Equity Method		28,227			33,596
Real Estate Groups Discontinued Operations		2,686			4,678
Real Estate Groups Pro-Rata Consolidation	$	191,072		$	138,739

35

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

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

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

		Year Ended
		January 31,
		2005			2004
		(in thousands)
(A)	Operating earnings
	Current	$	(15,286	)	$	(4,828	)
	Deferred		39,784			32,876
			24,498			28,048
(B)	Provision for decline in real estate
	Current		–			(608	)
	Deferred		–			(175	)
	Subtotal		–			(783	)
	Deferred-Equity method investment Non-Real Estate Groups		–			(1,828	)
			–			(2,611	)
(C)	(Gain) loss on disposition of other investments
	Current		324			9
	Deferred – Non-Real Estate Groups		(151	)		(259	)
	Deferred – Real Estate Groups		–			183
			173			(67	)
(D)	(Gain) loss on disposition recorded on equity method
	Current		(209	)		(819	)
	Deferred		12,864			(594	)
			12,655			(1,413	)
	Subtotal(A)(B)(C)(D)
	Current		(15,171	)		(6,246	)
	Deferred		52,497			30,203
	Income tax expense		37,326			23,957
(E)	Discontinued operations – Rental Properties
	Operating earnings
	Current		(895	)		(116	)
	Deferred		545			812
			(350	)		696
	Deferred tax on provision for decline in real estate		–			(306	)
	Gain on disposition of rental properties
	Current		6,364			2,549
	Deferred		20,388			–
			26,752			2,549
			26,402			2,939
	Subtotal(A)(B)(C)(D)(E)
	Current		(9,702	)		(3,813	)
	Deferred		73,430			30,709
			63,728			26,896
(F)	Discontinued operations – Lumber Group
	Operating earnings
	Current		4,852			3,798
	Deferred		(7	)		418
			4,845			4,216
	Gain on disposition of Lumber Group
	Current		4,851			–
	Deferred		4,568			–
			9,419			–
			14,264			4,216
	Subtotal(E)(F)		40,666			7,155
	Grand Total(A)(B)(C)(D)(E)(F)
	Current		1			(15	)
	Deferred		77,991			31,127
		$	77,992		$	31,112
	Recap of Grand Total:
	Real Estate Groups
	Current		10,847			1,919
	Deferred		65,790			32,548
			76,637			34,467
	Non-Real Estate Groups
	Current		(10,846	)		(1,934	)
	Deferred		12,201			(1,421	)
			1,355			(3,355	)
	Grand Total	$	77,992		$	31,112

36

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Year Ended January 31, 2005 (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			$	744,764		$	122,361	$	99,813		$	6,167		$	728,383		$	204,426		$	15,115	$	117,775		$	11,059		$	318,145
Exclude straight- line rent adjustment				(12,840	)		—		—			(849	)		(13,689	)		92			—		—			—			92
Adjusted revenues				731,924			122,361		99,813			5,318			714,694			204,518			15,115		117,775			11,059			318,237
Operating expenses, including depreciation and amortization for non- Real Estate Groups				388,800			66,269		57,961			2,088			382,580			130,687			10,623		65,396			5,974			191,434
Exclude straight- line rent adjustment				(10,301	)		—		—			(14	)		(10,315	)		—			—		—			—			—
Adjusted operating expenses				378,499			66,269		57,961			2,074			372,265			130,687			10,623		65,396			5,974			191,434
Add interest income				7,175			836		(610	)		135			5,864			3,447			24		976			93			4,492
Add equity in earnings of unconsolidated entities				41,005			—		(40,998	)		—			7			7,802			—		(7,716	)		—			86
Remove gain on disposition recorded on equity method				(31,996	)		—		31,996			—			—			—			—		—			—			—
Add back equity method depreciation and amortization expense				11,506			—		(11,506	)		—			—			16,958			—		(16,721	)		—			237
Net operating income				381,115			56,928		20,734			3,379			348,300			102,038			4,516		28,918			5,178			131,618
Interest expense, including early extinguishment of debt				168,522			24,609		20,734			1,553			166,200			43,904			3,710		28,918			6,031			75,143
Income tax expense (benefit)				(326	)		—		—			(57	)		(383	)		(10,778	)		—		—			(838	)		(11,616	)
Minority interest in earnings before depreciation and amortization				32,319			32,319		—			—			—			806			806		—			—			—
Add: EBDT from discontinued operations				1,883			—		—			(1,883	)		—			(15	)		—		—			15			—
Earnings before depreciation, amortization and deferred taxes (EBDT)			$	182,483		$	—	$	—		$	—		$	182,483		$	68,091		$	—	$	—		$	—		$	68,091
Reconciliation to net earnings:
	Earnings before depreciation, amortization and deferred taxes (EBDT)		$	182,483		$	—	$	—		$	—		$	182,483		$	68,091		$	—	$	—		$	—		$	68,091
	Depreciation and amortization – Real Estate Groups			(131,365	)		—		—			(952	)		(132,317	)		(57,217	)		—		—			(1,734	)		(58,951	)
	Deferred taxes – Real Estate Groups			(24,400	)		—		—			(730	)		(25,130	)		(9,816	)		—		—			185			(9,631	)
	Straight-line rent adjustment			2,539			—		—			835			3,374			(92	)		—		—			—			(92	)
	Gain on disposition of rental properties and other investments, net of tax			—			—		—			4,574			4,574			—			—		—			36,319			36,319
	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		(952	)		—		—			952			—			(1,734	)		—		—			1,734			—
		Deferred taxes – Real Estate Groups		(730	)		—		—			730			—			185			—		—			(185	)		—
		Straight-line rent adjustment		835			—		—			(835	)		—			—			—		—			—			—
		Gain on disposition of Lumber Group		—			—		—			—			—			—			—		—			—			—
		Gain on disposition of rental properties		4,574			—		—			(4,574	)		—			36,319			—		—			(36,319	)		—
	Net earnings		$	51,848		$	—	$	—		$	—		$	51,848		$	24,952		$	—	$	—		$	—		$	24,952

37

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Year Ended January 31, 2005 (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			$	92,657		$	6,418	$	37,933		$	—	$	124,172		$	—	$	—	$	—	$	—	$	—
Exclude straight- line rent adjustment				—			—		—			—		—			—		—		—		—		—
Adjusted revenues				92,657			6,418		37,933			—		124,172			—		—		—		—		—
Operating expenses, including depreciation and amortization for non- Real Estate Groups				55,445			3,360		25,855			—		77,940			—		—		—		—		—
Exclude straight- line rent adjustment				—			—		—			—		—			—		—		—		—		—
Adjusted operating expenses				55,445			3,360		25,855			—		77,940			—		—		—		—		—
Add interest income				33,316			3,286		100			—		30,130			—		—		—		—		—
Add equity in earnings of unconsolidated entities				16,454			—		(11,630	)		—		4,824			—		—		—		—		—
Remove gain on disposition recorded on equity method				—			—		—			—		—			—		—		—		—		—
Add back equity method depreciation and amortization expense				—			—		—			—		—			—		—		—		—		—
Net operating income				86,982			6,344		548			—		81,186			—		—		—		—		—
Interest expense, including early extinguishment of debt				6,002			260		548			—		6,290			—		—		—		—		—
Income tax expense (benefit)				32,149			—		—			—		32,149			—		—		—		—		—
Minority interest in earnings before depreciation and amortization				6,084			6,084		—			—		—			—		—		—		—		—
Add: EBDT from discontinued operations				—			—		—			—		—			4,545		—		—		—		4,545
Earnings before depreciation, amortization and deferred taxes (EBDT)			$	42,747		$	—	$	—		$	—	$	42,747		$	4,545	$	—	$	—	$	—	$	4,545
Reconciliation to net earnings:
	Earnings before depreciation, amortization and deferred taxes (EBDT)		$	42,747		$	—		—		$	—	$	42,747		$	4,545		—		—		—	$	4,545
	Depreciation and amortization – Real Estate Groups			(41	)		—		—			—		(41	)		—		—		—		—		—
	Deferred taxes – Real Estate Groups			(2,532	)		—		—			—		(2,532	)		—		—		—		—		—
	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		—			—		—			—		—			—		—		—		—		—
		Deferred taxes – Real Estate Groups		—			—		—			—		—			—		—		—		—		—
		Straight-line rent adjustment		—			—		—			—		—			—		—		—		—		—
		Gain on disposition of Lumber Group		—			—		—			—		—			11,501		—		—		—		11,501
		Gain on disposition of rental properties		—			—		—			—		—			—		—		—		—		—
Net earnings			$	40,174		$	—	$	—		$	—	$	40,174		$	16,046	$	—	$	—	$	—	$	16,046

38

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Year Ended January 31, 2005 (in thousands) continued

			The Nets 2004												Corporate Activities 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			$	—		$	—	$	5,323	$	—	$	5,323		$	4		$	—	$	—	$	—	$	4
Exclude straight- line rent adjustment				—			—		—		—		—			—			—		—		—		—
Adjusted revenues				—			—		5,323		—		5,323			4			—		—		—		4
Operating expenses, including depreciation and amortization for non- Real Estate Groups				—			—		10,863		—		10,863			35,775			—		—		—		35,775
Exclude straight- line rent adjustment				—			—		—		—		—			—			—		—		—		—
Adjusted operating expenses				—			—		10,863		—		10,863			35,775			—		—		—		35,775
Add interest income				—			—		84		—		84			248			—		—		—		248
Add equity in earnings of unconsolidated entities				(10,889	)		—		5,974		—		(4,915	)		20			—		—		—		20
Remove gain on disposition recorded on equity method				—			—		—		—		—			—			—		—		—		—
Add back equity method depreciation and amortization expense				—			—		—		—		—			—			—		—		—		—
Net operating income				(10,889	)		—		518		—		(10,371	)		(35,503	)		—		—		—		(35,503	)
Interest expense, including early extinguishment of debt				—			—		518		—		518			34,982			—		—		—		34,982
Income tax expense (benefit)				(4,781	)		—		—		—		(4,781	)		(23,759	)		—		—		—		(23,759	)
Minority interest in earnings before depreciation and amortization				—			—		—		—		—			—			—		—		—		—
Add: EBDT from discontinued operations				—			—		—		—		—			—			—		—		—		—
Earnings before depreciation, amortization and deferred taxes (EBDT)			$	(6,108	)	$	—	$	—	$	—	$	(6,108	)	$	(46,726	)	$	—	$	—	$	—	$	(46,726	)
Reconciliation to net earnings:
	Earnings before depreciation, amortization and deferred taxes (EBDT)		$	(6,108	)	$	—	$	—	$	—	$	(6,108	)	$	(46,726	)	$	—	$	—	$	—	$	(46,726	)
	Depreciation and amortization – Real Estate Groups			—			—		—		—		—			—			—		—		—		—
	Deferred taxes – Real Estate Groups			—			—		—		—		—			4,755			—		—		—		4,755
	Straight-line rent adjustment			—			—		—		—		—			—			—		—		—		—
	Gain on disposition of rental properties and other investments, net of tax			—			—		—		—		—			265			—		—		—		265
	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		—			—		—		—		—			—			—		—		—		—
		Deferred Taxes – Real Estate Groups		—			—		—		—		—			—			—		—		—		—
		Straight-line rent adjustment		—			—		—		—		—			—			—		—		—		—
		Gain on disposition of Lumber Group		—			—		—		—		—			—			—		—		—		—
		Gain on disposition of rental properties		—			—		—		—		—			—			—		—		—		—
	Net earnings		$	(6,108	)	$	—	$	—	$	—	$	(6,108	)	$	(41,706	)	$	—	$	—	$	—	$	(41,706	)

39

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Year Ended January 31, 2005 (in thousands) continued

			Total 2004
								Plus
			Full			Less		Unconsolidated			Plus			Pro-Rata
			Consolidation			Minority		Investments at			Discontinued			Consolidation
			(GAAP)			Interest		Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations			$	1,041,851		$	143,894	$	260,844		$	17,226		$	1,176,027
Exclude straight- line rent adjustment				(12,748	)		—		—			(849	)		(13,597	)
Adjusted revenues				1,029,103			143,894		260,844			16,377			1,162,430
Operating expenses, including depreciation and amortization for non- Real Estate Groups				610,707			80,252		160,075			8,062			698,592
Exclude straight- line rent adjustment				(10,301	)		—		—			(14	)		(10,315	)
Adjusted operating expenses				600,406			80,252		160,075			8,048			688,277
Add interest income				44,186			4,146		550			228			40,818
Add equity in earnings of unconsolidated entities				54,392			—		(54,370	)		—			22
Remove gain on disposition recorded on equity method				(31,996	)		—		31,996			—			—
Add back equity method depreciation and amortization expense				28,464			—		(28,227	)		—			237
Net operating income				523,743			67,788		50,718			8,557			515,230
Interest expense, including early extinguishment of debt				253,410			28,579		50,718			7,584			283,133
Income tax expense (benefit)				(7,495	)		—		—			(895	)		(8,390	)
Minority interest in earnings before depreciation and amortization				39,209			39,209		—			—			—
Add: EBDT from discontinued operations				6,413			—		—			(1,868	)		4,545
Earnings before depreciation, amortization and deferred taxes (EBDT)			$	245,032		$	—	$	—		$	—		$	245,032
Reconciliation to net earnings:
	Earnings before depreciation, amortization and deferred taxes (EBDT)		$	245,032		$	—	$	—		$	—		$	245,032
	Depreciation and amortization – Real Estate Groups			(188,623	)		—		—			(2,686	)		(191,309	)
	Deferred taxes – Real Estate Groups			(31,993	)		—		—			(545	)		(32,538	)
	Straight-line rent adjustment			2,447			—		—			835			3,282
	Gain on disposition of rental properties and other investments, net of tax			265			—		—			40,893			41,158
	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		(2,686	)		—		—			2,686			—
		Deferred taxes – Real Estate Groups		(545	)		—		—			545			—
		Straight-line rent adjustment		835			—		—			(835	)		—
		Gain on disposition of Lumber Group		11,501			—		—			—			11,501
		Gain on disposition of rental properties		40,893			—		—			(40,893	)		—
	Net earnings		$	85,206		$	—	$	—		$	—		$	85,206

40

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Year Ended January 31, 2004 (in thousands)

		Commercial Group 2003														Residential Group 2003
							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		$	620,275		$	134,231	$	155,035		$	9,952		$	651,031		$	138,397		$	8,039	$	84,445		$	20,637		$	235,440
Exclude straight- line rent adjustment			(11,365	)		—		—			(793	)		(12,158	)		(526	)		—		—			—			(526	)
Adjusted revenues			608,910			134,231		155,035			9,159			638,873			137,871			8,039		84,445			20,637			234,914
Operating expenses, including depreciation and amortization for non- Real Estate Groups			342,189			77,932		85,366			3,022			352,645			89,581			6,014		45,753			11,499			140,819
Exclude straight- line rent adjustment			(5,596	)		—		—			(28	)		(5,624	)		—			—		—			—			—
Adjusted operating expenses			336,593			77,932		85,366			2,994			347,021			89,581			6,014		45,753			11,499			140,819
Add interest income			5,595			214		(363	)		60			5,078			15,844			—		289			37			16,170
Add equity in earnings of unconsolidated entities			11,215			—		(12,062	)		—			(847	)		10,192			—		(1,345	)		—			8,847
Remove loss on disposition recorded on equity method			—			—		—			—			—			3,573			—		(3,573	)		—			—
Add back equity method depreciation and amortization expense			21,702			—		(21,702	)		—			—			13,673			—		(11,894	)		—			1,779
Net operating income			310,829			56,513		35,542			6,225			296,083			91,572			2,025		22,169			9,175			120,891
Interest expense, including early extinguishment of debt			132,134			31,286		35,542			2,946			139,336			23,571			1,043		22,169			6,141			50,838
Provision for decline in real estate recorded on the equity method			—			—		—			—			—			—			—		—			—			—
Income tax expense (benefit)			2,536			—		—			154			2,690			(1,752	)		—		—			(270	)		(2,022	)
Minority interest in earnings before depreciation and amortization			25,227			25,227		—			—			—			982			982		—			—			—
Add: EBDT from discontinued operations			3,125			—		—			(3,125	)		—			3,304			—		—			(3,304	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)		$	154,057		$	—	$	—		$	—		$	154,057		$	72,075		$	—	$	—		$	—		$	72,075
Reconciliation to net earnings:
	Earnings before depreciation, amortization and deferred taxes (EBDT)	$	154,057		$	—	$	—		$	—		$	154,057		$	72,075		$	—	$	—		$	—		$	72,075
	Depreciation and amortization – Real Estate Groups		(101,872	)		—		—			(1,618	)		(103,490	)		(33,848	)		—		—			(3,060	)		(36,908	)
	Deferred taxes – Real Estate Groups		(23,303	)		—		—			(550	)		(23,853	)		(19,784	)		—		—			(262	)		(20,046	)
	Straight-line rent adjustment		5,769			—		—			765			6,534			526			—		—			—			526
	Provision for decline in real estate, net of tax and minority interest		(216	)		—		—			(467	)		(683	)		(982	)		—		—			—			(982	)
	Provision for decline recorded on equity method, net of tax		—			—		—			—			—			—			—		—			—			—
	Gain (loss) on disposition of rental properties and other investments, net of tax		—			—		—			(64	)		(64	)		280			—		(2,160	)		3,961			2,081
	Loss on disposition recorded on equity method, net of tax		—			—		—			—			—			(2,160	)		—		2,160			—			—
	Discontinued operations, net of tax and minority interest:
	Depreciation and amortization – Real Estate Groups		(1,618	)		—		—			1,618			—			(3,060	)		—		—			3,060			—
	Deferred taxes – Real Estate Groups		(550	)		—		—			550			—			(262	)		—		—			262			—
	Straight-line rent adjustment		765			—		—			(765	)		—			—			—		—			—			—
	Provision for decline in real estate		(467	)		—		—			467			—			—			—		—			—			—
	Gain (loss) on disposition of rental properties		(64	)		—		—			64			—			3,961			—		—			(3,961	)		—
Net earnings		$	32,501		$	—	$	—		$	—		$	32,501		$	16,746		$	—	$	—		$	—		$	16,746

41

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Year Ended January 31, 2004 (in thousands) continued

			Land Development Group 2003													Lumber Group 2003
								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			$	89,458		$	5,123	$	20,735		$	—	$	105,070		$	—	$	—	$	—	$	—	$	—
Exclude straight- line rent adjustment				—			—		—			—		—			—		—		—		—		—
Adjusted revenues				89,458			5,123		20,735			—		105,070			—		—		—		—		—
Operating expenses, including depreciation and amortization for non- Real Estate Groups				58,647			2,984		13,674			—		69,337			—		—		—		—		—
Exclude straight- line rent adjustment				—			—		—			—		—			—		—		—		—		—
Adjusted operating expenses				58,647			2,984		13,674			—		69,337			—		—		—		—		—
Add interest income				721			12		348			—		1,057			—		—		—		—		—
Add equity in earnings of unconsolidated entities				10,330			—		(2,021	)		—		8,309			—		—		—		—		—
Add back equity method depreciation and amortization expense				—			—		—			—		—			—		—		—		—		—
Net operating income				41,862			2,151		5,388			—		45,099			—		—		—		—		—
Interest expense, including early extinguishment of debt				3,098			—		767			—		3,865			—		—		—		—		—
Provision for decline in real estate recorded on equity method				(4,621	)		—		4,621			—		—			—		—		—		—		—
Income tax expense (benefit)				12,633			—		—			—		12,633			—		—		—		—		—
Minority interest in earnings before depreciation and amortization				2,151			2,151		—			—		—			—		—		—		—		—
Add: EBDT from discontinued operations				—			—		—			—		—			3,701		—		—		—		3,701
Earnings before depreciation, amortization and deferred taxes (EBDT)			$	28,601		$	—	$	—		$	—	$	28,601		$	3,701	$	—	$	—	$	—	$	3,701
Reconciliation to net earnings:
	Earnings before depreciation, amortization and deferred taxes (EBDT)		$	28,601		$	—	$	—		$	—	$	28,601		$	3,701	$	—	$	—	$	—	$	3,701
	Depreciation and amortization – Real Estate Groups			(120	)		—		—			—		(120	)		—		—		—		—		—
	Deferred taxes – Real Estate Groups			(14,093	)		—		—			—		(14,093	)		—		—		—		—		—
	Straight-line rent adjustment			—			—		—			—		—			—		—		—		—		—
	Provision for decline in real estate, net of tax and minority interest			—			—		(2,793	)		—		(2,793	)		—		—		—		—		—
	Provision for decline recorded on equity method, net of tax			(2,793	)		—		2,793			—		—			—		—		—		—		—
	Gain (loss) on disposition of rental properties and other investments, net of tax			—			—		—			—		—			—		—		—		—		—
	Loss on disposition recorded on equity method, net of tax			—			—		—			—		—			—		—		—		—		—
	Discontinued operations, net of tax and minority interest:
		Depreciation and amortization – Real Estate Groups		—			—		—			—		—			—		—		—		—		—
		Deferred taxes – Real Estate Groups		—			—		—			—		—			—		—		—		—		—
		Straight-line rent adjustment		—			—		—			—		—			—		—		—		—		—
		Provision for decline in real estate		—			—		—			—		—			—		—		—		—		—
		Gain (loss) on disposition of rental properties		—			—		—			—		—			—		—		—		—		—
	Net earnings		$	11,595		$	—	$	—		$	—	$	11,595		$	3,701	$	—	$	—	$	—	$	3,701

42

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Year Ended January 31, 2004 (in thousands) continued

			Corporate Activities 2003												Total 2003
								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			$	(9	)	$	—	$	—	$	—	$	(9	)	$	848,121		$	147,393	$	260,215		$	30,589		$	991,532
Exclude straight- line rent adjustment				—			—		—		—		—			(11,891	)		—		—			(793	)		(12,684	)
Adjusted revenues				(9	)		—		—		—		(9	)		836,230			147,393		260,215			29,796			978,848
Operating expenses, including depreciation and amortization for non- Real Estate Groups				26,529			—		—		—		26,529			516,946			86,930		144,793			14,521			589,330
Exclude straight- line rent adjustment				—			—		—		—		—			(5,596	)		—		—			(28	)		(5,624	)
Adjusted operating expenses				26,529			—		—		—		26,529			511,350			86,930		144,793			14,493			583,706
Add interest income				552			—		—		—		552			22,712			226		274			97			22,857
Add equity in earnings of unconsolidated entities				14			—		—		—		14			31,751			—		(15,428	)		—			16,323
Remove loss on disposition recorded on equity method				—			—		—		—		—			3,573			—		(3,573	)		—			—
Add back equity method depreciation and amortization expense				—			—		—		—		—			35,375			—		(33,596	)		—			1,779
Net operating income				(25,972	)		—		—		—		(25,972	)		418,291			60,689		63,099			15,400			436,101
Interest expense, including early extinguishment of debt				38,067			—		—		—		38,067			196,870			32,329		58,478			9,087			232,106
Provision for decline in real estate recorded on the equity method				—			—		—		—		—			(4,621	)		—		4,621			—			—
Income tax expense (benefit)				(17,997	)		—		—		—		(17,997	)		(4,580	)		—		—			(116	)		(4,696	)
Minority interest in earnings before depreciation and amortization				—			—		—		—		—			28,360			28,360		—			—			—
Add: EBDT from discontinued operations				—			—		—		—		—			10,130			—		—			(6,429	)		3,701
Earnings before depreciation, amortization and deferred taxes (EBDT)			$	(46,042	)	$	—	$	—	$	—	$	(46,042	)	$	212,392		$	—	$	—		$	—		$	212,392
Reconciliation to net earnings:
	Earnings before depreciation, amortization and deferred taxes (EBDT)		$	(46,042	)	$	—	$	—	$	—	$	(46,042	)	$	212,392		$	—	$	—		$	—		$	212,392
	Depreciation and amortization – Real Estate Groups			—			—		—		—		—			(135,840	)		—		—			(4,678	)		(140,518	)
	Deferred taxes – Real Estate Groups			24,552			—		—		—		24,552			(32,628	)		—		—			(812	)		(33,440	)
	Straight-line rent adjustment			—			—		—		—		—			6,295			—		—			765			7,060
	Provision for decline in real estate, net of tax and minority interest			—			—		—		—		—			(1,198	)		—		(2,793	)		(467	)		(4,458	)
	Provision for decline recorded on equity method, net of tax			—			—		—		—		—			(2,793	)		—		2,793			—			—
	Gain (loss) on disposition of rental properties and other investments, net of tax			(384	)		—		—		—		(384	)		(104	)		—		(2,160	)		3,897			1,633
	Loss on disposition recorded on equity method, net of tax			—			—		—		—		—			(2,160	)		—		2,160			—			—
	Discontinued operations, net of tax and minority interest:
		Depreciation and amortization – Real Estate Groups		—			—		—		—		—			(4,678	)		—		—			4,678			—
		Deferred taxes – Real Estate Groups		—			—		—		—		—			(812	)		—		—			812			—
		Straight-line rent adjustment		—			—		—		—		—			765			—		—			(765	)		—
		Provision for decline in real estate		—			—		—		—		—			(467	)		—		—			467			—
		Gain (loss) on disposition of rental properties		—			—		—		—		—			3,897			—		—			(3,897	)		—
Net earnings			$	(21,874	)	$	—	$	—	$	—	$	(21,874	)	$	42,669		$	—	$	—		$	—		$	42,669

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