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

Exhibit 99.1

Forest City Enterprises, Inc.

Supplemental Package

Three Months Ended April 30, 2007 and 2006

Forest City Enterprises, Inc. and Subsidiaries
Three Months Ended April 30, 2007 and 2006
Supplemental Package

NYSE: FCEA, FCEB

Index

Corporate Overview	2
Supplemental Operating Information
Occupancy Data	4
Comparable Net Operating Income (NOI)	5
Comparable NOI Detail	6
Reconciliation of NOI to Net Earnings	7
Lease Expirations Schedules	8-9
Schedules of Significant Tenants	10-11
Development Pipeline	12-14
Supplemental Financial Information
Mortgage Financings	15
Scheduled Maturities Table	16-17
Consolidated Balance Sheet Information	18-19
Consolidated Earnings Information	20-21
Investments in and Advances to Affiliates	22-23
Results of Operations Summary	23-25
Reconciliation of Net Earnings to EBDT	25-26
Summary of EBDT	27-32

This Supplemental Package, together with other statements and information publicly disseminated by us, 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 in Item 1A of our Form 10-K for the year ended January 31, 2007 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 we have a geographic concentration of properties, reliance on major tenants, the impact of terrorist acts, our substantial leverage and the ability to obtain and service debt, guarantees under our 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 that 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 our reports filed with the United States Securities and Exchange Commission. We have no obligation to revise or update any forward-looking statements, other than imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.

1

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Corporate Overview

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

We have approximately $9.2 billion of assets in 26 states and the District of Columbia at April 30, 2007. Our core markets include New York City/Philadelphia metropolitan area, Denver, Boston, Greater Washington D.C./Baltimore metropolitan area, Chicago and California. As a result of an ongoing effort to increase property concentration in the core markets, these markets now account for approximately 76 percent of the cost of our real estate portfolio at April 30, 2007. We have offices in Boston, Chicago, Denver, London (England), Los Angeles, New York City, San Francisco, Washington, D.C., and our corporate headquarters are in Cleveland, Ohio.

SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION

We recommend that this supplemental package be read in conjunction with the Company’s Form 10-Q for the three months ended April 30, 2007. This supplemental package contains certain measures prepared in accordance with the generally accepted accounting principles (“GAAP”) under the full consolidation accounting method, and certain measures prepared under the pro-rata consolidation method, a non-GAAP measure. Along with net earnings, we use an additional measure, Earnings before Depreciation, Amortization and Deferred Taxes (“EBDT”), to report operating results. EBDT is a non-GAAP measure and may not be directly comparable to similarly-titled measures reported by other companies. The non-GAAP financial measures presented under the pro-rata consolidation method, comparable net operating income (“NOI”) and EBDT, provide supplemental information about our operations. Although these measures are not presented in accordance with GAAP, we believe they are necessary to understand our business and operating results, along with net earnings and other GAAP measures. Our investors can use these non-GAAP measures as supplementary information to evaluate our business. Our non-GAAP measures are not intended to be performance measures that should be regarded as alternatives to, or more meaningful than, our GAAP measures.

Consolidation Methods

We present certain financial amounts under the pro-rata consolidation method because we believe this information is useful to investors as this method reflects the manner in which we operate our business. In line with industry practice, we have made a large number of investments in which our economic ownership is less than 100% as a means of procuring opportunities and sharing risk. Under the pro-rata consolidation method, we generally present our investments proportionate to our economic share of ownership. Under GAAP, the full consolidation method is used to report partnership assets and liabilities consolidated at 100% if deemed to be under our control or if we are deemed to be the primary beneficiary of the variable interest entity (“VIE”), even if our ownership is not 100%. We provide reconciliations from the full consolidation method to the pro-rata consolidation method throughout our supplemental package. Please refer to our property listing for the detail of our consolidated and non-consolidated properties in our supplemental package for the year ended January 31, 2007 on pages 56-66.

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 24-26 for additional discussion of EBDT as well as a reconciliation of EBDT to net earnings.)

2

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

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 three months ended April 30, 2007 and 2006.

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 24), 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 6-7 of this document. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 27-32.

Corporate Headquarters

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

Annual Report on Form 10-K

A copy of the Annual Report on Form 10-K for the fiscal year ended January 31, 2007 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.

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Occupancy Data — April 30, 2007 and 2006

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
	April 30, 2007			April 30, 2007			April 30, 2006			April 30, 2006
Retail
Comparable		94.7	%		94.7	%		94.3	%		94.5	%
Total		93.0	%		93.3	%		93.9	%		94.0	%
Office
Comparable		93.8	%		93.7	%		92.5	%		92.6	%
Total		89.6	%		90.0	%		92.5	%		92.6	%
Residential
Comparable		94.3	%		95.1	%		94.4	%		94.6	%
Total		92.9	%		92.1	%		90.4	%		90.7	%
Hotels
Comparable and Total(1)					64.5	%					59.6	%
Comparable ADR and Total ADR(1)				$	135.47					$	131.00

Retail and office occupancy as of April 30, 2007 and 2006 is based on square feet leased at the end of the fiscal quarter. Average Occupancy Year-to-Date as of April 30, 2007 and 2006 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 April 30, 2007 and 2006 represents total units occupied divided by total units available. Average residential occupancy year-to-date for 2007 and 2006 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 three months ended April 30, 2007 and 2006.

(1) Total Hotel Average Occupancy Year-to-Date and Total ADR for April 30, 2006 have been restated to excludeEmbassy Suites Hotelwhich was sold during the year ended January 31, 2007.

4

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

We use NOI, along with EBDT as discussed on page 2, to assess operating performance. Comparable NOI is defined as NOI from properties opened and operated in the three months ended April 30, 2007 and 2006. The following schedule on page 6 presents comparable NOI for each of our major product lines, as well as strategic business unit under which these product lines operate. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on page 7. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 27-32.

Comparable Net Operating Income (NOI) (% change over same period, prior year)
	Three Months Ended April 30, 2007
	Full			Pro-Rata
	Consolidation			Consolidation
Retail		10.1	%		8.3	%
Office		(1.3	)%		0.5	%
Hotel		66.8	%		43.0	%
Residential		1.7	%		3.3	%
Total		4.5	%		4.8	%

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Net Operating Income(dollars in thousands)

	Three Months Ended April 30, 2007													Three Months Ended April 30, 2006													% Change
						Plus													Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata			Full					Unconsolidated		Plus			Pro-Rata			Full			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued		Consolidation			Consolidation			Less Minority		Investments at		Discontinued			Consolidation			Consolidation			Consolidation
	(GAAP)			Interest		Pro-Rata			Operations		(Non-GAAP)			(GAAP)			Interest		Pro-Rata		Operations			(Non-GAAP)			(GAAP)			(Non-GAAP)
Commercial Group
Retail
Comparable	$	51,761		$	5,452	$	2,488		$	—	$	48,797		$	47,029		$	4,881	$	2,898	$	—		$	45,046			10.1	%		8.3	%
Total		55,477			3,812		6,513			—		58,178			48,626			4,246		2,996		567			47,943
Office Buildings
Comparable		44,269			5,153		1,283			—		40,399			44,840			5,642		999		—			40,197			(1.3	)%		0.5	%
Total		46,151			3,070		1,330			—		44,411			43,609			5,737		1,005		(75	)		38,802
Hotels
Comparable		2,090			—		386			—		2,476			1,253			—		478		—			1,731			66.8	%		43.0	%
Total		2,390			152		386			—		2,624			1,237			—		478		1,791			3,506
Earnings from Commercial Land Sales		2,425			479		—			—		1,946			9,635			—		—		—			9,635
Other		(6,116	)		1,440		(108	)		—		(7,664	)		(1,808	)		2,969		30		—			(4,747	)
Total Commercial Group
Comparable		98,120			10,605		4,157			—		91,672			93,122			10,523		4,375		—			86,974			5.4	%		5.4	%
Total		100,327			8,953		8,121			—		99,495			101,299			12,952		4,509		2,283			95,139
Residential Group
Apartments
Comparable		26,953			651		7,507			—		33,809			26,508			690		6,920		—			32,738			1.7	%		3.3	%
Total		27,665			1,312		8,519			—		34,872			32,245			893		7,713		2,828			41,893
Military Housing
Comparable		—			—		—			—		—			—			—		—		—			—
Total		3,366			—		185			—		3,551			1,478			—		49		—			1,527
Total Residential Group
Comparable		26,953			651		7,507			—		33,809			26,508			690		6,920		—			32,738			1.7	%		3.3	%
Total		31,031			1,312		8,704			—		38,423			33,723			893		7,762		2,828			43,420
Total Rental Properties
Comparable		125,073			11,256		11,664			—		125,481			119,630			11,213		11,295		—			119,712			4.5	%		4.8	%
Total		131,358			10,265		16,825			—		137,918			135,022			13,845		12,271		5,111			138,559
Land Development Group		3,223			431		116			—		2,908			18,185			545		384		—			18,024
The Nets		(3,251	)		—		333			—		(2,918	)		(8,701	)		—		1,036		—			(7,665	)
Corporate Activities		(13,827	)		—		—			—		(13,827	)		(7,601	)		—		—		—			(7,601	)
Grand Total	$	117,503		$	10,696	$	17,274		$	—	$	124,081		$	136,905		$	14,390	$	13,691	$	5,111		$	141,317

6

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

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

	Three Months Ended April 30, 2007														Three Months Ended April 30, 2006
							Plus														Plus
	Full						Unconsolidated			Plus		Pro-Rata			Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Less 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	$	280,567		$	15,316		$	77,182		$	—	$	342,433		$	272,238		$	26,251		$	69,777		$	20,575		$	336,339
Exclude straight-line rent adjustment(1)		(5,842	)		—			—			—		(5,842	)		(2,694	)		—			—			(16	)		(2,710	)
Adjusted revenues		274,725			15,316			77,182			—		336,591			269,544			26,251			69,777			20,559			333,629
Operating expenses		177,439			5,795			50,554			—		222,198			155,739			12,492			48,415			16,313			207,975
Add back non-Real Estate depreciation and amortization(b)		1,997			—			1,879			—		3,876			349			—			6,190			—			6,539
Add back amortization of mortgage procurement costs for non-Real Estate Groups (d)		—			—			23			—		23			92			—			147			—			239
Exclude straight-line rent adjustment(2)		(1,692	)		—			—			—		(1,692	)		(1,167	)		—			—			(412	)		(1,579	)
Exclude preference payment		(898	)		—			—			—		(898	)		—			—			—			—			—
Adjusted operating expenses		176,846			5,795			52,456			—		223,507			155,013			12,492			54,752			15,901			213,174
Add interest income and other income		11,496			823			623			—		11,296			14,888			631			93			453			14,803
Add equity in earnings of unconsolidated entities		1,361			352			(1,308	)		—		(299	)		379			—			5,680			—			6,059
Remove gain on disposition recorded on equity method		(2,106	)		—			2,106			—		—			—			—			—			—			—
Add back equity method depreciation and amortization expense (see below)		8,873			—			(8,873	)		—		—			7,107			—			(7,107	)		—			—
Net Operating Income		117,503			10,696			17,274			—		124,081			136,905			14,390			13,691			5,111			141,317
Interest expense, including early extinguishment of debt		(80,951	)		(5,301	)		(17,274	)		—		(92,924	)		(68,234	)		(6,748	)		(13,691	)		(3,498	)		(78,675	)
Gain on disposition of equity method rental properties(e)		2,106			—			—			—		2,106			—			—			—			—			—
Gain on disposition of rental properties and other investments		—			—			—			—		—			—			—			—			75,298			75,298
Depreciation and amortization — Real Estate Groups(a)		(58,803	)		(2,687	)		(8,393	)		—		(64,509	)		(41,068	)		(3,271	)		(6,818	)		(2,585	)		(47,200	)
Amortization of mortgage procurement costs — Real Estate Groups(c)		(2,599	)		(160	)		(480	)		—		(2,919	)		(2,854	)		(308	)		(289	)		(74	)		(2,909	)
Straight-line rent adjustment(1) + (2)		4,150			—			—			—		4,150			1,527			—			—			(396	)		1,131
Preference payment		(898	)		—			—			—		(898	)		—			—			—			—			—
Equity method depreciation and amortization expense (see above)		(8,873	)		—			8,873			—		—			(7,107	)		—			7,107			—			—
Earnings (loss) before income taxes		(28,365	)		2,548			—			—		(30,913	)		19,169			4,063			—			73,856			88,962
Income tax provision		13,732			—			—			—		13,732			(7,166	)		—			—			(28,538	)		(35,704	)
Earnings (loss) before minority interest and discontinued operations		(14,633	)		2,548			—			—		(17,181	)		12,003			4,063			—			45,318			53,258
Minority Interest		(2,548	)		(2,548	)		—			—		—			(4,063	)		(4,063	)		—			—			—
Earnings (loss) from continuing operations		(17,181	)		—			—			—		(17,181	)		7,940			—			—			45,318			53,258
Discontinued operations, net of tax and minority interest:
Operating loss from rental properties		—			—			—			—		—			(885	)		—			—			885			—
Gain on disposition of rental properties		—			—			—			—		—			46,203			—			—			(46,203	)		—
		—			—			—			—		—			45,318			—			—			(45,318	)		—
Net earnings (loss)	$	(17,181	)	$	—		$	—		$	—	$	(17,181	)	$	53,258		$	—		$	—		$	—		$	53,258
(a)    Depreciation and amortization — Real Estate Groups	$	58,803		$	2,687		$	8,393		$	—	$	64,509		$	41,068		$	3,271		$	6,818		$	2,585		$	47,200
(b)    Depreciation and amortization — Non-Real Estate Groups		1,997			—			1,879			—		3,876			349			—			6,190			—			6,539
Total depreciation and amortization	$	60,800		$	2,687		$	10,272		$	—	$	68,385		$	41,417		$	3,271		$	13,008		$	2,585		$	53,739
(c)    Amortization of mortgage procurement costs — Real Estate Groups	$	2,599		$	160		$	480		$	—	$	2,919		$	2,854		$	308		$	289		$	74		$	2,909
(d)    Amortization of mortgage procurement costs — Non-Real Estate Groups		—			—			23			—		23			92			—			147			—			239
Total amortization of mortgage procurement costs	$	2,599		$	160		$	503		$	—	$	2,942		$	2,946		$	308		$	436		$	74		$	3,148

(e)   Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 and therefore are reported in continuing operations when sold. For the three months ended April 30, 2007, one equity method property was sold,White Acres, resulting in a pre-tax gain on disposition of $2,106. For the three months ended April 30, 2006, no equity method properties were sold.

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Retail Lease Expirations as of April 30, 2007

													AVERAGE
													BASE
	NUMBER OF		SQUARE FEET		PERCENTAGE			NET		PERCENTAGE			RENT PER
EXPIRATION	EXPIRING		OF EXPIRING		OF TOTAL			BASE RENT		OF TOTAL			SQUARE FEET
YEAR	LEASES		LEASES(3)		LEASED GLA(1)			EXPIRING(2)		BASE RENT			EXPIRING(3)
2007		153		476,631		3.81	%	$	8,122,700		3.11	%	$	21.77
2008		187		675,861		5.40			14,118,351		5.41			26.82
2009		261		882,224		7.05			17,102,173		6.55			25.15
2010		230		670,951		5.36			15,701,151		6.01			28.83
2011		339		1,373,820		10.98			33,588,672		12.86			28.19
2012		149		771,781		6.17			17,678,021		6.77			27.47
2013		143		574,165		4.59			16,656,844		6.38			30.86
2014		167		679,971		5.44			13,294,190		5.09			27.58
2015		177		752,346		6.01			18,983,554		7.27			29.61
2016		261		1,282,722		10.25			34,903,715		13.37			38.93
2017		81		830,529		6.64			15,027,280		5.76			19.45
Thereafter		101		3,541,547		28.30			55,922,141		21.42			17.94
Total		2,249		12,512,548		100.00	%	$	261,098,792		100.00	%	$	25.44

(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.

8

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Office Lease Expirations as of April 30, 2007

													AVERAGE
													BASE
	NUMBER OF		SQUARE FEET		PERCENTAGE			NET		PERCENTAGE			RENT PER
EXPIRATION	EXPIRING		OF EXPIRING		OF TOTAL			BASE RENT		OF TOTAL			SQUARE FEET
YEAR	LEASES		LEASES (3)		LEASED GLA (1)			EXPIRING (2)		BASE RENT			EXPIRING (3)
2007		60		414,577		4.58	%	$	7,669,809		3.66	%	$	22.02
2008		75		535,489		5.92			9,641,638		4.61			21.76
2009		57		463,911		5.13			9,319,151		4.45			24.91
2010		45		1,063,819		11.76			19,003,562		9.08			23.33
2011		31		513,865		5.68			10,343,203		4.94			28.00
2012		23		862,255		9.53			24,704,278		11.80			29.75
2013		23		759,607		8.40			17,008,236		8.13			24.54
2014		11		526,028		5.81			11,805,897		5.64			28.37
2015		5		189,840		2.10			2,381,720		1.14			19.73
2016		11		337,137		3.73			5,615,005		2.68			19.54
2017		7		119,894		1.33			2,054,088		0.98			18.17
Thereafter		31		3,260,196		36.03			89,750,669		42.89			30.25
Total		379		9,046,618		100.00	%	$	209,297,256		100.00	%	$	26.74

(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

Schedule of Significant Retail Tenants as of April 30, 2007

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

					PERCENTAGE
	NUMBER		LEASED		OF TOTAL
	OF		SQUARE		RETAIL
TENANT	LEASES		FEET		SQUARE FEET
AMC Entertainment, Inc.		5		462,863		3.70	%
Regal Entertainment Group		5		379,072		3.03
The Gap		23		295,345		2.36
The Home Depot		2		282,000		2.25
The Limited		43		280,340		2.24
TJX Companies		8		272,554		2.18
Dick’s Sporting Goods		3		226,408		1.81
Abercrombie & Fitch Stores, Inc.		28		210,663		1.68
Circuit City Stores, Inc.		6		199,107		1.59
Footlocker, Inc.		42		153,268		1.22
Pathmark Stores, Inc.		2		123,500		0.99
Ahold USA (Stop & Shop)		2		115,861		0.93
Subtotal		169		3,000,981		23.98
All Others		2,080		9,511,567		76.02
Total		2,249		12,512,548		100.00	%

10

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Schedule of Significant Office Tenants as of April 30, 2007

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

			PERCENTAGE
			OF TOTAL
	LEASED		OFFICE
TENANT	SQUARE FEET		SQUARE FEET
City of New York		890,185		9.84	%
Millennium Pharmaceuticals, Inc.		693,743		7.67
U.S. Government		591,374		6.54
Morgan Stanley & Co.		444,685		4.92
Securities Industry Automation Corp.		433,971		4.80
Wellchoice, Inc.		392,514		4.34
Keyspan Energy		335,318		3.71
Forest City Enterprises, Inc.(1)		330,144		3.65
Bank of New York		323,043		3.57
Bear Stearns		292,142		3.23
Alkermes, Inc.		210,248		2.32
Partners Health Care System, Inc.		136,150		1.50
University of Pennsylvania		121,630		1.34
Subtotal		5,195,147		57.43
All Others		3,851,471		42.57
Total		9,046,618		100.00	%

(1) All intercompany rental income is eliminated in consolidation.

11

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
April 30, 2007
2007 Openings and Acquisitions (4)

																Cost at FCE
									Pro-Rata			Cost at Full		Total Cost		Pro-Rata Share
		Dev.(D)		Date Opened/		FCE Legal			FCE % (h)			Consolidation		at 100%		(Non-GAAP)(b)				Gross
Property	Location	Acq.(A)		Acquired		Ownership%(h)			(1)			(GAAP)(a)		(2)		(1)X(2)		Sq. Ft./ No. of Units		Leasable Area
												(in millions)
Retail Centers:
Promenade Bolingbrook	Bolingbrook, IL		D		Q1-07		100.0	%		100.0	%	$	137.8	$	137.8	$	137.8		736,000		409,000	(f)
Office:
Colorado Studios	Denver, CO		A		Q1-07		90.0	%		90.0	%	$	2.0	$	2.0	$	1.8		75,000
Commerce Court	Pittsburgh, PA		A		Q1-07		70.0	%		100.0	%		26.5		26.5		26.5		378,000
Illinois Science and Technology Park — Building Q	Skokie, IL		A/D		Q1-07		100.0	%		100.0	%		49.1		49.1		49.1		160,000
												$	77.6	$	77.6	$	77.4		613,000
Total Openings(d)												$	215.4	$	215.4	$	215.2
Residential Phased-In Units(c)(e)																		Opened in ’07 / Total
Pine Ridge Expansion	Willoughby Hills, OH		D		2005-07		50.0	%		50.0	%	$	0.0	$	16.4	$	8.2		8/162
Total(g)												$	0.0	$	16.4	$	8.2		8/162

See attached April 30, 2007 footnotes.

12

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
April 30, 2007
Under Construction or to be acquired (19)

													Cost at FCE
				FCE		Pro-Rata			Cost at Full		Total Cost		Pro-Rata Share		Sq. Ft./			Gross
		Dev.(D)	Anticipated	Legal		FCE % (h)			Consolidation		at 100%		(Non-GAAP)(b)		No. of			Leasable			Pre-
Property	Location	Acq.(A)	Opening	Ownership%(h)		(1)			(GAAP)(a)		(2)		(1)X(2)		Units			Area			Leased %
									(in millions)
Retail Centers:
Rancho Cucamonga — Bass Pro	Rancho Cucamonga, CA	D	Q2-07		80.0%		80.0%		$	41.2	$	41.2	$	33.0		180,000			180,000			100	%
Orchard Town Center	Westminster, CO	D	Q1-08		100.0%		100.0%			144.0		144.0		144.0		968,000			554,000	(k)		37	%
Shops at Wiregrass (c)	Tampa, FL	D	Q3-08		50.0%		66.7%			0.0		142.9		95.3		646,000			356,000			56	%
East River Plaza (c)	Manhattan, NY	D	Q3-08		35.0%		50.0%			0.0		347.0		173.5		514,000			514,000			64	%
White Oak Village (l)	Richmond, VA	D	Q3-08		50.0%		100.0%			70.3		70.3		70.3		796,000			394,000			34	%
									$	255.5	$	745.4	$	516.1		3,104,000			1,998,000
Office:
Richmond Office Park	Richmond, VA	A	Q2-07		100.0%		100.0%		$	115.0	$	115.0	$	115.0		571,000						95	%
New York Times	Manhattan, NY	D	Q3-07		70.0%		79.5%			517.5		517.5		411.4		736,000	(m)					82	%
Johns Hopkins – 855 North Wolfe Street	East Baltimore, MD	D	Q2-08		76.6%		76.6%			104.7		104.7		80.2		278,000	(n)					36	%
									$	737.2	$	737.2	$	606.6		1,585,000
Residential:
Sterling Glen of Roslyn (o)	Roslyn, NY	D	Q2-07		40.0%		100.0%		$	79.9	$	79.9	$	79.9		158
Tobacco Row – Cameron Kinney	Richmond, VA	A	Q2-07		100.0%		100.0%			27.0		27.0		27.0		257
Stapleton Town Center – Botanica Phase II	Denver, CO	D	Q3-07		90.0%		90.0%			26.3		26.3		23.7		154
Uptown Apartments (c)	Oakland, CA	D	Q2-08		50.0%		50.0%			0.0		201.0		100.5		665
Ohana Military Communities, Hawaii Increment I (c) (e)	Honolulu, HI	D	2005-2008		10.0%		10.0%			0.0		316.5		31.7		1,952
Dallas Mercantile	Dallas, TX	D	Q1-08/Q3-08		100.0%		100.0%			134.6		134.6		134.6		366	(p)
Lucky Strike	Richmond, VA	D	Q1-08		100.0%		100.0%	��		37.8		37.8		37.8		131
Military Housing – Navy Midwest (c)	Chicago, IL	D	Q1-09		25.0%		25.0%			0.0		264.9		66.2		1,658
Military Housing – Marines, Hawaii Increment II (c)	Honolulu, HI	D	2007-2010		10.0%		10.0%			0.0		311.0		31.1		1,175
Military Housing – Navy, Hawaii Increment III (c)	Honolulu, HI	D	2007-2010		10.0%		10.0%			0.0		572.8		57.3		2,519
									$	305.6	$	1,971.8	$	589.8		9,035
																		Units Sold at
																		4/30/07
Condominiums:
Mercury (c)	Los Angeles, CA	D	Q3-07		50.0%		50.0%		$	0.0	$	153.5	$	76.8		238			57
Total Under Construction (i)									$	1,298.3	$	3,607.9	$	1,789.3
LESS: Above properties to be sold as condominiums									$	0.0	$	153.5	$	76.8
Under Construction less Condominiums									$	1,298.3	$	3,454.4	$	1,712.5

														Under Const./Total
Residential Phased-In Units:(c) (e)
Arbor Glen	Twinsburg, OH	D	2004-07	50.0	%	50.0	%	$	0.0	$	18.4	$	9.2		48/288
Pine Ridge Expansion	Willoughby Hills, OH	D	2005-07	50.0	%	50.0	%		0.0		16.4		8.2		32/162
Cobblestone Court	Painesville, OH	D	2006-08	50.0	%	50.0	%		0.0		24.6		12.3		192/304
Sutton Landing	Brimfield, OH	D	2007-08	50.0	%	50.0	%		0.0		15.9		8.0		216/216
Stratford Crossing	Wadsworth, OH	D	2007-09	50.0	%	50.0	%		0.0		24.1		12.1		108/348
Total (j)								$	0.0	$	99.4	$	49.8		596/1,318

     See attached April 30, 2007 footnotes.

13

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline

April 30, 2007 Footnotes

(a)	Amounts are presented on the full consolidation method of accounting, a GAAP measure. Under full consolidation, costs are reported as consolidated at 100 percent if we are deemed to have control or to be the primary beneficiary of our investments in the variable interest entity (“VIE”).
(b)	Cost at pro-rata share represents Forest City’s share of cost, based on the Company’s pro-rata ownership of each property (a non-GAAP measure). Under the pro-rata consolidation method of accounting the Company determines its pro-rata share by multiplying its pro-rata ownership by the total cost of the applicable property.
(c)	Reported under the equity method of accounting. This method represents a GAAP measure for investments in which the Company is not deemed to have control or to be the primary beneficiary of our investments in a VIE.
(d)	The difference between the full consolidation cost amount (GAAP) of $215.4 million to the Company’s pro-rata share (a non-GAAP measure) of $215.2 million of cost consists of a reduction to full consolidation for minority interest of $0.2 million of cost.
(e)	Phased-in openings. Costs are representative of the total project. (f) Includes 39,000 square feet of office space.
(f)	Includes 39,000 square feet of office space.
(g)	The difference between the full consolidation cost amount (GAAP) of $0.0 million to the Company’s pro-rata share (a non-GAAP measure) of $8.2 million consists of the Company’s share of cost for unconsolidated investments of $8.2 million.
(h)	As is customary within the real estate industry, the Company invests in certain real estate projects through joint ventures. For some of these projects, the Company provides funding at percentages that differ from the Company’s legal ownership.
(i)	The difference between the full consolidation cost amount (GAAP) of $1,298.3 million to the Company’s pro-rata share (a non-GAAP measure) of $1,789.3 million consists of a reduction to full consolidation for minority interest of $141.4 million of cost and the addition of its share of cost for unconsolidated investments of $632.4 million.
(j)	The difference between the full consolidation amount (GAAP) of $0.0 million to the Company’s pro-rata share (a non-GAAP measure) of $49.8 million consists of Forest City’s share of cost for unconsolidated investments of $49.8 million.
(k)	Includes 177,000 square feet for Target and 97,000 square feet for JCPenney that opened in Q3-06, as well as 16,000 square feet of office.
(l)	Formerly known as Laburnum.
(m)	Includes 23,000 square feet of retail space.
(n)	Project includes 19,000 square feet of retail space.
(o)	Supported-living property.
(p)	Project includes 18,000 square feet of retail space.

14

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Mortgage Financings

Our primary capital strategy seeks to isolate the financial risk at the property level to maximize returns and reduce risk on and of our equity capital. Our mortgage debt is nonrecourse, including our construction loans. We operate as a C-corporation and retain substantially all of our internally generated cash flows. We recycle this cash flow, together with refinancing and property sale proceeds to fund new development and acquisitions that drive favorable returns for our shareholders. This strategy provides us with the necessary liquidity to take advantage of investment opportunities.

We use taxable and tax-exempt nonrecourse debt for our real estate projects. For those projects financed with taxable debt, we generally seek long-term, fixed rate financing for those real estate project loans which mature within the next 12 months, as well as those real estate projects which are projected to open and achieve stabilized operations during that same time frame. For real estate projects financed with tax-exempt debt, we generally utilize variable rate debt. For construction loans, we generally pursue variable-rate financings with maturities ranging from two to five years.

We are actively working to extend the maturities and/or refinance the nonrecourse debt that is coming due in 2007 and 2008. During the three months ended April 30, 2007, we completed the following financings:

					Plus
					Unconsolidated
	Full		Less Minority		Investments at		Pro-Rata
Purpose of Financing	Consolidation		Interest		Pro-Rata		Consolidation
			(in thousands)
Loan extensions	$	186,140	$	—	$	—	$	186,140
Development projects and acquisitions(1)		169,642		—		8,763		178,405
Refinancings		93,500		17,750		29,500		105,250
	$	449,282	$	17,750	$	38,263	$	469,795

(1) $154,125 of the $169,642 relates to development projects and represents the full amount available to be drawn on the loan.

15

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt(dollars in thousands)
As of April 30, 2007

	Period Ending January 31, 2008												Fiscal Year Ending January 31, 2009
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	125,829		$	17,547		$	61,603		$	169,885		$	104,906		$	4,809		$	87,074		$	187,171
Weighted average rate		6.69	%		6.77	%		7.54	%		6.99	%		6.64	%		6.76	%		6.76	%		6.69	%
Variable:
Variable-rate debt		360,630			28,823			88,433			420,240			447,154			2,518			27,376			472,012
Weighted average rate		7.06	%		7.79	%		7.83	%		7.17	%		7.00	%		6.98	%		6.96	%		6.99	%
Tax-Exempt		191,777			2,900			6,988			195,865			61,770			—			—			61,770
Weighted average rate		4.97	%		4.70	%		4.68	%		4.96	%		4.66	%		—			—			4.66	%
Total variable-rate debt		552,407			31,723			95,421			616,105			508,924			2,518			27,376			533,782
Total Nonrecourse Mortgage Debt	$	678,236		$	49,270		$	157,024		$	785,990		$	613,830		$	7,327		$	114,450		$	720,953
Weighted Average Rate		6.40	%		7.24	%		7.58	%		6.58	%		6.70	%		6.83	%		6.81	%		6.72	%
	Fiscal Year Ending January 31, 2010												Fiscal Year Ending January 31, 2011
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	327,840		$	15,533		$	35,905		$	348,212		$	207,598		$	16,384		$	20,686		$	211,900
Weighted average rate		6.95	%		7.02	%		6.68	%		6.92	%		7.02	%		2.60	%		7.21	%		7.38	%
Variable:
Variable-rate debt		18,184			—			57,512			75,696			48,258			—			8,856			57,114
Weighted average rate		6.71	%		—			7.00	%		6.93	%		5.78	%		—			9.12	%		6.30	%
Tax-Exempt		206,560			6,000			120,000			320,560			43,765			—			—			43,765
Weighted average rate		4.54	%		4.49	%		4.51	%		4.53	%		4.39	%		—			—			4.39	%
Total variable-rate debt		224,744			6,000			177,512			396,256			92,023			—			8,856			100,879
Total Nonrecourse Mortgage Debt	$	552,584		$	21,533		$	213,417		$	744,468		$	299,621		$	16,384		$	29,542		$	312,779
Weighted Average Rate		6.04	%		6.31	%		5.55	%		5.89	%		6.44	%		2.60	%		7.78	%		6.77	%

16

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt(dollars in thousands)(continued)
As of April 30, 2007

	Fiscal Year Ending January 31, 2012												Thereafter
							Plus												Plus
							Unconsolidated												Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata			Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	361,070		$	19,538		$	34,610		$	376,142		$	2,631,182		$	174,166		$	649,037		$	3,106,053
Weighted average rate		7.12	%		7.22	%		6.93	%		7.10	%		5.78	%		5.88	%		5.68	%		5.76	%
Variable:
Variable-rate debt		3,128			—			4,602			7,730			59,192			—			35,057			94,249
Weighted average rate		5.76	%		—			7.12	%		6.57	%		5.57	%		—			6.57	%		5.95	%
Tax-Exempt		27,080			—			29,500			56,580			232,025			9,881			64,000			286,144
Weighted average rate		4.47	%		—			4.60	%		4.54	%		4.90	%		4.64	%		4.89	%		4.91	%
Total variable-rate debt		30,208			—			34,102			64,310			291,217			9,881			99,057			380,393
Total Nonrecourse Mortgage Debt	$	391,278		$	19,538		$	68,712		$	440,452		$	2,922,399		$	184,047		$	748,094		$	3,486,446
Weighted Average Rate		6.93	%		7.22	%		5.94	%		6.76	%		5.71	%		5.82	%		5.65	%		5.69	%
	Total
							Plus
							Unconsolidated
	Full			Less Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	3,758,425		$	247,977		$	888,915		$	4,399,363
Weighted average rate		6.14	%		5.92	%		6.04	%		6.13	%
Variable:
Variable-rate debt		936,546			31,341			221,836			1,127,041
Weighted average rate		6.86	%		7.72	%		7.35	%		6.93	%
Tax-Exempt		762,977			18,781			220,488			964,684
Weighted average rate		4.75	%		4.60	%		4.64	%		4.73	%
Total variable-rate debt		1,699,523			50,122			442,324			2,091,725
Total Nonrecourse Mortgage Debt	$	5,457,948		$	298,099		$	1,331,239		$	6,491,088
Weighted Average Rate		6.07	%		6.03	%		6.03	%		6.06	%

17

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

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

Consolidated Balance Sheet Information – April 30, 2007 (unaudited)

							Plus
	Full						Unconsolidated			Pro-Rata
	Consolidation			Less Minority			Investments at			Consolidation
	(GAAP)			Interest			Pro-Rata			(Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties	$	6,928,936		$	346,826		$	1,186,504		$	7,768,614
Projects under development		1,396,768			107,831			317,291			1,606,228
Land held for development or sale		184,803			6,770			86,527			264,560
Total Real Estate		8,510,507			461,427			1,590,322			9,639,402
Less accumulated depreciation		(1,146,947	)		(90,005	)		(285,007	)		(1,341,949	)
Real Estate, net		7,363,560			371,422			1,305,315			8,297,453
Cash and equivalents		160,922			24,057			24,338			161,203
Restricted cash		269,540			11,533			166,298			424,305
Notes and accounts receivable, net		298,742			11,564			14,541			301,719
Investments in and advances to affiliates		407,490			92,355			(93,845	)		221,290
Other assets		727,972			21,576			113,486			819,882
Total Assets	$	9,228,226		$	532,507		$	1,530,133		$	10,225,852
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse	$	5,457,948		$	298,099		$	1,331,239		$	6,491,088
Notes payable		79,193			1,151			81,943			159,985
Bank revolving credit facility		140,000			—			—			140,000
Senior and subordinated debt		886,900			—			—			886,900
Accounts payable and accrued expenses		811,863			33,162			117,051			895,752
Deferred income taxes		464,410			—			—			464,410
Total Liabilities		7,840,314			332,412			1,530,233			9,038,135
Minority Interest		398,840			200,095			(100	)		198,645
Total Shareholders’ Equity		989,072			—			—			989,072
Total Liabilities and Shareholders’ Equity	$	9,228,226		$	532,507		$	1,530,133		$	10,225,852

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Balance Sheet Information — January 31, 2007 (unaudited)

							Plus
	Full						Unconsolidated			Pro-Rata
	Consolidation			Less Minority			Investments at			Consolidation
	(GAAP)			Interest			Pro-Rata			(Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties	$	6,659,054		$	346,323		$	1,207,591		$	7,520,322
Projects under development		1,396,083			126,660			298,665			1,568,088
Land held for development or sale		174,136			6,032			78,578			246,682
Total Real Estate		8,229,273			479,015			1,584,834			9,335,092
Less accumulated depreciation		(1,085,978	)		(70,863	)		(286,054	)		(1,301,169	)
Real Estate, net		7,143,295			408,152			1,298,780			8,033,923
Cash and equivalents		254,213			24,545			32,997			262,665
Restricted cash		292,461			25,028			168,062			435,495
Notes and accounts receivable, net		287,615			26,619			9,458			270,454
Investments in and advances to affiliates		333,782			—			(95,710	)		238,072
Other assets		670,238			29,260			95,834			736,812
Total Assets	$	8,981,604		$	513,604		$	1,509,421		$	9,977,421
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse	$	5,338,372		$	320,270		$	1,308,209		$	6,326,311
Notes payable		96,127			1,167			88,244			183,204
Bank revolving credit facility		—			—			—			—
Senior and subordinated debt		886,900			—			—			886,900
Accounts payable and accrued expenses		772,964			15,711			112,968			870,221
Deferred income taxes		486,329			—			—			486,329
Total Liabilities		7,580,692			337,148			1,509,421			8,752,965
Minority Interest		375,101			176,456			—			198,645
Total Shareholders’ Equity		1,025,811			—			—			1,025,811
Total Liabilities and Shareholders’ Equity	$	8,981,604		$	513,604		$	1,509,421		$	9,977,421

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Three Months Ended April 30, 2007 (unaudited)

							Plus
	Full			Less			Unconsolidated			Pro-Rata
	Consolidation			Minority			Investments at			Consolidation
	(GAAP)			Interest			Pro-Rata			(Non-GAAP)
				(in thousands)
Revenues from real estate operations	$	280,567		$	15,316		$	77,182		$	342,433
Expenses
Operating expenses		177,439			5,795			50,554			222,198
Depreciation and amortization		60,800			2,687			10,272			68,385
		238,239			8,482			60,826			290,583
Interest expense, including early extinguishment of debt		(80,951	)		(5,301	)		(17,274	)		(92,924	)
Amortization of mortgage procurement costs		(2,599	)		(160	)		(503	)		(2,942	)
Interest and other income		11,496			823			623			11,296
Equity in earnings (loss) of unconsolidated entities (Note 1)		1,361			352			(1,308	)		(299	)
Gain on disposition of rental properties		—			—			2,106			2,106
Earnings (loss) before income taxes		(28,365	)		2,548			—			(30,913	)
Income tax expense (benefit)
Current		(1,634	)		—			—			(1,634	)
Deferred		(12,098	)		—			—			(12,098	)
		(13,732	)		—			—			(13,732	)
Earnings (loss) before minority interest and discontinued operations		(14,633	)		2,548			—			(17,181	)
Minority interest		(2,548	)		(2,548	)		—			—
Loss from continuing operations (Note 1)		(17,181	)		—			—			(17,181	)
Discontinued operations, net of tax and minority interest:
Operating earnings from rental properties		—			—			—			—
		—			—			—			—
Net loss	$	(17,181	)	$	—		$	—		$	(17,181	)

Note (1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the three months ended April 30, 2007, one equity method investment was sold,White Acres. A pre-tax gain of $2,106 ($1,292 net of tax) has been reported in equity in earnings of unconsolidated entities in the Consolidated Statements of Earnings, and therefore is included in earnings from continuing operations.

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Three Months Ended April 30, 2006 (unaudited)

							Plus
	Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Minority			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
							(in thousands)
Revenues from real estate operations	$	272,238		$	26,251		$	69,777		$	20,575		$	336,339
Expenses
Operating expenses		155,739			12,492			48,415			16,313			207,975
Depreciation and amortization		41,417			3,271			13,008			2,585			53,739
		197,156			15,763			61,423			18,898			261,714
Interest expense, including early extinguishment of debt		(68,234	)		(6,748	)		(13,691	)		(3,498	)		(78,675	)
Amortization of mortgage procurement costs		(2,946	)		(308	)		(436	)		(74	)		(3,148	)
Interest and other income		14,888			631			93			453			14,803
Equity in earnings of unconsolidated entities		379			—			5,680			—			6,059
Gain on disposition of rental properties		—			—			—			75,298			75,298
Earnings before income taxes		19,169			4,063			—			73,856			88,962
Income tax expense (benefit)
Current		(496	)		—			—			(563	)		(1,059	)
Deferred		7,662			—			—			29,101			36,763
		7,166			—			—			28,538			35,704
Earnings before minority interest and discontinued operations		12,003			4,063			—			45,318			53,258
Minority interest		(4,063	)		(4,063	)		—			—
Earnings from continuing operations		7,940			—			—			45,318			53,258
Discontinued operations, net of tax and minority interest:
Operating loss from rental properties		(885	)		—			—			885			—
Gain on disposition of rental properties		46,203			—			—			(46,203	)		—
		45,318			—			—			(45,318	)		—
Net earnings	$	53,258		$	—		$	—		$	—		$	53,258

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

The following schedules 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 which we do not control and/or are not the primary beneficiary, and which are accounted for under the equity method of accounting, as well as advances to partners and other affiliates.

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

	April 30,		January 31,
	2007		2007
	(in thousands)
Members’ and partners’ equity as below	$	561,073	$	592,681
Equity of other members and partners		467,228		496,971
Company’s investment in partnerships		93,845		95,710
Company’s proportionate share of advances to and on behalf of other affiliates		221,290		238,072
Minority interest in advances to and on behalf of other affiliates(1)		92,355		—
Total Investments in and Advances to Affiliates	$	407,490	$	333,782

(1) Primarily represents the minority interest portion of advances to other affiliates included in the fully consolidated presentation. Previously, a portion of these amounts were recorded in pro-rata accounts payable or receivable.

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

	Combined (100%)						Pro-Rata Share
	(GAAP)						(Non-GAAP)
	April 30, 2007			January 31, 2007			April 30, 2007			January 31, 2007
	(in thousands)						(in thousands)
Balance Sheet:
Completed rental properties	$	2,676,120		$	2,697,454		$	1,186,504		$	1,207,591
Projects under development		869,125			777,419			317,291			298,665
Land held for development or sale		194,247			160,296			86,527			78,578
Accumulated depreciation		(568,517	)		(554,910	)		(285,007	)		(286,054	)
Restricted cash		1,396,988			1,432,636			166,298			168,062
Other assets		531,990			526,142			152,365			138,289
Total Assets	$	5,099,953		$	5,039,037		$	1,623,978		$	1,605,131
Mortgage debt, nonrecourse	$	3,918,561		$	3,834,085		$	1,331,239		$	1,308,209
Other liabilities		620,319			612,271			198,994			201,212
Minority interest		—			—			(100	)		—
Members’ and partners’ equity		561,073			592,681			93,845			95,710
Total Liabilities and Members’/Partners’ Equity	$	5,099,953		$	5,039,037		$	1,623,978		$	1,605,131

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Investments in and Advances to Affiliates(continued)

	Combined (100%)						Pro-Rata Share
	(GAAP)						(Non-GAAP)
Three Months Ended April 30,	2007			2006			2007			2006
				(in thousands)
Operations:
Revenues	$	217,460		$	166,940		$	76,927		$	69,402
Equity in earnings of unconsolidated entities on a pro-rata basis		—			—			(299	)		6,059
Operating expenses		(154,781	)		(122,800	)		(50,502	)		(48,103	)
Interest expense		(54,043	)		(32,379	)		(17,233	)		(13,628	)
Depreciation and amortization		(37,744	)		(37,418	)		(10,905	)		(13,416	)
Interest and other income		19,189			3,046			623			92
Minority interest		—			—			352			—
Income (loss) from continuing operations		(9,919	)		(22,611	)		(1,037	)		406
Discontinued operations:
Gain on disposition of rental properties(1)		4,212			—			2,106			—
Operating earnings (loss) from rental properties		584			(57	)		292			(27	)
	$	4,796		$	(57	)	$	2,398		$	(27	)
Net earnings (loss) (pre-tax)	$	(5,123	)	$	(22,668	)	$	1,361		$	379

(1) The following table shows the detail of gain on disposition of rental properties that were held by equity method investments:

	Combined (100%)				Pro-Rata Share
	(GAAP)				(Non-GAAP)
	Three Months Ended April 30,
	2007		2006		2007		2006
			(in thousands)
White Acres (Apartments) (Richmond Heights, Ohio)	$	4,212	$	—	$	2,106	$	—

Results of Operations

Net Earnings —Net earnings (loss) for the three months ended April 30, 2007 was ($17,181,000) versus $53,258,000 for the three months ended April 30, 2006. Although we have substantial recurring revenue sources from our properties, we also enter into significant one-time transactions, which could create substantial variances in net earnings between periods. This variance to the prior year is primarily attributable to the following decreases, which are net of tax and minority interest:

• $46,203,000 ($75,298,000, pre-tax) related to the 2006 gains on disposition of two consolidated Commercial properties,Hilton Times Square, a 444-room hotel located in Manhattan, New York andG Street, a specialty retail center located in Philadelphia, Pennsylvania;

• $9,439,000 ($15,498,000, pre-tax) related to decreased earnings in 2007 reported in the Land Development Group primarily due to a decrease in land sales atWaterburyin North Ridgeville, Ohio,Stapleton, in Denver, Colorado andTangerine Crossingin Tucson, Arizona;

• $4,878,000 ($7,950,000, pre-tax) related to income recognition on the sale of state and federal Historic Preservation Tax Credits in 2006 that did not recur at the same level;

• $4,809,000 ($7,837,000, pre-tax) related to management’s approved plan to demolish two buildings owned by us adjacent toTen MetroTech Center, an office building located in Brooklyn, New York, to clear the land for a residential project named80 DeKalb Avenue. Due to this new development plan, the estimated useful lives of the two adjacent buildings were adjusted to expire at the scheduled demolition date in April 2007 resulting in accelerated depreciation expense;

• $4,718,000 ($7,689,000, pre-tax) related to decreases in Commercial Group outlot land sales in 2007 primarily atSimi Valleyin Simi Valley, California which was partially offset by an increase in land sales in 2007 atVictoria Gardensin Rancho Cucamonga, California;

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

• $1,631,000 ($2,658,000, pre-tax) related to an increase in depreciation and amortization for amounts recorded as tangible and intangible assets, which were a result of the purchase price allocation for the New York portfolio transaction that closed in November 2006;

• $1,166,000 ($1,901,000, pre-tax) related to increased write-offs of abandoned development projects in 2007;

• $1,109,000 ($1,719,000, pre-tax) related to stock-based compensation accounted for under SFAS No. 123 (Revised), “Share-Based Payment” (“SFAS No. 123(R)”);

• $888,000 ($1,447,000, pre-tax) in 2007 related to the fair market value adjustments of certain of our 10-year forward swaps which were marked to market as additional interest expense as a result of the derivatives not qualifying for hedge accounting; and

• $765,000 ($1,246,000, pre-tax) in 2007 related to the early extinguishment of nonrecourse mortgage debt primarily atColumbia Park Center, a specialty retail center located in North Bergen, New Jersey in order to secure more favorable financing terms.

These decreases were partially offset by the following increases, net of tax and minority interest:

• $3,325,000 ($5,450,000, pre-tax) related to the decreased losses from our equity investment in the New Jersey Nets basketball team; and

• $1,292,000 ($2,106,000, pre-tax) related to the 2007 gain on disposition of one equity method Residential property,White Acres, an apartment community located in Richmond Heights, Ohio.

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 non-real estate depreciation and amortization) 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 (“Rental Properties”) for the three months ended April 30, 2007 was $131,358,000 compared to $135,022,000 for the three months ended April 30, 2006, a 2.7% decrease. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on page 7. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 27-32.

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 Rental Properties for the three months ended April 30, 2007 was $137,918,000 compared to $138,559,000 for the three months ended April 30, 2006, a 0.5% decrease. Comparable NOI increased 4.8% for the three months ended April 30, 2007 compared to the prior year. Retail, office and hotel comparable NOI increased 8.3%, 0.5% and 43.0% respectively, from the prior year and our residential portfolio has generated an increase of 3.3%.

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 for real estate depreciation, amortization, amortization of mortgage procurement costs and deferred income taxes; iv) preferred payment classified as minority interest expense on the Company’s Consolidated Statement of Earnings; v) provision for decline in real estate (net of tax); vi) extraordinary items (net of tax); and vii) cumulative effect of change in accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment equals net earnings.

24

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

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.

Our EBDT for the quarter ended April 30, 2007 was $34,529,000, a $28,810,000 decrease from $63,339,000 for the quarter ended April 30, 2006. This variance is primarily attributable to decreased sales of state and federal Historic Preservation Tax Credits of $7,950,000 (primarily atAshton Mill, an apartment community located in Cumberland, Rhode Island), decreased EBDT reported in the Land Development Group of $9,547,000, decreased Commercial Group outlot land sales of $6,972,000, increased write-offs for abandoned development projects of $1,901,000, expensing of stock options under SFAS No. 123 (Revised), “Share-Based Payment” of $1,220,000, the fair market value adjustment for certain 10-year forward swaps of $1,447,000, and an increase in early extinguishment of debt of $765,000 primarily atColumbia Park Center, a specialty retail center located in North Bergen, New Jersey. These decreases were partially offset by the decreased losses from our equity investment in the New Jersey Nets basketball team of $3,325,000.

Summary of EBDT— The information in the tables on pages 27-32 present amounts for both full consolidation and pro-rata consolidation, providing a reconciliation of the difference between the two methods, as well as reconciliation from NOI to EBDT to net earnings. Under the pro-rata consolidation method, we present our partnership investments proportionate to our pro-rata share for each line item of our consolidated financial statements. Under full consolidation, partnership assets and liabilities are reported as consolidated at 100% if deemed under our control or if we are deemed to be the primary beneficiary for investments in the VIEs, or on the equity method of accounting if we do not have control or are not the primary beneficiary for investments in VIEs.

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

	Three Months Ended April 30,
	2007			2006
	(in thousands)
Net earnings (loss)	$	(17,181	)	$	53,258
Depreciation and amortization – Real Estate Groups(5)		64,509			47,200
Amortization of mortgage procurement costs – Real Estate Groups(5)		2,919			2,909
Deferred income tax expense – Real Estate Groups(6)		(10,360	)		7,329
Current income tax expense on non-operating earnings:(6)
Gain on disposition included in discontinued operations		—			(29	)
Straight-line rent adjustment(3)		(4,150	)		(1,131	)
Preference payment(4)		898			—
Gain on disposition recorded on equity method		(2,106	)		—
Discontinued operations:(1)(6)
Gain on disposition of rental properties		—			(136,384	)
Minority interest – Gain on disposition		—			61,086
Deferred income tax expense – Real Estate Groups		—			29,101
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)(2)	$	34,529		$	63,339

(1)	Pursuant to the definition of a component of an entity of SFAS No. 144, assuming no significant continuing involvement, all earnings of properties which have been sold or are held for sale are reported as discontinued operations.
(2)	The Company uses an additional measure, along with net earnings, to report its operating results. This measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”), is not a measure of operating results as defined by generally accepted accounting principles and may not be directly comparable to similarly-titled measures reported by other companies. The Company believes that EBDT provides additional information about its operations, and along with net earnings, is necessary to understand its operating results. EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of 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 for real estate depreciation, amortization, amortization of mortgage procurement costs and deferred income taxes; iv) preferred payment classified as minority interest expense on the Company’s Consolidated Statement of Earnings; v) provision for decline in real estate (net of tax); vi) extraordinary items (net of tax); and vii) cumulative effect of change in accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment equals net earnings.
(3)	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.

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

(4)

The Forest City Ratner Companies portfolio became a wholly-owned subsidiary of the Company on November 8, 2006 upon the issuance of the Class A Common Units in exchange for Bruce C. Ratner’s minority interests. For the first five years only, the Units that have not been exchanged are entitled to their proportionate share of an annual preferred payment of $2,500,000 plus an amount equal to the dividends paid on the same number of shares of the Company’s common stock. After five years, the Units that have not been exchanged are entitled to a payment equal to the dividends paid on an equivalent number of shares of the Company’s common stock. At April 30, 2007, the Company has recorded approximately $898,000 related to one quarter’s share of the annual preferred payment which is classified as minority interest expense on the Company’s Consolidated Statement of Earnings.

(5)

The following table provides detail of depreciation and amortization and amortization of mortgage procurement costs. The Company’s Real Estate Groups are engaged in the ownership, development, acquisition and management of real estate projects, including apartment complexes, regional malls and retail centers, hotels, office buildings and mixed-use facilities, as well as large land development projects.

	Depreciation and Amortization						Amortization of Mortgage Procurement Costs
	Three Months Ended April 30,						Three Months Ended April 30,
	2007			2006			2007			2006
Full Consolidation	$	60,800		$	41,417		$	2,599		$	2,946
Non-Real Estate		(1,997	)		(349	)		—			(92	)
Real Estate Groups Full Consolidation		58,803			41,068			2,599			2,854
Real Estate Groups related to minority interest		(2,687	)		(3,271	)		(160	)		(308	)
Real Estate Groups Equity Method		8,393			6,818			480			289
Real Estate Groups Discontinued Operations		—			2,585			—			74
Real Estate Groups Pro-Rata Consolidation	$	64,509		$	47,200		$	2,919		$	2,909

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

		Three Months Ended April 30,
		2007			2006
		(in thousands)
(A)	Operating earnings
	Current	$	(1,634	)	$	(496	)
	Deferred		(12,912	)		7,662
			(14,546	)		7,166
(B)	Gain on disposition recorded on equity method
	Current		—			—
	Deferred		814			—
			814			—
	Subtotal (A) (B)
	Current		(1,634	)		(496	)
	Deferred		(12,098	)		7,662
	Income tax expense		(13,732	)		7,166
(C)	Discontinued operations
	Operating earnings
	Current		—			(534	)
	Deferred		—			(23	)
			—			(557	)
	Gain on disposition of rental properties
	Current		—			(29	)
	Deferred		—			29,124
			—			29,095
			—			28,538
	Grand Total (A) (B) (C)
	Current		(1,634	)		(1,059	)
	Deferred		(12,098	)		36,763
		$	(13,732	)	$	35,704
	Recap of Grand Total:
	Real Estate Groups
	Current	$	2,246		$	1,874
	Deferred		(10,360	)		7,329
			(8,114	)		9,203
	Discontinued operations
	Current		—			(563	)
	Deferred		—			29,101
			—			28,538
	Non-Real Estate Groups
	Current		(3,880	)		(2,370	)
	Deferred		(1,738	)		333
			(5,618	)		(2,037	)
	Grand Total	$	(13,732	)	$	35,704

26

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended April 30, 2007(in thousands)

	Commercial Group 2007													Residential Group 2007
						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	$	203,027		$	12,427	$	28,550		$	—	$	219,150		$	66,807		$	2,514	$	43,574		$	—	$	107,867
Exclude straight-line rent adjustment		(5,839	)		—		—			—		(5,839	)		(4	)		—		—			—		(4	)
Adjusted revenues		197,188			12,427		28,550			—		213,311			66,803			2,514		43,574			—		107,863
Operating expenses, including non-Real Estate depreciation and amortization, and amortization of mortgage procurement costs		106,808			3,804		15,277			—		118,281			46,038			1,561		28,889			—		73,366
Exclude straight-line rent adjustment		(1,692	)		—		—			—		(1,692	)		—			—		—			—		—
Exclude preference payment		(898	)		—		—			—		(898	)		—			—		—			—		—
Adjusted operating expenses		104,218			3,804		15,277			—		115,691			46,038			1,561		28,889			—		73,366
Add interest income and other income		1,938			330		266			—		1,874			3,941			7		294			—		4,228
Add equity in earnings of unconsolidated entities		1,467			—		(1,466	)		—		1			3,572			352		(3,522	)		—		(302	)
Remove gain on disposition of equity method rental properties		—			—		—			—		—			(2,106	)		—		2,106			—		—
Add back equity method depreciation and amortization expense		3,952			—		(3,952	)		—		—			4,859			—		(4,859	)		—		—
Net operating income		100,327			8,953		8,121			—		99,495			31,031			1,312		8,704			—		38,423
Interest expense, including early extinguishment of debt		49,913			4,481		8,121			—		53,553			14,890			640		8,704			—		22,954
Income tax expense (benefit)		1,141			—		—			—		1,141			2,979			—		—			—		2,979
Minority interest in earnings before depreciation and amortization		4,472			4,472		—			—		—			672			672		—			—		—
Add: EBDT from discontinued operations		—			—		—			—		—			—			—		—			—		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	44,801		$	—	$	—		$	—	$	44,801		$	12,490		$	—	$	—		$	—	$	12,490
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	44,801		$	—	$	—		$	—	$	44,801		$	12,490		$	—	$	—		$	—	$	12,490
Depreciation and amortization – Real Estate Groups		(46,426	)		—		—			—		(46,426	)		(17,969	)		—		—			—		(17,969	)
Amortization of mortgage procurement costs – Real Estate Groups		(2,026	)		—		—			—		(2,026	)		(752	)		—		—			—		(752	)
Deferred taxes – Real Estate Groups		470			—		—			—		470			4,358			—		—			—		4,358
Straight-line rent adjustment		4,147			—		—			—		4,147			4			—		—			—		4
Preference payment		(898	)		—		—			—		(898	)		—			—		—			—		—
Gain on disposition of rental properties and other investments, net of tax		—			—		—			—		—			—			—		1,292			—		1,292
Gain on disposition of equity method rental properties, net of tax		—			—		—			—		—			1,292			—		(1,292	)		—		—
Net earnings (loss)	$	68		$	—	$	—		$	—	$	68		$	(577	)	$	—	$	—		$	—	$	(577	)

27

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended April 30, 2007(in thousands)(continued)

	Land Development Group 2007													The Nets 2007
						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	$	10,733		$	375	$	1,148		$	—	$	11,506		$	—		$	—	$	3,910	$	—	$	3,910
Exclude straight-line rent adjustment		1			—		—			—		1			—			—		—		—		—
Adjusted revenues		10,734			375		1,148			—		11,507			—			—		3,910		—		3,910
Operating expenses, including non-Real Estate depreciation and amortization, and amortization of mortgage procurement costs		12,156			430		1,464			—		13,190			—			—		6,826		—		6,826
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Exclude preference payment		—			—		—			—		—			—			—		—		—		—
Adjusted operating expenses		12,156			430		1,464			—		13,190			—			—		6,826		—		6,826
Add interest income and other income		5,010			486		54			—		4,578			—			—		9		—		9
Add equity in earnings of unconsolidated entities		(427	)		—		440			—		13			(3,251	)		—		3,240		—		(11	)
Remove gain on disposition of equity method rental properties		—			—		—			—		—			—			—		—		—		—
Add back equity method depreciation and amortization expense		62			—		(62	)		—		—			—			—		—		—		—
Net operating income		3,223			431		116			—		2,908			(3,251	)		—		333		—		(2,918	)
Interest expense, including early extinguishment of debt		2,306			180		116			—		2,242			—			—		333		—		333
Income tax expense (benefit)		3,363			—		—			—		3,363			(1,201	)		—		—		—		(1,201	)
Minority interest in earnings before depreciation and amortization		251			251		—			—		—			—			—		—		—		—
Add: EBDT from discontinued operations		—			—		—			—		—			—			—		—		—		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(2,697	)	$	—	$	—		$	—	$	(2,697	)	$	(2,050	)	$	—	$	—	$	—	$	(2,050	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(2,697	)	$	—	$	—		$	—	$	(2,697	)	$	(2,050	)	$	—	$	—	$	—	$	(2,050	)
Depreciation and amortization – Real Estate Groups		(114	)		—		—			—		(114	)		—			—		—		—		—
Amortization of mortgage procurement costs – Real Estate Groups		(141	)		—		—			—		(141	)		—			—		—		—		—
Deferred taxes – Real Estate Groups		3,185			—		—			—		3,185			—			—		—		—		—
Straight-line rent adjustment		(1	)		—		—			—		(1	)		—			—		—		—		—
Gain on disposition of rental properties and other investments, net of tax		—			—		—			—		—			—			—		—		—		—
Gain on disposition of equity method rental properties, net of tax		—			—		—			—		—			—			—		—		—		—
Net earnings (loss)	$	232		$	—	$	—		$	—	$	232		$	(2,050	)	$	—	$	—	$	—	$	(2,050	)

28

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended April 30, 2007(in thousands)(continued)

	Corporate Activities 2007												Total 2007
						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	$	—		$	—	$	—	$	—	$	—		$	280,567		$	15,316	$	77,182		$	—	$	342,433
Exclude straight-line rent adjustment		—			—		—		—		—			(5,842	)		—		—			—		(5,842	)
Adjusted revenues		—			—		—		—		—			274,725			15,316		77,182			—		336,591
Operating expenses, including non-Real Estate depreciation and amortization, and amortization of mortgage procurement costs		14,434			—		—		—		14,434			179,436			5,795		52,456			—		226,097
Exclude straight-line rent adjustment		—			—		—		—		—			(1,692	)		—		—			—		(1,692	)
Exclude preference payment		—			—		—		—		—			(898	)		—		—			—		(898	)
Adjusted operating expenses		14,434			—		—		—		14,434			176,846			5,795		52,456			—		223,507
Add interest income and other income		607			—		—		—		607			11,496			823		623			—		11,296
Add equity in earnings of unconsolidated entities		—			—		—		—		—			1,361			352		(1,308	)		—		(299	)
Remove gain on disposition of equity method rental properties		—			—		—		—		—			(2,106	)		—		2,106			—		—
Add back equity method depreciation and amortization expense		—			—		—		—		—			8,873			—		(8,873	)		—		—
Net operating income		(13,827	)		—		—		—		(13,827	)		117,503			10,696		17,274			—		124,081
Interest expense, including early extinguishment of debt		13,842			—		—		—		13,842			80,951			5,301		17,274			—		92,924
Income tax expense (benefit)		(9,654	)		—		—		—		(9,654	)		(3,372	)		—		—			—		(3,372	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—			5,395			5,395		—			—		—
Add: EBDT from discontinued operations		—			—		—		—		—			—			—		—			—		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(18,015	)	$	—	$	—	$	—	$	(18,015	)	$	34,529		$	—	$	—		$	—	$	34,529
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(18,015	)	$	—	$	—	$	—	$	(18,015	)	$	34,529		$	—	$	—		$	—	$	34,529
Depreciation and amortization – Real Estate Groups		—			—		—		—		—			(64,509	)		—		—			—		(64,509	)
Amortization of mortgage procurement costs – Real Estate Groups		—			—		—		—		—			(2,919	)		—		—			—		(2,919	)
Deferred taxes – Real Estate Groups		3,161			—		—		—		3,161			11,174			—		—			—		11,174
Straight-line rent adjustment		—			—		—		—		—			4,150			—		—			—		4,150
Preference payment		—			—		—		—		—			(898	)		—		—			—		(898	)
Gain on disposition of rental properties and other investments, net of tax		—			—		—		—		—			—			—		1,292			—		1,292
Gain on disposition of equity method rental properties, net of tax		—			—		—		—		—			1,292			—		(1,292	)		—		—
Net earnings (loss)	$	(14,854	)	$	—	$	—	$	—	$	(14,854	)	$	(17,181	)	$	—	$	—		$	—	$	(17,181	)

29

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended April 30, 2006(in thousands)

	Commercial Group 2006														Residential Group 2006
						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	$	196,339		$	23,160	$	22,649		$	15,746		$	211,574		$	55,083		$	2,244		$	30,797		$	4,829		$	88,465
Exclude straight-line rent adjustment		(2,684	)		—		—			(16	)		(2,700	)		(11	)		—			—			—			(11	)
Adjusted revenues		193,655			23,160		22,649			15,730			208,874			55,072			2,244			30,797			4,829			88,454
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		98,732			10,518		13,342			14,308			115,864			36,219			1,339			17,838			2,005			54,723
Exclude straight-line rent adjustment		(1,167	)		—		—			(412	)		(1,579	)		—			—			—			—			—
Adjusted operating expenses		97,565			10,518		13,342			13,896			114,285			36,219			1,339			17,838			2,005			54,723
Add interest income and other income		885			310		(109	)		449			915			9,930			(12	)		111			4			10,057
Add equity in earnings of unconsolidated entities		1,518			—		(1,883	)		—			(365	)		639			—			(1,007	)		—			(368	)
Add back equity method depreciation and amortization expense		2,806			—		(2,806	)		—			—			4,301			—			(4,301	)		—			—
Net operating income		101,299			12,952		4,509			2,283			95,139			33,723			893			7,762			2,828			43,420
Interest expense, including early extinguishment of debt		44,174			5,877		4,509			2,097			44,903			12,058			742			7,762			1,401			20,479
Income tax expense (benefit)		2,391			—		—			(752	)		1,639			(1,092	)		—			—			218			(874	)
Minority interest in earnings before depreciation and amortization		7,075			7,075		—			—			—			151			151			—			—			—
Add: EBDT from discontinued operations		938			—		—			(938	)		—			1,209			—			—			(1,209	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	48,597		$	—	$	—		$	—		$	48,597		$	23,815		$	—		$	—		$	—		$	23,815
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	48,597		$	—	$	—		$	—		$	48,597		$	23,815		$	—		$	—		$	—		$	23,815
Depreciation and amortization – Real Estate Groups		(29,508	)		—		—			(1,679	)		(31,187	)		(15,076	)		—			—			(906	)		(15,982	)
Amortization of mortgage procurement costs – Real Estate Groups		(1,966	)		—		—			(54	)		(2,020	)		(869	)		—			—			(20	)		(889	)
Deferred taxes – Real Estate Groups		(6,582	)		—		—			—			(6,582	)		(3,123	)		—			—			23			(3,100	)
Straight-line rent adjustment		1,517			—		—			(396	)		1,121			11			—			—			—			11
Gain on disposition of rental properties and other investments, net of tax		—			—		—			46,203			46,203			—			—			—			—			—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization – Real Estate Groups		(1,679	)		—		—			1,679			—			(906	)		—			—			906			—
Amortization of mortgage procurement costs – Real Estate Groups		(54	)		—		—			54			—			(20	)		—			—			20			—
Deferred taxes – Real Estate Groups		—			—		—			—			—			23			—			—			(23	)		—
Straight-line rent adjustment		(396	)		—		—			396			—			—			—			—			—			—
Gain on disposition of rental properties		46,203			—		—			(46,203	)		—			—			—			—			—			—
Net earnings	$	56,132		$	—	$	—		$	—		$	56,132		$	3,855		$	—		$	—		$	—		$	3,855

30

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended April 30, 2006(in thousands)(continued)

	Land Development Group 2006													The Nets 2006
						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	$	20,816		$	847	$	4,067		$	—	$	24,036		$	—		$	—	$	12,264	$	—	$	12,264
Exclude straight-line rent adjustment		1			—		—			—		1			—			—		—		—		—
Adjusted revenues		20,817			847		4,067			—		24,037			—			—		12,264		—		12,264
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		13,101			635		3,607			—		16,073			—			—		19,965		—		19,965
Exclude straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Adjusted operating expenses		13,101			635		3,607			—		16,073			—			—		19,965		—		19,965
Add interest income and other income		3,546			333		22			—		3,235			—			—		69		—		69
Add equity in earnings of unconsolidated entities		6,923			—		(98	)		—		6,825			(8,701	)		—		8,668		—		(33	)
Add back equity method depreciation and amortization expense		—			—		—			—		—			—			—		—		—		—
Net operating income		18,185			545		384			—		18,024			(8,701	)		—		1,036		—		(7,665	)
Interest expense, including early extinguishment of debt		1,829			129		384			—		2,084			—			—		1,036		—		1,036
Income tax expense (benefit)		9,090			—		—			—		9,090			(3,326	)		—		—		—		(3,326	)
Minority interest in earnings before depreciation and amortization		416			416		—			—		—			—			—		—		—		—
Add: EBDT from discontinued operations		—			—		—			—		—			—			—		—		—		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	6,850		$	—	$	—		$	—	$	6,850		$	(5,375	)	$	—	$	—	$	—	$	(5,375	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	6,850		$	—	$	—		$	—	$	6,850		$	(5,375	)	$	—	$	—	$	—	$	(5,375	)
Depreciation and amortization – Real Estate Groups		(31	)		—		—			—		(31	)		—			—		—		—		—
Amortization of mortgage procurement costs – Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Deferred taxes – Real Estate Groups		2,853			—		—			—		2,853			—			—		—		—		—
Straight-line rent adjustment		(1	)		—		—			—		(1	)		—			—		—		—		—
Gain on disposition of rental properties and other investments, net of tax		—			—		—			—		—			—			—		—		—		—
Discontinued operations, net of tax and minority interest:
Depreciation and amortization – Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Amortization of mortgage procurement costs – Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Deferred taxes – Real Estate Groups		—			—		—			—		—			—			—		—		—		—
Straight-line rent adjustment		—			—		—			—		—			—			—		—		—		—
Gain on disposition of rental properties		—			—		—			—		—			—			—		—		—		—
Net earnings	$	9,671		$	—	$	—		$	—	$	9,671		$	(5,375	)	$	—	$	—	$	—	$	(5,375	)

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended April 30, 2006(in thousands)(continued)

	Corporate Activities 2006												Total 2006
						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	$	—		$	—	$	—	$	—	$	—		$	272,238		$	26,251	$	69,777		$	20,575		$	336,339
Exclude straight-line rent adjustment		—			—		—		—		—			(2,694	)		—		—			(16	)		(2,710	)
Adjusted revenues		—			—		—		—		—			269,544			26,251		69,777			20,559			333,629
Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups		8,128			—		—		—		8,128			156,180			12,492		54,752			16,313			214,753
Exclude straight-line rent adjustment		—			—		—		—		—			(1,167	)		—		—			(412	)		(1,579	)
Adjusted operating expenses		8,128			—		—		—		8,128			155,013			12,492		54,752			15,901			213,174
Add interest income and other income		527			—		—		—		527			14,888			631		93			453			14,803
Add equity in earnings of unconsolidated entities		—			—		—		—		—			379			—		5,680			—			6,059
Add back equity method depreciation and amortization expense		—			—		—		—		—			7,107			—		(7,107	)		—			—
Net operating income		(7,601	)		—		—		—		(7,601	)		136,905			14,390		13,691			5,111			141,317
Interest expense, including early extinguishment of debt		10,173			—		—		—		10,173			68,234			6,748		13,691			3,498			78,675
Income tax expense (benefit)		(7,226	)		—		—		—		(7,226	)		(163	)		—		—			(534	)		(697	)
Minority interest in earnings before depreciation and amortization		—			—		—		—		—			7,642			7,642		—			—			—
Add: EBDT from discontinued operations		—			—		—		—		—			2,147			—		—			(2,147	)		—
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(10,548	)	$	—	$	—	$	—	$	(10,548	)	$	63,339		$	—	$	—		$	—		$	63,339
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(10,548	)	$	—	$	—	$	—	$	(10,548	)	$	63,339		$	—	$	—		$	—		$	63,339
Depreciation and amortization – Real Estate Groups		—			—		—		—		—			(44,615	)		—		—			(2,585	)		(47,200	)
Amortization of mortgage procurement costs – Real Estate Groups		—			—		—		—		—			(2,835	)		—		—			(74	)		(2,909	)
Deferred taxes – Real Estate Groups		(477	)		—		—		—		(477	)		(7,329	)		—		—			23			(7,306	)
Straight-line rent adjustment		—			—		—		—		—			1,527			—		—			(396	)		1,131
Gain on disposition of rental properties and other investments, net of tax		—			—		—		—		—			—			—		—			46,203			46,203
Discontinued operations, net of tax and minority interest:
Depreciation and amortization – Real Estate Groups		—			—		—		—		—			(2,585	)		—		—			2,585			—
Amortization of mortgage procurement costs – Real Estate Groups		—			—		—		—		—			(74	)		—		—			74			—
Deferred taxes – Real Estate Groups		—			—		—		—		—			23			—		—			(23	)		—
Straight-line rent adjustment		—			—		—		—		—			(396	)		—		—			396			—
Gain on disposition of rental properties		—			—		—		—		—			46,203			—		—			(46,203	)		—
Net earnings	$	(11,025	)	$	—	$	—	$	—	$	(11,025	)	$	53,258		$	—	$	—		$	—		$	53,258

32