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

Forest City Enterprises, Inc.

Supplemental Package

Three and Six Months Ended July 31, 2008 and 2007

Forest City Enterprises, Inc. and Subsidiaries
Three and Six Months Ended July 31, 2008 and 2007
Supplemental Package

NYSE: FCEA, FCEB

Index

Corporate Overview	2
Supplemental Operating Information
Occupancy Data	4
Comparable Net Operating Income (NOI)	5
Comparable NOI Detail	6-7
Reconciliation of NOI to Net Loss	8-9
Lease Expirations Schedules	10-11
Schedules of Significant Tenants	12-13
Development Pipeline	14-16
Supplemental Financial Information
Mortgage Financings	17
Scheduled Maturities Table	18-19
Consolidated Balance Sheet Information	20-21
Consolidated Earnings Information	22-25
Investments in and Advances to Affiliates	26-28
Real Estate and Related Nonrecourse Mortgage Debt	29-30
Real Estate Activity	31-35
Results of Operations Summary	36-38
Reconciliation of Net Loss to EBDT	39-40
Summary of EBDT	41-52

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 that 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, 2008 and other factors that might cause differences, some of which could be material, include, but are not limited to, general real estate development and investment risks including lack of satisfactory financing, construction and lease-up delays and cost overruns, dependence on rental income from real property, reliance on major tenants, the effect of economic and market conditions on a nationwide basis as well as in our primary markets, vacancies in our properties, downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, department store consolidations, international activities, the impact of terrorist acts, risks associated with an investment in and operation of a professional sports team, conflicts of interests, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our credit facility, the level and volatility of interest rates, the continued availability of tax-exempt government financing, effects of uninsured or underinsured losses, environmental liabilities, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, changes in market conditions, litigation risks, as well as other risks listed from time to time in our reports filed with the 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.

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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 and five reportable segments. TheCommercial 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. TheResidential Groupowns, develops, acquires and operates residential rental properties, including upscale and middle-market apartments and adaptive re-use developments. Additionally, the Residential Group develops for-sale condominium projects and also owns interests in entities that develop and manage military family housing. New York City operations are part of the Commercial Group or Residential Group depending on the nature of the operations. TheLand Development Groupacquires 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 Groupsare the combined Commercial, Residential and Land Development Groups.Corporate Activitiesand theNets, a franchise of the National Basketball Association (“NBA”) in which we account for our investment on the equity method of accounting, are reportable segments of the Company.

We have approximately $10.9 billion of assets in 27 states and the District of Columbia at July 31, 2008. Our core markets include the New York City/Philadelphia metropolitan area, Denver, Boston, the Greater Washington, D.C./Baltimore metropolitan area, Chicago and the state of California. As a result of an ongoing effort to increase property concentration in the core markets, these markets now account for approximately 77 percent of the cost of our real estate portfolio at July 31, 2008. We have offices in Albuquerque, Boston, Chicago, Denver, London (England), Los Angeles, New York City, San Francisco, Washington, D.C. and our corporate headquarters in Cleveland, Ohio.

SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION

We recommend that this supplemental package be read in conjunction with our Form 10-Q for the three and six months ended July 31, 2008. This supplemental package contains certain measures prepared in accordance with 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, 2008 on pages 55-67.

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 38-52 for additional discussion of EBDT as well as a reconciliation of EBDT to net earnings (loss).)

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 (loss), 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 our operating performance. The term “comparable,” which is used throughout this document, is generally defined as including properties that were open and operated in both the three and six months ended July 31, 2008 and 2007.

We believe occupancy rates, retail and office lease expirations, base rent, and significant retail and office tenant listings represent meaningful operating statistics about us.

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 38), 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 (loss), the most comparable financial measure calculated in accordance with GAAP, to NOI and reconciliation from NOI to comparable NOI are provided on pages 5-9 of this document. A reconciliation of NOI to net earnings (loss) for each strategic business unit can be found on pages 41-52.

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, 2008 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
Robert G. O’Brien
Executive Vice President and Chief Financial Officer

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

We offer our shareholders 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. You may obtain a copy of the Plan prospectus and an enrollment card by contacting National City Bank at (800) 622-6757.

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Occupancy Data — July 31, 2008 and 2007

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

				Average						Average
	Occupancy			Occupancy			Occupancy			Occupancy
	As of			Year-to-Date			As of			Year-to-Date
	July 31, 2008			July 31, 2008			July 31, 2007			July 31, 2007
Retail
Comparable		92.5	%		92.8	%		92.9	%		93.6	%
Total		90.7	%		91.4	%		92.1	%		92.9	%
Office
Comparable		92.7	%		91.8	%		89.9	%		90.0	%
Total		90.4	%		90.1	%		88.5	%		89.3	%
Residential
Comparable		92.9	%		92.5	%		94.4	%		93.9	%
Total		90.8	%		90.0	%		92.8	%		91.7	%
Hotels
Comparable and Total(1)					76.8	%					75.6	%
Comparable ADR and Total ADR(1)				$	150.07					$	148.32

Retail and office occupancy as of July 31, 2008 and 2007 is based on square feet leased at the end of the fiscal quarter. Average Occupancy Year-to-Date as of July 31, 2008 and 2007 for retail and office is calculated by dividing the sum of leased square feet at the beginning and end of the period by two. Residential occupancy as of July 31, 2008 and 2007 represents total units occupied divided by total units available. Average residential occupancy year-to-date for 2008 and 2007 is calculated by dividing gross potential rent less vacancy by gross potential rent. Average Daily Rate (“ADR”) is calculated by dividing revenue by the number of rooms sold for the six months ended July 31, 2008 and 2007.

(1) Total Hotel Average Occupancy Year-to-Date and Total ADR for July 31, 2007 have been restated to excludeUniversity Park at MIT Hotel, which was sold during the year ended January 31, 2008.

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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 and six months ended July 31, 2008 and 2007. The following schedules on pages 6-7 present 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 (loss), is presented on pages 8-9. A reconciliation of NOI to net earnings (loss) for each strategic business unit can be found on pages 41-52.

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

	Three Months Ended July 31, 2008						Six Months Ended July 31, 2008
	Full			Pro-Rata			Full			Pro-Rata
	Consolidation			Consolidation			Consolidation			Consolidation
Retail		3.2	%		4.5	%		3.2	%		3.2	%
Office		(4.8	%)		(1.5	%)		(1.7	%)		1.3	%
Hotel		(0.3	%)		(4.9	%)		(8.9	%)		(12.5	%)
Residential		4.5	%		0.6	%		6.1	%		2.2	%
Total		0.6	%		1.3	%		1.7	%		1.9	%

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Net Operating Income (dollars in thousands)
	Three Months Ended July 31, 2008													Three Months Ended July 31, 2007														% Change
						Plus														Plus
	Full			Less		Unconsolidated			Plus		Pro-Rata			Full			Less			Unconsolidated			Plus		Pro-Rata			Full			Pro-Rata
	Consolidation			Minority		Investments at			Discontinued		Consolidation			Consolidation			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	$	59,276		$	2,652	$	5,470		$	-	$	62,094		$	57,431		$	2,674		$	4,640		$	-	$	59,397			3.2	%		4.5	%
Total		61,535			3,342		5,515			-		63,708			62,586			4,588			4,955			-		62,953
Office Buildings
Comparable		44,489			1,670		2,326			-		45,145			46,734			2,613			1,707			-		45,828			(4.8	%)		(1.5	%)
Total		70,339			2,589		2,445			-		70,195			48,298			4,266			1,847			-		45,879
Hotels
Comparable		5,511			-		6			-		5,517			5,525			-			278			-		5,803			(0.3	%)		(4.9	%)
Total		5,996			143		6			-		5,859			5,993			(51	)		486			-		6,530
Earnings from Commercial
Land Sales		4,855			2,005		-			-		2,850			(316	)		-			-			-		(316	)
Other(1)		(3,374	)		598		(555	)		-		(4,527	)		(2,890	)		944			(32	)		-		(3,866	)
Total Commercial Group
Comparable		109,276			4,322		7,802			-		112,756			109,690			5,287			6,625			-		111,028			(0.4	%)		1.6	%
Total		139,351			8,677		7,411			-		138,085			113,671			9,747			7,256			-		111,180
Residential Group
Apartments
Comparable		28,641			1,047		6,498			-		34,092			27,398			752			7,240			-		33,886			4.5	%		0.6	%
Total		31,324			711		7,611			117		38,341			31,671			1,344			13,034			626		43,987
Military Housing
Comparable(2)		-			-		-			-		-			-			-			-			-		-
Total		15,661			396		936			-		16,201			1,493			(89	)		375			-		1,957
Other(1)		(6,716	)		50		179			-		(6,587	)		(5,103	)		4			339			-		(4,768	)
Sale of Residential
Development Project		-			-		-			-		-			10,090			-			-			-		10,090
Total Residential Group
Comparable		28,641			1,047		6,498			-		34,092			27,398			752			7,240			-		33,886			4.5	%		0.6	%
Total		40,269			1,157		8,726			117		47,955			38,151			1,259			13,748			626		51,266
Total Rental Properties
Comparable		137,917			5,369		14,300			-		146,848			137,088			6,039			13,865			-		144,914			0.6	%		1.3	%
Total		179,620			9,834		16,137			117		186,040			151,822			11,006			21,004			626		162,446
Land Development Group		6,717			401		148			-		6,464			6,873			303			83			-		6,653
The Nets		(8,548	)		-		1,690			-		(6,858	)		(2,226	)		-			429			-		(1,797	)
Corporate Activities		(10,271	)		-		-			-		(10,271	)		(9,515	)		-			-			-		(9,515	)
Grand Total	$	167,518		$	10,235	$	17,975		$	117	$	175,375		$	146,954		$	11,309		$	21,516		$	626	$	157,787

(1)	Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of historic and new market tax credit income.
(2)	Comparable NOI for Military Housing commences once the operating projects complete initial development phase.

6

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Net Operating Income (dollars in thousands)
	Six Months Ended July 31, 2008														Six Months Ended July 31, 2007														% Change
							Plus														Plus
	Full			Less			Unconsolidated			Plus		Pro-Rata			Full			Less			Unconsolidated		Plus			Pro-Rata			Full			Pro-Rata
	Consolidation			Minority			Investments at			Discontinued		Consolidation			Consolidation			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	$	116,143		$	5,327		$	10,924		$	-	$	121,740		$	112,509		$	5,389		$	10,877	$	-		$	117,997			3.2	%		3.2	%
Total		122,733			6,315			11,044			-		127,462			118,308			7,315			11,220		-			122,213
Office Buildings
Comparable		89,575			4,190			4,689			-		90,074			91,170			5,157			2,890		-			88,903			(1.7	%)		1.3	%
Total		125,267			4,993			5,023			-		125,297			94,532			7,807			3,089		-			89,814
Hotels
Comparable		6,766			-			216			-		6,982			7,426			-			552		-			7,978			(8.9	%)		(12.5	%)
Total		9,079			676			216			-		8,619			8,286			101			969		-			9,154
Earnings from Commercial
Land Sales		5,879			2,242			-			-		3,637			2,064			434			-		-			1,630
Other(1)		(29,458	)		(1,018	)		(1,081	)		-		(29,521	)		(9,192	)		3,043			99		-			(12,136	)
Total Commercial Group
Comparable		212,484			9,517			15,829			-		218,796			211,105			10,546			14,319		-			214,878			0.7	%		1.8	%
Total		233,500			13,208			15,202			-		235,494			213,998			18,700			15,377		-			210,675
Residential Group
Apartments
Comparable		55,371			1,431			13,250			-		67,190			52,202			1,398			14,917		-			65,721			6.1	%		2.2	%
Total		64,464			1,405			15,598			454		79,111			60,120			2,656			21,793		4,079			83,336
Military Housing
Comparable(2)		-			-			-			-		-			-			-			-		-			-
Total		25,619			396			2,060			-		27,283			4,859			(89	)		560		-			5,508
Other(1)		(15,317	)		95			(31	)		-		(15,443	)		(9,339	)		4			99		(1	)		(9,245	)
Sale of Residential
Development Project		-			-			-			-		-			10,090			-			-		-			10,090
Total Residential Group
Comparable		55,371			1,431			13,250			-		67,190			52,202			1,398			14,917		-			65,721			6.1	%		2.2	%
Total		74,766			1,896			17,627			454		90,951			65,730			2,571			22,452		4,078			89,689
Total Rental Properties
Comparable		267,855			10,948			29,079			-		285,986			263,307			11,944			29,236		-			280,599			1.7	%		1.9	%
Total		308,266			15,104			32,829			454		326,445			279,728			21,271			37,829		4,078			300,364
Land Development Group		6,158			419			278			-		6,017			10,096			734			199		-			9,561
The Nets		(22,021	)		-			3,303			-		(18,718	)		(5,477	)		-			762		-			(4,715	)
Corporate Activities		(23,583	)		-			-			-		(23,583	)		(23,342	)		-			-		-			(23,342	)
Grand Total	$	268,820		$	15,523		$	36,410		$	454	$	290,161		$	261,005		$	22,005		$	38,790	$	4,078		$	281,868

(1)	Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of historic and new market tax credit income.
(2)	Comparable NOI for Military Housing commences once the operating projects complete initial development phase.

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Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

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

	Three Months Ended July 31, 2008															Three Months Ended July 31, 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	$	330,239		$	15,053		$	108,196		$	162		$	423,544		$	287,586		$	15,329		$	96,040		$	12,397		$	380,694
Exclude straight-line rent adjustment (1)		2,638			-			-			-			2,638			(7,158	)		-			-			-			(7,158	)
Adjusted revenues		332,877			15,053			108,196			162			426,182			280,428			15,329			96,040			12,397			373,536
Operating expenses		186,090			5,324			80,936			76			261,778			177,186			4,853			62,399			11,883			246,615
Add back non-Real Estate depreciation and amortization (b)		3,502			-			2,828			-			6,330			2,022			-			638			-			2,660
Add back amortization of mtg. procurement costs for non-Real Estate Groups (d)		-			-			60			-			60			-			-			10			-			10
Exclude straight-line rent adjustment (2)		(1,610	)		-			-			-			(1,610	)		(3,688	)		-			-			-			(3,688	)
Exclude preference payment		(931	)		-			-			-			(931	)		(936	)		-			-			-			(936	)
Adjusted operating expenses		187,051			5,324			83,824			76			265,627			174,584			4,853			63,047			11,883			244,661
Add interest and other income		12,887			652			1,482			31			13,748			23,423			601			6,228			112			29,162
Add equity in earnings (loss) of unconsolidated entities		(5,577	)		(146	)		6,503			-			1,072			7,773			232			(7,791	)		-			(250	)
Add back provision for decline in real estate of equity method rental properties		5,661			-			(5,661	)		-			-			-			-			-			-			-
Add back equity method depreciation and amortization expense (see below)		8,721			-			(8,721	)		-			-			9,914			-			(9,914	)		-			-
Net Operating Income		167,518			10,235			17,975			117			175,375			146,954			11,309			21,516			626			157,787
Interest expense		(82,350	)		(3,402	)		(17,767	)		(43	)		(96,758	)		(72,708	)		(4,391	)		(16,443	)		(2,000	)		(86,760	)
Loss on early extinguishment of debt		(52	)		-			-			-			(52	)		(1,640	)		-			(39	)		(363	)		(2,042	)
Equity in earnings (loss) of unconsolidated entities		5,577			146			(6,503	)		-			(1,072	)		(7,773	)		(232	)		7,791			-			250
Provision for decline in real estate of equity method properties		(5,661	)		-			-			-			(5,661	)		-			-			-			-			-
Equity method depreciation and amortization expense (see above)		(8,721	)		-			8,721			-			-			(9,914	)		-			9,914			-			-
Gain on disposition of rental properties and other investments		-			-			-			8,627			8,627			431			-			-			106,318			106,749
Preferred return on disposition		-			-			(208	)		-			(208	)		-			-			(5,034	)		-			(5,034	)
Provision for decline in real estate		(365	)		-			-			-			(365	)		-			-			-			-			-
Depreciation and amortization - Real Estate Groups (a)		(66,726	)		(1,548	)		(8,325	)		(90	)		(73,593	)		(53,719	)		(1,138	)		(8,988	)		(921	)		(62,490	)
Amortization of mortgage procurement costs - Real Estate Groups (c)		(3,169	)		(117	)		(396	)		-			(3,448	)		(2,839	)		(261	)		(926	)		(34	)		(3,538	)
Straight-line rent adjustment (1) + (2)		(4,248	)		-			-			-			(4,248	)		3,470			-			-			-			3,470
Preference payment		(931	)		-			-			-			(931	)		(936	)		-			-			-			(936	)
Earnings (loss) before income taxes		872			5,314			(6,503	)		8,611			(2,334	)		1,326			5,287			7,791			103,626			107,456
Income tax provision		(3,723	)		-			-			(3,327	)		(7,050	)		609			-			-			(40,040	)		(39,431	)
Minority interest		(5,168	)		(5,168	)		-			-			-			(5,519	)		(5,519	)		-			-			-
Equity in earnings (loss) of unconsolidated entities		(5,577	)		(146	)		6,503			-			1,072			7,773			232			(7,791	)		-			(250	)
Earnings (loss) from continuing operations		(13,596	)		-			-			5,284			(8,312	)		4,189			-			-			63,586			67,775
Discontinued operations, net of tax		5,284			-			-			(5,284	)		-			63,586			-			-			(63,586	)		-
Net earnings (loss)	$	(8,312	)	$	-		$	-		$	-		$	(8,312	)	$	67,775		$	-		$	-		$	-		$	67,775
(a) Depreciation and amortization - Real Estate Groups	$	66,726		$	1,548		$	8,325		$	90		$	73,593		$	53,719		$	1,138		$	8,988		$	921		$	62,490
(b) Depreciation and amortization - Non-Real Estate		3,502			-			2,828			-			6,330			2,022			-			638			-			2,660
Total depreciation and amortization	$	70,228		$	1,548		$	11,153		$	90		$	79,923		$	55,741		$	1,138		$	9,626		$	921		$	65,150
(c) Amortization of mortgage procurement costs - Real Estate Groups	$	3,169		$	117		$	396		$	-		$	3,448		$	2,839		$	261		$	926		$	34		$	3,538
(d) Amortization of mortgage procurement costs - Non-Real Estate		-			-			60			-			60			-			-			10			-			10
Total amortization of mortgage procurement costs	$	3,169		$	117		$	456		$	-		$	3,508		$	2,839		$	261		$	936		$	34		$	3,548

8

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

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

	Six Months Ended July 31, 2008															Six Months Ended July 31, 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	$	637,885		$	31,566		$	199,342		$	706		$	806,367		$	555,951		$	30,645		$	173,222		$	24,599		$	723,127
Exclude straight-line rent adjustment (1)		(2,092	)		-			-			-			(2,092	)		(13,000	)		-			-			-			(13,000	)
Adjusted revenues		635,793			31,566			199,342			706			804,275			542,951			30,645			173,222			24,599			710,127
Operating expenses		393,766			17,043			145,511			287			522,521			345,778			10,648			112,953			20,730			468,813
Add back non-Real Estate depreciation and amortization (b)		6,821			-			13,439			-			20,260			4,019			-			2,517			-			6,536
Add back amortization of mtg. procurement costs for non-Real Estate Groups (d)		-			-			105			-			105			-			-			33			-			33
Exclude straight-line rent adjustment (2)		(3,193	)		-			-			-			(3,193	)		(5,380	)		-			-			-			(5,380	)
Exclude preference payment		(1,867	)		-			-			-			(1,867	)		(1,834	)		-			-			-			(1,834	)
Adjusted operating expenses		395,527			17,043			159,055			287			537,826			342,583			10,648			115,503			20,730			468,168
Add interest and other income		21,288			1,127			3,083			35			23,279			34,822			1,424			6,851			209			40,458
Add equity in earnings (loss) of unconsolidated entities		(15,224	)		(127	)		15,530			-			433			9,134			584			(9,099	)		-			(549	)
Remove gain on disposition recorded on equity method		(881	)		-			881			-			-			(2,106	)		-			2,106			-			-
Add back provision for decline in real estate of equity method rental properties		5,661			-			(5,661	)		-			-			-			-			-			-			-
Add back equity method depreciation and amortization expense (see below)		17,710			-			(17,710	)		-			-			18,787			-			(18,787	)		-			-
Net Operating Income		268,820			15,523			36,410			454			290,161			261,005			22,005			38,790			4,078			281,868
Interest expense		(165,721	)		(6,742	)		(36,180	)		(235	)		(195,394	)		(149,507	)		(8,871	)		(33,297	)		(3,608	)		(177,541	)
Loss on early extinguishment of debt		(5,231	)		(119	)		(22	)		-			(5,134	)		(4,184	)		(821	)		(459	)		(363	)		(4,185	)
Equity in earnings (loss) of unconsolidated entities		15,224			127			(15,530	)		-			(433	)		(9,134	)		(584	)		9,099			-			549
Gain on disposition of equity method rental properties		881			-			-			-			881			2,106			-			-			-			2,106
Provision for decline in real estate of equity method properties		(5,661	)		-			-			-			(5,661	)		-			-			-			-			-
Equity method depreciation and amortization expense (see above)		(17,710	)		-			17,710			-			-			(18,787	)		-			18,787			-			-
Gain on disposition of rental properties and other investments		150			-			-			8,627			8,777			431			-			-			106,318			106,749
Preferred return on disposition		-			-			(208	)		-			(208	)		-			-			(5,034	)		-			(5,034	)
Provision for decline in real estate		(365	)		-			-			-			(365	)		-			-			-			-			-
Depreciation and amortization - Real Estate Groups (a)		(130,026	)		(2,531	)		(16,768	)		(95	)		(144,358	)		(111,509	)		(3,825	)		(17,381	)		(1,934	)		(126,999	)
Amortization of mortgage procurement costs - Real Estate Groups (c)		(6,107	)		(269	)		(942	)		(11	)		(6,791	)		(5,403	)		(421	)		(1,406	)		(69	)		(6,457	)
Straight-line rent adjustment (1) + (2)		(1,101	)		-			-			-			(1,101	)		7,620			-			-			-			7,620
Preference payment		(1,867	)		-			-			-			(1,867	)		(1,834	)		-			-			-			(1,834	)
Earnings (loss) before income taxes		(48,714	)		5,989			(15,530	)		8,740			(61,493	)		(29,196	)		7,483			9,099			104,422			76,842
Income tax provision		15,856			-			-			(3,377	)		12,479			14,649			-			-			(40,348	)		(25,699	)
Minority interest		(5,862	)		(5,862	)		-			-			-			(8,067	)		(8,067	)		-			-			-
Equity in earnings (loss) of unconsolidated entities		(15,224	)		(127	)		15,530			-			433			9,134			584			(9,099	)		-			(549	)
Earnings (loss) from continuing operations		(53,944	)		-			-			5,363			(48,581	)		(13,480	)		-			-			64,074			50,594
Discontinued operations, net of tax		5,363			-			-			(5,363	)		-			64,074			-			-			(64,074	)		-
Net earnings (loss)	$	(48,581	)	$	-		$	-		$	-		$	(48,581	)	$	50,594		$	-		$	-		$	-		$	50,594
(a) Depreciation and amortization - Real Estate Groups	$	130,026		$	2,531		$	16,768		$	95		$	144,358		$	111,509		$	3,825		$	17,381		$	1,934		$	126,999
(b) Depreciation and amortization - Non-Real Estate		6,821			-			13,439			-			20,260			4,019			-			2,517			-			6,536
Total depreciation and amortization	$	136,847		$	2,531		$	30,207		$	95		$	164,618		$	115,528		$	3,825		$	19,898		$	1,934		$	133,535
(c) Amortization of mortgage procurement costs - Real Estate Groups	$	6,107		$	269		$	942		$	11		$	6,791		$	5,403		$	421		$	1,406		$	69		$	6,457
(d) Amortization of mortgage procurement costs - Non-Real Estate		-			-			105			-			105			-			-			33			-			33
Total amortization of mortgage procurement costs	$	6,107		$	269		$	1,047		$	11		$	6,896		$	5,403		$	421		$	1,439		$	69		$	6,490

9

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Retail Lease Expirations as of July 31, 2008

													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)
2008		112		386,154		3.14	%	$	7,279,778		2.63	%	$	24.90
2009		268		906,026		7.36			17,217,341		6.21			24.22
2010		240		630,820		5.13			15,636,949		5.65			30.45
2011		324		1,215,348		9.87			30,810,120		11.13			29.01
2012		219		902,256		7.33			22,866,695		8.26			28.86
2013		181		850,896		6.91			22,311,665		8.06			28.74
2014		161		701,748		5.70			16,224,382		5.86			28.85
2015		168		701,668		5.70			18,498,884		6.68			30.07
2016		243		1,196,677		9.72			34,370,864		12.41			39.64
2017		161		1,115,427		9.06			25,484,509		9.20			26.23
2018		84		465,827		3.78			10,601,278		3.83			24.51
Thereafter		90		3,237,262		26.30			55,592,779		20.08			19.31
Total		2,251		12,310,109		100.00	%	$	276,895,244		100.00	%	$	26.68

(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 our ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of straight-line rent and contingent rental payments, which are not reasonably estimatable.
(3)	Square feet of expiring leases and average base rent per square feet are operating statistics that represent 100% of the square footage and base rental income per square foot from expiring leases.

10

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Office Lease Expirations as of July 31, 2008

													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)
2008		47		290,740		2.72	%	$	5,636,581		1.88	%	$	23.31
2009		82		584,261		5.46			12,180,086		4.07			23.64
2010		76		1,167,100		10.91			24,250,783		8.10			24.45
2011		57		678,862		6.34			16,447,424		5.49			27.17
2012		52		1,013,499		9.47			29,321,272		9.79			30.52
2013		59		1,094,054		10.23			24,940,715		8.33			23.68
2014		22		618,171		5.78			14,121,199		4.71			28.17
2015		6		196,975		1.84			3,644,683		1.22			19.13
2016		16		421,242		3.94			7,989,382		2.67			21.35
2017		18		267,072		2.50			8,247,776		2.75			33.73
2018		9		672,140		6.28			17,629,253		5.88			30.01
Thereafter		38		3,694,178		34.53			135,118,858		45.11			38.31
Total		482		10,698,294		100.00	%	$	299,528,012		100.00	%	$	30.41

(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 our ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of straight-line rent and contingent rental payments, which are not reasonably estimatable.
(3)	Square feet of expiring leases and average base rent per square feet are operating statistics that represent 100% of the square footage and base rental income per square foot from expiring leases.

11

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Schedule of Significant Retail Tenants as of July 31, 2008

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

	NUMBER		LEASED		PERCENTAGE OF
	OF		SQUARE		TOTAL RETAIL
TENANT	LEASES		FEET		SQUARE FEET
AMC Entertainment, Inc.		6		514,063		4.18	%
Bass Pro Shops, Inc.		3		510,855		4.15
Regal Entertainment Group		5		379,072		3.08
The Gap		25		315,281		2.56
TJX Companies		9		291,131		2.37
The Home Depot		2		282,000		2.29
Dick’s Sporting Goods		5		257,486		2.09
Circuit City Stores, Inc.		7		220,616		1.79
Abercrombie & Fitch Stores, Inc.		28		210,663		1.71
The Limited		35		200,673		1.63
Footlocker, Inc.		36		138,005		1.12
Pathmark Stores, Inc.		2		123,500		1.00
Ahold USA (Stop & Shop)		2		115,861		0.94
Subtotal		165		3,559,206		28.91
All Others		2,086		8,750,903		71.09
Total		2,251		12,310,109		100.00	%

12

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Schedule of Significant Office Tenants as of July 31, 2008

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

	LEASED		PERCENTAGE OF
	SQUARE		TOTAL OFFICE
TENANT	FEET		SQUARE FEET
City of New York		890,185		8.32	%
Millennium Pharmaceuticals, Inc.		693,743		6.48
U.S. Government		577,730		5.40
Wellchoice, Inc.		458,209		4.28
Morgan Stanley & Co.		444,685		4.16
Securities Industry Automation Corp.		433,971		4.06
Forest City Enterprises, Inc.(1)		405,308		3.79
JP Morgan Chase & Co.(2)		385,254		3.60
Bank of New York		323,043		3.02
National Grid (formerly Keyspan Energy)		322,843		3.02
Alkermes, Inc.		210,248		1.97
Clearbridge Advisors, LLC, a Legg Mason Company		193,249		1.81
Covington & Burling, LLP		160,565		1.50
Seyfarth Shaw, LLP		96,909		0.90
Subtotal		5,595,942		52.31
All Others		5,102,352		47.69
Total		10,698,294		100.00	%

(1)	All intercompany rental income is eliminated in consolidation.
(2)	Includes leased square feet formerly held by Bear Stearns.

13

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
July 31, 2008
2008 Openings and Acquisitions (6)

										Cost at FCE
			Date		Pro-Rata	Cost at Full		Total Cost		Pro-Rata Share		Sq. ft./				Gross
		Dev (D)	Opened /	FCE Legal	FCE % (h)	Consolidation		at 100%		(Non-GAAP) (b)		No. of				Leasable
Property	Location	Acq (A)	Acquired	Ownership % (h)	(1)	(GAAP) (a)		(2)		(1) X (2)		Units				Area
						(in millions)
Retail Centers:
Orchard Town Center	Westminster, CO	D	Q1-08	100.0%	100.0%	$	170.5	$	170.5	$	170.5		980,000				565,000	(f)
Office:
818 Mission Street (c)	San Francisco, CA	A	Q1-08	50.0%	50.0%	$	0.0	$	20.6	$	10.3		34,000
Johns Hopkins - 855 North Wolfe Street	East Baltimore, MD	D	Q1-08	76.6%	76.6%		111.5		111.5		85.4		278,000	(i)
						$	111.5	$	132.1	$	95.7		312,000
Residential:
Lucky Strike	Richmond, VA	D	Q1-08	100.0%	100.0%	$	38.5	$	38.5	$	38.5		131
Uptown Apartments (c) (e)	Oakland, CA	D	Q1-08/Q3-08	50.0%	50.0%		0.0		205.4		102.7		665
Mercantile Place on Main (e)	Dallas, TX	D	Q1-08/Q4-08	100.0%	100.0%		146.1		146.1		146.1		366	(j)
						$	184.6	$	390.0	$	287.3		1,162
Total Openings and Acquisitions (d)						$	466.6	$	692.6	$	553.5
Residential Phased-In Units (c) (e):												Opened in ’08 / Total
Cobblestone Court	Painesville, OH	D	2006-08	50.0%	50.0%	$	0.0	$	24.6	$	12.3				96/304
Stratford Crossing	Wadsworth, OH	D	2007-09	50.0%	50.0%		0.0		25.3		12.7				72/348
Sutton Landing	Brimfield, OH	D	2007-09	50.0%	50.0%		0.0		15.9		8.0				84/216
Total(g)						$	0.0	$	65.8	$	33.0				252/868

See attached footnotes.

14

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline
July 31, 2008
Under Construction (13)

										Cost at FCE
					Pro-Rata	Cost at Full		Total Cost		Pro-Rata Share		Sq. ft./				Gross
		Dev (D)	Anticipated	FCE Legal	FCE % (h)	Consolidation		at 100%		(Non-GAAP) (b)		No. of				Leasable			Lease
Property	Location	Acq (A)	Opening	Ownership % (h)	(1)	(GAAP) (a)		(2)		(1) X (2)		Units				Area			Commitment %
						(in millions)
Retail Centers:
Shops at Wiregrass	Tampa, FL	D	Q3-08	50.0%	100.0%	$	149.1	$	149.1	$	149.1		646,000				356,000			78	%
White Oak Village	Richmond, VA	D	Q3-08	50.0%	100.0%		70.6		70.6		70.6		800,000				294,000			89	%
Promenade at Temecula Expansion	Temecula, CA	D	Q1-09	75.0%	75.0%		102.9		102.9		77.2		126,000				126,000			57	%
Village at Gulfstream (c)	Hallandale, FL	D	Q3-09	50.0%	50.0%		0.0		182.2		91.1		466,000				466,000	(l)		40	%
East River Plaza (c)	Manhattan, NY	D	Q3-09	35.0%	50.0%		0.0		407.4		203.7		517,000				517,000			70	%
Ridge Hill (e)	Yonkers, NY	D	Q4-09/Q2-10	70.0%	100.0%		670.7		670.7		670.7		1,200,000				1,200,000	(m)		14	%
						$	993.3	$	1,582.9	$	1,262.4		3,755,000				2,959,000
Office:
Mesa Del Sol Town Center (c)	Albuquerque, NM	D	Q4-08	47.5%	47.5%	$	0.0	$	18.7	$	8.9		74,000	(n)						31	%
Mesa Del Sol - Fidelity (c)	Albuquerque, NM	D	Q4-08	47.5%	47.5%		0.0		30.9		14.7		210,000							100	%
Waterfront Station - East 4th & West 4th Buildings (c)	Washington, DC	D	Q1-10	45.0%	45.0%		0.0		330.2		148.6		628,000	(o)						98	%
						$	0.0	$	379.8	$	172.2		912,000
Residential:
Haverhill	Haverhill, MA	D	Q1-09	100.0%	100.0%	$	75.3	$	75.3	$	75.3		305
80 Dekalb Avenue (e)	Brooklyn, NY	D	Q3-09/Q1-10	70.0%	100.0%		152.0		152.0		152.0		365
The Yards-Pattern Shop Lofts	Washington, DC	D	Q4-09	90.0%	90.0%		55.0		55.0		49.5		170
Beekman (e)	Manhattan, NY	D	Q2-10/11	49.0%	70.0%		875.7		875.7		613.0		904
						$	1,158.0	$	1,158.0	$	889.8		1,744
Total Under Construction (k)						$	2,151.3	$	3,120.7	$	2,324.4
Residential Phased-In Units (c) (e):												Under Const./ Total
Stratford Crossing	Wadsworth, OH	D	2007-09	50.0%	50.0%	$	0.0	$	25.3	$	12.7				168/348
Sutton Landing	Brimfield, OH	D	2007-09	50.0%	50.0%		0.0		15.9		8.0				108/216
Total (p)						$	0.0	$	41.2	$	20.7				276/564

See attached footnotes.

Military Housing - see Footnote q

15

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information

Development Pipeline

     July 31, 2008 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 $466.6 million to the Company’s pro-rata share (a non-GAAP measure) of $553.5 million consists of a reduction to full consolidation for minority interest of $26.1 million of cost and the addition of its share of cost for unconsolidated investments of $113.0 million.
(e)	Phased-in openings. Costs are representative of the total project.
(f)	Includes 177,000 square feet for Target and 97,000 square feet for JC Penney that opened in Q3-06, as well as 16,000 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 $33.0 million consists of the Company’s share of cost for unconsolidated investments of $33.0 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)	Includes 22,000 square feet of retail space.
(j)	Includes 18,000 square feet of retail space.
(k)	The difference between the full consolidation cost amount (GAAP) of $2,151.3 million to the Company’s pro-rata share (a non-GAAP measure) of $2,324.4 million consists of a reduction to full consolidation for minority interest of $293.9 million of cost and the addition of its share of cost for unconsolidated investments of $467.0 million.
(l)	Includes 86,000 square feet of office space.
(m)	Includes 156,000 square feet of office space.
(n)	Includes 22,000 square feet of retail space.
(o)	Includes 85,000 square feet of retail space.
(p)	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 $20.7 million consists of the Company’s share of cost for unconsolidated investments of $20.7 million.
(q)	Below is a summary of our equity method investments for Military Housing Development projects. The Company provides services for these projects including development, construction, and management and receives agreed upon fees for these services. (See pages 6-7 for net fee revenue included in NOI.)

		Anticipated	FCE	Cost at Full		Total Cost		Sq. ft./
Property	Location	Opening	Pro-Rata % (h)	Consolidation (a)		at 100%		No. of Units
				(in millions)
Military Housing -Openings (1)
Ohana Military Communities, Hawaii Increment I	Honolulu, HI	2005-Q2-08	*	$	0.0	$	316.5		1,952
Military Housing -Under Construction (7)
Midwest Millington	Memphis, TN	2008-2009	*		0.0		38.1		318
Navy Midwest	Chicago, IL	2006-2009	*		0.0		264.7		1,658
Air Force Academy	Colorado Springs, CO	2007-2009	50.0%		0.0		82.5		427
Marines, Hawaii Increment II	Honolulu, HI	2007-2010	*		0.0		338.8		1,175
Navy, Hawaii Increment III	Honolulu, HI	2007-2010	*		0.0		614.6		2,519
Pacific Northwest Communities	Seattle, WA	2007-2010	*		0.0		264.5		2,986
Hawaii Phase IV	Kaneohe, HI	2007-2014	*		0.0		257.9		917
Total Under Construction					0.0		1,861.1		10,000
Total Military Housing (8)				$	0.0	$	2,177.6		11,952

* The Company’ share of residual cash flow ranges from 0-20% during the life cycle of the project.

16

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Mortgage Financings

We use taxable and tax-exempt nonrecourse debt for our real estate projects. For those operating projects financed with taxable debt, we generally seek long-term, fixed-rate financing for those real estate project loans that mature within the next 12 months, as well as those real estate projects that 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 refinance and/or extend the maturities of the nonrecourse debt that is coming due in 2008 and 2009. During the six months ended July 31, 2008, we completed the following financings:

						Plus
				Less		Unconsolidated
	Full			Minority		Investments at		Pro-Rata
Purpose of Financing	Consolidation			Interest		Pro-Rata		Consolidation
	(in thousands)
Refinancings	$	561,960		$	11,850	$	81,844	$	631,954
Development projects(1)		949,125			206,720		59,692		802,097
Loan extensions/additional fundings		254,568			49,374		15,112		220,306
	$	1,765,653	(2)	$	267,944	$	156,648	$	1,654,357	(2)

(1)	Represents the full amount available to be drawn on the loans.
(2)	Of the total financings shown above of $1,765,653 at full consolidation and $1,654,357 at pro-rata, $711,774 and $692,485 at full consolidation and pro-rata, respectively, were reflected as maturing loans in either 2008 or 2009 in the listing of scheduled maturities as of January 31, 2008.

The table listed above is the result of our success in not only refinancing scheduled maturities, but also includes early financings of future loan maturities on existing properties and additional proceeds related to our development and acquisition pipeline. Of the total 2008 and 2009 maturities reported as of July 31, 2008, over 85% of the $179,492,000 of our loans that mature in 2008 at full consolidation (over 70% of the $253,212,000 of loans that mature in 2008 at our pro-rata share) and 50% of the $734,169,000 of our loans that mature in 2009 at full consolidation (over 55% of the $900,587,000 of loans that mature in 2009 at our pro-rata share) has been addressed to date through closed loans, scheduled amortization, committed refinancings and available extensions (some of which are based upon project specific performance and have been extended beyond the current fiscal year).

Projects under Development Debt

We use nonrecourse mortgage debt for the financing of our development pipeline. We draw on these financings to partially fund the cost incurred with the development of our real estate. As of July 31, 2008, the detail of how much is outstanding compared to the total commitment under the financing is as follows:

					Plus
			Less		Unconsolidated
	Full		Minority		Investments at		Pro-Rata
	Consolidation		Interest		Pro-Rata		Consolidation
	(in thousands)
Total outstanding on projects under development(1)	$	739,806	$	127,361	$	298,958	$	911,403
Total available commitment	$	1,865,065	$	277,007	$	433,635	$	2,021,693

(1) Outstanding debt of $178,579 and $227,759, at full and pro-rata consolidation, respectively, described above is listed as Restricted Cash in our Consolidated Balance Sheet. For bonds issued in conjunction with development, the local housing authority issued the full amount of the bonds at the beginning of construction and, until costs are incurred, bond funds must remain in escrow held by a financial institution affiliated with the bond issuance.

17

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt(dollars in thousands)
As of July 31, 2008

	Period Ending January 31, 2009												Fiscal Year Ending January 31, 2010
							Plus												Plus
				Less			Unconsolidated									Less			Unconsolidated
	Full			Minority			Investments at			Pro-Rata			Full			Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	34,050		$	1,342		$	38,102		$	70,810		$	243,061		$	13,288		$	36,112		$	265,885
Weighted average rate		6.45	%		6.42	%		6.32	%		6.38	%		6.80	%		6.99	%		6.72	%		6.78	%
Variable:
Variable-rate debt		143,672			12,051			44,982			176,603			489,948			67,006			170,600			593,542
Weighted average rate		4.50	%		4.09	%		4.79	%		4.60	%		4.69	%		5.27	%		4.75	%		4.65	%
Tax-Exempt		1,770			21			4,050			5,799			1,160			-			40,000			41,160
Weighted average rate		2.73	%		2.91	%		3.61	%		3.34	%		2.85	%		-	%		2.54	%		2.55	%
Total variable-rate debt		145,442			12,072			49,032			182,402			491,108			67,006			210,600			634,702
Total Nonrecourse Mortgage Debt	$	179,492		$	13,414		$	87,134		$	253,212		$	734,169		$	80,294		$	246,712		$	900,587
Weighted Average Rate		4.85	%		4.32	%		5.41	%		5.07	%		5.39	%		5.55	%		4.68	%		5.18	%
	Fiscal Year Ending January 31, 2011												Fiscal Year Ending January 31, 2012
							Plus												Plus
				Less			Unconsolidated									Less			Unconsolidated
	Full			Minority			Investments at			Pro-Rata			Full			Minority			Investments at			Pro-Rata
	Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt	$	162,614		$	4,786		$	22,816		$	180,644		$	372,678		$	4,016		$	74,157		$	442,819
Weighted average rate		7.17	%		5.15	%		7.10	%		7.22	%		7.04	%		5.12	%		6.28	%		6.93	%
Variable:
Variable-rate debt		265,130			-			27,611			292,741			86,694			-			17,279			103,973
Weighted average rate		5.38	%		-	%		4.59	%		5.30	%		4.51	%		-	%		4.56	%		4.52	%
Tax-Exempt		1,515			-			-			1,515			35,325			81			-			35,244
Weighted average rate		2.71	%		-	%		-			2.71	%		4.77	%		2.72	%		-	%		4.78	%
Total variable-rate debt		266,645			-			27,611			294,256			122,019			81			17,279			139,217
Total Nonrecourse Mortgage Debt	$	429,259		$	4,786		$	50,427		$	474,900		$	494,697		$	4,097		$	91,436		$	582,036
Weighted Average Rate		6.05	%		5.15	%		5.73	%		6.02	%		6.43	%		5.07	%		5.96	%		6.37	%

18

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Scheduled Maturities Table: Nonrecourse Mortgage Debt(dollars in thousands)(continued)
As of July 31, 2008

		Fiscal Year Ending January 31, 2013												Thereafter
								Plus												Plus
					Less			Unconsolidated									Less			Unconsolidated
		Full			Minority			Investments at			Pro-Rata			Full			Minority			Investments at			Pro-Rata
		Consolidation			Interest			Pro-Rata			Consolidation			Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt		$	316,807		$	5,500		$	29,570		$	340,877		$	3,023,821		$	170,397		$	816,442		$	3,669,866
Weighted average rate			5.98	%		6.24	%		6.54	%		6.02	%		5.81	%		5.98	%		5.68	%		5.77	%
Variable:
Variable-rate debt			45,366			-			3,127			48,493			698,825			-			26,691			725,516
Weighted average rate			6.31	%		-	%		4.62	%		6.21	%		6.33	%		-	%		3.55	%		6.23	%
Tax-Exempt			206,560			62,072			-			144,488			695,884			22,275			169,588			843,197
Weighted average rate			3.94	%		3.96	%		-	%		3.94	%		2.83	%		2.85	%		2.85	%		2.83	%
Total variable-rate debt			251,926			62,072			3,127			192,981			1,394,709			22,275			196,279			1,568,713
Total Nonrecourse Mortgage Debt		$	568,733		$	67,572		$	32,697		$	533,858		$	4,418,530		$	192,672		$	1,012,721		$	5,238,579
Weighted Average Rate			5.26	%		4.14	%		6.35	%		5.47	%		5.42	%		5.62	%		5.15	%		5.36	%
	Total
								Plus
					Less			Unconsolidated
		Full			Minority			Investments at			Pro-Rata
		Consolidation			Interest			Pro-Rata			Consolidation
Fixed:
Fixed-rate debt		$	4,153,031		$	199,329		$	1,017,199		$	4,970,901
Weighted average rate			6.05	%		6.02	%		5.84	%		6.01	%
Variable:
Variable-rate debt			1,729,635			79,057			290,290			1,940,868
Weighted average rate			5.48	%		5.09	%		4.62	%		5.37	%
Tax-Exempt			942,214			84,449			213,638			1,071,403
Weighted average rate			3.15	%		3.66	%		2.80	%		3.04	%
Total variable-rate debt			2,671,849			163,506			503,928			3,012,271
Total Nonrecourse Mortgage Debt		$	6,824,880		$	362,835		$	1,521,127		$	7,983,172
Weighted Average Rate			5.50	%		5.27	%		5.18	%		5.45	%

19

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

As discussed earlier, 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, we are not deemed the primary beneficiary.

Consolidated Balance Sheet Information — July 31, 2008 (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	$	7,948,753		$	247,649		$	1,269,376		$	8,970,480
Projects under development		1,775,979			271,915			488,431			1,992,495
Land held for development or sale		163,853			8,461			140,174			295,566
Total Real Estate		9,888,585			528,025			1,897,981			11,258,541
Less accumulated depreciation		(1,337,106	)		(46,598	)		(315,370	)		(1,605,878	)
Real Estate, net		8,551,479			481,427			1,582,611			9,652,663
Cash and equivalents		225,349			15,413			15,943			225,879
Restricted cash		387,213			41,783			156,840			502,270
Notes and accounts receivable, net		428,994			13,758			83,328			498,564
Investments in and advances to affiliates		390,778			24,936			(114,984	)		250,858
Other assets		895,705			29,833			76,663			942,535
Total Assets	$	10,879,518		$	607,150		$	1,800,401		$	12,072,769
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse	$	6,824,880		$	362,835		$	1,521,127		$	7,983,172
Notes payable		179,904			11,706			87,905			256,103
Bank revolving credit facility		143,500			-			-			143,500
Senior and subordinated debt		886,900			-			-			886,900
Accounts payable and accrued expenses		1,046,720			39,807			192,150			1,199,063
Deferred income taxes		486,024			-			-			486,024
Total Liabilities		9,567,928			414,348			1,801,182			10,954,762
Minority Interest		379,604			192,802			(781	)		186,021	(1)
Total Shareholders’ Equity		931,986			-			-			931,986
Total Liabilities and Shareholders’ Equity	$	10,879,518		$	607,150		$	1,800,401		$	12,072,769

(1) The $186,021 represents the value of the Class A Common Units exchanged for Bruce C. Ratner’s minority interests in the Forest City Ratner Company portfolio. The reduction in this amount of $12,624 from January 31, 2008 is due to conversion of certain of the Class A Common Units into shares of the Company’s Class A common stock and cash.

20

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Balance Sheet Information — January 31, 2008 (unaudited)

							Plus
	Full						Unconsolidated						Pro-Rata
	Consolidation			Less Minority			Investments at			Plus Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties	$	7,561,685		$	334,392		$	1,208,040		$	31,328		$	8,466,661
Projects under development		1,499,495			185,806			506,658			-			1,820,347
Land held for development or sale		155,524			7,658			118,335			-			266,201
Total Real Estate		9,216,704			527,856			1,833,033			31,328		��	10,553,209
Less accumulated depreciation		(1,244,391	)		(73,924	)		(301,604	)		(1,470	)		(1,473,541	)
Real Estate, net		7,972,313			453,932			1,531,429			29,858			9,079,668
Cash and equivalents		254,434			12,466			26,217			-			268,185
Restricted cash		248,262			8,970			182,675			-			421,967
Notes and accounts receivable, net		419,090			19,271			46,091			179			446,089
Investments in and advances to affiliates		495,828			14,844			(188,029	)		-			292,955
Other assets		829,998			23,826			87,777			1,635			895,584
Operating property assets held for sale		31,672			-			-			(31,672	)		-
Total Assets	$	10,251,597		$	533,309		$	1,686,160		$	-		$	11,404,448
Liabilities and Shareholders’ Equity
Liabilities
Mortgage debt, nonrecourse	$	6,338,610		$	345,849		$	1,458,579		$	27,700		$	7,479,040
Notes payable		143,874			1,101			85,582			-			228,355
Bank revolving credit facility		39,000			-			-			-			39,000
Senior and subordinated debt		886,900			-			-			-			886,900
Accounts payable and accrued expenses		1,015,844			35,659			142,171			798			1,123,154
Deferred income taxes		477,238			-			-			-			477,238
Liabilities of operating property held for sale		28,498			-			-			(28,498	)		-
Total Liabilities		8,929,964			382,609			1,686,332			-			10,233,687
Minority Interest		349,517			150,700			(172	)		-			198,645	(1)
Total Shareholders’ Equity		972,116			-			-			-			972,116
Total Liabilities and Shareholders’ Equity	$	10,251,597		$	533,309		$	1,686,160		$	-		$	11,404,448

(1) The $198,645 represents the value of the Class A Common Units exchanged for Bruce C. Ratner’s minority interests in the Forest City Ratner Company portfolio.

21

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Three Months Ended July 31, 2008 (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	$	330,239		$	15,053		$	108,196		$	162		$	423,544
Expenses
Operating expenses		186,090			5,324			80,936			76			261,778
Depreciation and amortization		70,228			1,548			11,153			90			79,923
Provision for decline in real estate		365			-			5,661			-			6,026
		256,683			6,872			97,750			166			347,727
Interest expense		(82,350	)		(3,402	)		(17,767	)		(43	)		(96,758	)
Amortization of mortgage procurement costs		(3,169	)		(117	)		(456	)		-			(3,508	)
Loss on early extinguishment of debt		(52	)		-			-			-			(52	)
Interest and other income		12,887			652			1,482			31			13,748
Gain on disposition of rental properties and other investments		-			-			(208	)		8,627			8,419
Earnings (loss) before income taxes		872			5,314			(6,503	)		8,611			(2,334	)
Income tax expense (benefit)
Current		(10,727	)		-			-			(1,055	)		(11,782	)
Deferred		14,450			-			-			4,382			18,832
		3,723			-			-			3,327			7,050
Minority interest		(5,168	)		(5,168	)		-			-			-
Equity in earnings (loss) of unconsolidated entities		(5,577	)		(146	)		6,503			-			1,072
Earnings (loss) from continuing operations		(13,596	)		-			-			5,284			(8,312	)
Discontinued operations, net of tax:
Operating loss from rental properties		(10	)		-			-			10			-
Gain on disposition of rental properties		5,294			-			-			(5,294	)		-
		5,284			-			-			(5,284	)		-
Net loss	$	(8,312	)	$	-		$	-		$	-		$	(8,312	)

22

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Six Months Ended July 31, 2008 (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	$	637,885		$	31,566		$	199,342		$	706		$	806,367
Expenses
Operating expenses		393,766			17,043			145,511			287			522,521
Depreciation and amortization		136,847			2,531			30,207			95			164,618
Provision for decline in real estate		365			-			5,661			-			6,026
		530,978			19,574			181,379			382			693,165
Interest expense		(165,721	)		(6,742	)		(36,180	)		(235	)		(195,394	)
Amortization of mortgage procurement costs		(6,107	)		(269	)		(1,047	)		(11	)		(6,896	)
Loss on early extinguishment of debt		(5,231	)		(119	)		(22	)		-			(5,134	)
Interest and other income		21,288			1,127			3,083			35			23,279
Gain on disposition of rental properties and other investments		150			-			673			8,627			9,450
Earnings (loss) before income taxes		(48,714	)		5,989			(15,530	)		8,740			(61,493	)
Income tax expense (benefit)
Current		(10,172	)		-			-			(1,119	)		(11,291	)
Deferred		(5,684	)		-			-			4,496			(1,188	)
		(15,856	)		-			-			3,377			(12,479	)
Minority interest		(5,862	)		(5,862	)		-			-			-
Equity in earnings (loss) of unconsolidated entities		(15,224	)		(127	)		15,530			-			433
Earnings (loss) from continuing operations		(53,944	)		-			-			5,363			(48,581	)
Discontinued operations, net of tax:
Operating earnings from rental properties		69			-			-			(69	)		-
Gain on disposition of rental properties		5,294			-			-			(5,294	)		-
		5,363			-			-			(5,363	)		-
Net loss	$	(48,581	)	$	-		$	-		$	-		$	(48,581	)

23

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Three Months Ended July 31, 2007 (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	$	287,586		$	15,329		$	96,040		$	12,397		$	380,694
Expenses
Operating expenses		177,186			4,853			62,399			11,883			246,615
Depreciation and amortization		55,741			1,138			9,626			921			65,150
		232,927			5,991			72,025			12,804			311,765
Interest expense		(72,708	)		(4,391	)		(16,443	)		(2,000	)		(86,760	)
Amortization of mortgage procurement costs		(2,839	)		(261	)		(936	)		(34	)		(3,548	)
Loss on early extinguishment of debt		(1,640	)		-			(39	)		(363	)		(2,042	)
Interest and other income		23,423			601			6,228			112			29,162
Gain on disposition of rental properties and other investments		431			-			(5,034	)		106,318			101,715
Earnings before income taxes		1,326			5,287			7,791			103,626			107,456
Income tax expense (benefit)
Current		1,771			-			-			5,682			7,453
Deferred		(2,380	)		-			-			34,358			31,978
		(609	)		-			-			40,040			39,431
Minority interest		(5,519	)		(5,519	)		-			-			-
Equity in earnings (loss) of unconsolidated entities		7,773			232			(7,791	)		-			(250	)
Earnings from continuing operations		4,189			-			-			63,586			67,775
Discontinued operations, net of tax:
Operating loss from rental properties		(1,651	)		-			-			1,651			-
Gain on disposition of rental properties		65,237			-			-			(65,237	)		-
		63,586			-			-			(63,586	)		-
Net earnings	$	67,775		$	-		$	-		$	-		$	67,775

24

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Consolidated Earnings Information — Six Months Ended July 31, 2007 (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	$	555,951		$	30,645		$	173,222		$	24,599		$	723,127
Expenses
Operating expenses		345,778			10,648			112,953			20,730			468,813
Depreciation and amortization		115,528			3,825			19,898			1,934			133,535
		461,306			14,473			132,851			22,664			602,348
Interest expense		(149,507	)		(8,871	)		(33,297	)		(3,608	)		(177,541	)
Amortization of mortgage procurement costs		(5,403	)		(421	)		(1,439	)		(69	)		(6,490	)
Loss on early extinguishment of debt		(4,184	)		(821	)		(459	)		(363	)		(4,185	)
Interest and other income		34,822			1,424			6,851			209			40,458
Gain on disposition of rental properties and other investments		431			-			(2,928	)		106,318			103,821
Earnings (loss) before income taxes		(29,196	)		7,483			9,099			104,422			76,842
Income tax expense (benefit)
Current		79			-			-			5,740			5,819
Deferred		(14,728	)		-			-			34,608			19,880
		(14,649	)		-			-			40,348			25,699
Minority interest		(8,067	)		(8,067	)		-			-			-
Equity in earnings (loss) of unconsolidated entities		9,134			584			(9,099	)		-			(549	)
Earnings (loss) from continuing operations		(13,480	)		-			-			64,074			50,594
Discontinued operations, net of tax:
Operating loss from rental properties		(1,163	)		-			-			1,163			-
Gain on disposition of rental properties		65,237			-			-			(65,237	)		-
		64,074			-			-			(64,074	)		-
Net earnings	$	50,594		$	-		$	-		$	-		$	50,594

25

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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 that we do not control and/or are not the primary beneficiary, and that 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:

	July 31,		January 31,
	2008		2008
	(in thousands)
Members’ and partners’ equity as below	$	614,808	$	741,871
Equity of other members and partners		499,824		553,842
Company’s investment in partnerships		114,984		188,029
Advances to and on behalf of other affiliates		250,858		292,955
Minority interest in advances to and on behalf of affiliates(1)		24,936		14,844
Total investments in and advances to affiliates	$	390,778	$	495,828

(1) Primarily represents the minority interest portion of advances to other affiliates included in the fully consolidated presentation.

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

	Combined (100%)						Pro-Rata Share
	(GAAP)						(Non-GAAP)
	July 31, 2008			January 31, 2008			July 31, 2008			January 31, 2008
	(in thousands)
Balance Sheet:
Completed rental properties	$	3,329,643		$	2,989,525		$	1,269,376		$	1,208,040
Projects under development		1,285,640			1,271,998			488,431			506,658
Land held for development or sale		310,575			265,943			140,174			118,335
Accumulated depreciation		(628,827	)		(606,961	)		(315,370	)		(301,604	)
Restricted cash – Military housing bond funds		984,253			1,029,503			60,539			67,235
Other restricted cash		333,147			574,638			96,301			115,440
Other assets		416,076			409,973			175,934			160,085
Total Assets	$	6,030,507		$	5,934,619		$	1,915,385		$	1,874,189
Mortgage debt, nonrecourse	$	4,612,411		$	4,486,786		$	1,521,127		$	1,458,579
Other liabilities		803,288			705,962			280,055			227,753
Minority interest		-			-			(781	)		(172	)
Members’ and partners’ equity		614,808			741,871			114,984			188,029
Total Liabilities and Members’/Partners’ Equity	$	6,030,507		$	5,934,619		$	1,915,385		$	1,874,189

26

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Investments in and Advances to Affiliates(continued)

	Combined (100%)						Pro-Rata Share
	(GAAP)						(Non-GAAP)
Three Months Ended July 31,	2008			2007			2008			2007
	(in thousands)
Operations:
Revenues	$	253,310		$	234,188		$	108,196		$	95,782
Equity in earnings of unconsolidated entities on a pro-rata basis		-			-			1,072			(250	)
Operating expenses		(200,470	)		(156,434	)		(80,895	)		(62,290	)
Interest expense including early extinguishment of debt		(55,629	)		(48,420	)		(17,767	)		(16,423	)
Provision for decline in real estate(1)		(45,348	)		-			(5,661	)		-
Depreciation and amortization		(30,125	)		(37,322	)		(11,609	)		(10,527	)
Interest income		14,446			9,354			1,274			1,189
Minority interest		-			-			(146	)		232
Earnings (loss) from continuing operations		(63,816	)		1,366			(5,536	)		7,713
Discontinued operations:
Income (loss) from discontinued operations		(81	)		121			(41	)		60
Net earnings (loss) (pre-tax)	$	(63,897	)	$	1,487		$	(5,577	)	$	7,773

	Combined (100%)						Pro-Rata Share
	(GAAP)						(Non-GAAP)
Six Months Ended July 31,	2008			2007			2008			2007
	(in thousands)
Operations:
Revenues	$	494,148		$	451,137		$	199,127		$	172,453
Equity in earnings of unconsolidated entities on a pro-rata basis		-			-			433			(549	)
Operating expenses		(369,356	)		(311,002	)		(145,375	)		(112,686	)
Interest expense including early extinguishment of debt		(115,162	)		(102,345	)		(36,095	)		(33,598	)
Provision for decline in real estate(1)		(45,348	)		-			(5,661	)		-
Depreciation and amortization		(78,360	)		(74,999	)		(31,232	)		(21,398	)
Interest income		31,810			28,541			2,875			1,812
Minority interest		-			-			(127	)		584
Earnings (loss) from continuing operations		(82,268	)		(8,668	)		(16,055	)		6,618
Discontinued operations:
Gain on disposition of rental properties(2)		3,070			4,212			881			2,106
Income (loss) from discontinued operations		(99	)		820			(50	)		410
Discontinued operations subtotal		2,971			5,032			831			2,516
Net earnings (loss) (pre-tax)	$	(79,297	)	$	(3,636	)	$	(15,224	)	$	9,134

27

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

(1) The following table shows the detail of the provision for decline in real estate for equity method investments:

	Combined (100%)				Pro-Rata Share
	(GAAP)				(Non-GAAP)
	Three and Six Months Ended July 31,
	2008		2007		2008		2007
	(in thousands)				(in thousands)
Navy Midwest (Military Housing Project) (Chicago, Illinois)	$	30,000	$	-	$	300	$	-
Mercury (Condominium) (Los Angeles, California)		12,006		-		4,098		-
El Centro Mall (Specialty Retail Center) (El Centro, California)		3,342		-		1,263		-
Total provision for decline in real estate for equity method rental properties	$	45,348	$	-	$	5,661	$	-

(2) 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)
	Six Months Ended July 31,
	2008		2007		2008		2007
	(in thousands)				(in thousands)
One International Place (Office Building) (Cleveland, Ohio)	$	3,070	$	-	$	881	$	-
White Acres (Apartments) (Richmond Heights, Ohio)		-		4,212		-		2,106
Total gain on disposition of equity method rental properties	$	3,070	$	4,212	$	881	$	2,106

28

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Real Estate and Related Nonrecourse Mortgage Debt

	July 31, 2008
			Nonrecourse
			Mortgage
	Total Cost		Debt
	(in thousands)
Full Consolidation
Completed rental properties
Residential	$	1,689,529	$	1,085,285
Commercial
Retail centers		3,054,859		2,418,354
Office and other buildings		3,193,961		2,484,430
Corporate and other equipment		10,404		-
		7,948,753		5,988,069
Projects under development
Residential
Under construction		390,885		310,457
In development		583,841		156,549
Commercial
Retail centers
Under construction		555,335		266,176
In development		50,610		-
Office and other buildings
Under construction		71,519		-
In development		123,789		6,624
		1,775,979		739,806
Land held for development or sale		163,853		97,005
Total - Full Consolidation	$	9,888,585	$	6,824,880
Less Minority Interest
Completed rental properties
Residential	$	35,110	$	27,308
Commercial
Retail centers		97,643		99,960
Office and other buildings		114,896		100,383
Corporate and other equipment		-		-
		247,649		227,651
Projects under development
Residential
Under construction		80,452		61,986
In development		174,102		65,375
Commercial
Retail centers
Under construction		1,328		-
In development		94		-
Office and other buildings
Under construction		12,052		-
In development		3,887		-
		271,915		127,361
Land held for development or sale		8,461		7,823
Total - Minority Interest	$	528,025	$	362,835

29

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Real Estate and Related Nonrecourse Mortgage Debt (continued)

	July 31, 2008
			Nonrecourse
			Mortgage
	Total Cost		Debt
	(in thousands)
Plus Unconsolidated Investments at Pro-Rata
Completed rental properties
Residential	$	678,622	$	606,971
Commercial
Retail centers		421,795		430,408
Office and other buildings		168,958		117,800
Corporate and other equipment		1		-
		1,269,376		1,155,179
Projects under development
Residential
Under construction		111,728		103,346
In development		9,336		3,855
Commercial
Retail centers
Under construction		197,827		101,246
In development		37,069		17,108
Office and other buildings
Under construction		399		5,214
In development		132,072		68,189
		488,431		298,958
Land held for development or sale		140,174		66,990
Total - Unconsolidated Investments at Pro-Rata	$	1,897,981	$	1,521,127
Pro-Rata Consolidation
Completed rental properties
Residential	$	2,333,041	$	1,664,948
Commercial
Retail centers		3,379,011		2,748,802
Office and other buildings		3,248,023		2,501,847
Corporate and other equipment		10,405		-
		8,970,480		6,915,597
Projects under development
Residential
Under construction		422,161		351,817
In development		419,075		95,029
Commercial
Retail centers
Under construction		751,834		367,422
In development		87,585		17,108
Office and other buildings
Under construction		59,866		5,214
In development		251,974		74,813
		1,992,495		911,403
Land held for development or sale		295,566		156,172
Total - Pro-Rata Consolidation	$	11,258,541	$	7,983,172

30

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

The following is a summary of the real estate activity of Forest City Rental Properties Corporation as presented on pro-rata consolidation including a reconciliation from full consolidation to pro-rata consolidation.

	Pro-Rata Consolidation (Non-GAAP)
	Six Months Ended
	July 31,			For the Years Ended January 31,
	2008			2008			2007			2006			2005
	(in thousands)
Forest City Rental Properties Corporation - Real Estate Activity(1)
Real estate
Completed rental properties	$	8,960,075		$	8,455,566		$	7,510,737		$	6,319,189		$	5,776,806
Projects under development		1,992,495			1,820,347			1,568,088			1,196,663			869,265
Land held for development or sale		116,098			90,151			79,909			50,275			53,007
Total real estate - Forest City Rental Properties		11,068,668			10,366,064			9,158,734			7,566,127			6,699,078
Less accumulated depreciation		(1,600,613	)		(1,468,273	)		(1,295,623	)		(1,104,286	)		(975,063	)
Real estate, net - Forest City Rental Properties	$	9,468,055		$	8,897,791		$	7,863,111		$	6,461,841		$	5,724,015
Plus real estate, net - Land Group and Corporate		184,608
Real estate, net - Forest City Enterprises	$	9,652,663
Real estate activity during the year
Completed rental properties
Capital expenditures	$	38,129		$	108,166		$	87,237		$	66,239		$	127,486
Transferred from projects under development		309,942			705,803			547,667			534,820			612,111
Acquisitions		7,790			335,750			314,779			58,667			115,185
Exchange of cash and Class A Common Units for partner’s interest		-			-			228,958			-			-
Acquisitions of partners’ interest and other		186,102			8,502			310,275			81,396			337,293
Total additions		541,963			1,158,221			1,488,916			741,122			1,192,075
Dispositions		(37,454	)(2)		(213,392	)(3)		(297,368	)(4)		(198,739	)(5)		(201,304	)(6)
Completed rental properties, net additions		504,509			944,829			1,191,548			542,383			990,771
Projects under development
New development		501,092			1,119,554			957,227			926,217			885,320
Transferred to completed rental properties		(309,942	)		(705,803	)		(547,667	)		(534,820	)		(612,111	)
Cost of land sales		(19,002	)		(161,492	)		(38,135	)		(63,999	)		-
Other		-			-			-			-			54,580
Projects under development, net additions		172,148			252,259			371,425			327,398			327,789
Land held for development or sale, net change		25,947			10,242			29,634			(2,732	)		(82	)
Increase in real estate, at cost	$	702,604		$	1,207,330		$	1,592,607		$	867,049		$	1,318,478

31

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

							Plus
				Less			Unconsolidated			Plus			Pro-Rata
	Full			Minority			Investments			Discontinued			Consolidation
Six Months Ended July 31,	Consolidation			Interest			at Pro-Rata			Operations			(Non-GAAP)
	(in thousands)
2008
Real estate
Completed rental properties	$	7,938,349		$	247,649		$	1,269,375		$	-		$	8,960,075
Projects under development		1,775,979			271,915			488,431			-			1,992,495
Land held for development or sale		58,404			5,497			63,191			-			116,098
Total real estate - Forest City Rental Properties		9,772,732			525,061			1,820,997			-			11,068,668
Less accumulated depreciation		(1,331,843	)		(46,598	)		(315,368	)		-			(1,600,613	)
Real estate, net - Forest City Rental Properties	$	8,440,889		$	478,463		$	1,505,629		$	-		$	9,468,055
Plus real estate, net - Land Group and Corporate		110,590			2,964			76,982			-			184,608
Real estate, net - Forest City Enterprises	$	8,551,479		$	481,427		$	1,582,611		$	-		$	9,652,663
Real estate activity during the year
Completed rental properties
Capital expenditures	$	33,978		$	1,080		$	5,231		$	-		$	38,129
Transferred from projects under development		259,101			7,261			58,102			-			309,942
Acquisitions		-			-			7,790			-			7,790
Acquisitions of partners’ interest and other		95,539			(95,049	)		(4,486	)		-			186,102
Total additions		388,618			(86,708	)		66,637			-			541,963
Dispositions		(859	)		(35	)		(5,302	)		(31,328	)		(37,454)	(2)
Completed rental properties, net additions		387,759			(86,743	)		61,335			(31,328	)		504,509
Projects under development
New development		540,048			93,370			54,414			-			501,092
Transferred to completed rental properties		(259,101	)		(7,261	)		(58,102	)		-			(309,942	)
Cost of land sales		(4,463	)		-			(14,539	)		-			(19,002	)
Projects under development, net additions		276,484			86,109			(18,227	)		-			172,148
Land held for development or sale, net additions		5,790			576			20,733			-			25,947
Increase (decrease) in real estate, at cost	$	670,033		$	(58	)	$	63,841		$	(31,328	)	$	702,604

32

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

							Plus
				Less			Unconsolidated			Plus			Pro-Rata
	Full			Minority			Investments			Discontinued			Consolidation
Years Ended January 31,	Consolidation			Interest			at Pro-Rata			Operations			(Non-GAAP)
2008	(in thousands)
Real estate - end of year
Completed rental properties	$	7,550,590		$	334,392		$	1,208,040		$	31,328		$	8,455,566
Projects under development		1,499,495			185,806			506,658			-			1,820,347
Land held for development or sale		52,614			4,921			42,458			-			90,151
Total real estate		9,102,699			525,119			1,757,156			31,328			10,366,064
Less accumulated depreciation		(1,239,123	)		(73,924	)		(301,604	)		(1,470	)		(1,468,273	)
Real estate, net	$	7,863,576		$	451,195		$	1,455,552		$	29,858		$	8,897,791
Real estate activity during the year
Completed rental properties
Capital expenditures	$	91,677		$	3,588		$	20,077		$	-		$	108,166
Transferred from projects under development		678,997			11,656			38,462			-			705,803
Acquisitions		334,655			-			1,095			-			335,750
Acquisitions of partners’ interest and other		17,652			(27,175	)		(36,325	)		-			8,502
Total additions		1,122,981			(11,931	)		23,309			-			1,158,221
Operating property held for sale		(31,328	)		-			-			31,328			-
Dispositions		(190,534	)		-			(22,858	)		-			(213,392	)  (3)
Completed rental properties, net additions		901,119			(11,931	)		451			31,328			944,829
Projects under development
New development		908,349			71,499			282,704			-			1,119,554
Transferred to completed rental properties		(678,997	)		(11,656	)		(38,462	)		-			(705,803	)
Cost of land sales		(125,940	)		(697	)		(36,249	)		-			(161,492	)
Projects under development, net additions		103,412			59,146			207,993			-			252,259
Land held for development or sale, net additions		(5,794	)		(596	)		15,440			-			10,242
Increase (decrease) in real estate, at cost	$	998,737		$	46,619		$	223,884		$	31,328		$	1,207,330
2007
Real estate - end of year
Completed rental properties	$	6,649,471		$	346,323		$	1,207,589		$	-		$	7,510,737
Projects under development		1,396,083			126,660			298,665			-			1,568,088
Land held for development or sale		58,408			5,517			27,018			-			79,909
Total real estate		8,103,962			478,500			1,533,272			-			9,158,734
Less accumulated depreciation		(1,080,432	)		(70,863	)		(286,054	)		-			(1,295,623	)
Real estate, net	$	7,023,530		$	407,637		$	1,247,218		$	-		$	7,863,111
Real estate activity during the year
Completed rental properties
Capital expenditures	$	78,663		$	17,488		$	26,062		$	-		$	87,237
Transferred from projects under development		359,649			6,835			194,853			-			547,667
Acquisitions		218,763			17,785			113,801			-			314,779
Exchange of cash and Class A Common Units for partner’s interest		228,958			-			-			-			228,958
Acquisitions of partners’ interest and other		32,884			(330,388	)		(52,997	)		-			310,275
Total additions		918,917			(288,280	)		281,719			-			1,488,916
Dispositions		(423,281	)		(131,224	)		(5,311	)		-			(297,368	)  (4)
Completed rental properties, net additions		495,636			(419,504	)		276,408			-			1,191,548
Projects under development
New development		898,561			49,927			108,593			-			957,227
Transferred to completed rental properties		(359,649	)		(6,835	)		(194,853	)		-			(547,667	)
Cost of land sales		(29,085	)		(673	)		(9,723	)		-			(38,135	)
Projects under development, net additions		509,827			42,419			(95,983	)		-			371,425
Land held for development or sale, net additions		20,317			2,097			11,414			-			29,634
Increase (decrease) in real estate, at cost	$	1,025,780		$	(374,988	)	$	191,839		$	-		$	1,592,607

33

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

							Plus
				Less			Unconsolidated			Plus		Pro-Rata
	Full			Minority			Investments			Discontinued		Consolidation
Years Ended January 31,	Consolidation			Interest			at Pro-Rata			Operations		(Non-GAAP)
	(in thousands)
2006
Real estate - end of year
Completed rental properties	$	6,153,835		$	765,827		$	931,181		$	-	$	6,319,189
Projects under development		886,256			84,241			394,648			-		1,196,663
Land held for development or sale		38,091			3,420			15,604			-		50,275
Total real estate		7,078,182			853,488			1,341,433			-		7,566,127
Less accumulated depreciation		(982,249	)		(147,375	)		(269,412	)		-		(1,104,286	)
Real estate, net	$	6,095,933		$	706,113		$	1,072,021		$	-	$	6,461,841
Real estate activity during the year
Completed rental properties
Capital expenditures	$	78,132		$	1,855		$	(10,038	)	$	-	$	66,239
Transferred from projects under development		490,278			11,968			56,510			-		534,820
Acquisitions		58,667			-			-			-		58,667
Acquisitions of partners’ interest and other		-			(86,432	)		(5,036	)		-		81,396
Total additions		627,077			(72,609	)		41,436			-		741,122
Dispositions		(164,403	)		(5,195	)		(39,531	)		-		(198,739	)(5)
Completed rental properties, net additions		462,674			(77,804	)		1,905			-		542,383
Projects under development
New development		807,768			78,696			197,145			-		926,217
Transferred to completed rental properties		(490,278	)		(11,968	)		(56,510	)		-		(534,820	)
Cost of land sales		(65,675	)		(2,787	)		(1,111	)		-		(63,999	)
Projects under development, net additions		251,815			63,941			139,524			-		327,398
Land held for development or sale, net additions		(2,455	)		(157	)		(434	)		-		(2,732	)
Increase (decrease) in real estate, at cost	$	712,034		$	(14,020	)	$	140,995		$	-	$	867,049
2005
Real estate - end of year
Completed rental properties	$	5,691,161		$	843,631		$	929,276		$	-	$	5,776,806
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
Total real estate		6,366,148			867,508			1,200,438			-		6,699,078
Less accumulated depreciation		(861,516	)		(141,674	)		(255,221	)		-		(975,063	)
Real estate, net	$	5,504,632		$	725,834		$	945,217		$	-	$	5,724,015
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
Acquisitions of partners’ interest and other		538,173			111,815			(89,065	)		-		337,293
Total additions		1,383,237			156,306			(34,856	)		-		1,192,075
Dispositions		(187,651	)		(18,721	)		(32,374	)		-		(201,304	)  (6)
Completed rental properties, net additions		1,195,586			137,585			(67,230	)		-		990,771
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	)
Cost of land sales		-			(54,580	)		-			-		54,580
Projects under development, net additions		127,859			(49,606	)		150,324			-		327,789
Land held for development or sale, net additions		3,142			484			(2,740	)		-		(82	)
Increase (decrease) in real estate, at cost	$	1,326,587		$	88,463		$	80,354		$	-	$	1,318,478

34

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

(1)	The table includes only the real estate activity for Forest City Rental Properties Corporation, a wholly-owned subsidiary of the Company 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.
(2)	Primarily reflects the dispositions ofSterling Glen of LynbrookandOne International Place.Sterling Glen of Lynbrookis a 130-unit supported-living apartment community in Lynbrook, New York.One International Placehas 88,000 square feet in Cleveland, Ohio.
(3)	Primarily reflects the dispositions ofLandings of Brentwood, Sterling Glen of Bayshore, Sterling Glen of Center City, Sterling Glen of Darien, Sterling Glen of Forest Hills, Sterling Glen of Plainview, Sterling Glen of Stamford,andUniversity Park at MIT Hotel. Landings of Brentwoodis a 724-unit apartment community in Nashville, Tennessee.Sterling Glen of Bayshoreis an 85-unit supported-living apartment community in Bayshore, New York.Sterling Glen of Center Cityis a 135-unit supported-living apartment community in Philadelphia, Pennsylvania.Sterling Glen of Darienis an 80-unit supported-living apartment community in Darien, Connecticut.Sterling Glen of Forest Hillsis an 83-unit supported-living apartment community in Forest Hills, New York.Sterling Glen of Plainviewis a 79-unit supported-living apartment community in Plainview, New York.Sterling Glen of Stamfordis a 166-unit supported-living apartment community in Stamford, Connecticut.University Park at MIT Hotel has 210 rooms in Cambridge, Massachusetts.
(4)	Primarily reflects the dispositions of Providence at Palm Harbor, Mount Vernon Square, Midtown Plaza, G Street, Battery Park City, Embassy Suites Hotel, and Hilton Times Square. Providence at Palm Harbor is a 236-units apartment community in Tampa, Florida, Mount Vernon Square is a 1,387-units apartment community in Alexandria, Virginia. Midtown Plaza has 240,000 square feet in Parma, Ohio. G Street has 13,000 square feet in Philadelphia, Pennsylvania. Battery Park City has 166,000 square feet in Manhattan, New York. Embassy Suites Hotel and Hilton Times Square have 463 and 444 rooms respectively in Manhattan, New York.
(5)	Primarily reflects the dispositions ofCherrywood Village, Ranchstone, Colony Place, Enclave, Flower Park,andShowcase.Cherrywood VillageandRanchstoneare apartment communities in Denver, Colorado with 360 and 368 units, respectively.Colony Placeis a 300-unit apartment community in Fort Myers, Florida.Enclaveis a 637-unit apartment community in San Jose, California.Flower Parkis a 199-unit apartment community in Santa Ana, California.Showcase has 186,000 square feet in Las Vegas, Nevada.
(6)	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.Woodlakeis 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 Suburbanhave 860,000 and 117,000 square feet, respectively, in Akron, Ohio.Pavilion has 250,000 square feet in San Jose, California.Flatbush Avenuehas 142,000 square feet in Brooklyn, New York.Hunting Parkhas 125,000 square feet in Philadelphia, Pennsylvania.Manhattan Town Centerhas 392,000 square feet in Manhattan, Kansas.

35

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Results of Operations

Net Earnings (Loss) —Net loss for the three months ended July 31, 2008 was ($8,312,000) versus net earnings of $67,775,000 for the three months ended July 31, 2007. 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 (loss) between periods. This variance to the prior year is primarily attributable to the following decreases, which are net of tax and minority interest:

• $65,237,000 ($106,318,000, pre-tax) related to the 2007 gains on disposition ofLandings of Brentwood, a consolidated apartment community in Nashville, Tennessee and the following six consolidated supported-living apartment communities:Sterling Glen of Bayshorein Bayshore, New York,Sterling Glen of Center Cityin Philadelphia, Pennsylvania,Sterling Glen of Darienin Darien, Connecticut,Sterling Glen of Forest Hillsin Forest Hills, New York,Sterling Glen of Plainviewin Plainview, New York andSterling Glen of Stamfordin Stamford, Connecticut;

• $6,191,000 ($10,090,000, pre-tax) related to the 2007 net gain recognized in other income on the sale ofSterling Glen of Roslyn, a consolidated supported-living apartment community under construction in Roslyn, New York;

• $4,053,000 ($6,322,000, pre-tax) related to the increased share of losses from our equity investment in the New Jersey Nets basketball team; and

• $2,515,000 ($4,098,000, pre-tax) related to an impairment charge recorded in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”). Due to the continued deterioration of the condominium market in Los Angeles, California,Mercury, an unconsolidated condominium project, lowered certain estimates of future undiscounted cash flows from unit sales.

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

• $6,948,000 ($11,385,000, pre-tax) primarily related to military housing fee income from the management and development of units in Hawaii, Illinois, Washington and Colorado;

• $5,294,000 ($8,627,000, pre-tax) related to the 2008 gain on disposition ofSterling Glen of Lynbrook,a supported-living apartment community in Lynbrook, New York;

• $2,056,000 ($3,350,000, pre-tax) related to the 2008 gain on the sale of an ownership interest in a parking management company; and

• $1,943,000 ($3,166,000, pre-tax) related to increases in Commercial Group outlot land sales in 2008 primarily atShort Pump Town Center, a regional mall and atWhite Oak Village, a retail center, both located in Richmond, Virginia.

Net loss for the six months ended July 31, 2008 was ($48,581,000) versus net earnings of $50,594,000 for the six months ended July 31, 2007. This variance to the prior year is primarily attributable to the following decreases, which are net of tax and minority interest:

• $65,237,000 ($106,318,000, pre-tax) related to the 2007 gains on disposition ofLandings of Brentwood,Sterling Glen of Bayshore,Sterling Glen of Center City,Sterling Glen of Darien,Sterling Glen of Forest Hills,Sterling Glen of PlainviewandSterling Glen of Stamford;

• $12,918,000 ($21,052,000, pre-tax) related to increased write-offs of abandoned development projects in 2008 compared to 2007. The increase primarily relates to the write-off atSummit at Lehigh Valley, a Commercial development project with a housing component located in Allentown, Pennsylvania, of $13,200,000 ($21,513,000 pre-tax) in 2008. Due to delays in the public entitlement process to fund infrastructure and overall slowdown in retail and housing markets, we did not acquire the underlying land, which the land owner decided to sell to a third party for an alternative use. As a result, in April 2008, we determined it was no longer probable that the project would be completed resulting in the charge during the six months ended July 31, 2008;

• $10,963,000 ($16,544,000, pre-tax) related to the increased share of losses from our equity investment in the New Jersey Nets basketball team;

36

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

• $6,191,000 ($10,090,000, pre-tax) related to the 2007 net gain recognized in other income on the sale ofSterling Glen of Roslyn;

• $2,515,000 ($4,098,000, pre-tax) related to an impairment charge recorded in accordance with SFAS No. 144 atMercury;

• $1,860,000 ($3,031,000, pre-tax) related to participation payments in 2008 on the refinancing of350 Massachusetts Avenue, an unconsolidated office building andJackson Building, a consolidated office building, both located in Cambridge, Massachusetts; and

• $752,000 ($1,225,000, pre-tax) related to the difference in gains on disposition of equity method properties between years. The 2007 gain on the disposition of our partnership interest inWhite Acres, an apartment community located in Richmond Heights, Ohio was higher than the 2008 gain on the sale of our partnership interest inOne International Place, an office building located in Cleveland, Ohio.

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

• $10,459,000 ($17,418,000, pre-tax) primarily related to military housing fee income from the management and development of units in Hawaii, Illinois, Washington and Colorado;

• $5,294,000 ($8,627,000, pre-tax) related to the 2008 gain on disposition ofSterling Glen of Lynbrook,a supported-living apartment community in Lynbrook, New York;

• $4,809,000 ($7,837,000, pre-tax) of expense in 2007 that did not recur in 2008 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;

• $2,056,000 ($3,350,000, pre-tax) related to the 2008 gain on the sale of an ownership interest in a parking management company; and

• $1,231,000 ($2,007,000, pre-tax) related to increases in Commercial Group outlot land sales in 2008 primarily atShort Pump Town CenterandWhite Oak Village, which was partially offset by a decrease in land sales atVictoria Gardens, a regional mall located in Rancho Cucamonga, California.

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 July 31, 2008 was $179,620,000 compared to $151,822,000 for the three months ended July 31, 2007, an 18.3% increase. A reconciliation of NOI to the most comparable GAAP measure, net earnings (loss), is presented on pages 8-9. NOI for the six months ended July 31, 2008 was $308,266,000 compared to $279,728,000 for the six months ended July 31, 2007, a 10.2% increase. A reconciliation of NOI to net earnings (loss) for each strategic business unit can be found on pages 41-52.

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 July 31, 2008 was $186,040,000 compared to $162,446,000 for the three months ended July 31, 2007, a 14.5% increase. NOI for the six months ended July 31, 2008 was $326,445,000 compared to $300,364,000 for the six months ended July 31, 2007, an 8.7% increase. Comparable NOI increased 1.3% for the three months ended July 31, 2008 compared to the prior year. Retail comparable NOI increased 4.5% and office decreased 1.5% from the prior year. Hotels decreased 4.9% and our residential portfolio has generated an increase of 0.6%. Comparable NOI increased 1.9% for the six months ended July 31, 2008 compared to the prior year. Retail and office comparable NOI increased 3.2% and 1.3%, respectively, from the prior year. Hotels decreased 12.5% and our residential portfolio has generated an increase of 2.2%.

37

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

EBDT— We use an additional measure, along with net earnings, to report our operating results. This non-GAAP measure, referred to as 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 our 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.

EBDT is reconciled to net earnings (loss), the most comparable financial measure calculated in accordance with GAAP, on page 39. 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 three months ended July 31, 2008 increased by 24.1% to $88,343,000 from $71,206,000 for the three months ended July 31, 2007. Our portfolio of rental properties provided an EBDT increase, as both our mature and new properties experienced EBDT growth. Our operating performance in the Company’s commercial and residential segments improved pre-tax EBDT by $15,286,000 for the three months ended July 31, 2008 compared to the prior year, including $12,663,000 from Military Housing. These increases in EBDT were negatively impacted by reporting a larger share of losses for the NBA Nets basketball team compared with the prior year, decreasing EBDT by $4,053,000 ($6,322,000 pre-tax) for the three months ended July 31, 2008 compared to the prior year.

Our EBDT for the six months ended July 31, 2008 decreased by 1.4% to $104,297,000 from $105,735,000 for the six months ended July 31, 2007. Our portfolio of rental properties provided and EBDT increase, as both our mature and new properties experienced EBDT growth. Our operating performance in the Company’s commercial and residential segments, improved pre-tax EBDT by $27,742,000 for the six months ended July 31, 2008 compared to the prior year, including $16,354,000from Military Housing. These increases in EBDT were negatively impacted by reporting a larger share of losses $10,963,000 ($16,544,000 pre-tax) for the NBA Nets basketball team compared with the prior year and increased project write-offs of $12,918,000 ($21,052,000 pre-tax) primarily due to the first quarter write-off ofSummit at Lehigh Valley,a Commercial development project with a housing component located in Allentown, Pennsylvania.

Summary of EBDT— The information in the tables on pages 39-52 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 (loss). 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.

38

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Reconciliation of Net Earnings (Loss) to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)⁽¹⁾

	Three Months Ended July 31,						Six Months Ended July 31,
	2008			2007			2008			2007
	(in thousands)						(in thousands)
Net Earnings (loss)	$	(8,312	)	$	67,775		$	(48,581	)	$	50,594
Depreciation and amortization - Real Estate Groups(5)		73,593			62,490			144,358			126,999
Amortization of mortgage procurement costs - Real Estate Groups(5)		3,448			3,538			6,791			6,457
Deferred income tax expense - Real Estate Groups(6)		16,121			33,397			788			23,037
Deferred income tax expense (benefit) - Non-Real Estate Groups:(6)
Gain on disposition of other investments		-			(57	)		58			(57	)
Current income tax expense on non-operating earnings:(6)
Gain on disposition of other investments		-			224			-			224
Gain on disposition included in discontinued operations		-			8,088			-			8,088
Gain on disposition of equity method rental properties		707			-			1,339			-
Straight-line rent adjustment(3)		4,248			(3,470	)		1,101			(7,620	)
Preference payment(4)		931			936			1,867			1,834
Preferred return on disposition		208			5,034			208			5,034
Provision for decline in real estate		365			-			365			-
Provision for decline in real estate of equity method rental properties		5,661			-			5,661			-
Gain on disposition of equity method rental properties		-			-			(881	)		(2,106	)
Gain on disposition of other investments		-			(431	)		(150	)		(431	)
Discontinued operations:(1)
Gain on disposition of rental properties		(8,627	)		(106,318	)		(8,627	)		(106,318	)
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)(2)	$	88,343		$	71,206		$	104,297		$	105,735

(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 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) 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).
(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.
(4)	The preference payment represents the respective period’s share of the annual preferred payment in connection with the issuance of Class A Common Units in exchange for Bruce C. Ratner’s minority interests in the Forest City Ratner Company portfolio.
(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						Six Months Ended						Three Months Ended						Six Months Ended
	July 31,						July 31,						July 31,						July 31,
	2008			2007			2008			2007			2008			2007			2008			2007
Full Consolidation	$	70,228		$	55,741		$	136,847		$	115,528		$	3,169		$	2,839		$	6,107		$	5,403
Non-Real Estate		(3,502	)		(2,022	)		(6,821	)		(4,019	)		-			-			-			-
Real Estate Groups Full Consolidation		66,726			53,719			130,026			111,509			3,169			2,839			6,107			5,403
Real Estate Groups related to minority interest		(1,548	)		(1,138	)		(2,531	)		(3,825	)		(117	)		(261	)		(269	)		(421	)
Real Estate Groups Equity Method		8,325			8,988			16,768			17,381			396			926			942			1,406
Real Estate Groups Discontinued Operations		90			921			95			1,934			-			34			11			69
Real Estate Groups Pro-Rata Consolidation	$	73,593		$	62,490		$	144,358		$	126,999		$	3,448		$	3,538		$	6,791		$	6,457

39

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

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

	Three Months Ended July 31,						Six Months Ended July 31,
	2008			2007			2008			2007
	(in thousands)						(in thousands)
(A)    Operating earnings
Current	$	(11,434	)	$	1,547		$	(11,511	)	$	(145	)
Deferred		17,565			(378	)		(2,335	)		(13,540	)
		6,131			1,169			(13,846	)		(13,685	)
(B)    Provision for decline in real estate
Deferred		(141	)		-			(141	)		-
Deferred - Equity method investment		(2,187	)		-			(2,187	)		-
Subtotal		(2,328	)		-			(2,328	)		-
(C)    Gain on disposition of other investments
Current - Non-Real Estate Groups		-			224			-			224
Deferred - Non-Real Estate Groups		-			(57	)		58			(57	)
		-			167			58			167
(D)    Gain on disposition of equity method rental properties
Current		707			-			1,339			-
Deferred		(787	)		(1,945	)		(1,079	)		(1,131	)
		(80	)		(1,945	)		260			(1,131	)
Subtotal (A) (B) (C) (D)
Current		(10,727	)		1,771			(10,172	)		79
Deferred		14,450			(2,380	)		(5,684	)		(14,728	)
Income tax expense		3,723			(609	)		(15,856	)		(14,649	)
(E)    Discontinued operations
Operating earnings
Current		(1,055	)		(2,406	)		(1,119	)		(2,348	)
Deferred		1,049			1,365			1,163			1,615
		(6	)		(1,041	)		44			(733	)
Gain on disposition of rental properties
Current		-			8,088			-			8,088
Deferred		3,333			32,993			3,333			32,993
		3,333			41,081			3,333			41,081
		3,327			40,040			3,377			40,348
Grand Total (A) (B) (C) (D) (E)
Current		(11,782	)		7,453			(11,291)			5,819
Deferred		18,832			31,978			(1,188	)		19,880
	$	7,050		$	39,431		$	(12,479	)	$	25,699
Recap of Grand Total:
Real Estate Groups
Current	$	7,671		$	10,728		$	10,072		$	12,974
Deferred		16,121			33,397			788			23,037
		23,792			44,125			10,860			36,011
Non-Real Estate Groups
Current		(19,453	)		(3,275	)		(21,363	)		(7,155	)
Deferred		2,711			(1,419	)		(1,976	)		(3,157	)
		(16,742	)		(4,694	)		(23,339	)		(10,312	)
Grand Total	$	7,050		$	39,431		$	(12,479	)	$	25,699

40

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2008(in thousands)

	Commercial Group 2008														Residential Group 2008
							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	$	248,040		$	9,994		$	27,372		$	-	$	265,418		$	75,040		$	4,580		$	66,847		$	162		$	137,469
Exclude straight-line rent adjustment		2,653			-			-			-		2,653			(15	)		-			-			-			(15	)
Adjusted revenues		250,693			9,994			27,372			-		268,071			75,025			4,580			66,847			162			137,454
Operating expenses		122,504			1,384			14,752			-		135,872			43,546			3,345			51,734			76			92,011
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		1,554			-			-			-		1,554			1,026			-			-			-			1,026
Exclude straight-line rent adjustment		(1,610	)		-			-			-		(1,610	)		-			-			-			-			-
Exclude preference payment		(931	)		-			-			-		(931	)		-			-			-			-			-
Adjusted operating expenses		121,517			1,384			14,752			-		134,885			44,572			3,345			51,734			76			93,037
Add interest and other income		4,566			75			410			-		4,901			2,587			60			1,051			31			3,609
Add equity in earnings of unconsolidated entities		543			(8	)		(553	)		-		(2	)		(2,019	)		(138	)		1,810			-			(71	)
Add back provision for decline in real estate of equity method rental properties		1,263			-			(1,263	)		-		-			4,398			-			(4,398	)		-			-
Add back equity method depreciation and amortization expense		3,803			-			(3,803	)		-		-			4,850			-			(4,850	)		-			-
Net operating income		139,351			8,677			7,411			-		138,085			40,269			1,157			8,726			117			47,955
Interest expense		57,697			3,067			7,411			-		62,041			9,171			306			8,518			43			17,426
Loss on early extinguishment of debt		52			-			-			-		52			-			-			-			-			-
Income tax expense (benefit)		1,897			-			-			-		1,897			1,240			-			-			(1,055	)		185
Preferred return on disposition		-			-			-			-		-			208			-			(208	)		-			-
Minority interest in earnings before depreciation and amortization		5,610			5,610			-			-		-			851			851			-			-			-
Add: EBDT from discontinued operations		-			-			-			-		-			1,129			-			-			(1,129	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	74,095		$	-		$	-		$	-	$	74,095		$	30,344		$	-		$	-		$	-		$	30,344
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	74,095		$	-		$	-		$	-	$	74,095		$	30,344		$	-		$	-		$	-		$	30,344
Depreciation and amortization - Real Estate Groups		(53,927	)		-			-			-		(53,927	)		(19,502	)		-			-			(90	)		(19,592	)
Amortization of mortgage procurement costs - Real Estate Groups		(2,564	)		-			-			-		(2,564	)		(753	)		-			-						(753	)
Deferred taxes - Real Estate Groups		(3,545	)		-			-			-		(3,545	)		(3,301	)		-			-			(1,049	)		(4,350	)
Straight-line rent adjustment		(4,263	)		-			-			-		(4,263	)		15			-			-			-			15
Preference payment		(931	)		-			-			-		(931	)		-			-			-			-			-
Preferred return on disposition, net of tax		-			-			-			-		-			(128	)		-			-			-			(128	)
Gain on disposition of rental properties and other investments, net of tax		-			-			-			-		-			-			-			-			5,294			5,294
Provision for decline in real estate, net of tax		-			-			(775	)		-		(775	)		-			-			(2,699	)		-			(2,699	)
Provision for decline in real estate of equity method rental properties, net of tax		(775	)		-			775			-		-			(2,699	)		-			2,699			-			-
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-			-			-		-			(90	)		-			-			90			-
Deferred taxes - Real Estate Groups		-			-			-			-		-			(1,049	)		-			-			1,049			-
Gain on disposition of rental properties		-			-			-			-		-			5,294			-			-			(5,294	)		-
Net earnings (loss)	$	8,090		$	-		$	-		$	-	$	8,090		$	8,131		$	-		$	-		$	-		$	8,131

41

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2008(in thousands)(continued)

	Land Development Group 2008													The Nets 2008
						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	$	7,159		$	479	$	6,789		$	-	$	13,469		$	-		$	-	$	7,188	$	-	$	7,188
Exclude straight-line rent adjustment		-			-		-			-		-			-			-		-		-		-
Adjusted revenues		7,159			479		6,789			-		13,469			-			-		7,188		-		7,188
Operating expenses		9,994			595		3,286			-		12,685			-			-		11,164		-		11,164
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		165			-		-			-		165			-			-		2,888		-		2,888
Exclude straight-line rent adjustment		-			-		-			-		-			-			-		-		-		-
Exclude preference payment		-			-		-			-		-			-			-		-		-		-
Adjusted operating expenses		10,159			595		3,286			-		12,850			-			-		14,052		-		14,052
Add interest and other income		5,202			517		15			-		4,700			-			-		6		-		6
Add equity in earnings of unconsolidated entities		4,447			-		(3,302	)		-		1,145			(8,548	)		-		8,548		-		-
Add back provision for decline in real estate of equity method rental properties		-			-		-			-		-			-			-		-		-		-
Add back equity method depreciation and amortization expense		68			-		(68	)		-		-			-			-		-		-		-
Net operating income		6,717			401		148			-		6,464			(8,548	)		-		1,690		-		(6,858	)
Interest expense		(69	)		29		148			-		50			-			-		1,690		-		1,690
Loss on early extinguishment of debt		-			-		-			-		-			-			-		-		-		-
Income tax expense (benefit)		4,030			-		-			-		4,030			(3,076	)		-		-		-		(3,076	)
Preferred return on disposition		-			-		-			-		-			-			-		-		-		-
Minority interest in earnings before depreciation and amortization		372			372		-			-		-			-			-		-		-		-
Add: EBDT from discontinued operations		-			-		-			-		-			-			-		-		-		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	2,384		$	-	$	-		$	-	$	2,384		$	(5,472	)	$	-	$	-	$	-	$	(5,472	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	2,384		$	-	$	-		$	-	$	2,384		$	(5,472	)	$	-	$	-	$	-	$	(5,472	)
Depreciation and amortization - Real Estate Groups		(74	)		-		-			-		(74	)		-			-		-		-		-
Amortization of mortgage procurement costs - Real Estate Groups		(131	)		-		-			-		(131	)		-			-		-		-		-
Deferred taxes - Real Estate Groups		1,550			-		-			-		1,550			-			-		-		-		-
Straight-line rent adjustment		-			-		-			-		-			-			-		-		-		-
Preference payment		-			-		-			-		-			-			-		-		-		-
Preferred return on disposition, net of tax		-			-		-			-		-			-			-		-		-		-
Gain on disposition of rental properties and other investments, net of tax		-			-		-			-		-			-			-		-		-		-
Provision for decline in real estate, net of tax		(224	)		-		-			-		(224	)		-			-		-		-		-
Provision for decline in real estate of equity method rental properties, net of tax		-			-		-			-		-			-			-		-		-		-
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-		-			-		-			-			-		-		-		-
Deferred taxes - Real Estate Groups		-			-		-			-		-			-			-		-		-		-
Gain on disposition of rental properties		-			-		-			-		-			-			-		-		-		-
Net earnings (loss)	$	3,505		$	-	$	-		$	-	$	3,505		$	(5,472	)	$	-	$	-	$	-	$	(5,472	)

42

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 2008(in thousands)(continued)

	Corporate Activities 2008												Total 2008
						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	$	-		$	-	$	-	$	-	$	-		$	330,239		$	15,053		$	108,196		$	162		$	423,544
Exclude straight-line rent adjustment		-			-		-		-		-			2,638			-			-			-			2,638
Adjusted revenues		-			-		-		-		-			332,877			15,053			108,196			162			426,182
Operating expenses		10,046			-		-		-		10,046			186,090			5,324			80,936			76			261,778
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		757			-		-		-		757			3,502			-			2,888			-			6,390
Exclude straight-line rent adjustment		-			-		-		-		-			(1,610	)		-			-			-			(1,610	)
Exclude preference payment		-			-		-		-		-			(931	)		-			-			-			(931	)
Adjusted operating expenses		10,803			-		-		-		10,803			187,051			5,324			83,824			76			265,627
Add interest and other income		532			-		-		-		532			12,887			652			1,482			31			13,748
Add equity in earnings of unconsolidated entities		-			-		-		-		-			(5,577	)		(146	)		6,503			-			1,072
Add back provision for decline in real estate of equity method rental properties		-			-		-		-		-			5,661			-			(5,661	)		-			-
Add back equity method depreciation and amortization expense		-			-		-		-		-			8,721			-			(8,721	)		-			-
Net operating income		(10,271	)		-		-		-		(10,271	)		167,518			10,235			17,975			117			175,375
Interest expense		15,551			-		-		-		15,551			82,350			3,402			17,767			43			96,758
Loss on early extinguishment of debt		-			-		-		-		-			52			-			-			-			52
Income tax expense (benefit)		(12,814	)		-		-		-		(12,814	)		(8,723	)		-			-			(1,055	)		(9,778	)
Preferred return on disposition		-			-		-		-		-			208			-			(208	)		-			-
Minority interest in earnings before depreciation and amortization		-			-		-		-		-			6,833			6,833			-			-			-
Add: EBDT from discontinued operations		-			-		-		-		-			1,129			-			-			(1,129	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(13,008	)	$	-	$	-	$	-	$	(13,008	)	$	88,343		$	-		$	-		$	-		$	88,343
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(13,008	)	$	-	$	-	$	-	$	(13,008	)	$	88,343		$	-		$	-		$	-		$	88,343
Depreciation and amortization - Real Estate Groups		-			-		-		-		-			(73,503	)		-			-			(90	)		(73,593	)
Amortization of mortgage procurement costs - Real Estate Groups		-			-		-		-		-			(3,448	)		-			-			-			(3,448	)
Deferred taxes - Real Estate Groups		(9,558	)		-		-		-		(9,558	)		(14,854	)		-			-			(1,049	)		(15,903	)
Straight-line rent adjustment		-			-		-		-		-			(4,248	)		-			-			-			(4,248	)
Preference payment		-			-		-		-		-			(931	)		-			-			-			(931	)
Preferred return on disposition, net of tax		-			-		-		-		-			(128	)		-			-			-			(128	)
Gain on disposition of rental properties and other investments, net of tax		-			-		-		-		-			-			-			-			5,294			5,294
Provision for decline in real estate, net of tax		-			-		-		-		-			(224	)		-			(3,474	)		-			(3,698	)
Provision for decline in real estate of equity method rental properties, net of tax		-			-		-		-		-			(3,474	)		-			3,474			-			-
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-		-		-		-			(90	)		-			-			90			-
Deferred taxes - Real Estate Groups		-			-		-		-		-			(1,049	)		-			-			1,049			-
Gain on disposition of rental properties		-			-		-		-		-			5,294			-			-			(5,294	)		-
Net earnings (loss)	$	(22,566	)	$	-	$	-	$	-	$	(22,566	)	$	(8,312	)	$	-		$	-		$	-		$	(8,312	)

43

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2008(in thousands)

	Commercial Group 2008														Residential Group 2008
							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	$	470,307		$	18,913		$	54,296		$	-	$	505,690		$	153,997		$	11,947		$	103,423		$	706		$	246,179
Exclude straight-line rent adjustment		(2,074	)		-			-			-		(2,074	)		(19	)		-			-			-			(19	)
Adjusted revenues		468,233			18,913			54,296			-		503,616			153,978			11,947			103,423			706			246,160
Operating expenses		252,993			5,897			30,027			-		277,123			98,453			10,064			72,358			287			161,034
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		3,110			-			-			-		3,110			1,917			-			-			-			1,917
Exclude straight-line rent adjustment		(3,193	)		-			-			-		(3,193	)		-			-			-			-			-
Exclude preference payment		(1,867	)		-			-			-		(1,867	)		-			-			-			-			-
Adjusted operating expenses		251,043			5,897			30,027			-		275,173			100,370			10,064			72,358			287			162,951
Add interest and other income		6,349			224			1,075			-		7,200			6,177			108			1,943			35			8,047
Add equity in earnings of unconsolidated entities		1,865			(32	)		(2,046	)		-		(149	)		712			(95	)		(1,112	)		-			(305	)
Remove gain on disposition of equity method rental properties		(881	)		-			881			-		-			-			-			-			-			-
Add back provision for decline in real estate of equity method rental properties		1,263			-			(1,263	)		-		-			4,398			-			(4,398	)		-			-
Add back equity method depreciation and amortization expense		7,714			-			(7,714	)		-		-			9,871			-			(9,871	)		-			-
Net operating income		233,500			13,208			15,202			-		235,494			74,766			1,896			17,627			454			90,951
Interest expense		116,442			6,019			15,202			-		125,625			19,382			664			17,397			235			36,350
Loss on early extinguishment of debt		1,479			119			-			-		1,360			3,752			-			22			-			3,774
Income tax expense (benefit)		1,383			-			-			-		1,383			4,375			-			-			(1,119	)		3,256
Preferred return on disposition		-			-			-			-		-			208			-			(208	)		-			-
Minority interest in earnings before depreciation and amortization		7,070			7,070			-			-		-			1,232			1,232			-			-			-
Add: EBDT from discontinued operations		-			-			-			-		-			1,338			-			-			(1,338	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	107,126		$	-		$	-		$	-	$	107,126		$	47,571		$	-		$	-		$	-		$	47,571
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	107,126		$	-		$	-		$	-	$	107,126		$	47,571		$	-		$	-		$	-		$	47,571
Depreciation and amortization - Real Estate Groups		(106,015	)		-			-			-		(106,015	)		(38,099	)		-			-			(95	)		(38,194	)
Amortization of mortgage procurement costs - Real Estate Groups		(5,046	)		-			-			-		(5,046	)		(1,480	)		-			-			(11	)		(1,491	)
Deferred taxes - Real Estate Groups		1,986			-			-			-		1,986			589			-			-			(1,163	)		(574	)
Straight-line rent adjustment		(1,119	)		-			-			-		(1,119	)		19			-			-			-			19
Preference payment		(1,867	)		-			-			-		(1,867	)		-			-			-			-			-
Preferred return on disposition, net of tax		-			-			-			-		-			(128	)		-			-			-			(128	)
Gain on disposition of rental properties and other investments, net of tax		-			-			541			-		541			-			-			-			5,294			5,294
Provision for decline in real estate, net of tax		-			-			(775	)		-		(775	)		-			-			(2,699	)		-			(2,699	)
Gain on disposition of equity method rental properties, net of tax		541			-			(541	)		-		-			-			-			-			-			-
Provision for decline in real estate of equity method rental properties, net of tax		(775	)		-			775			-		-			(2,699	)		-			2,699			-			-
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-			-			-		-			(95	)		-			-			95			-
Amortization of mortgage procurement costs - Real Estate Groups		-			-			-			-					(11	)		-			-			11
Deferred taxes - Real Estate Groups		-			-			-			-		-			(1,163	)		-			-			1,163			-
Gain on disposition of rental properties		-			-			-			-		-			5,294			-			-			(5,294	)		-
Net earnings (loss)	$	(5,169	)	$	-		$	-		$	-	$	(5,169	)	$	9,798		$	-		$	-		$	-		$	9,798

44

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2008(in thousands)(continued)

	Land Development Group 2008													The Nets 2008
						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	$	13,581		$	706	$	9,030		$	-	$	21,905		$	-		$	-	$	32,593	$	-	$	32,593
Exclude straight-line rent adjustment		1			-		-			-		1			-			-		-		-		-
Adjusted revenues		13,582			706		9,030			-		21,906			-			-		32,593		-		32,593
Operating expenses		19,524			1,082		5,333			-		23,775			-			-		37,793		-		37,793
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		283			-		-			-		283			-			-		13,544		-		13,544
Exclude straight-line rent adjustment		-			-		-			-		-			-			-		-		-		-
Exclude preference payment		-			-		-			-		-			-			-		-		-		-
Adjusted operating expenses		19,807			1,082		5,333			-		24,058			-			-		51,337		-		51,337
Add interest and other income		8,038			795		39			-		7,282			-			-		26		-		26
Add equity in earnings of unconsolidated entities		4,220			-		(3,333	)		-		887			(22,021	)		-		22,021		-		-
Remove gain on disposition of equity method rental properties		-			-		-			-		-			-			-		-		-		-
Add back provision for decline in real estate of equity method rental properties		-			-		-			-		-			-			-		-		-		-
Add back equity method depreciation and amortization expense		125			-		(125	)		-		-			-			-		-		-		-
Net operating income		6,158			419		278			-		6,017			(22,021	)		-		3,303		-		(18,718	)
Interest expense		6			59		278			-		225			-			-		3,303		-		3,303
Loss on early extinguishment of debt		-			-		-			-		-			-			-		-		-		-
Income tax expense (benefit)		4,094			-		-			-		4,094			(7,589	)		-		-		-		(7,589	)
Preferred return on disposition		-			-		-			-		-			-			-		-		-		-
Minority interest in earnings before depreciation and amortization		360			360		-			-		-			-			-		-		-		-
Add: EBDT from discontinued operations		-			-		-			-		-			-			-		-		-		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	1,698		$	-	$	-		$	-	$	1,698		$	(14,432	)	$	-	$	-	$	-	$	(14,432	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	1,698		$	-	$	-		$	-	$	1,698		$	(14,432	)	$	-	$	-	$	-	$	(14,432	)
Depreciation and amortization - Real Estate Groups		(149	)		-		-			-		(149	)		-			-		-		-		-
Amortization of mortgage procurement costs - Real Estate Groups		(254	)		-		-			-		(254	)		-			-		-		-		-
Deferred taxes - Real Estate Groups		1,841			-		-			-		1,841			-			-		-		-		-
Straight-line rent adjustment		(1	)		-		-			-		(1	)		-			-		-		-		-
Preference payment		-			-		-			-		-			-			-		-		-		-
Preferred return on disposition, net of tax		-			-		-			-		-			-			-		-		-		-
Gain on disposition of rental properties and other investments, net of tax		-			-		-			-		-			-			-		-		-		-
Provision for decline in real estate, net of tax		(224	)		-		-			-		(224	)		-			-		-		-		-
Gain on disposition of equity method rental properties, net of tax		-			-		-			-		-			-			-		-		-		-
Provision for decline in real estate of equity method rental properties, 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		-			-		-			-		-			-			-		-		-		-
Gain on disposition of rental properties		-			-		-			-		-						-		-				-
Net earnings (loss)	$	2,911		$	-	$	-		$	-	$	2,911		$	(14,432	)	$	-	$	-	$	-	$	(14,432	)

45

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 2008(in thousands)(continued)

	Corporate Activities 2008												Total 2008
						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	$	-		$	-	$	-	$	-	$	-		$	637,885		$	31,566		$	199,342		$	706		$	806,367
Exclude straight-line rent adjustment		-			-		-		-		-			(2,092	)		-			-			-			(2,092	)
Adjusted revenues		-			-		-		-		-			635,793			31,566			199,342			706			804,275
Operating expenses		22,796			-		-		-		22,796			393,766			17,043			145,511			287			522,521
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		1,511			-		-		-		1,511			6,821			-			13,544			-			20,365
Exclude straight-line rent adjustment		-			-		-		-		-			(3,193	)		-			-			-			(3,193	)
Exclude preference payment		-			-		-		-		-			(1,867	)		-			-			-			(1,867	)
Adjusted operating expenses		24,307			-		-		-		24,307			395,527			17,043			159,055			287			537,826
Add interest and other income		724			-		-		-		724			21,288			1,127			3,083			35			23,279
Add equity in earnings of unconsolidated entities		-			-		-		-		-			(15,224	)		(127	)		15,530			-			433
Remove gain on disposition of equity method rental properties		-			-		-		-		-			(881	)		-			881			-			-
Add back provision for decline in real estate of equity method rental properties		-			-		-		-		-			5,661			-			(5,661	)		-			-
Add back equity method depreciation and amortization expense		-			-		-		-		-			17,710			-			(17,710	)		-			-
Net operating income		(23,583	)		-		-		-		(23,583	)		268,820			15,523			36,410			454			290,161
Interest expense		29,891			-		-		-		29,891			165,721			6,742			36,180			235			195,394
Loss on early extinguishment of debt		-			-		-		-		-			5,231			119			22			-			5,134
Income tax expense (benefit)		(15,808	)		-		-		-		(15,808	)		(13,545	)		-			-			(1,119	)		(14,664	)
Preferred return on disposition		-			-		-		-		-			208			-			(208	)		-			-
Minority interest in earnings before depreciation and amortization		-			-		-		-		-			8,662			8,662			-			-			-
Add: EBDT from discontinued operations		-			-		-		-		-			1,338			-			-			(1,338	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(37,666	)	$	-	$	-	$	-	$	(37,666	)	$	104,297		$	-		$	-		$	-		$	104,297
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(37,666	)	$	-	$	-	$	-	$	(37,666	)	$	104,297		$	-		$	-		$	-		$	104,297
Depreciation and amortization - Real Estate Groups		-			-		-		-		-			(144,263	)		-			-			(95	)		(144,358	)
Amortization of mortgage procurement costs - Real Estate Groups		-			-		-		-		-			(6,780	)		-			-			(11	)		(6,791	)
Deferred taxes - Real Estate Groups		(4,115	)		-		-		-		(4,115	)		301			-			-			(1,163	)		(862	)
Straight-line rent adjustment		-			-		-		-		-			(1,101	)		-			-			-			(1,101	)
Preference payment		-			-		-		-		-			(1,867	)		-			-			-			(1,867	)
Preferred return on disposition, net of tax		-			-		-		-		-			(128	)		-			-			-			(128	)
Gain on disposition of rental properties and other investments, net of tax		92			-		-		-		92			92			-			541			5,294			5,927
Provision for decline in real estate, net of tax		-			-		-		-		-			(224	)		-			(3,474	)		-			(3,698	)
Gain on disposition of equity method rental properties, net of tax		-			-		-		-		-			541			-			(541	)		-			-
Provision for decline in real estate of equity method rental properties, net of tax		-			-		-		-		-			(3,474	)		-			3,474			-			-
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-		-		-		-			(95	)		-			-			95			-
Amortization of mortgage procurement costs - Real Estate Groups		-			-		-		-					(11	)		-			-			11			-
Deferred taxes - Real Estate Groups		-			-		-		-		-			(1,163	)		-			-			1,163			-
Gain on disposition of rental properties		-			-		-		-		-			5,294			-			-			(5,294	)		-
Net earnings (loss)	$	(41,689	)	$	-	$	-	$	-	$	(41,689	)	$	(48,581	)	$	-		$	-		$	-		$	(48,581	)

46

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 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	$	210,726		$	11,256		$	29,743		$	-	$	229,213		$	62,254		$	3,270	$	56,565		$	12,397		$	127,946
Exclude straight-line rent adjustment		(7,140	)		-			-			-		(7,140	)		(18	)		-		-			-			(18	)
Adjusted revenues		203,586			11,256			29,743			-		222,073			62,236			3,270		56,565			12,397			127,928
Operating expenses		109,080			1,825			15,776			-		123,031			44,901			2,275		38,920			11,883			93,429
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		1,101			-			-			-		1,101			221			-		-			-			221
Exclude straight-line rent adjustment		(3,688	)		-			-			-		(3,688	)		-			-		-			-			-
Exclude preference payment		(936	)		-			-			-		(936	)		-			-		-			-			-
Adjusted operating expenses		105,557			1,825			15,776			-		119,508			45,122			2,275		38,920			11,883			93,650
Add interest and other income		8,295			334			677			-		8,638			11,785			14		5,497			112			17,380
Add equity in earnings of unconsolidated entities		3,746			(18	)		(3,787	)		-		(23	)		3,055			250		(3,197	)		-			(392	)
Add back equity method depreciation and amortization expense		3,601			-			(3,601	)		-		-			6,197			-		(6,197	)		-			-
Net operating income		113,671			9,747			7,256			-		111,180			38,151			1,259		13,748			626			51,266
Interest expense		43,733			3,796			7,256			-		47,193			11,949			648		8,675			2,000			21,976
Loss on early extinguishment of debt		485			-			-			-		485			1,155			-		39			363			1,557
Income tax expense (benefit)		3,440			-			-			-		3,440			4,062			-		-			(2,406	)		1,656
Preferred return on disposition		-			-			-			-		-			5,034			-		(5,034	)		-			-
Minority interest in earnings before depreciation and amortization		5,951			5,951			-			-		-			611			611		-			-			-
Add: EBDT from discontinued operations		-			-			-			-		-			669			-		-			(669	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	60,062		$	-		$	-		$	-	$	60,062		$	26,077		$	-	$	-		$	-		$	26,077
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	60,062		$	-		$	-		$	-	$	60,062		$	26,077		$	-	$	-		$	-		$	26,077
Depreciation and amortization - Real Estate Groups		(41,920	)		-			-			-		(41,920	)		(19,469	)		-		-			(921	)		(20,390	)
Amortization of mortgage procurement costs - Real Estate Groups		(2,089	)		-			-			-		(2,089	)		(1,269	)		-		-			(34	)		(1,303	)
Deferred taxes - Real Estate Groups		(4,084	)		-			-			-		(4,084	)		790			-		-			(1,365	)		(575	)
Straight-line rent adjustment		3,452			-			-			-		3,452			18			-		-			-			18
Preference payment		(936	)		-			-			-		(936	)		-			-		-			-			-
Preferred return on disposition, net of tax		-			-			-			-		-			(3,089	)		-		-			-			(3,089	)
Gain on disposition of rental properties and other investments, net of tax		-			-			-			-		-			-			-		-			65,237			65,237
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-			-			-		-			(921	)		-		-			921			-
Amortization of mortgage procurement costs - Real Estate Groups		-			-			-			-		-			(34	)		-		-			34			-
Deferred taxes - Real Estate Groups		-			-			-			-		-			(1,365	)		-		-			1,365			-
Gain on disposition of rental properties		-			-			-			-		-			65,237			-		-			(65,237	)		-
Net earnings (loss)	$	14,485		$	-		$	-		$	-	$	14,485		$	65,975		$	-	$	-		$	-		$	65,975

47

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

     Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 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	$	14,606		$	803		$	7,636		$	-	$	21,439		$	-		$	-	$	2,096	$	-	$	2,096
Exclude straight-line rent adjustment		-			-			-			-		-			-			-		-		-		-
Adjusted revenues		14,606			803			7,636			-		21,439			-			-		2,096		-		2,096
Operating expenses		13,981			753			4,471			-		17,699			-			-		3,232		-		3,232
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		34			-			-			-		34			-			-		648		-		648
Exclude straight-line rent adjustment		-			-			-			-		-			-			-		-		-		-
Exclude preference payment		-			-			-			-		-			-			-		-		-		-
Adjusted operating expenses		14,015			753			4,471			-		17,733			-			-		3,880		-		3,880
Add interest and other income		2,968			253			40			-		2,755			-			-		14		-		14
Add equity in earnings of unconsolidated entities		3,198			-			(3,006	)		-		192			(2,226	)		-		2,199		-		(27	)
Add back equity method depreciation and amortization expense		116			-			(116	)		-		-			-			-		-		-		-
Net operating income		6,873			303			83			-		6,653			(2,226	)		-		429		-		(1,797	)
Interest expense		68			(53	)		83			-		204			-			-		429		-		429
Loss on early extinguishment of debt		-			-			-			-		-			-			-		-		-		-
Income tax expense (benefit)		2,971			-			-			-		2,971			(807	)		-		-		-		(807	)
Preferred return on disposition		-			-			-			-		-			-			-		-		-		-
Minority interest in earnings before depreciation and amortization		356			356			-			-		-			-			-		-		-		-
Add: EBDT from discontinued operations		-			-			-			-		-			-			-		-		-		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	3,478		$	-		$	-		$	-	$	3,478		$	(1,419	)	$	-	$	-	$	-	$	(1,419	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	3,478		$	-		$	-		$	-	$	3,478		$	(1,419	)	$	-	$	-	$	-	$	(1,419	)
Depreciation and amortization - Real Estate Groups		(180	)		-			-			-		(180	)		-			-		-		-		-
Amortization of mortgage procurement costs - Real Estate Groups		(146	)		-			-			-		(146	)		-			-		-		-		-
Deferred taxes - Real Estate Groups		476			-			-			-		476			-			-		-		-		-
Straight-line rent adjustment		-			-			-			-		-			-			-		-		-		-
Preference payment		-			-			-			-		-			-			-		-		-		-
Preferred return on disposition, net of tax		-			-			-			-		-			-			-		-		-		-
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		-			-			-			-		-			-			-		-		-		-
Gain on disposition of rental properties		-			-			-			-		-			-			-		-		-		-
Net earnings (loss)	$	3,628		$	-		$	-		$	-	$	3,628		$	(1,419	)	$	-	$	-	$	-	$	(1,419	)

48

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

     Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended July 31, 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	$	-		$	-	$	-	$	-	$	-		$	287,586		$	15,329	$	96,040		$	12,397		$	380,694
Exclude straight-line rent adjustment		-			-		-		-		-			(7,158	)		-		-			-			(7,158	)
Adjusted revenues		-			-		-		-		-			280,428			15,329		96,040			12,397			373,536
Operating expenses		9,224			-		-		-		9,224			177,186			4,853		62,399			11,883			246,615
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		666			-		-		-		666			2,022			-		648			-			2,670
Exclude straight-line rent adjustment		-			-		-		-		-			(3,688	)		-		-			-			(3,688	)
Exclude preference payment		-			-		-		-		-			(936	)		-		-			-			(936	)
Adjusted operating expenses		9,890			-		-		-		9,890			174,584			4,853		63,047			11,883			244,661
Add interest and other income		375			-		-		-		375			23,423			601		6,228			112			29,162
Add equity in earnings of unconsolidated entities		-			-		-		-		-			7,773			232		(7,791	)		-			(250	)
Add back equity method depreciation and amortization expense		-			-		-		-		-			9,914			-		(9,914	)		-			-
Net operating income		(9,515	)		-		-		-		(9,515	)		146,954			11,309		21,516			626			157,787
Interest expense		16,958			-		-		-		16,958			72,708			4,391		16,443			2,000			86,760
Loss on early extinguishment of debt		-			-		-		-		-			1,640			-		39			363			2,042
Income tax expense (benefit)		(9,481	)		-		-		-		(9,481	)		185			-		-			(2,406	)		(2,221	)
Preferred return on disposition		-			-		-		-		-			5,034			-		(5,034	)		-			-
Minority interest in earnings before depreciation and amortization		-			-		-		-		-			6,918			6,918		-			-			-
Add: EBDT from discontinued operations		-			-		-		-		-			669			-		-			(669	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(16,992	)	$	-	$	-	$	-	$	(16,992	)	$	71,206		$	-	$	-		$	-		$	71,206
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(16,992	)	$	-	$	-	$	-	$	(16,992	)	$	71,206		$	-	$	-		$	-		$	71,206
Depreciation and amortization - Real Estate Groups		-			-		-		-		-			(61,569	)		-		-			(921	)		(62,490	)
Amortization of mortgage procurement costs - Real Estate Groups		-			-		-		-		-			(3,504	)		-		-			(34	)		(3,538	)
Deferred taxes - Real Estate Groups		1,834			-		-		-		1,834			(984	)		-		-			(1,365	)		(2,349	)
Straight-line rent adjustment		-			-		-		-		-			3,470			-		-			-			3,470
Preference payment		-			-		-		-		-			(936	)		-		-			-			(936	)
Preferred return on disposition, net of tax		-			-		-		-		-			(3,089	)		-		-			-			(3,089	)
Gain on disposition of rental properties and other investments, net of tax		264			-		-		-		264			264			-		-			65,237			65,501
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-		-		-		-			(921	)		-		-			921			-
Amortization of mortgage procurement costs - Real Estate Groups		-			-		-		-		-			(34	)		-		-			34			-
Deferred taxes - Real Estate Groups		-			-		-		-		-			(1,365	)		-		-			1,365			-
Gain on disposition of rental properties		-			-		-		-		-			65,237			-		-			(65,237	)		-
Net earnings (loss)	$	(14,894	)	$	-	$	-	$	-	$	(14,894	)	$	67,775		$	-	$	-		$	-		$	67,775

49

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 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	$	413,753		$	23,683		$	58,293		$	-	$	448,363		$	116,859		$	5,784	$	100,139		$	24,599		$	235,813
Exclude straight-line rent adjustment		(12,979	)		-			-			-		(12,979	)		(22	)		-		-			-			(22	)
Adjusted revenues		400,774			23,683			58,293			-		435,384			116,837			5,784		100,139			24,599			235,791
Operating expenses		214,895			5,629			31,053			-		240,319			81,704			3,836		67,809			20,730			166,407
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		2,094			-			-			-		2,094			609			-		-			-			609
Exclude straight-line rent adjustment		(5,380	)		-			-			-		(5,380	)		-			-		-			-			-
Exclude preference payment		(1,834	)		-			-			-		(1,834	)		-			-		-			-			-
Adjusted operating expenses		209,775			5,629			31,053			-		235,199			82,313			3,836		67,809			20,730			167,016
Add interest and other income		10,233			664			943			-		10,512			15,629			21		5,791			209			21,608
Add equity in earnings of unconsolidated entities		5,213			(18	)		(5,253	)		-		(22	)		6,627			602		(6,719	)		-			(694	)
Remove gain on disposition of equity method rental properties		-			-			-			-		-			(2,106	)		-		2,106			-			-
Add back equity method depreciation and amortization expense		7,553			-			(7,553	)		-		-			11,056			-		(11,056	)		-			-
Net operating income		213,998			18,700			15,377			-		210,675			65,730			2,571		22,452			4,078			89,689
Interest expense		91,102			7,456			15,340			-		98,986			25,231			1,288		16,996			3,608			44,547
Loss on early extinguishment of debt		3,029			821			37			-		2,245			1,155			-		422			363			1,940
Income tax expense (benefit)		4,581			-			-			-		4,581			6,983			-		-			(2,348	)		4,635
Preferred return on disposition		-			-			-			-		-			5,034			-		(5,034	)		-			-
Minority interest in earnings before depreciation and amortization		10,423			10,423			-			-		-			1,283			1,283		-			-			-
Add: EBDT from discontinued operations		-			-			-			-		-			2,455			-		-			(2,455	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	104,863		$	-		$	-		$	-	$	104,863		$	38,567		$	-	$	-		$	-		$	38,567
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	104,863		$	-		$	-		$	-	$	104,863		$	38,567		$	-	$	-		$	-		$	38,567
Depreciation and amortization - Real Estate Groups		(88,346	)		-			-			-		(88,346	)		(36,425	)		-		-			(1,934	)		(38,359	)
Amortization of mortgage procurement costs - Real Estate Groups		(4,115	)		-			-			-		(4,115	)		(1,986	)		-		-			(69	)		(2,055	)
Deferred taxes - Real Estate Groups		(3,614	)		-			-			-		(3,614	)		5,398			-		-			(1,615	)		3,783
Straight-line rent adjustment		7,599			-			-			-		7,599			22			-		-			-			22
Preference payment		(1,834	)		-			-			-		(1,834	)		-			-		-			-			-
Preferred return on disposition, net of tax		-			-			-			-		-			(3,089	)		-		-			-			(3,089	)
Gain on disposition of rental properties and other investments, net of tax		-			-			-			-		-			-			-		1,292			65,237			66,529
Gain on disposition of equity method rental properties, net of tax		-			-			-			-		-			1,292			-		(1,292	)		-			-
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-			-			-		-			(1,934	)		-		-			1,934			-
Amortization of mortgage procurement costs - Real Estate Groups		-			-			-			-		-			(69	)		-		-			69			-
Deferred taxes - Real Estate Groups		-			-			-			-		-			(1,615	)		-		-			1,615			-
Gain on disposition of rental properties		-			-			-			-		-			65,237			-		-			(65,237	)		-
Net earnings (loss)	$	14,553		$	-		$	-		$	-	$	14,553		$	65,398		$	-	$	-		$	-		$	65,398

50

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

     Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 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	$	25,339		$	1,178	$	8,784		$	-	$	32,945		$	-		$	-	$	6,006	$	-	$	6,006
Exclude straight-line rent adjustment		1			-		-			-		1			-			-		-		-		-
Adjusted revenues		25,340			1,178		8,784			-		32,946			-			-		6,006		-		6,006
Operating expenses		26,078			1,183		5,935			-		30,830			-			-		8,156		-		8,156
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		93			-		-			-		93			-			-		2,550		-		2,550
Exclude straight-line rent adjustment		-			-		-			-		-			-			-		-		-		-
Exclude preference payment		-			-		-			-		-			-			-		-		-		-
Adjusted operating expenses		26,171			1,183		5,935			-		30,923			-			-		10,706		-		10,706
Add interest and other income		7,978			739		94			-		7,333			-			-		23		-		23
Add equity in earnings of unconsolidated entities		2,771			-		(2,566	)		-		205			(5,477	)		-		5,439		-		(38	)
Remove gain on disposition of equity method rental properties		-			-		-			-		-			-			-		-		-		-
Add back equity method depreciation and amortization expense		178			-		(178	)		-		-			-			-		-		-		-
Net operating income		10,096			734		199			-		9,561			(5,477	)		-		762		-		(4,715	)
Interest expense		2,374			127		199			-		2,446			-			-		762		-		762
														��
Loss on early extinguishment of debt		-			-		-			-		-			-			-		-		-		-
Income tax expense (benefit)		6,334			-		-			-		6,334			(2,008	)		-		-		-		(2,008	)
Preferred return on disposition		-			-		-			-		-			-			-		-		-		-
Minority interest in earnings before depreciation and amortization		607			607		-			-		-			-			-		-		-		-
Add: EBDT from discontinued operations		-			-		-			-		-			-			-		-		-		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	781		$	-	$	-		$	-	$	781		$	(3,469	)	$	-	$	-	$	-	$	(3,469	)
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	781		$	-	$	-		$	-	$	781		$	(3,469	)	$	-	$	-	$	-	$	(3,469	)
Depreciation and amortization - Real Estate Groups		(294	)		-		-			-		(294	)		-			-		-		-		-
Amortization of mortgage procurement costs - Real Estate Groups		(287	)		-		-			-		(287	)		-			-		-		-		-
Deferred taxes - Real Estate Groups		3,661			-		-			-		3,661			-			-		-		-		-
Straight-line rent adjustment		(1	)		-		-			-		(1	)		-			-		-		-		-
Preference payment		-			-		-			-		-			-			-		-		-		-
Preferred return on disposition, net of tax		-			-		-			-		-			-			-		-		-		-
Gain on disposition of rental properties and other investments, net of tax		-			-		-			-		-			-			-		-		-		-
Gain on disposition of equity method rental properties, 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		-			-		-			-		-			-			-		-		-		-
Gain on disposition of rental properties		-			-		-			-		-			-			-		-		-		-
Net earnings (loss)	$	3,860		$	-	$	-		$	-	$	3,860		$	(3,469	)	$	-	$	-	$	-	$	(3,469	)

51

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Six Months Ended July 31, 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	$	-		$	-	$	-	$	-		$	-		$	555,951		$	30,645	$	173,222		$	24,599		$	723,127
Exclude straight-line rent adjustment		-			-		-		-			-			(13,000	)		-		-			-			(13,000	)
Adjusted revenues		-			-		-		-			-			542,951			30,645		173,222			24,599			710,127
Operating expenses		23,101			-		-		-			23,101			345,778			10,648		112,953			20,730			468,813
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		1,223			-		-		-			1,223			4,019			-		2,550			-			6,569
Exclude straight-line rent adjustment		-			-		-		-			-			(5,380	)		-		-			-			(5,380	)
Exclude preference payment		-			-		-		-			-			(1,834	)		-		-			-			(1,834	)
Adjusted operating expenses		24,324			-		-		-			24,324			342,583			10,648		115,503			20,730			468,168
Add interest and other income		982			-		-		-			982			34,822			1,424		6,851			209			40,458
Add equity in earnings of unconsolidated entities		-			-		-		-			-			9,134			584		(9,099	)		-			(549	)
Remove gain on disposition of equity method rental properties		-			-		-		-			-			(2,106	)		-		2,106			-			-
Add back equity method depreciation and amortization expense		-			-		-		-			-			18,787			-		(18,787	)		-			-
Net operating income		(23,342	)		-		-		-			(23,342	)		261,005			22,005		38,790			4,078			281,868
Interest expense		30,800			-		-		-			30,800			149,507			8,871		33,297			3,608			177,541
Early extinguishment of debt		-			-		-		-			-			4,184			821		459			363			4,185
Income tax expense (benefit)		(19,135	)		-		-		-			(19,135	)		(3,245	)		-		-			(2,348	)		(5,593	)
Preferred return on disposition		-			-		-		-			-			5,034			-		(5,034	)		-			-
Minority interest in earnings before depreciation and amortization		-			-		-		-			-			12,313			12,313		-			-			-
Add: EBDT from discontinued operations		-			-		-		-			-			2,455			-		-			(2,455	)		-
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(35,007	)	$	-	$	-	$	-		$	(35,007	)	$	105,735		$	-	$	-		$	-		$	105,735
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(35,007	)	$	-	$	-	$	-		$	(35,007	)	$	105,735		$	-	$	-		$	-		$	105,735
Depreciation and amortization - Real Estate Groups		-			-		-		-			-			(125,065	)		-		-			(1,934	)		(126,999	)
Amortization of mortgage procurement costs - Real Estate Groups		-			-		-		-			-			(6,388	)		-		-			(69	)		(6,457	)
Deferred taxes - Real Estate Groups		4,995			-		-		-			4,995			10,440			-		-			(1,615	)		8,825
Straight-line rent adjustment		-			-		-		-			-			7,620			-		-			-			7,620
Preference payment		-			-		-		-			-			(1,834	)		-		-			-			(1,834	)
Preferred return on disposition, net of tax		-			-		-		-			-			(3,089	)		-		-			-			(3,089	)
Gain on disposition of rental properties and other investments, net of tax		264			-		-		-			264			264			-		1,292			65,237			66,793
Gain on disposition of equity method rental properties, net of tax		-			-		-		-			-			1,292			-		(1,292	)		-			-
Discontinued operations, net of tax and minority interest:
Depreciation and amortization - Real Estate Groups		-			-		-		-			-			(1,934	)		-		-			1,934			-
Amortization of mortgage procurement costs - Real Estate Groups		-			-		-		-			-			(69	)		-		-			69			-
Deferred taxes - Real Estate Groups		-			-		-		-	��		-			(1,615	)		-		-			1,615			-
Gain on disposition of rental properties		-			-		-		-			-			65,237			-		-			(65,237	)		-
Net earnings (loss)	$	(29,748	)	$	-	$	-	$	-		$	(29,748	)	$	50,594		$	-	$	-		$	-		$	50,594

52