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

Exhibit 99.1

Forest City Enterprises, Inc.

Supplemental Package

Three and Six Months Ended July 31, 2011 and 2010

Forest City Enterprises, Inc. and Subsidiaries

Three and Six Months Ended July 31, 2011 and 2010

Supplemental Package

NYSE: FCEA, FCEB

Index

Corporate Overview	2-3
Selected Financial Information
Forest City Enterprises, Inc.
Consolidated Balance Sheet Information	4-7
Consolidated Earnings Information	8-11
Supplemental Operating Information
Occupancy Data	12
Comparable Net Operating Income (NOI)	13
Comparable NOI Detail	14-15
NOI By Product Type	16
NOI By Core Market	17
Reconciliation of NOI to Net Earnings	18-19
Results of Operations Discussion	20-23
EBDT Bridge	24-25
Reconciliation of Net Earnings to EBDT	26-27
Schedules of Lease Expirations	28-29
Schedules of Significant Tenants	30-31
Development Pipeline	32-38
Supplemental Financial Information
Projects under Construction and Development Debt and Non-Recourse Debt	39
Scheduled Maturities Table	40-41
Investments in Unconsolidated Entities	42-44
Summary of EBDT	45-56

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, 2011 and other factors that might cause differences, some of which could be material, include, but are not limited to, the impact of current lending and capital market conditions on our liquidity, ability to finance or refinance projects and repay our debt, the impact of the current economic environment on the ownership, development and management of our real estate portfolio, general real estate investment and development risks, vacancies in our properties, further downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, anchor store consolidations or closings, international activities, the impact of terrorist acts, risks associated with an investment in a professional sports team, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our credit facility and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, the impact of credit rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure of our insurance carriers, environmental liabilities, conflicts of interest, risks associated with the sale of tax credits, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, volatility in the market price of our publicly traded securities, inflation risks, 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.

1

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial and 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 strategic business unit, owns, develops, acquires and operates regional malls, specialty/urban retail centers, office and life science buildings, hotels and mixed-use projects. TheResidential Group owns, 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. The Land Development Group acquires and sells both land and developed lots to residential, commercial and industrial customers. It also owns and develops land into master-planned communities and mixed-use projects.Real Estate Groups are the combined Commercial, Residential and Land Development Groups.Corporate Activities and theNets, a member of the National Basketball Association (“NBA”) in which we account for our investment on the equity method of accounting, are other reportable segments of the Company.

We have approximately $10.7 billion of assets in 26 states and the District of Columbia at July 31, 2011. Our core markets include Boston, the state of California, Chicago, Denver, New York City/Philadelphia metropolitan area and the Greater Washington, D.C./Baltimore metropolitan area. Our core markets account for approximately 76 percent of the cost of our real estate portfolio at July 31, 2011. We have offices in Albuquerque, Boston, Chicago, Dallas, 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, 2011. 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, 2011 on pages 63-74.

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, a measure of performance used by publicly traded Real Estate Investment Trusts, but may not be directly comparable to similarly titled measures reported by other companies. For additional discussion of EBDT as well as a reconciliation of net earnings to EBDT see pages 22-27.

2

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Supplemental Operating Information

The operating information contained in this document includes: occupancy data, comparable NOI, NOI by product type and core market, reconciliation of NOI to net earnings, results of operations discussion, EBDT bridge, reconciliation of net earnings to EBDT, retail and office lease expirations, significant retail and office tenants, 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, 2011 and 2010.

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 on pages 22-23), 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 NOI to net earnings, the most comparable financial measure calculated in accordance with GAAP and a reconciliation of NOI to net earnings for each strategic business unit are provided on pages 18-19 and 45-56 of this document. A reconciliation from NOI to comparable NOI can be found on pages 14-15.

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 as filed with the Securities and Exchange Commission for the fiscal year ended January 31, 2011 can be found on our website under SEC Filings 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, Chief Financial Officer and Treasurer

Transfer Agent and Registrar

Wells Fargo

Shareowner Services

P.O. Box 64854

St. Paul, MN 55164-9440

(800) 468-9716

www.shareowneronline.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 Wells Fargo Shareowner Services at (800) 468-9716 or by visiting www.shareowneronline.com.

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Forest City Enterprises, Inc. and Subsidiaries

Selected 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, 2011 (Unaudited)

	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties
Residential	$	1,515,512		$	26,022		$	1,118,880		$	2,608,370
Commercial
Retail centers		2,544,242			99,462			1,175,409			3,620,189
Office and other buildings		3,031,660			93,870			379,161			3,316,951
Corporate and other equipment		10,017			–			–			10,017
Total completed rental properties		7,101,431			219,354			2,673,450			9,555,527
Projects under construction
Residential		46,671			–			182,494			229,165
Commercial
Retail centers		677,303			689			10,897			687,511
Office and other buildings		400,264			247,896			3,675			156,043
Total projects under construction		1,124,238			248,585			197,066			1,072,719
Projects under development
Residential		753,760			154,957			6,063			604,866
Commercial
Retail centers		37,969			98			10,893			48,764
Office and other buildings		254,888			25,300			6,804			236,392
Total projects under development		1,046,617			180,355			23,760			890,022
Total projects under construction and development		2,170,855			428,940			220,826			1,962,741
Land held for development or sale		263,224			21,871			96,725			338,078
Total Real Estate		9,535,510			670,165			2,991,001			11,856,346
Less accumulated depreciation		(1,501,353	)		(51,729	)		(516,556	)		(1,966,180	)
Real Estate, net		8,034,157			618,436			2,474,445			9,890,166
Cash and equivalents		412,348			16,719			60,556			456,185
Restricted cash and escrowed funds		502,373			109,232			123,018			516,159
Notes and accounts receivable, net		394,324			18,365			170,474			546,433
Investments in and advances to affiliates		685,627			(154,263	)		(672,277	)		167,613
Lease and mortgage procurement costs, net		302,067			16,668			50,677			336,076
Prepaid expenses and other deferred costs, net		220,574			37,101			20,676			204,149
Intangible assets, net		114,709			4			10,521			125,226
Total Assets	$	10,666,179		$	662,262		$	2,238,090		$	12,242,007

4

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Balance Sheet Information – July 31, 2011 (Unaudited)

	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Liabilities and Equity
Liabilities
Mortgage debt and notes payable, nonrecourse
Completed rental properties
Residential	$	950,943		$	18,818		$	891,888		$	1,824,013
Commercial
Retail centers		1,789,570			101,627			911,556			2,599,499
Office and other buildings		2,134,147			76,611			310,780			2,368,316
Total completed rental properties		4,874,660			197,056			2,114,224			6,791,828
Projects under construction
Residential		47,700			–			116,416			164,116
Commercial
Retail centers		370,172			–			–			370,172
Office and other buildings		98,560			57,183			–			41,377
Total projects under construction		516,432			57,183			116,416			575,665
Projects under development
Residential		152,644			35,341			–			117,303
Commercial
Retail centers		–			–			–			–
Office and other buildings		41,800			4,180			2,887			40,507
Total projects under development		194,444			39,521			2,887			157,810
Total projects under construction and development		710,876			96,704			119,303			733,475
Land held for development or sale		36,151			3,313			29,479			62,317
Total Mortgage debt and notes payable, nonrecourse		5,621,687			297,073			2,263,006			7,587,620
Bank revolving credit facility		–			–			–			–
Senior and subordinated debt		1,084,831			–			–			1,084,831
Construction payables		156,037			48,502			19,089			126,624
Operating accounts payable and accrued expenses		629,753			32,746			158,024			755,031
Accrued derivative liability		152,600			–			13,937			166,537
Deferred profit on NY retail joint venture transaction		115,388			–			–			115,388
Total Accounts payable and accrued expenses		1,053,778			81,248			191,050			1,163,580
Cash distributions and losses in excess of investments in unconsolidated investments		282,955			(38,267	)		(215,966	)		105,256
Deferred income taxes		494,413			–			–			494,413
Total Liabilities		8,537,664			340,054			2,238,090			10,435,700
Redeemable Noncontrolling Interest		226,936			226,936			–			–
Equity
Shareholders’ Equity
Shareholders’ equity before accumulated other comprehensive loss		1,726,445			–			–			1,726,445
Accumulated other comprehensive loss		(106,159	)		–			–			(106,159	)
Total Shareholders’ Equity		1,620,286			–			–			1,620,286
Noncontrolling interest		281,293			95,272			–			186,021
Total Equity		1,901,579			95,272			–			1,806,307
Total Liabilities and Equity	$	10,666,179		$	662,262		$	2,238,090		$	12,242,007

5

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Balance Sheet Information – January 31, 2011 (Unaudited)

	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata Consolidation (Non-GAAP)
	(in thousands)
Assets
Real Estate
Completed rental properties
Residential	$	1,664,490		$	26,028		$	826,356		$	2,464,818
Commercial
Retail centers		3,226,717			113,193			718,593			3,832,117
Office and other buildings		3,314,371			253,604			378,863			3,439,630
Corporate and other equipment		9,847			–			1			9,848
Total completed rental properties		8,215,425			392,825			1,923,813			9,746,413
Projects under construction
Residential		771,245			213,988			3,642			560,899
Commercial
Retail centers		703,397			532			50,220			753,085
Office and other buildings		297,069			199,241			1,981			99,809
Total projects under construction		1,771,711			413,761			55,843			1,413,793
Projects under development
Residential		687,125			222,514			6,063			470,674
Commercial
Retail centers		17,837			99			10,890			28,628
Office and other buildings		229,562			58,830			6,807			177,539
Total projects under development		934,524			281,443			23,760			676,841
Total projects under construction and development		2,706,235			695,204			79,603			2,090,634
Land held for development or sale		244,879			18,683			115,607			341,803
Total Real Estate		11,166,539			1,106,712			2,119,023			12,178,850
Less accumulated depreciation		(1,614,399	)		(63,987	)		(424,331	)		(1,974,743	)
Real Estate, net		9,552,140			1,042,725			1,694,692			10,204,107
Cash and equivalents		193,372			13,979			48,583			227,976
Restricted cash and escrowed funds		720,180			240,709			78,890			558,361
Notes and accounts receivable, net		403,101			20,329			86,729			469,501
Investments in and advances to affiliates		431,509			(278,671	)		(323,995	)		386,185
Lease and mortgage procurement costs, net		356,804			30,171			33,025			359,658
Prepaid expenses and other deferred costs, net		266,689			44,536			10,443			232,596
Intangible assets, net		135,906			5			1,289			137,190
Total Assets	$	12,059,701		$	1,113,783		$	1,629,656		$	12,575,574

6

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Balance Sheet Information – January 31, 2011 (Unaudited)

	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Pro-Rata  Consolidation   (Non-GAAP)
	(in thousands)
Liabilities and Equity
Liabilities
Mortgage debt and notes payable, nonrecourse
Completed rental properties
Residential	$	1,110,095		$	18,998		$	709,846		$	1,800,943
Commercial
Retail centers		2,322,539			120,042			655,162			2,857,659
Office and other buildings		2,346,189			219,327			295,641			2,422,503
Total completed rental properties		5,778,823			358,367			1,660,649			7,081,105
Projects under construction
Residential		717,700			203,681			–			514,019
Commercial
Retail centers		379,363			–			–			379,363
Office and other buildings		82,157			60,108			–			22,049
Total projects under construction		1,179,220			263,789			–			915,431
Projects under development
Residential		155,890			61,760			–			94,130
Commercial
Retail centers		–			–			–			–
Office and other buildings		42,200			16,880			2,887			28,207
Total projects under development		198,090			78,640			2,887			122,337
Total projects under construction and development		1,377,310			342,429			2,887			1,037,768
Land held for development or sale		51,085			3,500			49,831			97,416
Total Mortgage debt and notes payable, nonrecourse		7,207,218			704,296			1,713,367			8,216,289
Bank revolving credit facility		137,152			–			–			137,152
Senior and subordinated debt		773,683			–			–			773,683
Construction payables		179,601			44,490			4,670			139,781
Operating accounts payable and accrued expenses		737,854			28,443	��		105,075			814,486
Accrued derivative liability		156,587			3,327			15,163			168,423
Total Accounts payable and accrued expenses		1,074,042			76,260			124,908			1,122,690
Cash distributions and losses in excess of investments in unconsolidated investments		290,492			(38,493	)		(208,619	)		120,366
Deferred income taxes		489,974			–			–			489,974
Total Liabilities		9,972,561			742,063			1,629,656			10,860,154
Redeemable Noncontrolling Interest		226,829			226,829			–			–
Equity
Shareholders’ Equity
Shareholders’ equity before accumulated other comprehensive loss		1,623,828			–			–			1,623,828
Accumulated other comprehensive loss		(94,429	)		–			–			(94,429)
Total Shareholders’ Equity		1,529,399			–			–			1,529,399
Noncontrolling interest		330,912			144,891			–			186,021
Total Equity		1,860,311			144,891			–			1,715,420
Total Liabilities and Equity	$	12,059,701		$	1,113,783		$	1,629,656		$	12,575,574

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Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Earnings Information – Three Months Ended July 31, 2011 (Unaudited)

	Full Consolidation (GAAP)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata  Consolidation   (Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	253,205	$	12,279	$	94,643	$	1,494	$	337,063
Expenses
Operating expenses		159,771		7,903		45,037		446		197,351
Depreciation and amortization		54,538		1,171		16,010		238		69,615
Impairment of real estate		235		–		–		–		235
		214,544		9,074		61,047		684		267,201
Interest expense		(64,064)		(3,558)		(25,183)		(180)		(85,869)
Amortization of mortgage procurement costs		(2,727)		(130)		(734)		(84)		(3,415)
Loss on early extinguishment of debt		(5,471)		–		(2,355)		–		(7,826)
Interest and other income		15,315		534		268		–		15,049
Net gain on disposition of rental properties		–		–		–		29,899		29,899
Earnings (loss) before income taxes		(18,286)		51		5,592		30,445		17,700
Income tax expense (benefit)
Current		(1,679)		–		–		1,543		(136)
Deferred		(4,492)		–		–		10,845		6,353
		(6,171)		–		–		12,388		6,217
Equity in earnings (loss) of unconsolidated entities		2,385		142		(5,592)		–		(3,349)
Earnings (loss) from continuing operations		(9,730)		193		–		18,057		8,134
Discontinued operations, net of tax:
Operating earnings from rental properties		1,000		665		–		(335)		–
Gain on disposition of rental properties		99,087		81,365		–		(17,722)		–
		100,087		82,030		–		(18,057)		–
Net earnings		90,357		82,223		–		–		8,134
Noncontrolling Interests
Earnings from continuing operations attributable to noncontrolling interests		(193)		(193)		–		–		–
Earnings from discontinued operations attributable to noncontrolling interests		(82,030)		(82,030)		–		–		–
		(82,223)		(82,223)		–		–		–
Net earnings attributable to Forest City Enterprises, Inc.	$	8,134	$	–	$	–	$	–	$	8,134
Preferred dividends		(3,850)		–		–		–		(3,850)
Net earnings attributable to Forest City Enterprises, Inc. common shareholders	$	4,284	$	–	$	–	$	–	$	4,284

8

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Earnings Information – Six Months Ended July 31, 2011 (Unaudited)

	Full   Consolidation   (GAAP)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata   Consolidation   (Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	561,629	$	24,868	$	177,357	$	6,593	$	720,711
Expenses
Operating expenses		322,679		15,341		82,721		2,944		393,003
Depreciation and amortization		111,245		2,829		29,700		1,030		139,146
Impairment of real estate		5,070		–		–		–		5,070
		438,994		18,170		112,421		3,974		537,219
Interest expense		(130,979)		(7,420)		(48,290)		(712)		(172,561)
Amortization of mortgage procurement costs		(5,622)		(260)		(1,352)		(333)		(7,047)
Loss on early extinguishment of debt		(5,767)		(4)		(2,355)		–		(8,118)
Interest and other income		30,822		394		385		–		30,813
Net gain on disposition of rental properties and partial interests in rental properties		9,561		–		12,567		39,937		62,065
Earnings (loss) before income taxes		20,650		(592)		25,891		41,511		88,644
Income tax expense (benefit)
Current		15,134		–		–		2,941		18,075
Deferred		(3,392)		–		–		14,558		11,166
		11,742		–		–		17,499		29,241
Equity in earnings (loss) of unconsolidated entities		22,379		190		(25,891)		–		(3,702)
Earnings (loss) from continuing operations		31,287		(402)		–		24,012		55,701
Discontinued operations, net of tax:
Operating earnings from rental properties		2,961		1,997		–		(964)		–
Gain on disposition of rental properties		104,806		81,758		–		(23,048)		–
		107,767		83,755		–		(24,012)		–
Net earnings		139,054		83,353		–		–		55,701
Noncontrolling Interests
Loss from continuing operations attributable to noncontrolling interests		402		402		–		–		–
Earnings from discontinued operations attributable to noncontrolling interests		(83,755)		(83,755)		–		–		–
		(83,353)		(83,353)		–		–		–
Net earnings attributable to Forest City Enterprises, Inc.	$	55,701	$	–	$	–	$	–	$	55,701
Preferred dividends		(7,700)		–		–		–		(7,700)
Net earnings attributable to Forest City Enterprises, Inc. common shareholders	$	48,001	$	–	$	–	$	–	$	48,001

9

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Earnings Information – Three Months Ended July 31, 2010 (Unaudited)

	Full   Consolidation   (GAAP)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata   Consolidation   (Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	294,221	$	14,854	$	80,162	$	12,396	$	371,925
Expenses
Operating expenses		169,516		9,368		39,807		7,433		207,388
Depreciation and amortization		58,040		1,906		12,267		2,573		70,974
Impairment of real estate		1,100		–		2,282		45,410		48,792
		228,656		11,274		54,356		55,416		327,154
Interest expense		(84,795)		(4,164)		(19,162)		(2,355)		(102,148)
Amortization of mortgage procurement costs		(2,721)		(112)		(598)		(426)		(3,633)
Gain on early extinguishment of debt		1,896		–		–		–		1,896
Interest and other income		16,231		133		(56)		3		16,045
Net gain (loss) on disposition of rental properties and partial interests in rental properties		204,269		–		(878)		1,993		205,384
Net gain on disposition of partial interests in other investment		55,112		23,675		–		–		31,437
Earnings (loss) before income taxes		255,557		23,112		5,112		(43,805)		193,752
Income tax expense (benefit)
Current		5,478		–		–		(553)		4,925
Deferred		76,088		–		–		(16,313)		59,775
		81,566		–		–		(16,866)		64,700
Equity in earnings (loss) of unconsolidated entities, including impairment		(996)		98		(5,112)		–		(6,206)
Earnings (loss) from continuing operations		172,995		23,210		–		(26,939)		122,846
Discontinued operations, net of tax:
Operating earnings (loss) from rental properties		(152)		86		–		238		–
Impairment of real estate		(27,800)		–		–		27,800		–
Gain on disposition of rental properties		5,310		4,211		–		(1,099)		–
		(22,642)		4,297		–		26,939		–
Net earnings		150,353		27,507		–		–		122,846
Noncontrolling Interests
Earnings from continuing operations attributable to noncontrolling interests		(23,210)		(23,210)		–		–		–
Earnings from discontinued operations attributable to noncontrolling interests		(4,297)		(4,297)		–		–		–
		(27,507)		(27,507)		–		–		–
Net earnings attributable to Forest City Enterprises, Inc.	$	122,846	$	–	$	–	$	–	$	122,846
Preferred dividends		(4,107)		–		–		–		(4,107)
Net earnings attributable to Forest City Enterprises, Inc. common shareholders	$	118,739	$	–	$	–	$	–	$	118,739

10

Forest City Enterprises, Inc. and Subsidiaries

Selected Financial Information

Consolidated Earnings Information – Six Months Ended July 31, 2010 (Unaudited)

	Full   Consolidation   (GAAP)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata   Consolidation   (Non-GAAP)
	(in thousands)
Revenues from real estate operations	$	563,003	$	26,668	$	153,635	$	23,980	$	713,950
Expenses
Operating expenses		324,644		15,641		93,443		13,153		415,599
Depreciation and amortization		117,366		3,281		24,513		4,776		143,374
Impairment of real estate		1,100		–		15,181		45,410		61,691
		443,110		18,922		133,137		63,339		620,664
Interest expense		(165,977)		(9,201)		(39,118)		(4,045)		(199,939)
Amortization of mortgage procurement costs		(5,333)		(201)		(1,151)		(481)		(6,764)
Gain on early extinguishment of debt		8,193		–		–		–		8,193
Interest and other income		23,045		1,032		14,760		6		36,779
Net gain (loss) on disposition of rental properties and partial interests in rental properties		205,135		–		(830)		1,993		206,298
Net gain on disposition of partial interests in other investment		55,112		23,675		–		–		31,437
Earnings (loss) before income taxes		240,068		23,051		(5,841)		(41,886)		169,290
Income tax expense (benefit)
Current		11,570		–		–		104		11,674
Deferred		60,626		–		–		(16,227)		44,399
		72,196		–		–		(16,123)		56,073
Equity in earnings (loss) of unconsolidated entities, including impairment		(18,120)		(6,346)		5,841		–		(5,933)
Earnings (loss) from continuing operations		149,752		16,705		–		(25,763)		107,284
Discontinued operations, net of tax:
Operating earnings from rental properties		1,727		789		–		(938)		–
Impairment of real estate		(27,800)		–		–		27,800		–
Gain on disposition of rental properties		5,310		4,211		–		(1,099)		–
		(20,763)		5,000		–		25,763		–
Net earnings		128,989		21,705		–		–		107,284
Noncontrolling Interests
Earnings from continuing operations attributable to noncontrolling interests		(16,705)		(16,705)		–		–		–
Earnings from discontinued operations attributable to noncontrolling interests		(5,000)		(5,000)		–		–		–
		(21,705)		(21,705)		–		–		–
Net earnings attributable to Forest City Enterprises, Inc.	$	107,284	$	–	$	–	$	–	$	107,284
Preferred dividends		(4,107)		–		–		–		(4,107)
Net earnings attributable to Forest City Enterprises, Inc. common shareholders	$	103,177	$	–	$	–	$	–	$	103,177

11

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Occupancy Data – July 31, 2011 and 2010

Retail and office occupancy as of July 31, 2011 and 2010 is based on square feet leased at the end of the fiscal quarter. Average Occupancy Year-to-Date as of July 31, 2011 and 2010 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, 2011 and 2010 represents total units occupied divided by total units available. Average Occupancy as of July 31, 2011 and 2010 for residential 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, 2011 and 2010.

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

	Occupancy As of July 31, 2011		Average         Occupancy         Year-to-Date         July 31, 2011		Occupancy As of July 31, 2010		Average         Occupancy         Year-to-Date         July 31, 2010
Retail
Comparable		90.3%		90.5%		90.2%		90.1%
Total		90.4%		90.8%		90.7%		89.7%
Office
Comparable		90.3%		89.8%		90.9%		90.9%
Total		88.8%		88.3%		89.9%		89.8%
Residential(1) (2)
Comparable		93.6%		94.8%		92.8%		93.0%
Total		93.0%		91.7%		91.6%		89.6%
Hotels
Comparable and Total				65.5%				66.3%
Comparable and Total ADR			$	148.27			$	139.24

The table below provides occupancy as reported in previous quarters. These amounts may differ from above because the properties that qualify as comparable change from period to period.

Occupancy Recap of Quarterly Supplemental Packages
	Occupancy As of										Average Occupancy Year-to-Date
	July 31, 2011		April 30, 2011		January 31, 2011		October 31, 2010		July 31,         2010		July 31, 2011		April 30,   2011		January 31, 2011		October 31, 2010		July 31,   2010
Retail
Comparable		90.3%		91.2%		91.2%		90.6%		90.9%		90.5%		91.2%		90.7%		90.4%		90.5%
Total		90.4%		91.1%		91.2%		90.4%		90.7%		90.8%		91.1%		90.0%		89.6%		89.7%
Office
Comparable		90.3%		90.7%		88.4%		90.5%		90.0%		89.8%		90.0%		89.2%		90.3%		90.0%
Total		88.8%		89.6%		87.8%		90.3%		89.9%		88.3%		88.7%		88.7%		90.0%		89.8%
Residential(1) (2)
Comparable		93.6%		93.7%		93.7%		93.7%		92.9%		94.8%		94.8%		93.8%		93.8%		93.2%
Total		93.0%		92.6%		92.7%		92.2%		91.6%		91.7%		91.5%		89.6%		89.3%		92.1%
Hotels
Comparable and Total												65.5%		56.9%		69.0%		69.9%		66.3%
Comparable and Total ADR											$	148.27	$	145.29	$	140.03	$	138.92	$	139.24

(1) Excludes military and subsidized senior housing units.

(2) Prior periods have been recasted to exclude subsidized senior housing. The Company believes this change will improve disclosure by allowing investors to see results for the conventional apartment portfolio separated from those of the limited-dividend senior-housing properties.

12

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, 2011 and 2010. The schedules below present Pro-Rata Comparable NOI for the three and six months ended July 31, 2011. The following schedules on pages 14-15 present comparable NOI for each of our major product lines, as well as strategic business units under which these product lines operate. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on pages 18-19. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 45-56.

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

	Three Months Ended          July 31, 2011		Six Months Ended          July 31, 2011
Retail		1.6%		2.2%
Office		3.1%		0.2%
Residential(1)		3.1%		4.3%
Hotel		1.6%		(10.4%)
Total		2.5%		1.6%

The tables below provide the percentage change of Comparable Net Operating Income (NOI) as reported in previous quarters. GAAP reconciliations for previous quarters can be found in prior supplemental packages.

Quarterly Historical Trends											Annual Historical Trends
	Three Months Ended											Year Ended
	July 31, 2011		April 30, 2011		January 31, 2011		October 31, 2010		July 31, 2010			January 31, 2011		January 31, 2010		January 31, 2009
Retail		1.6%		2.6%		3.4%		4.1%		3.2%	Retail		2.2%		(3.9%)		0.3%
Office		3.1%		(2.5%)		0.2%		2.2%		1.6%	Office		2.1%		5.4%		1.2%
Residential (1)		3.1%		4.8%		2.0%		7.0%		8.2%	Residential (1)		4.3%		(3.9%)		1.4%
Hotel		1.6%		(54.2%)		(13.4%)		(20.3%)		7.9%	Hotel		(3.9%)		(9.9%)		(4.9%)
Total		2.5%		0.5%		1.6%		3.0%		3.6%	Total		2.4%		(0.9%)		0.7%

(1) Prior periods have been recasted to exclude subsidized senior housing. The Company believes this change will improve disclosure by allowing investors to see results for the conventional apartment portfolio separated from those of the limited-dividend senior-housing properties.

13

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

													Net Operating Income(dollars in thousands)
			Three Months Ended July 31, 2011													Three Months Ended July 31, 2010												% Change
			Full  Consolidation  (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)		Full Consolidation (GAAP)	Pro-Rata  Consolidation  (Non-GAAP)
Commercial Group
	Retail
		Comparable	$	48,461		$	2,986		$	9,611	$	–	$	55,086		$	51,519		$	2,612		$	5,291	$	–	$	54,198	(5.9%)	1.6%
		Total		50,499			2,501			10,976		–		58,974			61,911			2,791			5,675		2,225		67,020
	Office Buildings
		Comparable		57,716			1,410			4,842		–		61,148			57,049			2,588			4,833		–		59,294	1.2%	3.1%
		Total		64,404			1,646			3,179		831		66,768			60,913			2,921			2,240		1,208		61,440
	Hotels
		Comparable		3,347			–			413		–		3,760			3,329			–			370		–		3,699	0.5%	1.6%
		Total		5,847			–			413		–		6,260			3,329			–			370		774		4,473
	Earnings from Commercial
		Land Sales		773			–			–		–		773			2,612			–			–		–		2,612
	Other(1)			(7,779	)		(533	)		1,970		–		(5,276	)		858			(1,092	)		1,966		–		3,916
Total Commercial Group
		Comparable		109,524			4,396			14,866		–		119,994			111,897			5,200			10,494		–		117,191	(2.1%)	2.4%
		Total		113,744			3,614			16,538		831		127,499			129,623			4,620			10,251		4,207		139,461
Residential Group
	Apartments
		Comparable		24,958			353			5,079		–		29,684			24,075			473			5,177		–		28,779	3.7%	3.1%
		Total		26,196			942			7,245		–		32,499			24,765			679			6,120		251		30,457
	Subsidized Senior Housing			2,317			154			1,700		–		3,863			3,593			131			1,842		–		5,304
	Military Housing			4,806			238			393		–		4,961			6,525			–			379		–		6,904
	Other(1)			(3,675	)		(54	)		1,609		–		(2,012	)		1,461			119			452		–		1,794
Total Residential Group
		Comparable		24,958			353			5,079		–		29,684			24,075			473			5,177		–		28,779	3.7%	3.1%
		Total		29,644			1,280			10,947		–		39,311			36,344			929			8,793		251		44,459
Total Rental Properties
		Comparable		134,482			4,749			19,945		–		149,678			135,972			5,673			15,671		–		145,970	(1.1%)	2.5%
		Total		143,388			4,894			27,485		831		166,810			165,967			5,549			19,044		4,458		183,920
Land Development Group				590			158			53		–		485			2,327			188			118		–		2,257
The Nets
	Operations			(3,382	)		–			–		–		(3,382	)		(7,161	)		(20	)		–		–		(7,141)
	Gain on disposition of partial interest			–			–			–		–		–			55,112			23,675			–		–		31,437
		Total		(3,382	)		–			–		–		(3,382	)		47,951			23,655			–		–		24,296
Corporate Activities				(10,104	)		–			–		–		(10,104	)		(9,801	)		–			–		–		(9,801)
Grand Total			$	130,492		$	5,052		$	27,538	$	831	$	153,809		$	206,444		$	29,392		$	19,162	$	4,458	$	200,672

(1) Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

14

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

											Net Operating Income(dollars in thousands)
			Six Months Ended July 31, 2011										Six Months Ended July 31, 2010										% Change
			Full Consolidation (GAAP)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)		Full Consolidation (GAAP)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)		Full Consolidation (GAAP)	Pro-Rata Consolidation (Non-GAAP)
Commercial Group
	Retail
		Comparable	$	105,749	$	5,970	$	15,886	$	–	$	115,665	$	107,913	$	5,461	$	10,740	$	–	$	113,192	(2.0%)	2.2%
		Total		109,488		5,393		19,347		–		123,442		123,532		5,715		11,258		5,161		134,236
	Office Buildings
		Comparable		113,140		3,498		9,659		–		119,301		115,395		5,213		8,910		–		119,092	(2.0%)	0.2%
		Total		122,301		3,669		6,363		3,032		128,027		121,490		5,592		6,315		2,535		124,748
	Hotels
		Comparable		3,450		–		773		–		4,223		3,974		–		738		–		4,712	(13.2%)	(10.4%)
		Total		5,950		–		773		46		6,769		3,974		–		738		1,566		6,278
	Earnings from Commercial
		Land Sales (2)		43,357		(782)		–		–		44,139		2,901		14		–		–		2,887
	Other(1)			(6,712)		(583)		3,907		–		(2,222)		(4,665)		(734)		3,198		–		(733)
Total Commercial Group
		Comparable		222,339		9,468		26,318		–		239,189		227,282		10,674		20,388		–		236,996	(2.2%)	0.9%
		Total		274,384		7,697		30,390		3,078		300,155		247,232		10,587		21,509		9,262		267,416
Residential Group
	Apartments
		Comparable		48,617		824		10,194		–		57,987		46,242		761		10,136		–		55,617	5.1%	4.3%
		Total		53,050		1,920		13,794		–		64,924		48,534		1,107		11,786		900		60,113
	Subsidized Senior Housing			4,559		251		3,424		–		7,732		6,236		167		3,624		–		9,693
	Military Housing			10,396		238		771		–		10,929		13,002		–		749		–		13,751
	Land Sales			158		16		–		–		142		–		–		–		–		–
	Other(1)			(5,255)		(445)		2,064		–		(2,746)		(2,419)		(111)		452		–		(1,856)
Total Residential Group
		Comparable		48,617		824		10,194		–		57,987		46,242		761		10,136		–		55,617	5.1%	4.3%
		Total		62,908		1,980		20,053		–		80,981		65,353		1,163		16,611		900		81,701
Total Rental Properties
		Comparable		270,956		10,292		36,512		–		297,176		273,524		11,435		30,524		–		292,613	(0.9%)	1.6%
		Total		337,292		9,677		50,443		3,078		381,136		312,585		11,750		38,120		10,162		349,117
Land Development Group				2,692		434		202		–		2,460		1,674		206		(148)		–		1,320
The Nets
	Operations			(3,686)		–		–		–		(3,686)		(17,591)		(6,243)		1,146		–		(10,202)
	Gain on disposition of partial interest			–		–		–		–		–		55,112		23,675		–		–		31,437
		Total		(3,686)		–		–		–		(3,686)		37,521		17,432		1,146		–		21,235
Corporate Activities				(25,035)		–		–		–		(25,035)		(21,147)		–		–		–		(21,147)
Grand Total			$	311,263	$	10,111	$	50,645	$	3,078	$	354,875	$	330,633	$	29,388	$	39,118	$	10,162	$	350,525

(1) Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

(2) Includes $42,622 of NOI generated from the casino land sale at full and pro-rata consolidation.

15

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Net Operating Income by Product Type

Pro-Rata Consolidation (dollars in thousands)

Six Months Ended July 31, 2011

NOI by Product Type:	$	345,942
Casino Land Sale		42,622
The Nets
Operations		(3,686)
Gain on disposition of partial interest		–
Total Nets		(3,686)
Corporate Activities		(25,035)
Other(1)		(4,968)
Grand Total NOI	$	354,875

Six Months Ended July 31, 2010

NOI by Product Type:	$	353,026
Casino Land Sale		–
The Nets
Operations		(10,202)
Gain on disposition of partial interest		31,437
Total Nets		21,235
Corporate Activities		(21,147)
Other(1)		(2,589)
Grand Total NOI	$	350,525

(1) Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

(2) Includes subsidized senior housing.

16

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Net Operating Income by Core Market

Pro-Rata Consolidation (dollars in thousands)

Six Months Ended July 31, 2011

NOI by Market:	$	345,942
Casino Land Sale		42,622
The Nets
Operations		(3,686)
Gain on disposition of partial interest		–
Total Nets		(3,686)
Corporate Activities		(25,035)
Other(1)		(4,968)
Grand Total NOI	$	354,875

Six Months Ended July 31, 2010

NOI by Market:	$	353,026
Casino Land Sale		–
The Nets
Operations		(10,202)
Gain on disposition of partial interest		31,437
Total Nets		21,235
Corporate Activities		(21,147)
Other(1)		(2,589)
Grand Total NOI	$	350,525

(1) Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead, net of tax credit income.

17

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

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

		Three Months Ended July 31, 2011															Three Months Ended July 31, 2010
		Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations		$	253,205		$	12,279		$	94,643		$	1,494		$	337,063		$	294,221		$	14,854		$	80,162		$	12,396		$	371,925
Exclude straight-line rent adjustment (1)			1,619			–			–			(217	)		1,402			(5,451	)		–			–			(508	)		(5,959	)
Adjusted revenues			254,824			12,279			94,643			1,277			338,465			288,770			14,854			80,162			11,888			365,966
Add interest and other income			15,315			534			268			–			15,049			16,231			133			(56	)		3			16,045
Add gain on disposition of partial interests in other investment – Nets			–			–			–			–			–			55,112			23,675			–			–			31,437
Add equity in earnings (loss) of unconsolidated entities, including impairment			2,385			142			(5,592	)		–			(3,349	)		(996	)		98			(5,112	)		–			(6,206	)
Exclude loss on disposition of unconsolidated entities			–			–			–			–			–			878			–			(878	)		–			–
Exclude impairment of unconsolidated real estate			–			–			–			–			–			2,282			–			(2,282	)		–			–
Exclude depreciation and amortization of unconsolidated entities (see below)			16,744			–			(16,744	)		–			–			12,865			–			(12,865	)		–			–
Adjusted total income			289,268			12,955			72,575			1,277			350,165			375,142			38,760			58,969			11,891			407,242
Operating expenses			159,771			7,903			45,037			446			197,351			169,516			9,368			39,807			7,433			207,388
Add back non-Real Estate depreciation and amortization (b)			686			–			–			–			686			1,185			–			–			–			1,185
Exclude straight-line rent adjustment (2)			(1,095	)		–			–			–			(1,095	)		(1,417	)		–			–			–			(1,417	)
Exclude preference payment			(586	)		–			–			–			(586	)		(586	)		–			–			–			(586	)
Adjusted operating expenses			158,776			7,903			45,037			446			196,356			168,698			9,368			39,807			7,433			206,570
Net operating income			130,492			5,052			27,538			831			153,809			206,444			29,392			19,162			4,458			200,672
Interest expense			(64,064	)		(3,558	)		(25,183	)		(180	)		(85,869	)		(84,795	)		(4,164	)		(19,162	)		(2,355	)		(102,148	)
Gain (loss) on early extinguishment of debt			(5,471	)		–			(2,355	)		–			(7,826	)		1,896			–			–			–			1,896
Equity in earnings (loss) of unconsolidated entities, including impairment			(2,385	)		(142	)		5,592			–			3,349			996			(98	)		5,112			–			6,206
Loss on disposition of unconsolidated entities			–			–			–			–			–			(878	)		–			–			–			(878	)
Impairment of unconsolidated real estate			–			–			–			–			–			(2,282	)		–			–			–			(2,282	)
Depreciation and amortization of unconsolidated entities (see above)			(16,744	)		–			16,744			–			–			(12,865	)		–			12,865			–			–
Net gain on disposition of rental properties and partial interests in rental properties			–			–			–			29,899			29,899			204,269			–			–			1,993			206,262
Impairment of consolidated real estate			(235	)		–			–			–			(235	)		(1,100	)		–			–			(45,410	)		(46,510	)
Depreciation and amortization – Real Estate Groups (a)			(53,852	)		(1,171	)		(16,010	)		(238	)		(68,929	)		(56,855	)		(1,906	)		(12,267	)		(2,573	)		(69,789	)
Amortization of mortgage procurement costs – Real Estate Groups (c)			(2,727	)		(130	)		(734	)		(84	)		(3,415	)		(2,721	)		(112	)		(598	)		(426	)		(3,633	)
Straight-line rent adjustment (1) + (2)			(2,714	)		–			–			217			(2,497	)		4,034			–			–			508			4,542
Preference payment			(586	)		–			–			–			(586	)		(586	)		–			–			–			(586	)
Earnings (loss) before income taxes			(18,286	)		51			5,592			30,445			17,700			255,557			23,112			5,112			(43,805	)		193,752
Income tax provision			6,171			–			–			(12,388	)		(6,217	)		(81,566	)		–			–			16,866			(64,700	)
Equity in earnings (loss) of unconsolidated entities, including impairment			2,385			142			(5,592	)		–			(3,349	)		(996	)		98			(5,112	)		–			(6,206	)
Earnings (loss) from continuing operations			(9,730	)		193			–			18,057			8,134			172,995			23,210			–			(26,939	)		122,846
Discontinued operations, net of tax			100,087			82,030			–			(18,057	)		–			(22,642	)		4,297			–			26,939			–
Net earnings			90,357			82,223			–			–			8,134			150,353			27,507			–			–			122,846
Noncontrolling interests
Earnings from continuing operations attributable to noncontrolling interests			(193	)		(193	)		–			–			–			(23,210	)		(23,210	)		–			–			–
Earnings from discontinued operations attributable to noncontrolling interests			(82,030	)		(82,030	)		–			–			–			(4,297	)		(4,297	)		–			–			–
Noncontrolling interests			(82,223	)		(82,223	)		–			–			–			(27,507	)		(27,507	)		–			–			–
Net earnings attributable to Forest City Enterprises, Inc.		$	8,134		$	–		$	–		$	–		$	8,134		$	122,846		$	–		$	–		$	–		$	122,846
Preferred dividends			(3,850	)		–			–			–			(3,850	)		(4,107	)		–			–			–			(4,107	)
Net earnings attributable to Forest City Enterprises, Inc. common shareholders		$	4,284		$	–		$	–		$	–		$	4,284		$	118,739		$	–		$	–		$	–		$	118,739
(a)	Depreciation and amortization – Real Estate Groups	$	53,852		$	1,171		$	16,010		$	238		$	68,929		$	56,855		$	1,906		$	12,267		$	2,573		$	69,789
(b)	Depreciation and amortization – Non-Real Estate		686			–			–			–			686			1,185			–			–			–			1,185
	Total depreciation and amortization	$	54,538		$	1,171		$	16,010		$	238		$	69,615		$	58,040		$	1,906		$	12,267		$	2,573		$	70,974
(c)	Amortization of mortgage procurement costs – Real Estate Groups	$	2,727		$	130		$	734		$	84		$	3,415		$	2,721		$	112		$	598		$	426		$	3,633
(d)	Amortization of mortgage procurement costs – Non-Real Estate		–			–			–			–			–			–			–			–			–			–
	Total amortization of mortgage procurement costs	$	2,727		$	130		$	734		$	84		$	3,415		$	2,721		$	112		$	598		$	426		$	3,633

18

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

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

	Six Months Ended July 31, 2011															Six Months Ended July 31, 2010
							Plus															Plus
	Full			Less			Unconsolidated			Plus			Pro-Rata			Full			Less			Unconsolidated			Plus			Pro-Rata
	Consolidation			Noncontrolling			Investments at			Discontinued			Consolidation			Consolidation			Noncontrolling			Investments at			Discontinued			Consolidation
	(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)			(GAAP)			Interest			Pro-Rata			Operations			(Non-GAAP)
Revenues from real estate operations	$	561,629		$	24,868		$	177,357		$	6,593		$	720,711		$	563,003		$	26,668		$	153,635		$	23,980		$	713,950
Exclude straight-line rent adjustment (1)		(1,462	)		–			–			(571	)		(2,033	)		(9,568	)		–			–			(671	)		(10,239	)
Adjusted revenues		560,167			24,868			177,357			6,022			718,678			553,435			26,668			153,635			23,309			703,711
Add interest and other income		30,822			394			385			–			30,813			23,045			1,032			14,760			6			36,779
Add gain on disposition of partial interests in other investment – Nets		–			–			–			–			–			55,112			23,675			–			–			31,437
Add equity in earnings (loss) of unconsolidated entities, including impairment		22,379			190			(25,891	)		–			(3,702	)		(18,120	)		(6,346	)		5,841			–			(5,933	)
Exclude gain (loss) on disposition of unconsolidated entities		(12,567	)		–			12,567			–			–			830			–			(830	)		–			–
Exclude impairment of unconsolidated real estate		–			–			–			–			–			15,181			–			(15,181	)		–			–
Exclude depreciation and amortization of unconsolidated entities (see below)		31,052			–			(31,052	)		–			–			24,717			–			(24,717	)		–			–
Adjusted total income		631,853			25,452			133,366			6,022			745,789			654,200			45,029			133,508			23,315			765,994
Operating expenses		322,679			15,341			82,721			2,944			393,003			324,644			15,641			93,443			13,153			415,599
Add back non-Real Estate depreciation and amortization (b)		1,388			–			–			–			1,388			2,753			–			878			–			3,631
Add back amortization of mortgage procurement costs for non-Real Estate Groups (d)		–			–			–			–			–			–			–			69			–			69
Exclude straight-line rent adjustment (2)		(2,306	)		–			–			–			(2,306	)		(2,659	)		–			–			–			(2,659	)
Exclude preference payment		(1,171	)		–			–			–			(1,171	)		(1,171	)		–			–			–			(1,171	)
Adjusted operating expenses		320,590			15,341			82,721			2,944			390,914			323,567			15,641			94,390			13,153			415,469
Net operating income		311,263			10,111			50,645			3,078			354,875			330,633			29,388			39,118			10,162			350,525
Interest expense		(130,979	)		(7,420	)		(48,290	)		(712	)		(172,561	)		(165,977	)		(9,201	)		(39,118	)		(4,045	)		(199,939	)
Gain (loss) on early extinguishment of debt		(5,767	)		(4	)		(2,355	)		–			(8,118	)		8,193			–			–			–			8,193
Equity in earnings (loss) of unconsolidated entities, including impairment		(22,379	)		(190	)		25,891			–			3,702			18,120			6,346			(5,841	)		–			5,933
Gain (loss) on disposition of unconsolidated entities		12,567			–			–			–			12,567			(830	)		–			–			–			(830	)
Impairment of unconsolidated real estate		–			–			–			–			–			(15,181	)		–			–			–			(15,181	)
Depreciation and amortization of unconsolidated entities (see above)		(31,052	)		–			31,052			–			–			(24,717	)		–			24,717			–			–
Net gain on disposition of rental properties and partial interests in rental properties		9,561			–			–			39,937			49,498			205,135			–			–			1,993			207,128
Impairment of consolidated real estate		(5,070	)		–			–			–			(5,070	)		(1,100	)		–			–			(45,410	)		(46,510	)
Depreciation and amortization – Real Estate Groups (a)		(109,857	)		(2,829	)		(29,700	)		(1,030	)		(137,758	)		(114,613	)		(3,281	)		(23,635	)		(4,776	)		(139,743	)
Amortization of mortgage procurement costs – Real Estate Groups (c)		(5,622	)		(260	)		(1,352	)		(333	)		(7,047	)		(5,333	)		(201	)		(1,082	)		(481	)		(6,695	)
Straight-line rent adjustment (1) + (2)		(844	)		–			–			571			(273	)		6,909			–			–			671			7,580
Preference payment		(1,171	)		–			–			–			(1,171	)		(1,171	)		–			–			–			(1,171	)
Earnings (loss) before income taxes		20,650			(592	)		25,891			41,511			88,644			240,068			23,051			(5,841	)		(41,886	)		169,290
Income tax provision		(11,742	)		–			–			(17,499	)		(29,241	)		(72,196	)		–			–			16,123			(56,073	)
Equity in earnings (loss) of unconsolidated entities, including impairment		22,379			190			(25,891	)		–			(3,702	)		(18,120	)		(6,346	)		5,841			–			(5,933	)
Earnings (loss) from continuing operations		31,287			(402	)		–			24,012			55,701			149,752			16,705			–			(25,763	)		107,284
Discontinued operations, net of tax		107,767			83,755			–			(24,012	)		–			(20,763	)		5,000			–			25,763			–
Net earnings		139,054			83,353			–			–			55,701			128,989			21,705			–			–			107,284
Noncontrolling interests
(Earnings) loss from continuing operations attributable to noncontrolling interests		402			402			–			–			–			(16,705	)		(16,705	)		–			–			–
Earnings from discontinued operations attributable to noncontrolling interests		(83,755	)		(83,755	)		–			–			–			(5,000	)		(5,000	)		–			–			–
Noncontrolling interests		(83,353	)		(83,353	)		–			–			–			(21,705	)		(21,705	)		–			–			–
Net earnings attributable to Forest City Enterprises, Inc.	$	55,701		$	–		$	–		$	–		$	55,701		$	107,284		$	–		$	–		$	–		$	107,284
Preferred dividends		(7,700	)		–			–			–			(7,700	)		(4,107	)		–			–			–			(4,107	)
Net earnings attributable to Forest City Enterprises, Inc. common shareholders	$	48,001		$	–		$	–		$	–		$	48,001		$	103,177		$	–		$	–		$	–		$	103,177
(a)   Depreciation and amortization – Real Estate Groups	$	109,857		$	2,829		$	29,700		$	1,030		$	137,758		$	114,613		$	3,281		$	23,635		$	4,776		$	139,743
(b)   Depreciation and amortization – Non-Real Estate		1,388			–			–			–			1,388			2,753			–			878			–			3,631
Total depreciation and amortization	$	111,245		$	2,829		$	29,700		$	1,030		$	139,146		$	117,366		$	3,281		$	24,513		$	4,776		$	143,374
(c)   Amortization of mortgage procurement costs – Real Estate Groups	$	5,622		$	260		$	1,352		$	333		$	7,047		$	5,333		$	201		$	1,082		$	481		$	6,695
(d)   Amortization of mortgage procurement costs – Non-Real Estate		–			–			–			–			–			–			–			69			–			69
Total amortization of mortgage procurement costs	$	5,622		$	260		$	1,352		$	333		$	7,047		$	5,333		$	201		$	1,151		$	481		$	6,764

19

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Results of Operations

Net Earnings Attributable to Forest City Enterprises, Inc. – Net earnings attributable to Forest City Enterprises, Inc. for the three months ended July 31, 2011 was $8,134,000 versus $122,846,000 for the three months ended July 31, 2010. Although we have substantial recurring revenue from our properties, we also periodically enter into significant transactions, which can create substantial variances in net earnings between periods. This variance to the prior year is primarily attributable to the following decreases, which are net of noncontrolling interest:

• $204,269,000 related to the 2010 gain on disposition of partial interest in seven mixed-useUniversity Park life science properties in Cambridge, Massachusetts, related to the formation of a new joint venture with an outside partner;

• $31,437,000 related to the 2010 gain on disposition of partial interest in The Nets;

• $10,800,000 related to the 2011 loss on early extinguishment of debt on the exchange of a portion of our Senior Notes due 2016 for Class A common stock; and

• $3,318,000 (which includes $91,000 for unconsolidated entities) related to a decrease in income recognized on the sale of state and federal Historic Preservation Tax Credits and New Market Tax Credits in 2011 compared to 2010.

These decreases were partially offset by the following increases, net of noncontrolling interest:

• $48,557,000 related to the 2011 decrease in impairment charges of consolidated (including discontinued operations) and unconsolidated entities;

• $27,907,000 related to the 2011 gain on disposition of rental properties exceeding 2010 gains. The 2011 gain on disposition primarily related toWaterfront Station – East 4^th & West 4^th Buildings, while the 2010 gain related to the disposition of101 San Fernando, an apartment community in San Jose, California;

• $7,342,000 related to the change in fair market value of certain derivatives between the comparable periods, which was marked to market through interest expense as a result of the derivatives not qualifying for hedge accounting;

• $5,329,000 related to the 2011 gain on early extinguishment of Urban Development Action Grant (“UDAG”) loans onAvenue at Tower City Center, a specialty retail center in Cleveland, Ohio;

• $3,759,000 related to a 2011 decrease in allocated losses from our equity investment in The Nets; and

• $58,483,000 due to decreased income tax expense primarily related to the various transactions noted above.

Net earnings attributable to Forest City Enterprises, Inc. for the six months ended July 31, 2011 was $55,701,000 versus $107,284,000 for the six months ended July 31, 2010. The variance to the prior year is primarily attributable to the following decreases, which are net of noncontrolling interest:

• $175,793,000 related to the 2010 gain on disposition of partial interest in seven mixed-useUniversity Park life science properties, related to the formation of a new joint venture with an outside partner;

• $31,437,000 related to the 2010 gain on disposition of partial interest in The Nets;

• $29,342,000 related to the 2010 gain on disposition of partial interest inThe Grand,Lenox Club andLenox Park, apartment communities in the Washington, D.C. metropolitan area, related to the formation of a new joint venture with an outside partner; and

• $18,993,000 related to the 2011 loss on early extinguishment of debt on the exchange of a portion of our Senior Notes due 2016 for Class A common stock and the 2010 gain on early extinguishment of debt on the exchange of a portion of our Senior Notes due 2011, 2015 and 2017 for a new issue of Series A preferred stock and purchase of a portion of our Senior Notes due 2011 and 2017.

These decreases were partially offset by the following increases, net of noncontrolling interest:

• $56,621,000 related to the 2011 decrease in impairment charges of consolidated (including discontinued operations) and unconsolidated entities;

20

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

• $42,622,000 related to the 2011 sale of land and air rights to Rock Ohio Caesars Cleveland, LLC (“Rock Ohio”) for development of a casino in downtown Cleveland, Ohio (“Casino land sale”);

• $37,945,000 related to the 2011 gains on disposition ofWaterfront Station – East 4^th & West 4^th BuildingsandCharleston Marriott, a hotel in Charleston, West Virginia, offset by the 2010 gain on disposition of101 San Fernando;

• $12,567,000 related to the 2011 gains on disposition of our unconsolidated investments inMetropolitan Lofts andTwin Lake Towers, apartment communities in Los Angeles, California and Denver, Colorado, respectively;

• $9,561,000 due to the 2011 gain on disposition of partial interests in 15 retail properties in the New York City metropolitan area, related to the formation of new joint venture agreements with an outside partner;

• $8,413,000 related to the change in fair market value of certain derivatives between the comparable periods, which was marked to market through interest expense as a result of the derivatives not qualifying for hedge accounting;

• $7,662,000 related to a 2011 decrease in allocated losses from our equity investment in The Nets;

• $5,329,000 related to the 2011 gain on early extinguishment of UDAG loans onAvenue at Tower City Center;

• $3,217,000 related to an increase in income recognized on the sale of state and federal Historic Preservation Tax Credits and New Market Tax Credits in 2011 compared to 2010; and

• $26,832,000 due to decreased income tax expense primarily related to the various transactions noted above.

Net Operating Income (NOI) from Real Estate Groups– NOI, a non-GAAP measure, is defined as revenues (excluding straight-line rent adjustments) less operating expenses (including depreciation and amortization and amortization of mortgage procurement costs for non-real estate groups) plus interest income plus equity in earnings (loss) of unconsolidated entities (excluding gain on disposition and impairment of unconsolidated entities) plus depreciation and amortization of unconsolidated entities. 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.

Full Consolidation – 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, 2011 was $143,388,000 compared to $165,967,000 for the three months ended July 31, 2010, a 13.6% decrease. NOI for the six months ended July 31, 2011 was $337,292,000 compared to $312,585,000 for the six months ended July 31, 2010, a 7.9% increase. The primary drivers of the six month increase were the NOI generated from the casino land sale within the Commercial Group of $42,622,000 partially offset by reduced NOI resulting from our joint venture transactions. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on pages 18-19. A reconciliation of NOI to net earnings (loss) for each strategic business unit can be found on pages 45-56.

Pro-Rata Consolidation – 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 Rental Properties for the three months ended July 31, 2011 was $166,810,000 compared to $183,920,000 for the three months ended July 31, 2010, a 9.3% decrease. NOI for the six months ended July 31, 2011 was $381,136,000 compared to $349,117,000 for the six months ended July 31, 2010, a 9.2% increase. The primary drivers of the six month increase were the NOI generated from the casino land sale within the Commercial Group of $42,622,000 partially offset by reduced NOI resulting from our joint venture transactions.

Comparable NOI increased 2.5% for the three months ended July 31, 2011 compared to the prior year. Retail, office and hotel comparable NOI increased 1.6%, 3.1% and 1.6%, respectively, and our residential portfolio increased 3.1%. Comparable NOI increased 1.6% for the six months ended July 31, 2011 compared to the prior year. Retail, office, and residential comparable NOI increased 2.2%, 0.2% and 4.3%, respectively, while hotel comparable NOI decreased 10.4%.

Capital Improvements to our Operating Portfolio – Our diversified real estate portfolio requires certain capital improvements to maintain and improve its operating performance. During the six months ended July 31, 2011 we invested $29,829,000 at pro-rata consolidation ($22,622,000 at full consolidation) in capital improvements to our operating portfolio as compared to $20,561,000 at pro-rata consolidation ($15,693,000 at full consolidation) during the six months ended July 31, 2010.

21

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating 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, and amortization of mortgage procurement costs; iv) deferred income taxes; v) preferred payment which is classified as noncontrolling interest expense on our Consolidated Statement of Operations; vi) impairment of real estate (net of tax); vii) extraordinary items (net of tax); and viii) cumulative or retrospective effect of change in accounting principle (net of tax).

EBDT is reconciled to net earnings (loss), the most comparable financial measure calculated in accordance with GAAP, on page 25. 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 income taxes, which are the result of timing differences of certain income and expense items which are to be realized 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 impairment of 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.

Effective during the six months ended July 31, 2011, under the direction of the Company’s chief operating decision maker, EBDT which is provided in order to assess performance for the Real Estate Groups and The Nets was on a pre-tax basis. The Corporate Activity segment controls the tax strategies and evaluates results on a consolidated basis. As a result, beginning February 1, 2011, the Company will no longer allocate income tax expense (benefit) to the Real Estate Groups or The Nets. In addition, based on the consolidated evaluation of income taxes, it was determined that EBDT would exclude all deferred income taxes instead of just those attributable to the Real Estate Groups.

Our EBDT for the three months ended July 31, 2011 decreased by $34,854,000 or 33.0% to $70,706,000 from $105,560,000 for the three months ended July 31, 2010. The fluctuations in EBDT by Segment are as follows:

• Our Commercial and Residential Segments remained about flat. This is primarily the result of increased EBDT from the change in fair market value of derivatives between the comparable periods which were marked to market through interest expense of $7,322,000, the 2011 gain on early extinguishment of Urban Development Action Grant (UDAG) loans of $5,329,000, and increased NOI on our mature portfolio of $3,708,000. These increases in the portfolio were partially offset by reduced EBDT from properties sold of $5,316,000, increased write-offs of abandoned projects of $4,494,000, decreased income recognized from state and federal Historic Preservation and New Market tax credits of $2,997,000, and reduced EBDT from new properties of $1,800,000 primarily due to lease up losses at8 Spruce Street andPresidio Landmark partially offset by the ramp up of other new property openings;

• Our Land Segment provided a pre-tax EBDT decrease of $2,399,000, primarily due to lower margins on land sales;

• The Nets provided a pre-tax EBDT decrease of $27,678,000, primarily due to the nonrecurring 2010 gain on disposition of partial interest of $31,437,000, partially offset by the decrease in our allocated losses of $3,759,000;

• Corporate pre-tax EBDT decreased $10,109,000. This pre-tax EBDT decrease is primarily due to the 2011 loss on early extinguishment of debt of $10,800,000 on the exchange of a portion of our Senior Notes for Class A common stock; and

• EBDT was favorably impacted by a larger tax benefit of $5,452,000 compared to prior year.

22

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Our EBDT for the six months ended July 31, 2011 increased by $22,055,000 or 12.5% to $198,082,000 from $176,027,000 for the six months ended July 31, 2010. The fluctuations in EBDT by Segment are as follows:

• Our Commercial and Residential Segments combined provided a pre-tax EBDT increase of $55,624,000. This is primarily related to the 2011 sale of land and air rights to Rock Ohio of $42,622,000, increased EBDT from the change in fair market value of derivatives between the comparable periods which were marked to market through interest expense of $8,309,000, increased income recognized from state and federal Historic Preservation and New Market tax credits of $4,713,000, increased NOI on our mature portfolio of $4,564,000, and decreased interest expense on our mature portfolio of $3,276,000. These increases in the portfolio were partially offset by reduced EBDT from properties sold of $9,543,000;

• Our Land Segment provided a pre-tax EBDT increase of $614,000, primarily due to increased sales;

• The Nets provided a pre-tax EBDT decrease of $23,775,000, primarily due to the nonrecurring 2010 gain on disposition of partial interest of $31,437,000, partially offset by the decrease in our allocated losses of $7,662,000;

• Corporate pre-tax EBDT decreased $17,046,000. This pre-tax EBDT decrease includes the 2011 loss on early extinguishment of debt on the exchange of a portion of our Senior Notes for Class A common stock of $10,800,000 and the nonrecurring 2010 gain on early extinguishment of debt related to the exchange of our Senior Notes of $8,193,000; and

• EBDT was favorably impacted by a larger tax benefit of $6,638,000 compared to prior year.

23

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

24

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

25

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Summary of EBDT – The information in the following tables present amounts for both full consolidation and pro-rata consolidation, providing a reconciliation of the difference between the two methods, as well as a reconciliation from NOI to EBDT to net earnings (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 VIEs, or on the equity method of accounting if we do not have control or are not the primary beneficiary for investments in VIEs.

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

		00000000000			00000000000		00000000000			00000000000
	Three Months Ended July 31,					Six Months Ended July 31,
	2011			2010		2011			2010
	(in thousands)					(in thousands)
Net earnings attributable to Forest City Enterprises, Inc.	$	8,134		$	122,846	$	55,701		$	107,284
Depreciation and amortization – Real Estate Groups(4)		68,929			69,789		137,758			139,743
Amortization of mortgage procurement costs – Real Estate Groups(4)		3,415			3,633		7,047			6,695
Deferred income tax expense(5)		6,353			59,775		11,166			44,399
Remove non-Real Estate deferred taxes for 2010 only(5)		–			(11,790)		–			(6,657)
Current income tax expense on non-operating earnings:(5)
Gain on disposition of rental properties and partial interest in rental properties		8,865			21,740		39,169			35,464
Gain on disposition included in discontinued operations		1,591			115		2,792			115
Straight-line rent adjustment(2)		2,497			(4,542)		273			(7,580)
Preference payment(3)		586			586		1,171			1,171
Impairment of consolidated real estate		235			1,100		5,070			1,100
Impairment of unconsolidated real estate		–			2,282		–			15,181
Gain on disposition of rental properties and partial interest in rental properties		–			(204,269)		(9,561	)		(205,135)
Gain on disposition of unconsolidated entities		–			878		(12,567	)		830
Discontinued operations:(1)
Gain on disposition of rental properties		(111,264	)		(6,204)		(121,695	)		(6,204)
Impairment of real estate		–			45,410		–			45,410
Noncontrolling interest - Gain on disposition		81,365			4,211		81,758			4,211
Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT)	$	70,706		$	105,560	$	198,082		$	176,027
EBDT Per Share
Numerator(in thousands):
EBDT	$	70,706		$	105,560	$	198,082		$	176,027
If-Converted Method (Pro forma numerator adjustment for interest, net of tax):
3.625% Puttable Senior Notes due 2014		1,110			1,110		2,219			2,219
5% Convertile Senior Notes due 2016		413			1,530		1,102			3,061
4.25% Convertible Senior Notes due 2018		329			–		329			–
EBDT for per share data	$	72,558		$	108,200	$	201,732		$	181,307
Denominator
Weighted average shares outstanding – Basic		168,788,754			155,456,575		167,171,093			155,405,179
Effect of stock options and restricted stock		1,019,210			442,299		1,036,656			468,164
Effect of convertible preferred stock		14,550,257			14,550,257		14,550,257			11,656,283
Effect of convertible debt		19,912,982			28,133,038		20,066,506			28,133,038
Effect of convertible Class A Common Units		3,646,755			3,646,755		3,646,755			3,646,755
Weighted average shares outstanding – Diluted		207,917,958			202,228,924		206,471,267			199,309,419
EBDT Per Share	$	0.35		$	0.54	$	0.98		$	0.91

EBDT Per Share
Quarterly Historical Trends	Three Months Ended
	July 31, 2011		April 30, 2011		January 31, 2011		October 31, 2010		July 31, 2010
Numerator(in thousands):
EBDT	$	70,706	$	127,376	$	43,149	$	90,699	$	105,560
If-Converted Method (Pro forma numerator adjustment for interest, net of tax):
3.625% Puttable Senior Notes due 2014		1,110		1,110		1,110		1,110		1,110
5% Convertible Senior Notes due 2016		413		688		1,521		1,530		1,530
4.25% Convertible Senior Notes due 2018		329		–		–		–		–
EBDT for per share data	$	72,558	$	129,174	$	45,780	$	93,339	$	108,200
Denominator
Weighted average shares outstanding – Basic		168,788,754		165,498,904		155,643,554		155,484,451		155,456,575
Effect of stock options and restricted stock		1,019,210		1,054,102		803,779		462,812		442,299
Effect of convertible preferred stock		14,550,257		14,550,257		14,550,257		14,550,257		14,550,257
Effect of convertible debt		19,912,982		20,225,204		28,047,083		28,133,038		28,133,038
Effect of convertible Class A Common Units		3,646,755		3,646,755		3,646,755		3,646,755		3,646,755
Weighted average shares outstanding – Diluted		207,917,958		204,975,222		202,691,428		202,277,313		202,228,924
EBDT Per Share	$	0.35	$	0.63	$	0.23	$	0.46	$	0.54

26

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

(1) All earnings of properties which have been sold or are held for sale are reported as discontinued operations assuming no significant continuing involvement.

(2) The Company recognizes minimum rents on a straight-line basis over the term of the related lease pursuant to accounting for leases. The straight-line rent adjustment is recorded as an increase or decrease to revenue or operating expense 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.

(3) 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 noncontrolling interest in the Forest City Ratner Companies portfolio.

(4) The following table provides detail of depreciation and amortization and amortization of mortgage procurement costs presented in thousands.

	Depreciation and Amortization								Amortization of Mortgage Procurement Costs
	Three Months Ended July 31,				Six Months Ended July 31,				Three Months Ended July 31,				Six Months Ended July 31,
	2011		2010		2011		2010		2011		2010		2011		2010
Full Consolidation	$	54,538	$	58,040	$	111,245	$	117,366	$	2,727	$	2,721	$	5,622	$	5,333
Non-Real Estate		(686)		(1,185)		(1,388)		(2,753)		–		–		–		–
Real Estate Groups Full Consolidation		53,852		56,855		109,857		114,613		2,727		2,721		5,622		5,333
Real Estate Groups related to noncontrolling interest		(1,171)		(1,906)		(2,829)		(3,281)		(130)		(112)		(260)		(201)
Real Estate Groups Unconsolidated		16,010		12,267		29,700		23,635		734		598		1,352		1,082
Real Estate Groups Discontinued Operations		238		2,573		1,030		4,776		84		426		333		481
Real Estate Groups Pro-Rata Consolidation	$	68,929	$	69,789	$	137,758	$	139,743	$	3,415	$	3,633	$	7,047	$	6,695

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

	Three Months Ended July 31,				Six Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)				(in thousands)
Current taxes
Operating earnings	$	(10,544)	$	(16,262)	$	(24,035)	$	(23,894)
Gain on disposition of rental properties and partial interest in rental properties		8,865		21,740		39,169		35,464
Subtotal		(1,679)		5,478		15,134		11,570
Discontinued operations
Operating earnings		(48)		(668)		149		(11)
Gain on disposition of rental properties and partial interest in rental properties		1,591		115		2,792		115
Subtotal		1,543		(553)		2,941		104
Total Current taxes		(136)		4,925		18,075		11,674
Deferred taxes
Continuing operations		(4,492)		76,088		(3,392)		60,626
Discontinued operations		10,845		(16,313)		14,558		(16,227)
Total Deferred taxes		6,353		59,775		11,166		44,399
Grand Total	$	6,217	$	64,700	$	29,241	$	56,073
2010 Recap of Grand Total:
Real Estate Groups
Current			$	11,537			$	20,056
Deferred				47,985				37,742
				59,522				57,798
Non-Real Estate Groups
Current				(6,612)				(8,382)
Deferred				11,790				6,657
				5,178				(1,725)
Grand Total			$	64,700			$	56,073

27

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Retail Lease Expirations as of July 31, 2011

EXPIRATION YEAR	NUMBER OF EXPIRING LEASES		SQUARE FEET OF EXPIRING LEASES(3)		PERCENTAGE OF TOTAL LEASED GLA (1)		NET BASE RENT EXPIRING(2)		PERCENTAGE OF TOTAL BASE RENT		AVERAGE BASE RENT PER SQUARE FEET EXPIRING(3)
2011		250		778,326		6.11    %	$	18,207,261		7.21    %	$	30.45
2012		271		950,123		7.46		19,349,688		7.66		27.94
2013		308		1,128,314		8.86		24,321,749		9.63		27.20
2014		258		1,107,037		8.69		20,677,933		8.19		27.39
2015		203		832,758		6.54		18,533,723		7.34		29.29
2016		232		1,319,394		10.36		29,226,406		11.57		36.39
2017		151		1,003,259		7.88		20,836,073		8.25		26.58
2018		151		705,639		5.54		17,756,176		7.03		26.89
2019		118		1,043,200		8.19		19,780,065		7.83		24.83
2020		115		903,266		7.09		17,404,950		6.89		29.21
2021		60		869,916		6.83		15,658,405		6.20		29.95
Thereafter		68		2,097,653		16.45		30,766,321		12.20		20.60
Total		2,185		12,738,885		100.00    %	$	252,518,750		100.00    %	$	27.54

(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, amortization of above and below market lease values in-place, and contingent rental payments (which are not reasonably estimable).

(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.

28

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Office Lease Expirations as of July 31, 2011

EXPIRATION YEAR	NUMBER OF EXPIRING LEASES		SQUARE FEET OF EXPIRING LEASES(3)		PERCENTAGE OF TOTAL LEASED GLA (1)		NET BASE RENT EXPIRING(2)		PERCENTAGE OF TOTAL BASE RENT		AVERAGE BASE RENT PER SQUARE FEET EXPIRING(3)
2011		53		363,105		3.27    %	$	6,853,161		2.33    %	$	19.93
2012		92		989,473		8.91		25,054,936		8.50		31.42
2013		92		1,162,933		10.48		24,912,299		8.46		22.29
2014		63		968,391		8.72		18,067,606		6.13		30.44
2015		44		480,655		4.33		8,882,161		3.02		21.28
2016		48		766,037		6.90		16,894,263		5.73		28.73
2017		25		434,214		3.91		10,593,990		3.60		25.87
2018		21		1,209,820		10.90		33,822,613		11.48		32.40
2019		20		808,811		7.29		14,347,186		4.87		25.61
2020		14		1,046,733		9.43		27,813,919		9.44		32.92
2021		8		374,921		3.38		6,690,469		2.27		18.28
Thereafter		31		2,494,488		22.48		100,665,993		34.17		42.02
Total		511		11,099,581		100.00    %	$	294,598,596		100.00    %	$	30.92

(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, amortization of above and below market lease values in-place, and contingent rental payments (which are not reasonably estimable).

(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.

29

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Schedule of Significant Retail Tenants as of July 31, 2011

(Based on net base rent 1% or greater of the Company’s ownership share)
TENANT	NUMBER OF LEASES		LEASED SQUARE FEET		PERCENTAGE OF TOTAL RETAIL SQUARE FEET
Bass Pro Shops, Inc.		3		510,855		4.01    %
Regal Entertainment Group		5		381,461		2.99
AMC Entertainment, Inc.		5		377,797		2.97
TJX Companies		11		347,457		2.73
The Gap		26		336,900		2.64
Dick’s Sporting Goods		6		293,171		2.30
The Limited		37		220,357		1.73
Best Buy		6		207,969		1.63
Abercrombie & Fitch Stores, Inc.		27		194,549		1.53
Footlocker, Inc.		33		125,098		0.98
Forever 21, Inc.		9		103,368		0.81
American Eagle Outfitters, Inc.		16		91,343		0.72
Subtotal		184		3,190,325		25.04
All Others		2,001		9,548,560		74.96
Total		2,185		12,738,885		100.00    %

30

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Schedule of Significant Office Tenants as of July 31, 2011

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

TENANT	LEASED SQUARE FEET		PERCENTAGE OF TOTAL OFFICE SQUARE FEET
City of New York		1,044,167		9.41    %
Millennium Pharmaceuticals, Inc.		660,741		5.95
U.S. Government		647,983		5.84
WellPoint, Inc.		392,514		3.54
JP Morgan Chase & Co.		383,341		3.45
Morgan Stanley & Co.		377,304		3.40
Forest City Enterprises, Inc.(1)		356,187		3.21
Bank of New York		323,043		2.91
National Grid		254,034		2.29
Clearbridge Advisors, LLC, a Legg Mason Company		193,249		1.74
Covington & Burling, LLP		160,565		1.45
Seyfarth Shaw, LLP		96,909		0.87
Subtotal		4,890,037		44.06
All Others		6,209,544		55.94
Total		11,099,581		100.00    %

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

31

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Openings and Acquisitions

as of July 31, 2011

Property	Location	Dev (D) Acq (A)	Date Opened / Acquired	FCE Legal Ownership % (a)	Pro-Rata FCE % (a) (1)	Cost at Full Consolidation (GAAP) (b)		Total Cost at 100% (2)		Cost at FCE Pro-Rata Share (Non-GAAP) (c) (1) X (2)		Sq. ft./ No. of Units		Gross Leasable Area		Lease Commitment %
2011 (2)						(in millions)
Retail Centers:
Westchester’s Ridge Hill (d)	Yonkers, NY	D	Q2-11/12	70.0%	100.0%	$	0.0	$	0.0	$	0.0		176,000		176,000
Residential:
8 Spruce Street (leasable units only) (d) (f)	Manhattan, NY	D	Q1-11/12	35.7%	51.0%	$	0.0	$	0.0	$	0.0		682
Prior Two Years Openings (7)
Retail Centers:
Village at Gulfstream Park (f)	Hallandale Beach, FL	D	Q1-10	50.0%	50.0%	$	0.0	$	198.9	$	99.5		511,000		511,000		70%
East River Plaza (f)	Manhattan, NY	D	Q4-09/Q2-10	35.0%	50.0%		0.0		390.6		195.3		527,000		527,000		90%
Promenade in Temecula Expansion	Temecula, CA	D	Q1-09	75.0%	100.0%		113.4		113.4		113.4		127,000		127,000		89%
						$	113.4	$	702.9	$	408.2		1,165,000		1,165,000
Office:
Waterfront Station
– East 4th & West 4th Buildings (g)	Washington, D.C.	D	Q1-10	45.0%	45.0%	$	245.9	$	245.9	$	110.7		631,000				99%
Residential : (h)
Presidio Landmark	San Francisco, CA	D	Q3-10	100.0%	100.0%	$	96.5	$	96.5	$	96.5		161				70% (r)
North Church Towers	Parma Heights, OH	A	Q3-09	100.0%	100.0%		5.1		5.1		5.1		399				86%
DKLB BKLN (f)	Brooklyn, NY	D	Q4-09/Q2-10	40.8%	51.0%		0.0		161.8		82.5		365				96%
						$	101.6	$	263.4	$	184.1		925
Total Prior Two Years Openings (i)						$	460.9	$	1,212.2	$	703.0
Recap of Total Prior Two Years Openings
Total 2010						$	342.4	$	931.9	$	502.0
Total 2009							118.5		280.3		201.0
Total Prior Two Years Openings (i)						$	460.9	$	1,212.2	$	703.0

See footnotes on page 33-34.

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Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Projects Under Construction (4)

as of July 31, 2011

Property	Location	Anticipated Opening	FCE Legal Ownership % (a)		Pro-Rata FCE % (a) (1)		Cost at Full Consolidation (GAAP) (b)		Total Cost at 100% (2)		Cost at FCE Pro-Rata Share (Non-GAAP) (c) (1) X (2)		Sq. ft./ No. of Units		Gross Leasable Area			Lease Commitment %
							(in millions)
Retail Centers:
Westchester’s Ridge Hill (e)	Yonkers, NY	Q2-11/12		70.0%		100.0%	$	842.4	$	842.4	$	842.4		1,336,000		1,336,000	(l)		52%
Residential:
8 Spruce Street (f) (j)	Manhattan, NY	Q1-11/12		35.7%		51.0%	$	0.0	$	875.7	$	446.6		903					51% (m)
Foundry Lofts	Washington, D.C.	Q3-11		100.0%		100.0%		61.4		61.4		61.4		170
							$	61.4	$	937.1	$	508.0		1,073
Arena:
Barclays Center	Brooklyn, NY	Q3-12		33.8% (n)		33.8% (n)	$	904.3	$	904.3	$	305.9		670,000		18,000 seats	(o)		56% (p)
Total Under Construction (k)							$	1,808.1	$	2,683.8	$	1,656.3
Fee Development:														Sq. ft.
Las Vegas City Hall	Las Vegas, NV	Q1-12		–        (q)		–        (q)	$	0.0	$	146.2	$	0.0		270,000
Projects Under Construction (2) Subsequent to July 31, 2011
Retail Centers:
The Yards – Boilermaker Shop	Washington, D.C.	Q3-12		100.0%		100.0%	$	19.4	$	19.4	$	19.4		41,000		41,000			73% (r)
Residential:
Novella Apartments	Denver, CO	Q3-12		90.0%		90.0%	$	10.1	$	10.1	$	9.1		85
Total Projects Under Construction Subsequent to July 31, 2011							$	29.5	$	29.5	$	28.5

FOOTNOTES

(a) 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.

(b) 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”).

(c) 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.

(d) See the Under Construction pipeline for cost details of the total property.

(e) Phased-in opening includes the total cost and square footage of the center, including Cinema De Lux, REI and WESTMED which opened in the second quarter.

(f) 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.

(g) Property was sold on May 10, 2011 and was 99% leased at time of sale.

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Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

FOOTNOTES (continued)

(h) The lease percentage represents occupancy as of July 31, 2011.

(i) The difference between the full consolidation cost amount (GAAP) of $460.9 million to the Company’s pro-rata share (a non-GAAP measure) of $703.0 million consists of a reduction to full consolidation for noncontrolling interest of $135.2 million of cost and the addition of its share of cost for unconsolidated investments of $377.3 million.

(j) Phased in opening. Costs are representative of the total project cost, including 682 units opened as of August 30, 2011.

(k) The difference between the full consolidation cost amount (GAAP) of $1,808.1 million to the Company’s pro-rata share (a non-GAAP measure) of $1,656.3 million consists of a reduction to full consolidation for noncontrolling interest of $598.4 million of cost and the addition of its share of cost for unconsolidated investments of $446.6 million.

(l) Includes 156,000 square feet of office space.

(m) As of August 30, 2011, 457 leases have been signed since appointments with prospective residents began on February 18, 2011, representing 51% of the total 903 units after construction is complete. As of July 31, 2011, $246.5 million at pro-rata consolidation of costs incurred and $158.5 million at pro-rata consolidation of mortgage debt were transferred to completed rental properties on the Company’s balance sheet.

(n) On May 2, 2011, the Company closed on a purchase agreement with a minority interest partner. As a result, the Company’s legal and pro-rata ownership increased to approximately 34%.

(o) The Nets, a member of the NBA, has a 37 year license agreement to use the arena.

(p) Represents the percentage of forecasted contractually obligated arena income that is under contract. Contractually obligated income, which includes revenue from naming rights, sponsorships, suite licenses, Nets minimum rent and food concession agreements, accounts for 72% of total forecasted revenues for the arena.

(q) This is a fee development project, owned by the City of Las Vegas. Therefore, these costs are not included on the full consolidation or pro-rata balance sheet.

(r) Updated lease commitments as of September 6, 2011.

Equity Requirements for Projects Under Construction^(a)

as of July 31, 2011

	100%		Less Unconsolidated Investments at 100%		Full Consolidation (GAAP)(b)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Pro-Rata Consolidation (Non-GAAP) (c)
	(dollars in millions)
Total Cost Under Construction	$	2,683.8	$	875.7	$	1,808.1	$	598.4	$	446.6	$	1,656.3
Total Loan Draws and Other Sources at Completion(d)		1,668.2		539.0		1,129.2		376.5		263.1		1,015.8
Net Equity at Completion		1,015.6		336.7		678.9		221.9		183.5		640.5
Net Costs Incurred to Date(e)		1,870.4		734.5		1,135.9		281.7		382.8		1,237.0
Loan Draws and Other Sources to Date (e)		935.3		424.4		510.9		59.8		225.8		676.9
Net Equity to Date(e)		935.1		310.1		625.0		221.9		157.0		560.1
% of Total Equity		92%				92%						87%
Remaining Costs		813.4		141.2		672.2		316.7		63.8		419.3
Remaining Loan Draws and Other Sources		732.9		114.6		618.3		316.7		37.3		338.9
Remaining Equity	$	80.5	$	26.6	$	53.9	$	–	$	26.5	$	80.4
% of Total Equity		8%				8%						13%

(a) This schedule includes only the four properties listed on the previous page. This does not include costs associated with phased-in units, operating property renovations and military housing.

(b) 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”).

(c) 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.

(d) “Other Sources” includes estimates of third party subsidies and tax credit proceeds. The timing and the amounts may differ from our estimates.

(e) Reflects activity through July 31, 2011.

34

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Projects Under Development

as of July 31, 2011

Below is a summary of our active large scale development projects, which have yet to commence construction, often referred to as our “shadow pipeline” which are crucial to our long-term growth. While we cannot make any assurances on the timing or delivery of these projects, our track record speaks to our ability to bring large, complex, projects to fruition when there is demand and available construction financing. The projects listed below represent pro-rata costs of $738.1 million ($918.2 million at full consolidation) of Projects Under Development (“PUD”) on our balance sheet and pro-rata mortgage debt of $145.2 million ($184.7 million at full consolidation).

1)     Atlantic Yards –Brooklyn, NY

Atlantic Yards is adjacent to the state-of-the art arena, the Barclays Center, which is designed by the award-winning firms Ellerbe Becket and SHoP Architects and is currently under construction. In addition, Atlantic Yards will feature more than 6,400 units of housing, including over 2,200 affordable units, approximately 250,000 square feet of retail space, and more than 8 acres of landscaped open space.

2)     LiveWork Las Vegas – Las Vegas, NV

LiveWork Las Vegas is a mixed-use project on a 13.5-acre parcel in downtown Las Vegas. At full build-out, the project will have a new 260,000-square-foot City Hall for Las Vegas and is also expected to include up to 1 million square feet of office space and approximately 300,000 square feet of retail. The City Hall is owned by the city of Las Vegas and is a fee-development project.

3)     The Yards – Washington, D.C.

The Yards is a 42-acre mixed-use project, located in the neighborhood of the Washington Nationals baseball park in Southeast D.C. The full development is expected to include up to 2,700 residential units, 1.8 million square feet of office space, and 300,000 square feet of retail and dining space. The Yards features a 5.5-acre publicly funded public park that is a gathering place and recreational focus for the community. The first residential building, Foundry Lofts, which is under construction and expected to open in Q3-11.

4)     The Science + Technology Park at Johns Hopkins –Baltimore, MD

The 31-acre Science + Technology Park at Johns Hopkins is a new center for collaborative research directly adjacent to the world-renowned Johns Hopkins medical and research complex. Initial plans call for 1.1 million square feet in five buildings, with future phases that could support additional expansion. In 2008, the Company opened the first of those buildings, 855 North Wolfe Street, a 279,000-square-foot office building anchored by the Johns Hopkins School of Medicine’s Institute for Basic Biomedical Sciences.

5)     Colorado Science + Technology Park at Fitzsimons – Aurora, CO

The 184-acre Colorado Science + Technology Park at Fitzsimons is becoming a hub for the biotechnology industry in the Rocky Mountain region. Anchored by the University of Colorado at Denver Health Science Center, the University of Colorado Hospital and The Denver Children’s Hospital, the park will offer cost-effective lease rates; build-to-suit office and research sites; and flexible lab and office layouts in a cutting-edge research park. The park is also adjacent to Forest City’s 4,700-acre Stapleton mixed-used development.

6)     Waterfront Station– Washington, D.C.

Located in Southwest Washington, D.C., Waterfront Station is adjacent to the Waterfront/Southeastern University MetroRail station. Waterfront Station is expected to include 660,000 square feet of office space, an estimated 400 residential units and 40,000 square feet of stores and restaurants.

7)     300 Massachusetts Avenue – Cambridge, MA

Located in the science and technology hub of Cambridge, MA, the 300 Massachusetts Avenue block represents an expansion of University Park @ MIT. In a 50/50 partnership with MIT, Forest City is presently focused on a project that reflects a development program of approximately 260,000 square feet of lab and office space. Potential redevelopment of the entire block is possible with the acquisition of adjacent parcels in future phases, and would result in an approximately 400,000 square foot project.

35

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Military Housing

as of July 31, 2011

Below is a summary of our equity method investments for Military Housing Development projects. The Company provides development, construction and management services for these projects and receives agreed upon fees for these services. The following phases still have a percentage of units opened and under construction:

Property	Location	Anticipated Opening	FCE Pro-Rata %	Cost at Full Consolidation		Total Cost at 100%		No. of Units
				(in millions)
Military Housing – Openings (2)
Navy, Hawaii Increment III	Honolulu, HI	2007-Q1-11	*	$	0.0	$	464.8		2,520
Marines, Hawaii Increment II	Honolulu, HI	2007-Q2-11	*		0.0		292.7		1,175
Total Openings				$	0.0	$	757.5		3,695
Military Housing – Under Construction (5)
Pacific Northwest Communities	Seattle, WA	2007-2011	*	$	0.0	$	280.5		2,985
Navy Midwest	Chicago, IL	2006-2012	*		0.0		200.3		1,401
Midwest Millington	Memphis, TN	2008-2012	*		0.0		33.1		318
Air Force Academy	Colorado Springs, CO	2007-2013	50.0%		0.0		69.5		427
Hawaii Phase IV	Kaneohe, HI	2007-2014	*		0.0		475.1		1,141
Total Under Construction				$	0.0	$	1,058.5		6,272
Total Military Housing				$	0.0	$	1,816.0		9,967
* The Company’s share of residual cash flow ranges from 0-20% during the life cycle of the project.

Recent commitment not yet closed

Air Force – Southern Group was awarded on August 30, 2010. We are currently in exclusive negotiations with the Air Force. This project is expected to include 2,185 end state units at four Air Force bases in Sumter, SC, Manchester, TN, Charleston, SC and Biloxi, MS. There are 330 financially excluded units that will not be encumbered by debt and which may be removed from the end state at the sole discretion of the Air Force. The financial closing of the project is scheduled for October 1, 2011 and commencement of construction is expected to immediately follow.

Development fees related to our military housing projects are earned based on a contractual percentage of the actual development costs incurred. We also recognize additional development incentive fees upon successful completion of certain criteria, such as incentives to realize development cost savings, encourage small and local business participation, comply with specified safety standards and other project management incentives as specified in the development agreements. NOI from development and development incentive fees is $788,000 and $1,925,000 for the three and six months ended July 31, 2011, respectively, and $1,705,000 and $3,318,000 for the three and six months ended July 31, 2010, respectively.

Construction management fees are earned based on a contractual percentage of the actual construction costs incurred. We also recognize certain construction incentive fees based upon successful completion of certain criteria as set forth in the construction contracts. NOI from construction and incentive fees is $738,000 and $1,918,000 for the three and six months ended July 31, 2011, respectively, and $1,465,000 and $3,060,000 recognized during the three and six months ended July 31, 2010, respectively.

Property management and asset management fees are earned based on a contractual percentage of the annual net rental income and annual operating income, respectively, that is generated by the military housing privatization projects as defined in the agreements. We also recognize certain property management incentive fees based upon successful completion of certain criteria as set forth in the property management agreements. Property management, management incentive and asset management fees generated NOI of $2,418,000 and $5,647,000 during the three and six months ended July 31, 2011, respectively, and $3,120,000 and $6,242,000 during the three and six months ended July 31, 2010, respectively.

36

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Land Held for Development or Sale

as of July 31, 2011

The Land Development Group acquires and sells raw land and sells fully-entitled developed lots to residential, commercial, and industrial customers. The Land Development Group also owns and develops raw land into master-planned communities, mixed-use projects and other residential developments. Below is a summary of our large Land Development Group projects.

Location	Gross       Acres (1)		Saleable     Acres (2)		Option         Acres (3)
Stapleton – Denver, CO		213		141		1,358
Mesa del Sol – Albuquerque, NM		3,011		1,647		5,731
Central Station – Chicago, IL		30		30		–
Texas		2,798		1,553		–
North Carolina		1,225		1,001		788
Ohio		967		652		470
Arizona		663		489		–
Other		884		698		–
Total		9,791		6,211		8,347

(1) Represent all acres currently owned including those used for roadways, open spaces and parks.

(2) Saleable acres represent the total of all acres owned and available for sales. The Land Development Group may choose to further develop some of the acres into completed sublots prior to sale.

(3) Option acres are those acres that the Land Development Group has a formal option to acquire. Typically these options are in the form of purchase agreements with contingencies for the satisfaction of due diligence reviews.

Stapleton – Denver, CO

Stapleton represents one of the nation’s largest urban redevelopments. At full build out of 4,700 acres or 7.5 square miles, Stapleton is planned for more than 12,000 homes and apartments, a projected 3 million square-feet of retail and 10 million square-feet of office/research and development/industrial space. Centrally located 10 minutes east of Downtown Denver and 20 minutes from Denver International Airport, Stapleton will be home to 30,000 residents and 35,000 workers when complete.

Mesa del Sol – Albuquerque, NM

Mesa del Sol is a 20-square mile, mixed-use community on the south mesa of Albuquerque, N.M., five minutes from the Albuquerque International Airport. Mesa del Sol’s master plan calls for mixed-use development that will include 1,400 acres for industrial/commercial and office development use, 4,400 acres for residential and supporting retail use, 3,200 acres for open space and parks and 800 acres for schools and universities.

Central Station – Chicago, IL

Located adjacent to the city’s Museum Campus, and just minutes from the heart of Chicago’s Loop, the 80-acre Central Station is a residential community with 3,727 residential units completed, of which 3,156 are occupied and 571 units are listed for sale, and another 4,000 units in development. Central Station, a 14 million-square-foot development, is being developed in partnership with The Fogelson Companies.

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Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Land Held for Development or Sale (continued)

as of July 31, 2011

Other Significant Land Holdings

Legacy Lakes – Aberdeen, NC

Legacy Lakes is a master-planned community located in the Pinehurst area. This community is surrounding the Nicklaus-designed Legacy Golf Course. Legacy Lakes is 406 acres and includes 718 residential lots. Of the 406 total acres, 265 are saleable acres and 17 acres have been sold to date.

Gladden Farms – Marana, AZ

Gladden Farms is a master-planned community that includes residential and commercial uses in a suburban area of northwest Tucson. This community includes parks, trails and a school in a rural setting. Gladden Farms is 1,350 acres and includes approximately 4,142 residential lots and 223 acres of commercial space. As of July 31, 2011, 1,266 lots and 100 commercial acres have been sold. Of the 1,350 total acres, 868 are saleable acres and 408 acres have been sold to date.

Cotton Creek – Mooresville, NC

Cotton Creek is a master-planned community located in a northern suburb of Charlotte, NC. This community will feature a variety of attached and detached home sites, which will be sold to a mix of national and local builders. Cotton Creek is 534 acres. When completed the development is expected to produce approximately 1,300 residential lots.

Three Stones – Prosper, TX

Three Stones is a master-planned community of 2,031 acres located in the growth corridor north of Dallas in the town of Prosper. The community is fully entitled and the plan includes approximately 3,090 single family lots, 600 units of attached housing, over 600 acres of parks and open space and 250 acres for commercial/retail use. A variety of single family lot sizes will be offered, as well as a complete amenity center. The development of Phase 1 is expected to be completed in late 2012.

San Antonio Portfolio– San Antonio, TX

Forest City owns four multi-phase communities and finished lots in three additional locations in the San Antonio area, predominantly on the west side. As of July 31, 2011, almost 1,000 of the total 2,563 lots have been sold. The remaining portfolio is comprised of 449 finished lots and 1,112 undeveloped “paper” lots. Our San Antonio communities serve several different price ranges, and all lots are under option contract to one of seven different builders.

Tangerine Crossing – Tucson, AZ

Tangerine Crossing is a master-planned gated residential community with a major retail component on the exterior in a desirable region of the Tucson metropolitan area. This community includes open space, trails and recreation. Tangerine Crossing is 309 acres and includes 396 residential lots and a 25-acre retail center. As of July 31, 2011, 230 lots and the 25 commercial acres have been sold. Of the 309 total acres, 98 are saleable acres and 69 acres have been sold to date.

Timberlake– Oak Point (Dallas), TX

Timberlake is a planned community of approximately 250 acres located in Denton County, north of Dallas. Forest City entered into this project earlier in 2011 through the formation of a new partnership with Taylor Duncan Interests, Inc. with Forest City providing capital for financing and development. The project is zoned for over 800 single family lots, and development of Phase 1 is expected to begin in 2012.

Woodforest – Houston, TX

Woodforest, which is not included in the acres on the previous page, is an active, 3,000-acre master-planned community, located in southern Montgomery County, north of Houston. Forest City entered into this project last year through the formation of a new partnership with Johnson Development, with Forest City providing capital for financing and development. The project is zoned for 5,700 units and six active home builders are currently involved with model homes in place serving a wide range of prices. Over 200 home sales have occurred to date. The project is being developed adjacent to the 27-hole Woodforest Golf Club that opened in 2001 and has been rated one of the top courses in the state.

38

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Operating Information

Debt for Projects under Construction and Development

We use nonrecourse mortgage debt and nonrecourse notes payable for the financing of our projects under construction and development. We draw on these financings to partially fund the cost incurred with the development of our real estate. As of July 31, 2011, the detail of how much is outstanding compared to the total commitment under the financing is as follows:

	Full       Consolidation       (GAAP)		Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Pro-Rata       Consolidation       (Non-GAAP)
	(in thousands)
Outstanding
Fixed	$	196,088	$	65,706	$	887	$	131,269
Variable
Taxable		514,788		30,998		74,377		558,167
Tax-Exempt		–		–		44,039		44,039
Total outstanding on projects under construction and development(1)	$	710,876	$	96,704	$	119,303	$	733,475
Commitment
Fixed	$	852,197	$	402,963	$	887	$	450,121
Variable
Taxable		645,482		30,998		74,377		688,861
Tax-Exempt		–		–		44,039		44,039
Total commitment	$	1,497,679	$	433,961	$	119,303	$	1,183,021

(1) Proceeds from outstanding debt of $20,741 and $45,516, at full and pro-rata consolidation, respectively, described above is recorded as restricted cash and escrowed funds in our Consolidated Balance Sheet. For bonds issued in conjunction with development, the full amount of the bonds at the beginning of construction must remain in escrow until costs are incurred.

Nonrecourse Debt

Our primary capital strategy seeks to isolate the operating and financial risk at the property level to maximize returns and reduce risk on and of our equity capital. As such, substantially all of our operating and development properties are separately encumbered with nonrecourse mortgage debt which in some limited circumstances is supplemented by nonrecourse notes payable (collectively “nonrecourse debt”).

We use taxable and tax-exempt nonrecourse debt for our real estate projects. 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. For those real estate projects financed with taxable debt, we generally seek long-term, fixed-rate financing for those operating projects whose loans mature or are projected to open and achieve stabilized operations. The availability of nonrecourse mortgage capital is improving, especially in strong markets, but is still not at the levels before the economic downturn. For those assets that cannot be refinanced at attractive terms, we attempt to extend the maturities with existing lenders.

We are actively working to refinance and/or extend the maturities of the nonrecourse debt that are coming due in the next 24 months. During the six months ended July 31, 2011, we completed the following financings:

Purpose of Financing	Full     Consolidation		Less Noncontrolling Interest		Plus   Unconsolidated   Investments at Pro-Rata		Pro-Rata       Consolidation
	(in thousands)
Refinancings	$	84,000	$	830	$	56,113	$	139,283
Construction and development projects(1)		294,421		66,876		–		227,545
Loan extensions/additional fundings		257,856		54,381		427,928		631,403
	$	636,277	$	122,087	$	484,041	$	998,231

(1) Represents the full amount available to be drawn on the loans.

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Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Scheduled Maturities Table: Nonrecourse Debt(dollars in thousands)

As of July 31, 2011

	Period Ending January 31, 2012												Fiscal Year Ending January 31, 2013
	Full     Consolidation			Less   Noncontrolling   Interest			Plus     Unconsolidated     Investments at     Pro-Rata			Pro-Rata     Consolidation			Full     Consolidation			Less   Noncontrolling   Interest			Plus     Unconsolidated     Investments at     Pro-Rata			Pro-Rata     Consolidation
Fixed:
Fixed-rate debt	$	144,692		$	4,072		$	101,251		$	241,871		$	318,236		$	18,006		$	61,122		$	361,352
Weighted average rate		6.36	%		6.15	%		7.11	%		6.68	%		6.02	%		6.72	%		6.39	%		6.04	%
Variable:
Variable-rate debt		327,152			10,461			21,027			337,718			737,390			13,190			113,919			838,119
Weighted average rate		3.11	%		6.80	%		2.52	%		2.96	%		3.72	%		8.22	%		3.67	%		3.64	%
Tax-Exempt		238			24			2,983			3,197			239			24			–			215
Weighted average rate		1.53	%		1.51	%		1.47	%		1.47	%		1.58	%		1.57	%		–	%		1.58	%
Total variable-rate debt		327,390			10,485			24,010			340,915			737,629			13,214			113,919			838,334
Total Nonrecourse Debt	$	472,082		$	14,557		$	125,261		$	582,786		$	1,055,865		$	31,220		$	175,041		$	1,199,686
Weighted Average Rate		4.11	%		6.61	%		6.21	%		4.50	%		4.41	%		7.35	%		4.62	%		4.36	%
	Fiscal Year Ending January 31, 2014												Fiscal Year Ending January 31, 2015
	Full     Consolidation			Less   Noncontrolling   Interest			Plus     Unconsolidated     Investments at     Pro-Rata			Pro-Rata     Consolidation			Full     Consolidation			Less   Noncontrolling   Interest			Plus     Unconsolidated     Investments at     Pro-Rata			Pro-Rata     Consolidation
Fixed:
Fixed-rate debt	$	691,808		$	72,846		$	139,490		$	758,452		$	386,623		$	66,298		$	191,169		$	511,494
Weighted average rate		6.30	%		9.82	%		6.35	%		5.97	%		5.95	%		5.78	%		5.49	%		5.80	%
Variable:
Variable-rate debt		92,673			9,060			13,302			96,915			23,563			–			30,302			53,865
Weighted average rate		6.59	%		8.64	%		4.19	%		6.07	%		3.68	%		–	%		4.23	%		3.99	%
Tax-Exempt		91,055			26			53,040			144,069			272			27			–			245
Weighted average rate		2.55	%		1.55	%		3.05	%		2.73	%		1.58	%		1.59	%		–	%		1.58	%
Total variable-rate debt		183,728			9,086			66,342			240,984			23,835			27			30,302			54,110
Total Nonrecourse Debt	$	875,536		$	81,932		$	205,832		$	999,436		$	410,458		$	66,325		$	221,471		$	565,604
Weighted Average Rate		5.94	%		9.69	%		5.36	%		5.52	%		5.82	%		5.78	%		5.32	%		5.63	%

40

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

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

As of July 31, 2011

	Fiscal Year Ending January 31, 2016												Thereafter
	Full     Consolidation			Less   Noncontrolling   Interest			Plus     Unconsolidated     Investments at     Pro-Rata			Pro-Rata     Consolidation			Full     Consolidation			Less   Noncontrolling   Interest			Plus     Unconsolidated     Investments at     Pro-Rata			Pro-Rata     Consolidation
Fixed:
Fixed-rate debt	$	357,164		$	29,276		$	123,152		$	451,040		$	1,479,614		$	65,714		$	826,330		$	2,240,230
Weighted average rate		5.58	%		5.82	%		5.31	%		5.49	%		5.70	%		5.74	%		5.78	%		5.73	%
Variable:
Variable-rate debt		–			–			21,682			21,682			640,340			2,717			295,299			932,922
Weighted average rate		–	%		–	%		1.62	%		1.62	%		7.23	%		3.25	%		2.98	%		5.90	%
Tax-Exempt		290			29			–			261			330,338			5,303			268,938			593,973
Weighted average rate		1.58	%		1.58	%		–	%		1.58	%		1.01	%		1.00	%		1.86	%		1.40	%
Total variable-rate debt		290			29			21,682			21,943			970,678			8,020			564,237			1,526,895
Total Nonrecourse Debt	$	357,454		$	29,305		$	144,834		$	472,983		$	2,450,292		$	73,734		$	1,390,567		$	3,767,125
Weighted Average Rate		5.58	%		5.82	%		4.76	%		5.31	%		5.47	%		5.31	%		4.42	%		5.09	%
	Total
	Full     Consolidation			Less   Noncontrolling   Interest			Plus     Unconsolidated     Investments at     Pro-Rata			Pro-Rata     Consolidation
Fixed:
Fixed-rate debt	$	3,378,137		$	256,212		$	1,442,514		$	4,564,439
Weighted average rate		5.90	%		7.00	%		5.87	%		5.83	%
Variable:
Variable-rate debt		1,821,118			35,428			495,531			2,281,221
Weighted average rate		4.99	%		7.53	%		3.17	%		4.55	%
Tax-Exempt		422,432			5,433			324,961			741,960
Weighted average rate		1.34	%		1.02	%		2.05	%		1.66	%
Total variable-rate debt		2,243,550			40,861			820,492			3,023,181
Total Nonrecourse Debt	$	5,621,687		$	297,073		$	2,263,006		$	7,587,620
Weighted Average Rate		5.26	%		6.95	%		4.73	%		5.04	%

41

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

The following schedules present information on investments in unconsolidated entities.

Investments in Unconsolidated Entities

Investments in unconsolidated entities include investments in and advances to affiliates and cash distributions and losses in excess of unconsolidated investments that the Company does not control and/or is not deemed to be the primary beneficiary, and which are accounted for under the equity method of accounting.

The following is a reconciliation of members’ and partners’ equity to the Company’s carrying value:

	July 31, 2011		January 31, 2011
	(in thousands)
Members’ and partners’ equity, as below	$	987,583	$	587,164
Equity of other members and partners		857,348		616,640
Company’s investment in partnerships		130,235		(29,476)
Basis differences		177,495		76,634
Advances to and on behalf of other affiliates		94,942		93,859
Total Investments in Unconsolidated Entities	$	402,672	$	141,017
Assets – Investments in and advances to affiliates	$	685,627	$	431,509
Liabilities – Cash distributions and losses in excess of investments in unconsolidated investments		(282,955)		(290,492)
Total Investments in Unconsolidated Entities	$	402,672	$	141,017

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

	Combined (100%)				Pro-Rata Share
	(GAAP)				(Non-GAAP)
	July 31, 2011		January 31, 2011		July 31, 2011		January 31, 2011
	(in thousands)
Balance Sheet:
Real Estate
Completed rental properties	$	6,905,798	$	5,514,041	$	2,673,450	$	1,923,813
Projects under construction and development		425,495		174,106		220,826		79,603
Land held for development or sale		230,431		272,930		96,725		115,607
Total Real Estate		7,561,724		5,961,077		2,991,001		2,119,023
Less accumulated depreciation		(1,158,399)		(944,968)		(516,556)		(424,331)
Real Estate, net		6,403,325		5,016,109		2,474,445		1,694,692
Cash and equivalents		125,605		109,246		60,556		48,583
Restricted cash – military housing bond funds		345,365		384,584		5,694		5,161
Other restricted cash and escrowed funds		292,490		206,778		117,324		73,729
Other assets		750,381		536,246		252,348		131,486
Operating property assets held for sale(1)		–		67,190		–		–
Total Assets	$	7,917,166	$	6,320,153	$	2,910,367	$	1,953,651
Mortgage debt and notes payable, nonrecourse	$	6,461,858	$	5,301,900	$	2,263,006	$	1,713,367
Other liabilities		467,725		369,871		191,050		124,908
Liabilities of operating property held for sale(1)		–		61,218		–		–
Total Liabilities		6,929,583		5,732,989		2,454,056		1,838,275
Members’ and partners’ equity		987,583		587,164		456,311		115,376
Total Liabilities and Members’ and Partners’ Equity	$	7,917,166	$	6,320,153	$	2,910,367	$	1,953,651

(1) Represents assets and liabilities ofMetropolitan Lofts, an unconsolidated apartment community in Los Angeles, California, which was disposed on February 1, 2011.

42

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Investments in Unconsolidated Entities(continued)

	Combined (100%) (GAAP)						Pro-Rata Share (Non-GAAP)
Three Months Ended July 31,	2011			2010			2011			2010
	(in thousands)
Operations:
Revenues	$	258,831		$	218,481		$	94,643		$	80,162
Equity in earnings (loss) of unconsolidated entities on a pro-rata basis		–			–			(3,349	)		(6,206	)
Operating expenses		(140,394	)		(122,421	)		(45,037	)		(39,807	)
Interest expense including early extinguishment of debt		(86,064	)		(67,554	)		(27,538	)		(19,162	)
Depreciation and amortization		(48,259	)		(43,485	)		(16,744	)		(12,865	)
Interest and other income		4,769			5,012			268			(56	)
Noncontrolling interest		–			–			142			98
Net earnings (loss) (pre-tax)	$	(11,117	)	$	(9,967	)	$	2,385		$	2,164
Impairment of investments in unconsolidated entities(1)		–			(2,282	)		–			(2,282	)
Loss on disposition of equity method investments(2)		–			(878	)		–			(878	)
Net earnings (loss) (pre-tax) from unconsolidated entities	$	(11,117	)	$	(13,127	)	$	2,385		$	(996	)
	Combined (100%) (GAAP)						Pro-Rata Share (Non-GAAP)
Six Months Ended July 31,	2011			2010			2011			2010
	(in thousands)
Operations:
Revenues	$	515,020		$	451,504		$	177,357		$	167,701
Equity in earnings (loss) of unconsolidated entities on a pro-rata basis		–			–			(3,702	)		(5,933	)
Operating expenses		(294,786	)		(263,319	)		(82,721	)		(93,443	)
Interest expense including early extinguishment of debt		(160,291	)		(129,993	)		(50,645	)		(39,118	)
Impairment of real estate(1)		–			(1,457	)		–			(743	)
Depreciation and amortization		(95,651	)		(80,577	)		(31,052	)		(25,664	)
Interest and other income		7,527			7,549			385			694
Noncontrolling interest		–			–			190			(6,346	)
Net earnings (loss) (pre-tax)	$	(28,181	)	$	(16,293	)	$	9,812		$	(2,852	)
Impairment of investments in unconsolidated entities(1)		–			(14,438	)		–			(14,438	)
Gain (loss) on disposition of equity method investments(2)		12,567			(830	)		12,567			(830	)
Net earnings (loss) (pre-tax) from unconsolidated entities	$	(15,614	)	$	(31,561	)	$	22,379		$	(18,120	)

43

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

(1) The following tables show the detail of impairment of unconsolidated entities:

		Combined (100%) (GAAP)					Pro-Rata Share (Non-GAAP)
		Three Months Ended July 31,
		2011		2010			2011		2010
		(in thousands)
Impairment of investments in unconsolidated entities:
Mixed-Use Land Development:
Central Station: Mercy Campus	Chicago, Illinois	$	–	$	1,817		$	–	$	1,817
Other			–		465			–		465
Total impairment of investments in unconsolidated entities		$	–	$	2,282		$	–	$	2,282
		Combined (100%)					Pro-Rata Share
		(GAAP)					(Non-GAAP)
		Six Months Ended July 31,
		2011		2010			2011		2010
		(in thousands)
Impairment of real estate:
Old Stone Crossing at Caldwell Creek (Mixed-Use Land Development)	Charlotte, North Carolina	$	–	$	1,457		$	–	$	743
		$	–	$	1,457		$	–	$	743
Impairment of investments in unconsolidated entities:
Mixed-Use Land Development:
Central Station: Mercy Campus	Chicago, Illinois	$	–	$	1,817		$	–	$	1,817
Office Buildings:
818 Mission Street	San Francisco, California		–		4,018			–		4,018
Bulletin Building	San Francisco, California		–		3,543			–		3,543
Metreon (Specialty Retail Center)	San Francisco, California		–		4,595			–		4,595
Other			–		465			–		465
Total impairment of investments in unconsolidated entities		$	–	$	14,438		$	–	$	14,438
Total impairment of unconsolidated entities		$	–	$	15,895		$	–	$	15,181
(2)       Upon disposition, investments accounted for on the equity method are not classified as discontinued operations; therefore, gains or losses on the disposition of these properties are reported in continuing operations. The following table shows the detail of gains and losses on disposition of unconsolidated entities:
		Combined (100%) (GAAP)					Pro-Rata Share (Non-GAAP)
		Three Months Ended July 31,
		2011		2010			2011		2010
		(in thousands)
Gain (loss) on disposition of equity method investments:
Specialty Retail Centers:
Coachella Plaza	Coachella, California	$	–	$	104		$	–	$	104
Southgate Mall	Yuma, Arizona		–		64			–		64
Metreon	San Francisco, California		–		(1,046	)		–		(1,046	)
Total loss on disposition of equity method investments		$	–	$	(878	)	$	–	$	(878	)
		Combined (100%) (GAAP)					Pro-Rata Share (Non-GAAP)
		Six Months Ended July 31,
		2011		2010			2011		2010
		(in thousands)
Gain (loss) on disposition of equity method investments:
Apartment Communities:
Metropolitan Lofts	Los Angeles, California	$	9,964	$	–		$	9,964	$	–
Twin Lake Towers	Denver, Colorado		2,603		–			2,603		–
Specialty Retail Centers:
Coachella Plaza	Coachella, California		–		104			–		104
Southgate Mall	Yuma, Arizona		–		64			–		64
El Centro Mall	El Centro, California		–		48			–		48
Metreon	San Francisco, California		–		(1,046	)		–		(1,046	)
Total gain (loss) on disposition of equity method investments		$	12,567	$	(830	)	$	12,567	$	(830	)

44

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Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Three Months Ended July 31, 2011(in thousands)

	Commercial Group 2011														Residential Group 2011
	Full Consolidation (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	187,818		$	8,626	$	55,995		$	1,494		$	236,681		$	57,525		$	3,254	$	36,558		$	–	$	90,829
Exclude straight-line rent adjustment		1,907			–		–			(217	)		1,690			(288	)		–		–			–		(288	)
Adjusted revenues		189,725			8,626		55,995			1,277			238,371			57,237			3,254		36,558			–		90,541
Add interest and other income		7,714			173		40			–			7,581			4,998			149		224			–		5,073
Add equity in earnings (loss) of unconsolidated entities, including impairment		3,845			1		(3,844	)		–			–			1,614			141		(1,548	)		–		(75	)
Exclude gain on disposition of unconsolidated entities		–			–		–			–			–			–			–		–			–		–
Exclude depreciation and amortization of unconsolidated entities		10,394			–		(10,394	)		–			–			6,274			–		(6,274	)		–		–
Adjusted total income		211,678			8,800		41,797			1,277			245,952			70,123			3,544		28,960			–		95,539
Operating expenses		99,421			5,186		25,259			446			119,940			40,359			2,264		18,013			–		56,108
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		194			–		–			–			194			120			–		–			–		120
Exclude straight-line rent adjustment		(1,095	)		–		–			–			(1,095	)		–			–		–			–		–
Exclude preference payment		(586	)		–		–			–			(586	)		–			–		–			–		–
Adjusted operating expenses		97,934			5,186		25,259			446			118,453			40,479			2,264		18,013			–		56,228
Net operating income		113,744			3,614		16,538			831			127,499			29,644			1,280		10,947			–		39,311
Interest expense		41,459			2,846		16,519			180			55,312			9,040			582		8,611			–		17,069
(Gain) loss on early extinguishment of debt		(5,329	)		–		19			–			(5,310	)		–			–		2,336			–		2,336
Noncontrolling interest in earnings before depreciation and amortization		768			768		–			–			–			698			698		–			–		–
Add: Pre-Tax EBDT from discontinued operations		651			–		–			(651	)		–			–			–		–			–		–
Pre-Tax EBDT		77,497			–		–			–			77,497			19,906			–		–			–		19,906
Income tax expense (benefit)		–			–		–			–			–			–			–		–			–		–
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	77,497		$	–	$	–		$	–		$	77,497		$	19,906		$	–	$	–		$	–	$	19,906
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	77,497		$	–	$	–		$	–		$	77,497		$	19,906		$	–	$	–		$	–	$	19,906
Depreciation and amortization – Real Estate Groups		(49,436	)		–		–			(238	)		(49,674	)		(19,188	)		–		–			–		(19,188	)
Amortization of mortgage procurement costs – Real Estate Groups		(2,360	)		–		–			(84	)		(2,444	)		(886	)		–		–			–		(886	)
Straight-line rent adjustment		(3,002	)		–		–			217			(2,785	)		288			–		–			–		288
Preference payment		(586	)		–		–			–			(586	)		–			–		–			–		–
Gain on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest		–			–		–			29,899			29,899			–			–		–			–		–
Gain on disposition of unconsolidated entities		–			–		–			–			–			–			–		–			–		–
Impairment of consolidated and unconsolidated real estate		–			–		–			–			–			(235	)		–		–			–		(235	)
Discontinued operations:
Depreciation and amortization – Real Estate Groups		(238	)		–		–			238			–			–			–		–			–		–
Amortization of mortgage procurement costs – Real Estate Groups		(84	)		–		–			84			–			–			–		–			–		–
Straight-line rent adjustment		217			–		–			(217	)		–			–			–		–			–		–
Gain on disposition of rental properties		29,899			–		–			(29,899	)		–			–			–		–			–		–
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	51,907		$	–	$	–		$	–		$	51,907		$	(115	)	$	–	$	–		$	–	$	(115	)

45

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Three Months Ended July 31, 2011(in thousands)(continued)

Land Development Group 2011

The Nets 2011

Full Consolidation (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata  Consolidation    (Non-GAAP)

Full Consolidation (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata  Consolidation   (Non-GAAP)

Revenues from real estate operations

$

7,862

$

399

$

2,090

$

–

$

9,553

$

–

$

–

$

–

$

–

$

–

Exclude straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Adjusted revenues

7,862

399

2,090

–

9,553

–

–

–

–

–

Add interest and other income

2,553

212

4

–

2,345

–

–

–

–

–

Add equity in earnings (loss) of unconsolidated entities, including impairment

308

–

(200

)

–

108

(3,382

)

–

–

–

(3,382

)

Exclude gain on disposition of unconsolidated entities

–

–

–

–

–

–

–

–

–

–

Exclude depreciation and amortization of unconsolidated entities

76

–

(76

)

–

–

–

–

–

–

–

Adjusted total income

10,799

611

1,818

–

12,006

(3,382

)

–

–

–

(3,382

)

Operating expenses

10,193

453

1,765

–

11,505

–

–

–

–

–

Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs

16

–

–

–

16

–

–

–

–

–

Exclude straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Exclude preference payment

–

–

–

–

–

–

–

–

–

–

Adjusted operating expenses

10,209

453

1,765

–

11,521

–

–

–

–

–

Net operating income

590

158

53

–

485

(3,382

)

–

–

–

(3,382

)

Interest expense

776

130

53

–

699

–

–

–

–

–

(Gain) loss on early extinguishment of debt

–

–

–

–

–

–

–

–

–

–

Noncontrolling interest in earnings before depreciation and amortization

28

28

–

–

–

–

–

–

–

–

Add: Pre-Tax EBDT from discontinued operations

–

–

–

–

–

–

–

–

–

–

Pre-Tax EBDT

(214

)

–

–

–

(214

)

(3,382

)

–

–

–

(3,382

)

Income tax expense (benefit)

–

–

–

–

–

–

–

–

–

–

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

(214

)

$

–

$

–

$

–

$

(214

)

$

(3,382

)

$

–

$

–

$

–

$

(3,382

)

Reconciliation to net earnings:

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

(214

)

$

–

$

–

$

–

$

(214

)

$

(3,382

)

$

–

$

–

$

–

$

(3,382

)

Depreciation and amortization – Real Estate Groups

(67

)

–

–

–

(67

)

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

(85

)

–

–

–

(85

)

–

–

–

–

–

Straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Preference payment

–

–

–

–

–

–

–

–

–

–

Gain on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest

–

–

–

–

–

–

–

–

–

–

Gain on disposition of unconsolidated entities

–

–

–

–

–

–

–

–

–

–

Impairment of consolidated and unconsolidated real estate

–

–

–

–

–

–

–

–

–

–

Discontinued operations:

Depreciation and amortization – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Gain on disposition of rental properties

–

–

–

–

–

–

–

–

–

–

Net earnings (loss) attributable to Forest City Enterprises, Inc.

$

(366

)

$

–

$

–

$

–

$

(366

)

$

(3,382

)

$

–

$

–

$

–

$

(3,382

)

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, 2011(in thousands) (continued)

	Corporate Activities 2011												Total 2011
	Full Consolidation (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full Consolidation (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	–		$	–	$	–	$	–	$	–		$	253,205		$	12,279	$	94,643		$	1,494		$	337,063
Exclude straight-line rent adjustment		–			–		–		–		–			1,619			–		–			(217	)		1,402
Adjusted revenues		–			–		–		–		–			254,824			12,279		94,643			1,277			338,465
Add interest and other income		50			–		–		–		50			15,315			534		268			–			15,049
Add equity in earnings (loss) of unconsolidated entities, including impairment		–			–		–		–		–			2,385			142		(5,592	)		–			(3,349	)
Exclude gain on disposition of unconsolidated entities		–			–		–		–		–			–			–		–			–			–
Exclude depreciation and amortization of unconsolidated entities		–			–		–		–		–			16,744			–		(16,744	)		–			–
Adjusted total income		50			–		–		–		50			289,268			12,955		72,575			1,277			350,165
Operating expenses		9,798			–		–		–		9,798			159,771			7,903		45,037			446			197,351
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		356			–		–		–		356			686			–		–			–			686
Exclude straight-line rent adjustment		–			–		–		–		–			(1,095	)		–		–			–			(1,095	)
Exclude preference payment		–			–		–		–		–			(586	)		–		–			–			(586	)
Adjusted operating expenses		10,154			–		–		–		10,154			158,776			7,903		45,037			446			196,356
Net operating income		(10,104	)		–		–		–		(10,104	)		130,492			5,052		27,538			831			153,809
Interest expense		12,789			–		–		–		12,789			64,064			3,558		25,183			180			85,869
(Gain) loss on early extinguishment of debt		10,800			–		–		–		10,800			5,471			–		2,355			–			7,826
Noncontrolling interest in earnings before depreciation and amortization		–			–		–		–		–			1,494			1,494		–			–			–
Add: Pre-Tax EBDT from discontinued operations		–			–		–		–		–			651			–		–			(651	)		–
Pre-Tax EBDT		(33,693	)		–		–		–		(33,693	)		60,114			–		–			–			60,114
Income tax expense (benefit)		(10,592	)		–		–		–		(10,592	)		(10,592	)		–		–			–			(10,592	)
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(23,101	)	$	–	$	–	$	–	$	(23,101	)	$	70,706		$	–	$	–		$	–		$	70,706
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(23,101	)	$	–	$	–	$	–	$	(23,101	)	$	70,706		$	–	$	–		$	–		$	70,706
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(68,691	)		–		–			(238	)		(68,929	)
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(3,331	)		–		–			(84	)		(3,415	)
Straight-line rent adjustment		–			–		–		–		–			(2,714	)		–		–			217			(2,497	)
Preference payment		–			–		–		–		–			(586	)		–		–			–			(586	)
Gain on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest		–			–		–		–		–			–			–		–			29,899			29,899
Gain on disposition of unconsolidated entities		–			–		–		–		–			–			–		–			–			–
Impairment of consolidated and unconsolidated real estate		–			–		–		–		–			(235	)		–		–			–			(235	)
Discontinued operations:
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(238	)		–		–			238			–
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(84	)		–		–			84			–
Straight-line rent adjustment		–			–		–		–		–			217			–		–			(217	)		–
Gain on disposition of rental properties		–			–		–		–		–			29,899			–		–			(29,899	)		–
Tax (expense) benefit:
Deferred taxes		(6,353	)		–		–		–		(6,353	)		(6,353	)		–		–			–			(6,353	)
Gain (loss) on disposition of rental properties and partial interest in rental properties		(10,456	)		–		–		–		(10,456	)		(10,456	)		–		–			–			(10,456	)
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	(39,910	)	$	–	$	–	$	–	$	(39,910	)	$	8,134		$	–	$	–		$	–		$	8,134
Preferred dividends		(3,850	)		–		–		–		(3,850	)		(3,850	)		–		–			–			(3,850	)
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders	$	(43,760	)	$	–	$	–	$	–	$	(43,760	)	$	4,284		$	–	$	–		$	–		$	4,284

47

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Six Months Ended July 31, 2011(in thousands)

	Commercial Group 2011															Residential Group 2011
	Full Consolidation (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)			Full   Consolidation   (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	434,648		$	19,516		$	100,499		$	6,593		$	522,224		$	111,029		$	4,302	$	72,341		$	–	$	179,068
Exclude straight-line rent adjustment		(1,400	)		–			–			(571	)		(1,971	)		(62	)		–		–			–		(62	)
Adjusted revenues		433,248			19,516			100,499			6,022			520,253			110,967			4,302		72,341			–		179,006
Add interest and other income		14,455			(338	)		69			–			14,862			10,874			291		372			–		10,955
Add equity in earnings (loss) of unconsolidated entities, including impairment		6,767			–			(6,767	)		–			–			18,646			190		(18,253	)		–		203
Exclude gain on disposition of unconsolidated entities		–			–			–			–			–			(12,567	)		–		12,567			–		–
Exclude depreciation and amortization of unconsolidated entities		19,063			–			(19,063	)		–			–			11,830			–		(11,830	)		–		–
Adjusted total income		473,533			19,178			74,738			6,022			535,115			139,750			4,783		55,197			–		190,164
Operating expenses		202,300			11,481			44,348			2,944			238,111			76,536			2,803		35,144			–		108,877
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		389			–			–			–			389			243			–		–			–		243
Exclude straight-line rent adjustment		(2,369	)		–			–			–			(2,369	)		63			–		–			–		63
Exclude preference payment		(1,171	)		–			–			–			(1,171	)		–			–		–			–		–
Adjusted operating expenses		199,149			11,481			44,348			2,944			234,960			76,842			2,803		35,144			–		109,183
Net operating income		274,384			7,697			30,390			3,078			300,155			62,908			1,980		20,053			–		80,981
Interest expense		87,417			6,103			30,371			712			112,397			15,254			1,083		17,717			–		31,888
(Gain) loss on early extinguishment of debt		(5,033	)		4			19			–			(5,018	)		–			–		2,336			–		2,336
Noncontrolling interest in earnings before depreciation and amortization		1,590			1,590			–			–			–			897			897		–			–		–
Add: Pre-Tax EBDT from discontinued operations		2,366			–			–			(2,366	)		–			–			–		–			–		–
Pre-Tax EBDT		192,776			–			–			–			192,776			46,757			–		–			–		46,757
Income tax expense (benefit)		–			–			–			–			–			–			–		–			–		–
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	192,776		$	–		$	–		$	–		$	192,776		$	46,757		$	–	$	–		$	–	$	46,757
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	192,776		$	–		$	–		$	–		$	192,776		$	46,757		$	–	$	–		$	–	$	46,757
Depreciation and amortization – Real Estate Groups		(99,074	)		–			–			(1,030	)		(100,104	)		(37,501	)		–		–			–		(37,501	)
Amortization of mortgage procurement costs – Real Estate Groups		(4,842	)		–			–			(333	)		(5,175	)		(1,726	)		–		–			–		(1,726	)
Straight-line rent adjustment		(969	)		–			–			571			(398	)		125			–		–			–		125
Preference payment		(1,171	)		–			–			–			(1,171	)		–			–		–			–		–
Gain on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest		9,561			–			–			39,937			49,498			–			–		12,567			–		12,567
Gain on disposition of unconsolidated entities		–			–			–			–			–			12,567			–		(12,567	)		–		–
Impairment of consolidated and unconsolidated real estate		(3,435	)		–			–			–			(3,435	)		(235	)		–		–			–		(235	)
Discontinued operations:
Depreciation and amortization – Real Estate Groups		(1,030	)		–			–			1,030			–			–			–		–			–		–
Amortization of mortgage procurement costs – Real Estate Groups		(333	)		–			–			333			–			–			–		–			–		–
Straight-line rent adjustment		571			–			–			(571	)		–			–			–		–			–		–
Gain on disposition of rental properties		39,937			–			–			(39,937	)		–			–			–		–			–		–
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	131,991		$	–		$	–		$	–		$	131,991		$	19,987		$	–	$	–		$	–	$	19,987

48

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Six Months Ended July 31, 2011(in thousands) (continued)

Land Development Group 2011

The Nets 2011

Full Consolidation (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata Consolidation (Non-GAAP)

Full   Consolidation   (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata Consolidation (Non-GAAP)

Revenues from real estate operations

$

15,952

$

1,050

$

4,517

$

–

$

19,419

$

–

$

–

$

–

$

–

$

–

Exclude straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Adjusted revenues

15,952

1,050

4,517

–

19,419

–

–

–

–

–

Add interest and other income

5,394

441

(56

)

–

4,897

–

–

–

–

–

Add equity in earnings (loss) of unconsolidated entities, including impairment

652

–

(871

)

–

(219

)

(3,686

)

–

–

–

(3,686

)

Exclude gain on disposition of unconsolidated entities

–

–

–

–

–

–

–

–

–

–

Exclude depreciation and amortization of unconsolidated entities

159

–

(159

)

–

–

–

–

–

–

–

Adjusted total income

22,157

1,491

3,431

–

24,097

(3,686

)

–

–

–

(3,686

)

Operating expenses

19,418

1,057

3,229

–

21,590

–

–

–

–

–

Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs

47

–

–

–

47

–

–

–

–

–

Exclude straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Exclude preference payment

–

–

–

–

–

–

–

–

–

–

Adjusted operating expenses

19,465

1,057

3,229

–

21,637

–

–

–

–

–

Net operating income

2,692

434

202

–

2,460

(3,686

)

–

–

–

(3,686

)

Interest expense

1,600

234

202

–

1,568

–

–

–

–

–

(Gain) loss on early extinguishment of debt

–

–

–

–

–

–

–

–

–

–

Noncontrolling interest in earnings before depreciation and amortization

200

200

–

–

–

–

–

–

–

–

Add: Pre-Tax EBDT from discontinued operations

–

–

–

–

–

–

–

–

–

–

Pre-Tax EBDT

892

–

–

–

892

(3,686

)

–

–

–

(3,686

)

Income tax expense (benefit)

–

–

–

–

–

–

–

–

–

–

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

892

$

–

$

–

$

–

$

892

$

(3,686

)

$

–

$

–

$

–

$

(3,686

)

Reconciliation to net earnings:

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

892

$

–

$

–

$

–

$

892

$

(3,686

)

$

–

$

–

$

–

$

(3,686

)

Depreciation and amortization – Real Estate Groups

(153

)

–

–

–

(153

)

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

(146

)

–

–

–

(146

)

–

–

–

–

–

Straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Preference payment

–

–

–

–

–

–

–

–

–

–

Gain on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest

–

–

–

–

–

–

–

–

–

–

Gain on disposition of unconsolidated entities

–

–

–

–

–

–

–

–

–

–

Impairment of consolidated and unconsolidated real estate

(1,400

)

–

–

–

(1,400

)

–

–

–

–

–

Discontinued operations:

Depreciation and amortization – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Gain on disposition of rental properties

–

–

–

–

–

–

–

–

–

–

Net earnings (loss) attributable to Forest City Enterprises, Inc.

$

(807

)

$

–

$

–

$

–

$

(807

)

$

(3,686

)

$

–

$

–

$

–

$

(3,686

)

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, 2011(in thousands)(continued)

	Corporate Activities 2011												Total 2011
	Full Consolidation (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full   Consolidation   (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	–		$	–	$	–	$	–	$	–		$	561,629		$	24,868	$	177,357		$	6,593		$	720,711
Exclude straight-line rent adjustment		–			–		–		–		–			(1,462	)		–		–			(571	)		(2,033	)
Adjusted revenues		–			–		–		–		–			560,167			24,868		177,357			6,022			718,678
Add interest and other income		99			–		–		–		99			30,822			394		385			–			30,813
Add equity in earnings (loss) of unconsolidated entities, including impairment		–			–		–		–		–			22,379			190		(25,891	)		–			(3,702	)
Exclude gain on disposition of unconsolidated entities		–			–		–		–		–			(12,567	)		–		12,567			–			–
Exclude depreciation and amortization of unconsolidated entities		–			–		–		–		–			31,052			–		(31,052	)		–			–
Adjusted total income		99			–		–		–		99			631,853			25,452		133,366			6,022			745,789
Operating expenses		24,425			–		–		–		24,425			322,679			15,341		82,721			2,944			393,003
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		709			–		–		–		709			1,388			–		–			–			1,388
Exclude straight-line rent adjustment		–			–		–		–		–			(2,306	)		–		–			–			(2,306	)
Exclude preference payment		–			–		–		–		–			(1,171	)		–		–			–			(1,171	)
Adjusted operating expenses		25,134			–		–		–		25,134			320,590			15,341		82,721			2,944			390,914
Net operating income		(25,035	)		–		–		–		(25,035	)		311,263			10,111		50,645			3,078			354,875
Interest expense		26,708			–		–		–		26,708			130,979			7,420		48,290			712			172,561
(Gain) loss on early extinguishment of debt		10,800			–		–		–		10,800			5,767			4		2,355			–			8,118
Noncontrolling interest in earnings before depreciation and amortization		–			–		–		–		–			2,687			2,687		–			–			–
Add: Pre-Tax EBDT from discontinued operations		–			–		–		–		–			2,366			–		–			(2,366	)		–
Pre-Tax EBDT		(62,543	)		–		–		–		(62,543	)		174,196			–		–			–			174,196
Income tax expense (benefit)		(23,886	)		–		–		–		(23,886	)		(23,886	)		–		–			–			(23,886	)
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(38,657	)	$	–	$	–	$	–	$	(38,657	)	$	198,082		$	–	$	–		$	–		$	198,082
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(38,657	)	$	–	$	–	$	–	$	(38,657	)	$	198,082		$	–	$	–		$	–		$	198,082
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(136,728	)		–		–			(1,030	)		(137,758	)
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(6,714	)		–		–			(333	)		(7,047	)
Straight-line rent adjustment		–			–		–		–		–			(844	)		–		–			571			(273	)
Preference payment		–			–		–		–		–			(1,171	)		–		–			–			(1,171	)
Gain on disposition of rental properties and partial interests in rental properties, net of noncontrolling interest		–			–		–		–		–			9,561			–		12,567			39,937			62,065
Gain on disposition of unconsolidated entities		–			–		–		–		–			12,567			–		(12,567	)		–			–
Impairment of consolidated and unconsolidated real estate		–			–		–		–		–			(5,070	)		–		–			–			(5,070	)
Discontinued operations:
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(1,030	)		–		–			1,030			–
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(333	)		–		–			333			–
Straight-line rent adjustment		–			–		–		–		–			571			–		–			(571	)		–
Gain on disposition of rental properties		–			–		–		–		–			39,937			–		–			(39,937	)		–
Tax (expense) benefit:
Deferred taxes		(11,166	)		–		–		–		(11,166	)		(11,166	)		–		–			–			(11,166	)
Gain (loss) on disposition of rental properties and partial interest in rental properties		(41,961	)		–		–		–		(41,961	)		(41,961	)		–		–			–			(41,961	)
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	(91,784	)	$	–	$	–	$	–	$	(91,784	)	$	55,701		$	–	$	–		$	–		$	55,701
Preferred dividends		(7,700	)		–		–		–		(7,700	)		(7,700	)		–		–			–			(7,700	)
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders	$	(99,484	)	$	–	$	–	$	–	$	(99,484	)	$	48,001		$	–	$	–		$	–		$	48,001

50

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Three Months Ended July 31, 2010(in thousands)(continued)

	Commercial Group 2010															Residential Group 2010
	Full   Consolidation   (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)			Full   Consolidation   (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	234,813		$	13,569		$	40,333		$	11,312		$	272,889		$	53,790		$	884	$	36,130		$	1,084		$	90,120
Exclude straight-line rent adjustment		(5,140	)		–			–			(508	)		(5,648	)		(318	)		–		–			–			(318	)
Adjusted revenues		229,673			13,569			40,333			10,804			267,241			53,472			884		36,130			1,084			89,802
Add interest and other income		8,264			(210	)		(485	)		1			7,990			5,668			142		353			2			5,881
Add gain on disposition of partial interests in other investment – Nets		–			–			–			–			–			–			–		–			–			–
Add equity in earnings (loss) of unconsolidated entities, including impairment		1,962			–			(1,961	)		–			1			4,624			118		(4,173	)		–			333
Exclude gain (loss) on disposition of unconsolidated entities		878			–			(878	)		–			–			–			–		–			–			–
Exclude impairment of unconsolidated real estate		–			–			–			–			–			–			–		–			–			–
Exclude depreciation and amortization of unconsolidated entities		6,602			–			(6,602	)		–			–			6,191			–		(6,191	)		–			–
Adjusted total income		247,379			13,359			30,407			10,805			275,232			69,955			1,144		26,119			1,086			96,016
Operating expenses		119,342			8,739			20,156			6,598			137,357			33,321			215		17,326			835			51,267
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		418			–			–			–			418			289			–		–			–			289
Exclude straight-line rent adjustment		(1,418	)		–			–			–			(1,418	)		1			–		–			–			1
Exclude preference payment		(586	)		–			–			–			(586	)		–			–		–			–			–
Adjusted operating expenses		117,756			8,739			20,156			6,598			135,771			33,611			215		17,326			835			51,557
Net operating income		129,623			4,620			10,251			4,207			139,461			36,344			929		8,793			251			44,459
Interest expense		59,924			3,915			10,251			2,344			68,604			9,167			178		8,793			11			17,793
Gain on early extinguishment of debt		–			–			–			–			–			–			–		–			–			–
Noncontrolling interest in earnings before depreciation and amortization		705			705			–			–			–			751			751		–			–			–
Add: Pre-Tax EBDT from discontinued operations		1,863			–			–			(1,863	)		–			240			–		–			(240	)		–
Pre-Tax EBDT		70,857			–			–			–			70,857			26,666			–		–			–			26,666
Income tax expense (benefit)		(1,163	)		–			–			–			(1,163	)		1,500			–		–			–			1,500
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	72,020		$	–		$	–		$	–		$	72,020		$	25,166		$	–	$	–		$	–		$	25,166
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	72,020		$	–		$	–		$	–		$	72,020		$	25,166		$	–	$	–		$	–		$	25,166
Depreciation and amortization – Real Estate Groups		(48,979	)		–			–			(2,319	)		(51,298	)		(18,162	)		–		–			(254	)		(18,416	)
Amortization of mortgage procurement costs – Real Estate Groups		(2,522	)		–			–			(421	)		(2,943	)		(601	)		–		–			(5	)		(606	)
Deferred taxes – Real Estate Groups		(10,198	)		–			–			(227	)		(10,425	)		26			–		–			(291	)		(265	)
Straight-line rent adjustment		3,722			–			–			508			4,230			319			–		–			–			319
Preference payment		(586	)		–			–			–			(586	)		–			–		–			–			–
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of tax		125,047			–			(536	)		–			124,511			121			–		–			1,099			1,220
Gain (loss) on disposition of unconsolidated entities, net of tax		(536	)		–			536			–			–			–			–		–			–			–
Impairment of consolidated and unconsolidated real estate, net of tax		–			–			–			(27,800	)		(27,800	)		–			–		–			–			–
Impairment of unconsolidated real estate, net of tax		–			–			–			–			–			–			–		–			–			–
Discontinued operations, net of tax:
Depreciation and amortization – Real Estate Groups		(2,319	)		–			–			2,319			–			(254	)		–		–			254			–
Amortization of mortgage procurement costs – Real Estate Groups		(421	)		–			–			421			–			(5	)		–		–			5			–
Deferred taxes – Real Estate Groups		(227	)		–			–			227			–			(291	)		–		–			291			–
Straight-line rent adjustment		508			–			–			(508	)		–			–			–		–			–			–
Gain on disposition of rental properties		–			–			–			–			–			1,099			–		–			(1,099	)		–
Impairment of consolidated and unconsolidated real estate		(27,800	)		–			–			27,800			–			–			–		–			–			–
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	107,709		$	–		$	–		$	–		$	107,709		$	7,418		$	–	$	–		$	–		$	7,418

51

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Three Months Ended July 31, 2010(in thousands)(continued)

Land Development Group 2010

The Nets 2010

Full   Consolidation   (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata Consolidation (Non-GAAP)

Full   Consolidation   (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata Consolidation (Non-GAAP)

Revenues from real estate operations

$

5,618

$

401

$

3,699

$

–

$

8,916

$

–

$

–

$

–

$

–

$

–

Exclude straight-line rent adjustment

7

–

–

–

7

–

–

–

–

–

Adjusted revenues

5,625

401

3,699

–

8,923

–

–

–

–

–

Add interest and other income

2,231

201

76

–

2,106

–

–

–

–

–

Add gain on disposition of partial interests in other investment – Nets

–

–

–

–

–

55,112

23,675

–

–

31,437

Add equity in earnings (loss) of unconsolidated entities, including impairment

(421

)

–

1,022

–

601

(7,161

)

(20

)

–

–

(7,141

)

Exclude gain (loss) on disposition of unconsolidated entities

–

–

–

–

–

–

–

–

–

–

Exclude impairment of unconsolidated real estate

2,282

–

(2,282

)

–

–

–

–

–

–

–

Exclude depreciation and amortization of unconsolidated entities

72

–

(72

)

–

–

–

–

–

–

–

Adjusted total income

9,789

602

2,443

–

11,630

47,951

23,655

–

–

24,296

Operating expenses

7,423

414

2,325

–

9,334

–

–

–

–

–

Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs

39

–

–

–

39

–

–

–

–

–

Exclude straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Exclude preference payment

–

–

–

–

–

–

–

–

–

–

Adjusted operating expenses

7,462

414

2,325

–

9,373

–

–

–

–

–

Net operating income

2,327

188

118

–

2,257

47,951

23,655

–

–

24,296

Interest expense

25

71

118

–

72

–

–

–

–

–

Gain on early extinguishment of debt

–

–

–

–

–

–

–

–

–

–

Noncontrolling interest in earnings before depreciation and amortization

117

117

–

–

–

23,655

23,655

–

–

–

Add: Pre-Tax EBDT from discontinued operations

–

–

–

–

–

–

–

–

–

–

Pre-Tax EBDT

2,185

–

–

–

2,185

24,296

–

–

–

24,296

Income tax expense (benefit)

(673

)

–

–

–

(673

)

9,551

–

–

–

9,551

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

2,858

$

–

$

–

$

–

$

2,858

$

14,745

$

–

$

–

$

–

$

14,745

Reconciliation to net earnings:

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

2,858

$

–

$

–

$

–

$

2,858

$

14,745

$

–

$

–

$

–

$

14,745

Depreciation and amortization – Real Estate Groups

(75

)

–

–

–

(75

)

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

(84

)

–

–

–

(84

)

–

–

–

–

–

Deferred taxes – Real Estate Groups

(1,101

)

–

–

–

(1,101

)

–

–

–

–

–

Straight-line rent adjustment

(7

)

–

–

–

(7

)

–

–

–

–

–

Preference payment

–

–

–

–

–

–

–

–

–

–

Gain (loss) on disposition of rental properties and partial interests in rental properties, net of tax

–

–

–

–

–

–

–

–

–

–

Gain (loss) on disposition of unconsolidated entities, net of tax

–

–

–

–

–

–

–

–

–

–

Impairment of consolidated and unconsolidated real estate, net of tax

(672

)

–

(1,398

)

–

(2,070

)

–

–

–

–

–

Impairment of unconsolidated real estate, net of tax

(1,398

)

–

1,398

–

–

–

–

–

–

–

Discontinued operations, net of tax:

Depreciation and amortization – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Deferred taxes – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Gain on disposition of rental properties

–

–

–

–

–

–

–

–

–

–

Impairment of consolidated and unconsolidated real estate

–

–

–

–

–

–

–

–

–

–

Net earnings (loss) attributable to Forest City Enterprises, Inc.

$

(479

)

$

–

$

–

$

–

$

(479

)

$

14,745

$

–

$

–

$

–

$

14,745

52

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Three Months Ended July 31, 2010(in thousands)(continued)

	Corporate Activities 2010												Total 2010
	Full   Consolidation   (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full   Consolidation   (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	–		$	–	$	–	$	–	$	–		$	294,221		$	14,854	$	80,162		$	12,396		$	371,925
Exclude straight-line rent adjustment		–			–		–		–		–			(5,451	)		–		–			(508	)		(5,959	)
Adjusted revenues		–			–		–		–		–			288,770			14,854		80,162			11,888			365,966
Add interest and other income		68			–		–		–		68			16,231			133		(56	)		3			16,045
Add gain on disposition of partial interests in other investment – Nets		–			–		–		–		–			55,112			23,675		–			–			31,437
Add equity in earnings (loss) of unconsolidated entities, including impairment		–			–		–		–		–			(996	)		98		(5,112	)		–			(6,206	)
Exclude gain (loss) on disposition of unconsolidated entities		–			–		–		–		–			878			–		(878	)		–			–
Exclude impairment of unconsolidated real estate		–			–		–		–		–			2,282			–		(2,282	)		–			–
Exclude depreciation and amortization of unconsolidated entities		–			–		–		–		–			12,865			–		(12,865	)		–			–
Adjusted total income		68			–		–		–		68			375,142			38,760		58,969			11,891			407,242
Operating expenses		9,430			–		–		–		9,430			169,516			9,368		39,807			7,433			207,388
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		439			–		–		–		439			1,185			–		–			–			1,185
Exclude straight-line rent adjustment		–			–		–		–		–			(1,417	)		–		–			–			(1,417	)
Exclude preference payment		–			–		–		–		–			(586	)		–		–			–			(586	)
Adjusted operating expenses		9,869			–		–		–		9,869			168,698			9,368		39,807			7,433			206,570
Net operating income		(9,801	)		–		–		–		(9,801	)		206,444			29,392		19,162			4,458			200,672
Interest expense		15,679			–		–		–		15,679			84,795			4,164		19,162			2,355			102,148
Gain on early extinguishment of debt		(1,896	)		–		–		–		(1,896	)		(1,896	)		–		–			–			(1,896	)
Noncontrolling interest in earnings before depreciation and amortization		–			–		–		–		–			25,228			25,228		–			–			–
Add: Pre-Tax EBDT from discontinued operations		–			–		–		–		–			2,103			–		–			(2,103	)		–
Pre-Tax EBDT		(23,584	)		–		–		–		(23,584	)		100,420			–		–			–			100,420
Income tax expense (benefit)		(14,355	)		–		–		–		(14,355	)		(5,140	)		–		–			–			(5,140	)
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(9,229	)	$	–	$	–	$	–	$	(9,229	)	$	105,560		$	–	$	–		$	–		$	105,560
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(9,229	)	$	–	$	–	$	–	$	(9,229	)	$	105,560		$	–	$	–		$	–		$	105,560
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(67,216	)		–		–			(2,573	)		(69,789	)
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(3,207	)		–		–			(426	)		(3,633	)
Deferred taxes – Real Estate Groups		2,682			–		–		–		2,682			(8,591	)		–		–			(518	)		(9,109	)
Straight-line rent adjustment		–			–		–		–		–			4,034			–		–			508			4,542
Preference payment		–			–		–		–		–			(586	)		–		–			–			(586	)
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of tax		–			–		–		–		–			125,168			–		(536	)		1,099			125,731
Gain (loss) on disposition of unconsolidated entities, net of tax		–			–		–		–		–			(536	)		–		536			–			–
Impairment of consolidated and unconsolidated real estate, net of tax		–			–		–		–		–			(672	)		–		(1,398	)		(27,800	)		(29,870	)
Impairment of unconsolidated real estate, net of tax		–			–		–		–		–			(1,398	)		–		1,398			–			–
Discontinued operations, net of tax:
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(2,573	)		–		–			2,573			–
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(426	)		–		–			426			–
Deferred taxes – Real Estate Groups		–			–		–		–		–			(518	)		–		–			518			–
Straight-line rent adjustment		–			–		–		–		–			508			–		–			(508	)		–
Gain on disposition of rental properties		–			–		–		–		–			1,099			–		–			(1,099	)		–
Impairment of consolidated and unconsolidated real estate		–			–		–		–		–			(27,800	)		–		–			27,800			–
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	(6,547	)	$	–	$	–	$	–	$	(6,547	)	$	122,846		$	–	$	–		$	–		$	122,846
Preferred dividends		(4,107	)		–		–		–		(4,107	)		(4,107	)		–		–			–			(4,107	)
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders	$	(10,654	)	$	–	$	–	$	–	$	(10,654	)	$	118,739		$	–	$	–		$	–		$	118,739

53

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Six Months Ended July 31, 2010(in thousands)

	Commercial Group 2010														Residential Group 2010
	Full   Consolidation   (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)			Full   Consolidation   (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	445,345		$	24,141	$	75,837		$	21,474		$	518,515		$	105,182		$	1,778		$	71,664		$	2,506		$	177,574
Exclude straight-line rent adjustment		(8,802	)		–		–			(671	)		(9,473	)		(770	)		–			–			–			(770	)
Adjusted revenues		436,543			24,141		75,837			20,803			509,042			104,412			1,778			71,664			2,506			176,804
Add interest and other income		10,209			415		109			2			9,905			8,237			242			530			4			8,529
Add gain on disposition of partial interests in other investment – Nets		–			–		–			–			–			–			–			–			–			–
Add equity in earnings (loss) of unconsolidated entities, including impairment		(6,739	)		–		6,740			–			1			6,662			(103	)		(6,348	)		–			417
Exclude gain (loss) on disposition of unconsolidated entities		830			–		(830	)		–			–			–			–			–			–			–
Exclude impairment of unconsolidated real estate		12,156			–		(12,156	)		–			–			–			–			–			–			–
Exclude depreciation and amortization of unconsolidated entities		12,525			–		(12,525	)		–			–			12,046			–			(12,046	)		–			–
Adjusted total income		465,524			24,556		57,175			20,805			518,948			131,357			1,917			53,800			2,510			185,750
Operating expenses		221,185			13,969		35,666			11,543			254,425			65,152			754			37,189			1,610			103,197
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		939			–		–			–			939			850			–			–			–			850
Exclude straight-line rent adjustment		(2,661	)		–		–			–			(2,661	)		2			–			–			–			2
Exclude preference payment		(1,171	)		–		–			–			(1,171	)		–			–			–			–			–
Adjusted operating expenses		218,292			13,969		35,666			11,543			251,532			66,004			754			37,189			1,610			104,049
Net operating income		247,232			10,587		21,509			9,262			267,416			65,353			1,163			16,611			900			81,701
Interest expense		118,078			8,604		21,509			3,927			134,910			14,023			454			16,611			118			30,298
Gain on early extinguishment of debt		–			–		–			–			–			–			–			–			–			–
Noncontrolling interest in earnings before depreciation and amortization		1,983			1,983		–			–			–			709			709			–			–			–
Add: Pre-Tax EBDT from discontinued operations		5,335			–		–			(5,335	)		–			782			–			–			(782	)		–
Pre-Tax EBDT		132,506			–		–			–			132,506			51,403			–			–			–			51,403
Income tax expense (benefit)		(595	)		–		–			–			(595	)		(1,376	)		–			–			–			(1,376	)
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	133,101		$	–	$	–		$	–		$	133,101		$	52,779		$	–		$	–		$	–		$	52,779
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	133,101		$	–	$	–		$	–		$	133,101		$	52,779		$	–		$	–		$	–		$	52,779
Depreciation and amortization – Real Estate Groups		(99,328	)		–		–			(4,140	)		(103,468	)		(35,485	)		–			–			(636	)		(36,121	)
Amortization of mortgage procurement costs – Real Estate Groups		(4,907	)		–		–			(468	)		(5,375	)		(1,143	)		–			–			(13	)		(1,156	)
Deferred taxes – Real Estate Groups		(12,969	)		–		–			(204	)		(13,173	)		(6,613	)		–			–			(400	)		(7,013	)
Straight-line rent adjustment		6,141			–		–			671			6,812			772			–			–			–			772
Preference payment		(1,171	)		–		–			–			(1,171	)		–			–			–			–			–
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of tax		107,615			–		(507	)		–			107,108			17,731			–			–			1,099			18,830
Gain (loss) on disposition of unconsolidated entities, net of tax		(507	)		–		507			–			–			–			–			–			–			–
Impairment of consolidated and unconsolidated real estate, net of tax		–			–		(7,441	)		(27,800	)		(35,241	)		–			–			–			–			–
Impairment of unconsolidated real estate, net of tax		(7,441	)		–		7,441			–			–			–			–			–			–			–
Discontinued operations, net of tax:
Depreciation and amortization – Real Estate Groups		(4,140	)		–		–			4,140			–			(636	)		–			–			636			–
Amortization of mortgage procurement costs – Real Estate Groups		(468	)		–		–			468			–			(13	)		–			–			13			–
Deferred taxes – Real Estate Groups		(204	)		–		–			204			–			(400	)		–			–			400			–
Straight-line rent adjustment		671			–		–			(671	)		–			–			–			–			–			–
Gain on disposition of rental properties		–			–		–			–			–			1,099			–			–			(1,099	)		–
Impairment of consolidated and unconsolidated real estate		(27,800	)		–		–			27,800			–			–			–			–			–			–
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	88,593		$	–	$	–		$	–		$	88,593		$	28,091		$	–		$	–		$	–		$	28,091

54

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Six Months Ended July 31, 2010(in thousands)(continued)

Land Development Group 2010

The Nets 2010

Full   Consolidation   (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata Consolidation (Non-GAAP)

Full   Consolidation   (GAAP)

Less Noncontrolling Interest

Plus Unconsolidated Investments at Pro-Rata

Plus Discontinued Operations

Pro-Rata Consolidation (Non-GAAP)

Revenues from real estate operations

$

12,476

$

749

$

6,134

$

–

$

17,861

$

–

$

–

$

–

$

–

$

–

Exclude straight-line rent adjustment

4

–

–

–

4

–

–

–

–

–

Adjusted revenues

12,480

749

6,134

–

17,865

–

–

–

–

–

Add interest and other income

4,425

375

84

–

4,134

–

–

14,037

–

14,037

Add gain on disposition of partial interests in other investment – Nets

–

–

–

–

–

55,112

23,675

–

–

31,437

Add equity in earnings (loss) of unconsolidated entities, including impairment

(452

)

–

1,242

–

790

(17,591

)

(6,243

)

4,207

–

(7,141

)

Exclude gain (loss) on disposition of unconsolidated entities

–

–

–

–

–

–

–

–

–

–

Exclude impairment of unconsolidated real estate

3,025

–

(3,025

)

–

–

–

–

–

–

–

Exclude depreciation and amortization of unconsolidated entities

146

–

(146

)

–

–

–

–

–

–

–

Adjusted total income

19,624

1,124

4,289

–

22,789

37,521

17,432

18,244

–

38,333

Operating expenses

17,871

918

4,437

–

21,390

–

–

16,151

–

16,151

Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs

79

–

–

–

79

–

–

947

–

947

Exclude straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Exclude preference payment

–

–

–

–

–

–

–

–

–

–

Adjusted operating expenses

17,950

918

4,437

–

21,469

–

–

17,098

–

17,098

Net operating income

1,674

206

(148

)

–

1,320

37,521

17,432

1,146

–

21,235

Interest expense

1,333

143

(148

)

–

1,042

–

–

1,146

–

1,146

Gain on early extinguishment of debt

–

–

–

–

–

–

–

–

–

–

Noncontrolling interest in earnings before depreciation and amortization

63

63

–

–

–

17,432

17,432

–

–

–

Add: Pre-Tax EBDT from discontinued operations

–

–

–

–

–

–

–

–

–

–

Pre-Tax EBDT

278

–

–

–

278

20,089

–

–

–

20,089

Income tax expense (benefit)

(288

)

–

–

–

(288

)

8,717

–

–

–

8,717

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

566

$

–

$

–

$

–

$

566

$

11,372

$

–

$

–

$

–

$

11,372

Reconciliation to net earnings:

Earnings before depreciation, amortization and deferred taxes (EBDT)

$

566

$

–

$

–

$

–

$

566

$

11,372

$

–

$

–

$

–

$

11,372

Depreciation and amortization – Real Estate Groups

(154

)

–

–

–

(154

)

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

(164

)

–

–

–

(164

)

–

–

–

–

–

Deferred taxes – Real Estate Groups

(220

)

–

–

–

(220

)

–

–

–

–

–

Straight-line rent adjustment

(4

)

–

–

–

(4

)

–

–

–

–

–

Preference payment

–

–

–

–

–

–

–

–

–

–

Gain (loss) on disposition of rental properties and partial interests in rental properties, net of tax

–

–

–

–

–

–

–

–

–

–

Gain (loss) on disposition of unconsolidated entities, net of tax

–

–

–

–

–

–

–

–

–

–

Impairment of consolidated and unconsolidated real estate, net of tax

(672

)

–

(1,853

)

–

(2,525

)

–

–

–

–

–

Impairment of unconsolidated real estate, net of tax

(1,853

)

–

1,853

–

–

–

–

–

–

–

Discontinued operations, net of tax:

Depreciation and amortization – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Amortization of mortgage procurement costs – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Deferred taxes – Real Estate Groups

–

–

–

–

–

–

–

–

–

–

Straight-line rent adjustment

–

–

–

–

–

–

–

–

–

–

Gain on disposition of rental properties

–

–

–

–

–

–

–

–

–

–

Impairment of consolidated and unconsolidated real estate

–

–

–

–

–

–

–

–

–

–

Net earnings (loss) attributable to Forest City Enterprises, Inc.

$

(2,501

)

$

–

$

–

$

–

$

(2,501

)

$

11,372

$

–

$

–

$

–

$

11,372

55

Forest City Enterprises, Inc. and Subsidiaries

Supplemental Financial Information

Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) – Six Months Ended July 31, 2010(in thousands)(continued)

	Corporate Activities 2010												Total 2010
	Full   Consolidation   (GAAP)			Less Noncontrolling Interest		Plus Unconsolidated Investments at Pro-Rata		Plus Discontinued Operations		Pro-Rata Consolidation (Non-GAAP)			Full   Consolidation   (GAAP)			Less Noncontrolling Interest			Plus Unconsolidated Investments at Pro-Rata			Plus Discontinued Operations			Pro-Rata Consolidation (Non-GAAP)
Revenues from real estate operations	$	–		$	–	$	–	$	–	$	–		$	563,003		$	26,668		$	153,635		$	23,980		$	713,950
Exclude straight-line rent adjustment		–			–		–		–		–			(9,568	)		–			–			(671	)		(10,239	)
Adjusted revenues		–			–		–		–		–			553,435			26,668			153,635			23,309			703,711
Add interest and other income		174			–		–		–		174			23,045			1,032			14,760			6			36,779
Add gain on disposition of partial interests in other investment – Nets		–			–		–		–		–			55,112			23,675			–			–			31,437
Add equity in earnings (loss) of unconsolidated entities, including impairment		–			–		–		–		–			(18,120	)		(6,346	)		5,841			–			(5,933	)
Exclude gain (loss) on disposition of unconsolidated entities		–			–		–		–		–			830			–			(830	)		–			–
Exclude impairment of unconsolidated real estate		–			–		–		–		–			15,181			–			(15,181	)		–			–
Exclude depreciation and amortization of unconsolidated entities		–			–		–		–		–			24,717			–			(24,717	)		–			–
Adjusted total income		174			–		–		–		174			654,200			45,029			133,508			23,315			765,994
Operating expenses		20,436			–		–		–		20,436			324,644			15,641			93,443			13,153			415,599
Non-Real Estate depreciation and amortization and amortization of mortgage procurement costs		885			–		–		–		885			2,753			–			947			–			3,700
Exclude straight-line rent adjustment		–			–		–		–		–			(2,659	)		–			–			–			(2,659	)
Exclude preference payment		–			–		–		–		–			(1,171	)		–			–			–			(1,171	)
Adjusted operating expenses		21,321			–		–		–		21,321			323,567			15,641			94,390			13,153			415,469
Net operating income		(21,147	)		–		–		–		(21,147	)		330,633			29,388			39,118			10,162			350,525
Interest expense		32,543			–		–		–		32,543			165,977			9,201			39,118			4,045			199,939
Gain on early extinguishment of debt		(8,193	)		–		–		–		(8,193	)		(8,193	)		–			–			–			(8,193	)
Noncontrolling interest in earnings before depreciation and amortization		–			–		–		–		–			20,187			20,187			–			–			–
Add: Pre-Tax EBDT from discontinued operations		–			–		–		–		–			6,117			–			–			(6,117	)		–
Pre-Tax EBDT		(45,497	)		–		–		–		(45,497	)		158,779			–			–			–			158,779
Income tax expense (benefit)		(23,706	)		–		–		–		(23,706	)		(17,248	)		–			–			–			(17,248	)
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(21,791	)	$	–	$	–	$	–	$	(21,791	)	$	176,027		$	–		$	–		$	–		$	176,027
Reconciliation to net earnings:
Earnings before depreciation, amortization and deferred taxes (EBDT)	$	(21,791	)	$	–	$	–	$	–	$	(21,791	)	$	176,027		$	–		$	–		$	–		$	176,027
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(134,967	)		–			–			(4,776	)		(139,743	)
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(6,214	)		–			–			(481	)		(6,695	)
Deferred taxes – Real Estate Groups		3,520			–		–		–		3,520			(16,282	)		–			–			(604	)		(16,886	)
Straight-line rent adjustment		–			–		–		–		–			6,909			–			–			671			7,580
Preference payment		–			–		–		–		–			(1,171	)		–			–			–			(1,171	)
Gain (loss) on disposition of rental properties and partial interests in rental properties, net of tax		–			–		–		–		–			125,346			–			(507	)		1,099			125,938
Gain (loss) on disposition of unconsolidated entities, net of tax		–			–		–		–		–			(507	)		–			507			–			–
Impairment of consolidated and unconsolidated real estate, net of tax		–			–		–		–		–			(672	)		–			(9,294	)		(27,800	)		(37,766	)
Impairment of unconsolidated real estate, net of tax		–			–		–		–		–			(9,294	)		–			9,294			–			–
Discontinued operations, net of tax:
Depreciation and amortization – Real Estate Groups		–			–		–		–		–			(4,776	)		–			–			4,776			–
Amortization of mortgage procurement costs – Real Estate Groups		–			–		–		–		–			(481	)		–			–			481			–
Deferred taxes – Real Estate Groups		–			–		–		–		–			(604	)		–			–			604			–
Straight-line rent adjustment		–			–		–		–		–			671			–			–			(671	)		–
Gain on disposition of rental properties		–			–		–		–		–			1,099			–			–			(1,099	)		–
Impairment of consolidated and unconsolidated real estate		–			–		–		–		–			(27,800	)		–			–			27,800			–
Net earnings (loss) attributable to Forest City Enterprises, Inc.	$	(18,271	)	$	–	$	–	$	–	$	(18,271	)	$	107,284		$	–		$	–		$	–		$	107,284
Preferred dividends		(4,107	)		–		–		–		(4,107	)		(4,107	)		–			–			–			(4,107	)
Net earnings (loss) attributable to Forest City Enterprises, Inc. common shareholders	$	(22,378	)	$	–	$	–	$	–	$	(22,378	)	$	103,177		$	–		$	–		$	–		$	103,177

56