Exhibit 99.1
Forest City Reports Fiscal 2007 First-Quarter Results
CLEVELAND--(BUSINESS WIRE)--June 7, 2007--Forest City Enterprises,
Inc. (NYSE:FCEA)(NYSE:FCEB) today announced EBDT, net earnings and
revenues for the fiscal first quarter ended April 30, 2007.
First-quarter EBDT (Earnings Before Depreciation, Amortization and
Deferred Taxes) was $34.5 million, or $0.32 per share, compared with
last year's EBDT of $63.3 million, or $0.61 per share. Fiscal 2007
first-quarter net loss was $17.2 million, or $0.17 per share, compared
with net earnings of $53.3 million, or $0.52 per share, in the 2006
first quarter. The primary difference in net earnings for the quarters
was the gain on disposition of a hotel property in 2006 with no
similar transaction in 2007. First-quarter consolidated revenues were
$280.6 million compared with $272.2 million last year.
Charles A. Ratner, president and chief executive officer of Forest
City Enterprises, said, "As we have said in the past, quarterly
results are not indicative of annual or long-term performance. Our
strategy of emphasizing diverse products in strong urban markets
nationwide has provided us the ability to produce 27 years of
consecutive EBDT growth, and we expect 2007 to be another record
year."
EBDT and EBDT per share are non-Generally Accepted Accounting
Principle (GAAP) measures. A reconciliation of net earnings (the most
directly comparable GAAP measure to EBDT) to EBDT is provided in the
Financial Highlights table in this news release.
Discussion of Results
Ratner said, "EBDT for the first quarter of 2007 was $29 million
lower than the first quarter of 2006. EBDT from our Land Development
Group and commercial outlot sales decreased $16.5 million, and
Historic Tax Credit Income decreased $8.0 million. We anticipate that
these items will produce less EBDT in 2007, and the impact of these
items will be disproportionate on a quarterly basis. In addition, we
incurred $2.2 million of expense related to debt restructurings and
refinancings, which negatively impacted EBDT in the short term, as we
proactively took advantage of market conditions to lock in favorable
long-term financing terms.
"The fundamentals in the rental properties business are strong.
Our portfolio of mature properties performed well with an increase in
overall comparable property NOI (net operating income), and our new
properties are ramping up nicely and more than offset EBDT lost to
property sales. We anticipate these favorable trends in our mature and
new properties will continue through the remainder of 2007. Our Land
business and military housing portfolio will contribute significantly
more to EBDT in future quarters."
The Company achieved a 4.8 percent increase in total comparable
property NOI. Retail and office portfolio comparable property NOI
increased 8.3 percent and 0.5 percent, respectively, in 2007 from the
prior year's first quarter. In the residential portfolio, comparable
property NOI increased 3.3 percent. Comparable property NOI, defined
as NOI from properties operated in both 2007 and 2006, is a non-GAAP
financial measure, and is based on the pro-rata consolidation method,
also a non-GAAP financial measure. Included in this release is a
schedule that presents comparable property NOI on the full
consolidation method.
Fiscal 2007 first-quarter comparable occupancies were up overall
compared with the same period a year ago. Comparable retail
occupancies were 94.7 percent in 2007 compared with 94.3 percent in
2006. Comparable office occupancies were 93.8 percent compared with
92.5 percent last year. Comparable average occupancies in the
residential business increased to 95.1 percent compared with 94.6
percent last year.
First-Quarter Openings/Project Highlights
During the first quarter, Forest City opened four projects,
representing $215 million of cost at full consolidation and at the
Company's pro-rata share. The openings consisted of 613,000 square
feet of office space and a 736,000-square-foot retail center.
The retail opening was Promenade Bolingbrook, an open-air town
center in the Chicago suburb of Bolingbrook, Illinois. The $137.8
million center is anchored by Macy's and Bass Pro Shops Outdoor World
and includes nearly 60 specialty retailers and restaurants in a main
street-style center. The retail space at Promenade Bolingbrook is
approximately 90 percent committed.
Recent project highlights include:
-- The Presidio: The Company signed an agreement to redevelop the
former Public Health Service hospital in the historic Presidio
of San Francisco into an apartment community of up to 161
residential units, located near the Golden Gate Bridge.
-- Ridge Hill Village: Forest City has received all necessary
discretionary approvals and is currently in the process of
obtaining all permits in order to begin construction later
this year on the 1.2-million-square-foot retail portion of
this mixed-use project in Yonkers, New York.
-- Office Portfolio Acquisition Agreement: The Company is under
contract to acquire a Class A office portfolio (Richmond
Office Park) located in suburban Richmond, Virginia.
Consisting of 11 buildings totaling nearly 600,000 rentable
square feet, the properties are 95 percent leased to a mix of
high-quality local and regional tenants.
Development Pipeline
A schedule of the Company's openings and acquisitions, and the
pipeline of projects under construction, is included in this news
release. The schedule includes comparable project costs on both a full
consolidation and pro-rata share basis. Described below are several of
the Company's projects under construction or under development.
Projects Under Construction
At the end of the first quarter, Forest City's pipeline included
19 projects under construction or to be acquired, representing a total
cost of $1.3 billion on a full consolidation basis and $1.8 billion at
the Company's pro-rata share. Including the projects opened during the
first quarter, a total of ten projects are scheduled to open in fiscal
2007. Total planned openings for the year represent more than $1.0
billion of cost on a full consolidation basis and $982.0 million at
the Company's pro-rata share.
The 52-story, 1.5-million-square-foot New York Times Building in
Manhattan will open in the third quarter of 2007. Of the 736,000
square feet of office space owned by Forest City, 82 percent has been
leased. This signature office building will be one of the Company's
most valuable single assets when completed.
Ratner said. "In total, we have more than $980 million of projects
that have already opened or are scheduled to open in 2007 - the second
year in a row in which we will have more than $800 million in project
openings. We are confident that we will be able to deliver these
projects on time, on budget and at the anticipated spreads that will
continue to drive shareholder value."
Projects Under Development
At the end of the first quarter, Forest City had more than 20
projects under development, representing in excess of $2.6 billion of
cost on a full consolidation basis and at the Company's pro-rata
share. Not yet included in the development pipeline are two other
large mixed-use projects: Brooklyn Atlantic Yards in Brooklyn, New
York, where site demolition began during the first quarter; and The
Yards, a 42-acre project formerly known as Southeast Federal Center in
Washington, D.C., where Forest City expects to begin demolition and
construction of infrastructure later this year.
Among the projects under development and scheduled to begin
construction in 2007 are several major retail/mixed-use projects,
including Ridge Hill Village and the 443,000-square-foot Village at
Gulfstream Park in Hallandale, Florida. Residential projects under
development include 80 DeKalb Avenue, a 365-unit apartment community
in Brooklyn; and Beekman, an 893-unit residential development in
Manhattan. These four projects represent more than $1.9 billion on a
full consolidation basis and at the Company's pro-rata share. "It is
gratifying that our company will be able to open $980 million of
projects currently under construction, and still grow our pipeline of
projects under construction and under development to record levels,"
Ratner said. "It demonstrates our ability to move projects from
conception through our development pipeline toward the realization of
their ultimate value."
Land Development Update
Land sales, as expected, have moderated throughout the country.
This national trend is consistent with the Company's recent land sales
experience at Stapleton, where, after several years of unprecedented
demand, home sales have stabilized at a reasonable level. There were
134 homes sold and 113 homes closed (occupied) in the first quarter.
Since inception in 2001, 3,045 homes have sold and 2,863 have closed.
As an indication of development momentum at the 9,000-acre Mesa
del Sol mixed-use project in Albuquerque, the demand for commercial
space is continuing. The National Nuclear Security Administration has
signed an option agreement to acquire 40 acres for the development of
approximately 300,000 square feet of office space. Meanwhile,
Albuquerque Studios' new film production site has attracted Sony
Pictures Imageworks, Inc. to occupy a 100,000-square-foot facility for
visual effects production and character animation.
Financing Activity
Forest City continues to take advantage of current interest rates
and attractive debt markets for its project financings. In June, the
Company negotiated a new three-year credit agreement with its
13-member bank group. The new agreement features improved pricing and
allows for a $150 million accordion feature during the term, which
would increase the Company's revolving credit facility to $750
million. In order to further take advantage of the favorable markets
and lock in low long-term interest rates, the Company incurred early
extinguishment of debt charges during the quarter. The Company will
continue to proactively pursue opportunities to further lock in
low-cost project financing and expects it will incur modest charges
through the remainder of the year.
During the fiscal first quarter, Forest City closed on
transactions totaling $449.3 million in nonrecourse mortgage
financings, including $93.5 million in refinancings, $169.6 million in
development and acquisitions, and $186.2 million in loan extensions
and additional fundings.
As of April 30, 2007, the Company's weighted average cost of
mortgage debt decreased to 6.07 percent from 6.10 percent at April 30,
2006, primarily due to the attractive financing rates achieved on the
Company's fixed rate portfolio. Fixed-rate mortgage debt, which
represented 69 percent of the Company's total nonrecourse mortgage
debt, decreased from 6.24 percent at April 30, 2006 to 6.14 percent at
April 30, 2007. The variable-rate mortgage debt increased from 5.72
percent at April 30, 2006 to 5.91 percent at April 30, 2007.
Outlook
Ratner said, "We are confident in our ability to deliver our 28th
consecutive year of EBDT growth in fiscal 2007. While quarterly
results may vary, our portfolio is strong and the momentum of our new
projects provides many exciting growth opportunities. We are looking
forward to the third-quarter opening of the New York Times Building,
and to building on our retail/mixed-use growth platform, our military
housing business, and demand in the rental residential market. Our
pipeline of large, high-impact projects is stronger than ever and we
are making excellent progress on these projects - which will continue
to create new value for shareholders."
Corporate Description
Forest City Enterprises, Inc. is a $9.2 billion NYSE-listed
national real estate company. The Company is principally engaged in
the ownership, development, management and acquisition of commercial
and residential real estate and land throughout the United States.
Supplemental Package
Please refer to the Investor Relations section of the Company's
website at www.forestcity.net for a Supplemental Package, which the
Company will also furnish to the Securities and Exchange Commission on
Form 8-K. This Supplemental Package includes operating and financial
information for the quarter ended April 30, 2007, with reconciliations
of non-GAAP financial measures, such as EBDT, comparable property NOI
and pro-rata financial statements, to their most directly comparable
GAAP financial measures.
EBDT
The Company uses an additional measure, along with net earnings,
to report its operating results. This non-GAAP measure, referred to as
Earnings Before Depreciation, Amortization and Deferred Taxes
("EBDT"), is not a measure of operating results or cash flows from
operations as defined by GAAP and may not be directly comparable to
similarly-titled measures reported by other companies.
The Company believes that EBDT provides additional information
about its core operations and, along with net earnings, is necessary
to understand its 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. The Company believes
EBDT is important to investors because it provides another method for
the investor to measure its long-term operating performance as net
earnings can vary from year to year due to property dispositions,
acquisitions and other factors that have a short-term impact.
EBDT is defined as net earnings excluding the following items: i)
gain (loss) on disposition of rental properties, divisions and other
investments (net of tax); ii) the adjustment to recognize rental
revenues and rental expense using the straight-line method; iii)
non-cash charges for real estate depreciation, amortization,
amortization of mortgage procurement costs and deferred income taxes;
iv) preferred payment classified as minority interest expense on the
Company's Consolidated Statement of Earnings; v) provision for decline
in real estate (net of tax); vi) extraordinary items (net of tax); and
vii) cumulative effect of change in accounting principle (net of tax).
Unlike the real estate segments, EBDT for the Nets segment equals net
earnings.
EBDT is reconciled to net earnings, the most comparable financial
measure calculated in accordance with GAAP, in the table titled
Financial Highlights below and in the Company's Supplemental Package,
which the Company will also furnish to the SEC on Form 8-K. 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. The Company excludes depreciation
and amortization expense related to real estate operations from EBDT
because it believes the values of its properties, in general, have
appreciated over time in excess of their original cost. Deferred taxes
from real estate operations, which are the result of timing
differences of certain net expense items deducted in a future year for
federal income tax purposes, are excluded until the year in which they
are reflected in the Company's current tax provision. The provision
for decline in real estate is excluded from EBDT because it varies
from year to year based on factors unrelated to the Company's overall
financial performance and is related to the ultimate gain on
dispositions of operating properties. The Company's EBDT may not be
directly comparable to similarly-titled measures reported by other
companies.
Pro-Rata Consolidation Method
This press release contains certain financial measures prepared in
accordance with GAAP under the full consolidation accounting method
and certain financial measures prepared in accordance with the
pro-rata consolidation method (non-GAAP). The Company presents certain
financial amounts under the pro-rata method because it believes this
information is useful to investors as this method reflects the manner
in which the Company operates its business. In line with industry
practice, the Company has made a large number of investments in which
its economic ownership is less than 100 percent as a means of
procuring opportunities and sharing risk. Under the pro-rata
consolidation method, the Company presents its investments
proportionate to its share of ownership. Under GAAP, the full
consolidation method is used to report partnership assets and
liabilities consolidated at 100 percent if deemed to be under its
control or if the Company is deemed to be the primary beneficiary of
the variable interest entities, even if its ownership is not 100
percent. The Company provides reconciliations from the full
consolidation method to the pro-rata consolidation method in the
exhibits below and throughout its Supplemental Package, which the
Company will also furnish to the SEC on Form 8-K.
Safe Harbor Language
Statements made in this news release that state the Company or
management's intentions, hopes, beliefs, expectations or predictions
of the future are forward-looking statements. It is important to note
that the Company's actual results could differ materially from those
projected in such forward-looking statements. Additional information
concerning factors that could cause actual results to differ
materially from those in the forward-looking statements include, but
are not limited to, real estate development and investment risks,
economic conditions in the Company's core markets, reliance on major
tenants, the impact of terrorist acts, the Company's substantial
leverage and the ability to service debt, guarantees under the
Company's credit facility, changes in interest rates, continued
availability of tax-exempt government financing, the sustainability of
substantial operations at the subsidiary level, significant geographic
concentration, illiquidity of real estate investments, dependence on
rental income from real property, conflicts of interest, competition,
potential liability from syndicated properties, effects of uninsured
loss, environmental liabilities, partnership risks, litigation risks,
risks associated with an investment in a professional sports
franchise, and other risk factors as disclosed from time to time in
the Company's SEC filings, including, but not limited to, the
Company's annual and quarterly reports.
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2007 and 2006
(dollars in thousands, except share and per share data)
Three Months Ended
April 30, Increase (Decrease)
------------------------ -------------------
2007 2006 Amount Percent
------------------------ ----------- -------
Operating Results:
Earnings (loss) from
continuing operations $(17,181) $7,940 $(25,121)
Discontinued operations,
net of tax and minority
interest (1) - 45,318 (45,318)
------------------------ -----------
Net earnings $(17,181) $53,258 $(70,439)
======================== ===========
Earnings Before
Depreciation,
Amortization and Deferred
Taxes (EBDT) (2) $34,529 $63,339 $(28,810) (45.5%)
======================== ===========
Reconciliation of Net
Earnings to Earnings
Before Depreciation,
Amortization and Deferred
Taxes (EBDT) (2):
Net earnings (loss) $(17,181) $53,258 $(70,439)
Depreciation and
amortization - Real
Estate Groups (6) 64,509 47,200 17,309
Amortization of mortgage
procurement costs - Real
Estate Groups (6) 2,919 2,909 10
Deferred income tax
expense - Real Estate
Groups (7) (10,360) 7,329 (17,689)
Current income tax expense
on non-operating
earnings: (7)
Gain on disposition
included in
discontinued
operations - (29) 29
Straight-line rent
adjustment (3) (4,150) (1,131) (3,019)
Preference payment (5) 898 - 898
Gain on disposition
recorded on equity method (2,106) - (2,106)
Discontinued operations:
(1) (7)
Gain on disposition of
rental properties - (136,384) 136,384
Minority interest -
Gain on disposition - 61,086 (61,086)
Deferred income tax
expense - Real Estate
Groups - 29,101 (29,101)
------------------------ -----------
Earnings Before
Depreciation,
Amortization and Deferred
Taxes (EBDT) (2) $34,529 $63,339 $(28,810) (45.5%)
======================== ===========
Diluted Earnings per
Common Share:
Earnings (loss) from
continuing operations $(0.17) $0.08 $(0.25)
Discontinued operations,
net of tax and minority
interest (1) - 0.44 (0.44)
------------------------ -----------
Net earnings $(0.17) $0.52 $(0.69)
======================== ===========
Earnings Before
Depreciation,
Amortization and Deferred
Taxes (EBDT) (2) (4) $0.32 $0.61 $(0.29) (47.5%)
======================== ===========
Operating earnings (loss),
net of tax (a non-GAAP
financial measure) $(0.16) $0.11 $(0.27)
Gain on disposition of
rental properties and
other investments, net of
tax 0.01 1.04 (1.03)
Minority interest (0.02) (0.63) 0.61
------------------------ -----------
Net earnings (loss) $(0.17) $0.52 $(0.69)
======================== ===========
Diluted weighted average
shares outstanding (4) 101,990,754 102,997,002 (1,006,248)
======================== ===========
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2007 and 2006
(dollars in thousands)
Three Months Ended
April 30, Increase (Decrease)
------------------ -------------------
2007 2006 Amount Percent
------------------ -------------------
Operating Earnings (a non-GAAP
financial measure) and
Reconciliation to Net Earnings:
Revenues from real estate
operations
Commercial Group $203,027 $196,339 $6,688
Residential Group 66,807 55,083 11,724
Land Development Group 10,733 20,816 (10,083)
Corporate Activities - - -
------------------ ----------
Total Revenues 280,567 272,238 8,329 3.1%
Operating expenses (177,439)(155,739) (21,700)
Interest expense, including
early extinguishment of debt (80,951) (68,234) (12,717)
Amortization of mortgage
procurement costs (6) (2,599) (2,946) 347
Depreciation and amortization
(6) (60,800) (41,417) (19,383)
Interest and other income 11,496 14,888 (3,392)
Equity in earnings of
unconsolidated entities 1,361 379 982
Gain on disposition recorded on
equity method (2,106) - (2,106)
Revenues and interest income
from discontinued operations
(1) - 23,458 (23,458)
Expenses from discontinued
operations (1) - (24,912) 24,912
------------------ ----------
Operating earnings (loss) (a
non-GAAP financial measure) (30,471) 17,715 (48,186)
------------------ ----------
Income tax expense (7) 13,732 (7,166) 20,898
Income tax expense from
discontinued operations (1) (7) - (28,538) 28,538
Income tax expense on non-
operating earnings items (see
below) 814 29,095 (28,281)
------------------ ----------
Operating earnings (loss), net
of tax (a non-GAAP financial
measure) (15,925) 11,106 (27,031)
------------------ ----------
Gain on disposition recorded on
equity method 2,106 - 2,106
Gain on disposition of rental
properties included in
discontinued operations (1) - 136,384 (136,384)
Income tax benefit (expense) on
non-operating earnings: (7)
Gain on disposition recorded
on equity method (814) - (814)
Gain on disposition of rental
properties included in
discontinued operations - (29,095) 29,095
------------------ ----------
Income tax expense on non-
operating earnings (see above) (814) (29,095) 28,281
------------------ ----------
Minority interest in continuing
operations (2,548) (4,063) 1,515
Minority interest in
discontinued operations: (1)
Operating earnings - 12 (12)
Gain on disposition of rental
properties - (61,086) 61,086
------------------ ----------
- (61,074) 61,074
------------------ ----------
Minority interest (2,548) (65,137) 62,589
------------------ ----------
Net earnings (loss) $(17,181) $53,258 $(70,439)
================== ==========
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2007 and 2006
(in thousands)
1) Pursuant to the definition of a component of an entity of SFAS No.
144, assuming no significant continuing involvement, all earnings of
properties which have been sold or are held for sale are reported as
discontinued operations.
2) The Company uses an additional measure, along with net earnings, to
report its operating results. This measure, referred to as Earnings
Before Depreciation, Amortization and Deferred Taxes ("EBDT"), is not
a measure of operating results as defined by generally accepted
accounting principles and may not be directly comparable to
similarly-titled measures reported by other companies. The Company
believes that EBDT provides additional information about its
operations, and along with net earnings, is necessary to understand
its operating results. EBDT is defined as net earnings excluding the
following items: i) gain (loss) on disposition of operating
properties, divisions and other investments (net of tax); ii) the
adjustment to recognize rental revenues and rental expense using the
straight-line method; iii) non-cash charges for real estate
depreciation, amortization (including amortization of mortgage
procurement costs) and deferred income taxes; iv) preferred payment
classified as minority interest expense on the Company's Consolidated
Statement of Earnings; v) provision for decline in real estate (net
of tax); vi) extraordinary items (net of tax); and vii) cumulative
effect of change in accounting principle (net of tax). See our
discussion of EBDT in the news release.
3) The Company recognizes minimum rents on a straight-line basis over
the term of the related lease pursuant to the provision of SFAS No.
13, "Accounting for Leases." The straight-line rent adjustment is
recorded as an increase or decrease to revenue from Forest City
Rental Properties Corporation, a wholly-owned subsidiary of Forest
City Enterprises, Inc., with the applicable offset to either accounts
receivable or accounts payable, as appropriate.
4) For the three months ended April 30, 2007, the effect of 6,746,140
shares of dilutive securities were not included in the computation of
diluted earnings per share because their effect is anti-dilutive to
the loss from continuing operations. (Since 5,678,540 of these shares
are dilutive for the computation of EBDT per share for the three
months ended April 30, 2007, diluted weighted average shares
outstanding of 107,669,294 were used to arrive at $0.32/share.)
5) The Forest City Ratner Companies portfolio became a wholly-owned
subsidiary of the Company November 8, 2006 upon the issuance of the
Class A Common Units in exchange for Bruce C. Ratner's minority
interests. For the first five years only, the Units that have not
been exchanged are entitled to their proportionate share of an annual
preferred payment of $2,500,000 plus an amount equal to the dividends
paid on the same number of shares of the Company's common stock.
After five years, the Units that have not been exchanged are entitled
to a payment equal to the dividends paid on an equivalent number of
shares of the Company's common stock. At April 30, 2007, the Company
has recorded approximately $898,000 related to one quarter's share of
the annual preferred payment which is classified as minority interest
expense on the Company's consolidated statement of earnings.
6) The following table provides detail of depreciation and
amortization and amortization of mortgage procurement costs. The
Company's Real Estate Groups are engaged in the ownership,
development, acquisition and management of real estate projects,
including apartment complexes, regional malls and retail centers,
hotels, office buildings and mixed-use facilities, as well as large
land development projects.
Depreciation and Amortization
-----------------------------
Three Months Ended April 30,
-----------------------------
2007 2006
-----------------------------
Full Consolidation $60,800 $41,417
Non-Real Estate (1,997) (349)
-----------------------------
Real Estate Groups Full Consolidation 58,803 41,068
Real Estate Groups related to minority
interest (2,687) (3,271)
Real Estate Groups Equity Method 8,393 6,818
Real Estate Groups Discontinued
Operations - 2,585
-----------------------------
Real Estate Groups Pro-Rata
Consolidation $64,509 $47,200
=============================
Amortization of Mortgage
Procurement Costs
-----------------------------
Three Months Ended April 30,
-----------------------------
2007 2006
-----------------------------
Full Consolidation $2,599 $2,946
Non-Real Estate - (92)
-----------------------------
Real Estate Groups Full Consolidation 2,599 2,854
Real Estate Groups related to minority
interest (160) (308)
Real Estate Groups Equity Method 480 289
Real Estate Groups Discontinued
Operations - 74
-----------------------------
Real Estate Groups Pro-Rata
Consolidation $2,919 $2,909
=============================
Three Months Ended April 30,
-----------------------------
2007 2006
-----------------------------
(7) The following table provides detail (in thousands)
of Income Tax Expense (Benefit):
(A) Operating earnings
Current $(1,634) $(496)
Deferred (12,912) 7,662
-----------------------------
(14,546) 7,166
-----------------------------
(B) Gain on disposition recorded on
equity method
Current - -
Deferred 814 -
-----------------------------
814 -
-----------------------------
Subtotal (A) (B)
Current (1,634) (496)
Deferred (12,098) 7,662
-----------------------------
Income tax expense (13,732) 7,166
-----------------------------
(C) Discontinued operations
Operating earnings
Current - (534)
Deferred - (23)
-----------------------------
- (557)
Gain on disposition of rental
properties
Current - (29)
Deferred - 29,124
-----------------------------
- 29,095
-----------------------------
- 28,538
-----------------------------
Grand Total (A) (B) (C)
Current (1,634) (1,059)
Deferred (12,098) 36,763
-----------------------------
$(13,732) $35,704
=============================
Recap of Grand Total:
Real Estate Groups
Current $2,246 $1,874
Deferred (10,360) 7,329
-----------------------------
(8,114) 9,203
Discontinued operations
Current - (563)
Deferred - 29,101
-----------------------------
- 28,538
Non-Real Estate Groups
Current (3,880) (2,370)
Deferred (1,738) 333
-----------------------------
(5,618) (2,037)
-----------------------------
Grand Total $(13,732) $35,704
=============================
Reconciliation of Net Operating Income (non-GAAP) to Net Earnings
(GAAP) (in thousands):
Three Months Ended April 30, 2007
-------------------------------------------------
Plus
Unconsol- Pro-Rata
Full idated Plus Consol-
Consol- Less Invest- Discon- idation
idation Minority ments at tinued (Non-
(GAAP) Interest Pro-Rata Operations GAAP)
-------------------------------------------------
Revenues from real
estate operations $280,567 $15,316 $77,182 $- $342,433
Exclude straight-
line rent
adjustment (1) (5,842) - - - (5,842)
-------------------------------------------------
Adjusted revenues 274,725 15,316 77,182 - 336,591
Operating expenses 177,439 5,795 50,554 - 222,198
Add back non-Real
Estate depreciation
and amortization
(b) 1,997 - 1,879 - 3,876
Add back
amortization of
mortgage
procurement costs
for non-Real Estate
Groups (d) - - 23 - 23
Exclude straight-
line rent
adjustment (2) (1,692) - - - (1,692)
Exclude preference
payment (898) - - - (898)
-------------------------------------------------
Adjusted operating
expenses 176,846 5,795 52,456 - 223,507
Add interest income
and other income 11,496 823 623 - 11,296
Add equity in
earnings of
unconsolidated
entities 1,361 352 (1,308) - (299)
Remove gain on
disposition
recorded on equity
method (2,106) - 2,106 - -
Add back equity
method depreciation
and amortization
expense (see below) 8,873 - (8,873) - -
-------------------------------------------------
Net Operating Income 117,503 10,696 17,274 - 124,081
Interest expense,
including early
extinguishment of
debt (80,951) (5,301) (17,274) - (92,924)
Gain on disposition
of equity method
rental properties
(e) 2,106 - - - 2,106
Gain on disposition
of rental
properties and
other investments - - - - -
Depreciation and
amortization - Real
Estate Groups (a) (58,803) (2,687) (8,393) - (64,509)
Amortization of
mortgage
procurement costs -
Real Estate Groups
(c) (2,599) (160) (480) - (2,919)
Straight-line rent
adjustment (1) +
(2) 4,150 - - - 4,150
Preference payment (898) - - - (898)
Equity method
depreciation and
amortization
expense (see above) (8,873) - 8,873 - -
-------------------------------------------------
Earnings (loss)
before income taxes (28,365) 2,548 - - (30,913)
Income tax provision 13,732 - - - 13,732
-------------------------------------------------
Earnings (loss)
before minority
interest and
discontinued
operations (14,633) 2,548 - - (17,181)
Minority Interest (2,548) (2,548) - - -
-------------------------------------------------
Earnings (loss) from
continuing
operations (17,181) - - - (17,181)
Discontinued
operations, net of
tax and minority
interest:
Operating loss
from rental
properties - - - - -
Gain on
disposition of
rental
properties - - - - -
-------------------------------------------------
- - - - -
-------------------------------------------------
Net earnings (loss) $(17,181) $- $- $- $(17,181)
=================================================
(a) Depreciation and
amortization - Real
Estate Groups $58,803 $2,687 $8,393 $- $64,509
(b) Depreciation and
amortization - Non-
Real Estate 1,997 - 1,879 - 3,876
-------------------------------------------------
Total
depreciation
and
amortization $60,800 $2,687 $10,272 $- $68,385
=================================================
(c) Amortization of
mortgage
procurement costs -
Real Estate Groups $2,599 $160 $480 $- $2,919
(d) Amortization of
mortgage
procurement costs -
Non-Real Estate - - 23 - 23
-------------------------------------------------
Total
amortization of
mortgage
procurement
costs $2,599 $160 $503 $- $2,942
=================================================
(e) Properties accounted for on the equity method do not meet the
definition of a component of an entity under SFAS No. 144 and
therefore are reported in continuing operations when sold. For the
three months ended April 30, 2007, one equity method property was
sold, White Acres, resulting in a pre-tax gain on disposition of
$2,106. For the three months ended April 30, 2006, no equity method
properties were sold.
Reconciliation of Net Operating Income (non-GAAP) to Net Earnings
(GAAP) (in thousands):
Three Months Ended April 30, 2006
-------------------------------------------------
Plus
Unconsol- Pro-Rata
Full idated Plus Consol-
Consol- Less Invest- Discon- idation
idation Minority ments at tinued (Non-
(GAAP) Interest Pro-Rata Operations GAAP)
-------------------------------------------------
Revenues from real
estate operations $272,238 $26,251 $69,777 $20,575 $336,339
Exclude straight-
line rent
adjustment (1) (2,694) - - (16) (2,710)
-------------------------------------------------
Adjusted revenues 269,544 26,251 69,777 20,559 333,629
Operating expenses 155,739 12,492 48,415 16,313 207,975
Add back non-Real
Estate depreciation
and amortization
(b) 349 - 6,190 - 6,539
Add back
amortization of
mortgage
procurement costs
for non-Real Estate
Groups (d) 92 - 147 - 239
Exclude straight-
line rent
adjustment (2) (1,167) - - (412) (1,579)
Exclude preference
payment - - - - -
-------------------------------------------------
Adjusted operating
expenses 155,013 12,492 54,752 15,901 213,174
Add interest income
and other income 14,888 631 93 453 14,803
Add equity in
earnings of
unconsolidated
entities 379 - 5,680 - 6,059
Remove gain on
disposition
recorded on equity
method - - - - -
Add back equity
method depreciation
and amortization
expense (see below) 7,107 - (7,107) - -
-------------------------------------------------
Net Operating Income 136,905 14,390 13,691 5,111 141,317
Interest expense,
including early
extinguishment of
debt (68,234) (6,748) (13,691) (3,498) (78,675)
Gain on disposition
of equity method
rental properties
(e) - - - - -
Gain on disposition
of rental
properties and
other investments - - - 75,298 75,298
Depreciation and
amortization - Real
Estate Groups (a) (41,068) (3,271) (6,818) (2,585) (47,200)
Amortization of
mortgage
procurement costs -
Real Estate Groups
(c) (2,854) (308) (289) (74) (2,909)
Straight-line rent
adjustment (1) +
(2) 1,527 - - (396) 1,131
Preference payment - - - - -
Equity method
depreciation and
amortization
expense (see above) (7,107) - 7,107 - -
-------------------------------------------------
Earnings (loss)
before income taxes 19,169 4,063 - 73,856 88,962
Income tax provision (7,166) - - (28,538) (35,704)
-------------------------------------------------
Earnings (loss)
before minority
interest and
discontinued
operations 12,003 4,063 - 45,318 53,258
Minority Interest (4,063) (4,063) - - -
-------------------------------------------------
Earnings (loss) from
continuing
operations 7,940 - - 45,318 53,258
Discontinued
operations, net of
tax and minority
interest:
Operating loss
from rental
properties (885) - - 885 -
Gain on
disposition of
rental
properties 46,203 - - (46,203) -
-------------------------------------------------
45,318 - - (45,318) -
-------------------------------------------------
Net earnings (loss) $53,258 $- $- $- $53,258
=================================================
(a) Depreciation and
amortization - Real
Estate Groups $41,068 $3,271 $6,818 $2,585 $47,200
(b) Depreciation and
amortization - Non-
Real Estate 349 - 6,190 - 6,539
-------------------------------------------------
Total
depreciation
and
amortization $41,417 $3,271 $13,008 $2,585 $53,739
=================================================
(c) Amortization of
mortgage
procurement costs -
Real Estate Groups $2,854 $308 $289 $74 $2,909
(d) Amortization of
mortgage
procurement costs -
Non-Real Estate 92 - 147 - 239
-------------------------------------------------
Total
amortization of
mortgage
procurement
costs $2,946 $308 $436 $74 $3,148
=================================================
(e) Properties accounted for on the equity method do not meet the
definition of a component of an entity under SFAS No. 144 and
therefore are reported in continuing operations when sold. For the
three months ended April 30, 2007, one equity method property was
sold, White Acres, resulting in a pre-tax gain on disposition of
$2,106. For the three months ended April 30, 2006, no equity method
properties were sold.
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Net Operating Income (dollars in thousands)
--------------------------------------------------
Three Months Ended April 30, 2007
--------------------------------------------------
Plus Pro-Rata
Full Unconsol- Plus Consol-
Consol- Less idated Discon- idation
idation Minority Investments tinued (Non-
(GAAP) Interest at Pro-Rata Operations GAAP)
--------------------------------------------------
Commercial Group
Retail
Comparable $51,761 $5,452 $2,488 $- $48,797
-------------------------------------------------------------------
Total 55,477 3,812 6,513 - 58,178
Office Buildings
Comparable 44,269 5,153 1,283 - 40,399
-------------------------------------------------------------------
Total 46,151 3,070 1,330 - 44,411
Hotels
Comparable 2,090 - 386 - 2,476
-------------------------------------------------------------------
Total 2,390 152 386 - 2,624
Earnings from
Commercial Land
Sales 2,425 479 - - 1,946
Other (6,116) 1,440 (108) - (7,664)
-------------------------------------------------------------------
Total Commercial
Group
Comparable 98,120 10,605 4,157 - 91,672
-------------------------------------------------------------------
Total 100,327 8,953 8,121 - 99,495
Residential Group
Apartments
Comparable 26,953 651 7,507 - 33,809
-------------------------------------------------------------------
Total 27,665 1,312 8,519 - 34,872
Military Housing
Comparable - - - - -
-------------------------------------------------------------------
Total 3,366 - 185 - 3,551
Total Residential
Group
Comparable 26,953 651 7,507 - 33,809
-------------------------------------------------------------------
Total 31,031 1,312 8,704 - 38,423
Total Rental
Properties
Comparable 125,073 11,256 11,664 - 125,481
-------------------------------------------------------------------
Total 131,358 10,265 16,825 - 137,918
Land Development
Group 3,223 431 116 - 2,908
The Nets (3,251) - 333 - (2,918)
Corporate Activities (13,827) - - - (13,827)
- ---------------------------------------------------------------------
Grand Total $117,503 $10,696 $17,274 $- $124,081
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Net Operating Income (dollars in thousands)
---------------------------------------------------
Three Months Ended April 30, 2006
---------------------------------------------------
Plus Pro-Rata
Full Unconsol- Plus Consol-
Consol- Less idated Discon- idation
idation Minority Investments tinued (Non-
(GAAP) Interest at Pro-Rata Operations GAAP)
---------------------------------------------------
Commercial Group
Retail
Comparable $47,029 $4,881 $2,898 $- $45,046
-------------------------------------------------------------------
Total 48,626 4,246 2,996 567 47,943
Office Buildings
Comparable 44,840 5,642 999 - 40,197
-------------------------------------------------------------------
Total 43,609 5,737 1,005 (75) 38,802
Hotels
Comparable 1,253 - 478 - 1,731
-------------------------------------------------------------------
Total 1,237 - 478 1,791 3,506
Earnings from
Commercial Land
Sales 9,635 - - - 9,635
Other (1,808) 2,969 30 - (4,747)
-------------------------------------------------------------------
Total Commercial
Group
Comparable 93,122 10,523 4,375 - 86,974
-------------------------------------------------------------------
Total 101,299 12,952 4,509 2,283 95,139
Residential Group
Apartments
Comparable 26,508 690 6,920 - 32,738
-------------------------------------------------------------------
Total 32,245 893 7,713 2,828 41,893
Military Housing
Comparable - - - - -
-------------------------------------------------------------------
Total 1,478 - 49 - 1,527
Total Residential
Group
Comparable 26,508 690 6,920 - 32,738
-------------------------------------------------------------------
Total 33,723 893 7,762 2,828 43,420
Total Rental
Properties
Comparable 119,630 11,213 11,295 - 119,712
-------------------------------------------------------------------
Total 135,022 13,845 12,271 5,111 138,559
Land Development
Group 18,185 545 384 - 18,024
The Nets (8,701) - 1,036 - (7,665)
Corporate
Activities (7,601) - - - (7,601)
- ---------------------------------------------------------------------
Grand Total $136,905 $14,390 $13,691 $5,111 $141,317
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Net Operating Income (dollars in thousands)
-------------------------------------------
% Change
-------------------------------------------
Full Consolidation Pro-Rata Consolidation
(GAAP) (Non-GAAP)
-------------------------------------------
Commercial Group
Retail
Comparable 10.1% 8.3%
------------------------
Total
Office Buildings
Comparable (1.3%) 0.5%
------------------------
Total
Hotels
Comparable 66.8% 43.0%
------------------------
Total
Earnings from Commercial
Land Sales
Other
------------------------
Total Commercial Group
Comparable 5.4% 5.4%
------------------------
Total
Residential Group
Apartments
Comparable 1.7% 3.3%
------------------------
Total
Military Housing
Comparable
------------------------
Total
Total Residential Group
Comparable 1.7% 3.3%
------------------------
Total
Total Rental Properties
Comparable 4.5% 4.8%
------------------------
Total
Land Development Group
The Nets
Corporate Activities
- ---------------------------
Grand Total
Development Pipeline
- ----------------------------------------------------------------------
April 30, 2007
2007 Openings and Acquisitions (4)
Dev FCE Pro-
(D) Date Legal Rata
Acq Opened/ Ownership FCE %
Property/Location (A) Acquired % (h) (h)(1)
- ---------------------------------------------------------------------
Retail Centers:
Promenade Bolingbrook/Bolingbrook, IL D Q1-07 100.0% 100.0%
Office:
Colorado Studios/Denver, CO A Q1-07 90.0% 90.0%
Commerce Court/Pittsburgh, PA A Q1-07 70.0% 100.0%
Illinois Science and Technology Park -
Building Q/Skokie, IL A/D Q1-07 100.0% 100.0%
Total Openings (d)
- ----------------------------------------------------------------------
Residential Phased-In Units (c) (e):
Pine Ridge Expansion/Willoughby Hills,
OH D 2005-07 50.0% 50.0%
Total (g)
- ----------------------------------------------------------------------
See Attached Footnotes
Development Pipeline
- ----------------------------------------------------------------------
April 30, 2007
2007 Openings and Acquisitions (4)
Cost at
FCE
Pro-
Rata
Cost at Share
Full (Non-
Consol- Total GAAP)
idation Cost (b) Sq. ft./ Gross
(GAAP) at 100% (1) X No. of Leasable
Property/Location (a) (2) (2) Units Area
- ----------------------------------------------------------------------
(in millions)
------------------------
Retail Centers:
Promenade
Bolingbrook/Bolingbrook,
IL $137.8 $137.8 $137.8 736,000 409,000 (f)
------------------------======== ========
Office:
Colorado Studios/Denver,
CO $2.0 $2.0 $1.8 75,000
Commerce Court/Pittsburgh,
PA 26.5 26.5 26.5 378,000
Illinois Science and
Technology Park -
Building Q/Skokie, IL 49.1 49.1 49.1 160,000
--------------------------------
$77.6 $77.6 $77.4 613,000
------------------------========
------------------------
Total Openings (d) $215.4 $215.4 $215.2
========================
- ----------------------------------------------------------
Residential Phased-In Opened in '07 /
Units (c) (e): Total
---------------
Pine Ridge
Expansion/Willoughby
Hills, OH $0.0 $16.4 $8.2 8/162
--------------------------------
Total (g) $0.0 $16.4 $8.2 8/162
================================
- ----------------------------------------------------------
See Attached Footnotes
Development Pipeline
- ----------------------------------------------------------------------
April 30, 2007
Under Construction or to be Acquired (19)
FCE
Dev Legal Pro-
(D) Ownership Rata
AcqAnticipated % FCE %
Property/ Location (A) Opening (h) (h)(1)
- ----------------------------------------------------------------------
Retail Centers:
Rancho Cucamonga - Bass Pro/ Rancho
Cucamonga, CA D Q2-07 80.0% 80.0%
Orchard Town Center/ Westminster, CO D Q1-08 100.0% 100.0%
Shops at Wiregrass (c)/ Tampa, FL D Q3-08 50.0% 66.7%
East River Plaza (c)/ Manhattan, NY D Q3-08 35.0% 50.0%
White Oak Village (l)/ Richmond, VA D Q3-08 50.0% 100.0%
Office:
Richmond Office Park/ Richmond, VA A Q2-07 100.0% 100.0%
New York Times/ Manhattan, NY D Q3-07 70.0% 79.5%
Johns Hopkins - 855 North Wolfe Street/
East Baltimore, MD D Q2-08 76.6% 76.6%
Residential:
Sterling Glen of Roslyn (o)/ Roslyn, NY D Q2-07 40.0% 100.0%
Tobacco Row - Cameron Kinney/ Richmond,
VA A Q2-07 100.0% 100.0%
Stapleton Town Center - Botanica Phase
II/ Denver, CO D Q3-07 90.0% 90.0%
Uptown Apartments (c)/ Oakland, CA D Q2-08 50.0% 50.0%
Ohana Military Communities, Hawaii
Increment I (c) (e)/ Honolulu, HI D 2005-2008 10.0% 10.0%
Dallas Mercantile/ Dallas, TX D Q1-08/Q3-08 100.0% 100.0%
Lucky Strike/ Richmond, VA D Q1-08 100.0% 100.0%
Military Housing - Navy Midwest (c)/
Chicago, IL D Q1-09 25.0% 25.0%
Military Housing - Marines, Hawaii
Increment II (c)/ Honolulu, HI D 2007-2010 10.0% 10.0%
Military Housing - Navy, Hawaii
Increment III (c)/ Honolulu, HI D 2007-2010 10.0% 10.0%
Condominiums:
Mercury (c)/ Los Angeles, CA D Q3-07 50.0% 50.0%
Total Under Construction (i)
LESS: Above properties to be sold as
condominiums
Under Construction less Condominiums
- ----------------------------------------------------------------------
Residential Phased-In Units (c) (e):
Arbor Glenn/ Twinsburg, OH D 2004-07 50.0% 50.0%
Pine Ridge Expansion/ Willoughby Hills,
OH D 2005-07 50.0% 50.0%
Cobblestone Court/ Painesville, OH D 2006-08 50.0% 50.0%
Sutton Landing/ Brimfield, OH D 2007-08 50.0% 50.0%
Stratford Crossing/ Wadsworth, OH D 2007-09 50.0% 50.0%
Total (j)
- ----------------------------------------------------------------------
See Attached Footnotes
Development Pipeline
- ----------------------------------------------------------------------
April 30, 2007
Under Construction or to be Acquired (19)
Cost at
FCE
Cost at Pro-Rata
Full Share
Consol- Total (Non-
idation Cost at GAAP) Sq. ft./ Gross Pre-
Property/ (GAAP) 100% (b) No. of Leasable Leased
Location (a) (2) (1) X (2) Units Area %
- ----------------------------------------------------------------------
(in millions)
----------------------------
Retail
Centers:
Rancho
Cucamonga -
Bass Pro/
Rancho
Cucamonga,
CA $41.2 $41.2 $33.0 180,000 180,000 100%
Orchard
Town
Center/
Westminster,
CO 144.0 144.0 144.0 968,000 554,000 (k) 37%
Shops at
Wiregrass
(c)/ Tampa,
FL 0.0 142.9 95.3 646,000 356,000 56%
East River
Plaza (c)/
Manhattan,
NY 0.0 347.0 173.5 514,000 514,000 64%
White Oak
Village (l)/
Richmond, VA 70.3 70.3 70.3 796,000 394,000 34%
------------------------------------------------
$255.5 $745.4 $516.1 3,104,000 1,998,000
----------------------------====================
Office:
Richmond
Office Park/
Richmond, VA $115.0 $115.0 $115.0 571,000 95%
New York
Times/
Manhattan,
NY $517.5 $517.5 $411.4 736,000 (m) 82%
Johns Hopkins
- 855 North
Wolfe
Street/ East
Baltimore,
MD 104.7 104.7 80.2 278,000 (n) 36%
--------------------------------------
$ 737.2 $ 737.2 $ 606.6 1,585,000
----------------------------==========
Residential:
Sterling Glen
of Roslyn
(o)/ Roslyn,
NY $79.9 $79.9 $79.9 158
Tobacco Row -
Cameron
Kinney/
Richmond, VA 27.0 27.0 27.0 257
Stapleton
Town Center
- Botanica
Phase II/
Denver, CO 26.3 26.3 23.7 154
Uptown
Apartments
(c)/
Oakland, CA 0.0 201.0 100.5 665
Ohana
Military
Communities,
Hawaii
Increment I
(c) (e)/
Honolulu, HI 0.0 316.5 31.7 1,952
Dallas
Mercantile/
Dallas, TX 134.6 134.6 134.6 366 (p)
Lucky Strike/
Richmond, VA 37.8 37.8 37.8 131
Military
Housing -
Navy Midwest
(c)/
Chicago, IL 0.0 264.9 66.2 1,658
Military
Housing -
Marines,
Hawaii
Increment II
(c)/
Honolulu, HI 0.0 311.0 31.1 1,175
Military
Housing -
Navy, Hawaii
Increment
III (c)/
Honolulu, HI 0.0 572.8 57.3 2,519
--------------------------------------
$305.6 $1,971.8 $589.8 9,035
----------------------------==========
Units Sold
at
Condominiums: 4/30/07
----------
Mercury (c)/
Los Angeles,
CA $0.0 $153.5 $76.8 238 57
----------------------------==========
----------------------------
Total Under
Construction
(i) $1,298.3 $3,607.9 $1789.3
============================
LESS: Above
properties
to be sold
as
condominiums $0.0 $153.5 $76.8
----------------------------
Under
Construction
less
Condominiums $1,298.3 $3,454.4 $1,712.5
============================
- ---------------------------------------------------
Residential
Phased-In
Units (c)
(e): Under Const./Total
-------------------
Arbor Glenn/
Twinsburg,
OH $0.0 $18.4 $9.2 48/288
Pine Ridge
Expansion/
Willoughby
Hills, OH 0.0 16.4 8.2 32/162
Cobblestone
Court/
Painesville,
OH 0.0 24.6 12.3 192/304
Sutton
Landing/
Brimfield,
OH 0.0 15.9 8.0 216/216
Stratford
Crossing/
Wadsworth,
OH 0.0 24.1 12.1 108/348
--------------------------------------
Total (j) $0.0 $99.4 $49.8 596/1,318
----------------------------==========
- ---------------------------------------------------
See Attached Footnotes
Development Pipeline
- ----------------------------------------------------------------------
2007 FOOTNOTES
- ----------------------------------------------------------------------
( a ) Amounts are presented on the full consolidation method of
accounting, a GAAP measure. Under full consolidation, costs are
reported as consolidated at 100 percent if we are deemed to
have control or to be the primary beneficiary of our
investments in the variable interest entity ("VIE").
( b ) Cost at pro-rata share represents Forest City's share of cost,
based on the Company's pro-rata ownership of each property (a
non-GAAP measure). Under the pro-rata consolidation method of
accounting the Company determines its pro-rata share by
multiplying its pro-rata ownership by the total cost of the
applicable property.
( c ) Reported under the equity method of accounting. This method
represents a GAAP measure for investments in which the Company
is not deemed to have control or to be the primary beneficiary
of our investments in a VIE.
( d ) The difference between the full consolidation cost amount (GAAP)
of $215.4 million to the Company's pro-rata share (a non-GAAP
measure) of $215.2 million consists of a reduction to full
consolidation for minority interest of $0.2 million of cost.
( e ) Phased-in openings. Costs are representative of the total
project.
( f ) Includes 39,000 square feet of office space.
( g ) The difference between the full consolidation cost amount (GAAP)
of $0.0 million to the Company's pro-rata share (a non-GAAP
measure) of $8.2 million consists of the Company's share of
cost for unconsolidated investments of $8.2 million.
( h ) As is customary within the real estate industry, the Company
invests in certain real estate projects through joint ventures.
For some of these projects, the Company provides funding at
percentages that differ from the Company's legal ownership.
( i ) The difference between the full consolidation cost amount (GAAP)
of $1,298.3 million to the Company's pro-rata share (a non-GAAP
measure) of $1,789.3 million of cost consists of a reduction to
full consolidation for minority interest of $141.4 million of
cost and the addition of its share of cost for unconsolidated
investments of $632.4 million.
( j ) The difference between the full consolidation cost amount (GAAP)
of $0.0 million to the Company's pro-rata share (a non-GAAP
measure) of $49.8 million consists of Forest City's share of
cost for unconsolidated investments of $49.8 million.
( k ) Includes 177,000 square feet for Target and 97,000 square feet
for JC Penney that opened in Q3-06, as well as 16,000 square
feet of office.
( l ) Formerly known as Laburnum.
( m ) Includes 23,000 square feet of retail space.
( n ) Project includes 19,000 square feet of retail space.
( o ) Supported-living property.
( p ) Project includes 18,000 square feet of retail space.
CONTACT: Forest City Enterprises, Inc.
Thomas G. Smith, Executive Vice President,
Chief Financial Officer, 216-621-6060
or
Thomas T. Kmiecik, Assistant Treasurer, 216-621-6060
or
On The Web: www.forestcity.net