Forest City Enterprises 2006 Annual Report

Forest City Enterprises, Inc. Supplemental Package Years Ended January 31, 2007 and 2006 Forest City Enterprises, Inc. and Subsidiaries Years Ended January 31, 2007 and 2006 Supplemental Package NYSE: FCEA, FCEB Index Corporate Overview ...................................................................................................................... Supplemental Operating Information Occupancy Data ........................................................................................................................... Comparable Net Operating Income (NOI) ................................................................................... Comparable NOI Detail................................................................................................................ Reconciliation of NOI to Net Earnings ........................................................................................ Lease Expirations Schedules ........................................................................................................ Schedules of Significant Tenants ................................................................................................. Development Pipeline .................................................................................................................. Supplemental Financial Information Mortgage Financings.................................................................................................................... Scheduled Maturities Table.......................................................................................................... Forest City Enterprises, Inc. Consolidated Balance Sheet Information .......................................................................... Consolidated Earnings Information................................................................................... Investments in and Advances to Affiliates ........................................................................ Real Estate and Related Nonrecourse Mortgage Debt ...................................................... Forest City Rental Properties Corporation Consolidated Balance Sheet Information .......................................................................... Consolidated Earnings Information................................................................................... Real Estate Activity........................................................................................................... Results of Operations Summary................................................................................................... Reconciliation of Net Earnings to EBDT ..................................................................................... Summary of EBDT....................................................................................................................... Property Listing............................................................................................................................ 2 5 6 7-8 9-10 11-12 13-14 15-17 18 19-20 21-22 23-26 27-28 29-30 31-32 33-34 35-38 39-41 42-43 44-55 56-66 This Supplemental Package, together with other statements and information publicly disseminated by the Company, contains forwardlooking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ from the results discussed in the forward-looking statements. Risk factors discussed in Item 1A of the Company’s Form 10-K for the year ended January 31, 2007 and other factors that might cause differences, some of which could be material, include, but are not limited to, real estate development and investment risks including lack of satisfactory financing, construction and lease-up delays and cost overruns, the effect of economic and market conditions on a nationwide basis as well as regionally in areas where the Company has a geographic concentration of properties, reliance on major tenants, the impact of terrorist acts, the Company’s substantial leverage and the ability to obtain and service debt, guarantees under the Company’s credit facility, the level and volatility of interest rates, continued availability of tax-exempt government financing, the sustainability of substantial operations at the subsidiary level, illiquidity of real estate investments, dependence on rental income from real property, conflicts of interest, financial stability of tenants within the retail industry which may be impacted by competition and consumer spending, potential liability from syndicated properties, effects of uninsured loss, environmental liabilities, partnership risks, litigation risks, risks associated with an investment in a professional sports franchise, the rate revenue increases versus the rate of expense increases, as well as other risks listed from time to time in the Company’s reports filed with the United States Securities and Exchange Commission. The Company has no obligation to revise or update any forward-looking statements, other than imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements. 1 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Corporate Overview We principally engage in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. We operate through three strategic business units. The Commercial Group, our largest business unit, owns, develops, acquires and operates regional malls, specialty/urban retail centers, office and life science buildings, hotels and mixed-use projects. The Residential Group owns, develops, acquires and operates residential rental property, including upscale and middle-market apartments, adaptive re-use developments and supported-living communities. Additionally, the Residential Group develops for-sale condominium projects and also owns, develops and manages military family housing. New York City operations are part of the Commercial Group or Residential Group depending on the nature of the operations. Real Estate Groups are the combined Commercial and Residential Groups. 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. The Nets, a franchise of the National Basketball Association (“NBA”) in which we account for our investment on the equity method of accounting, is a reportable segment of the Company. We have approximately $9.0 billion of assets in 26 states and the District of Columbia at January 31, 2007. Our core markets include New York City/Philadelphia metropolitan area, Denver, Boston, Greater Washington D.C./Baltimore metropolitan area, Chicago and California. As a result of an ongoing effort to increase property concentration in the core markets, these markets now account for approximately 75 percent of the cost of our real estate portfolio at January 31, 2007. We have offices in Boston, Chicago, Denver, Los Angeles, New York City, San Francisco, Washington, D.C., and our corporate headquarters are in Cleveland, Ohio. SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION We recommend that this supplemental package be read in conjunction with the Company’s Form 10-K for the year ended January 31, 2007. This supplemental package contains certain measures prepared in accordance with the generally accepted accounting principles (“GAAP”) under the full consolidation accounting method, and certain measures prepared under the pro-rata consolidation method, a non-GAAP measure. Along with net earnings, we use an additional measure, Earnings before Depreciation, Amortization and Deferred Taxes (“EBDT”), to report operating results. EBDT is a non-GAAP measure and may not be directly comparable to similarly-titled measures reported by other companies. The non-GAAP financial measures presented under the pro-rata consolidation method, comparable net operating income (“NOI”) and EBDT, provide supplemental information about our operations. Although these measures are not presented in accordance with GAAP, we believe they are necessary to understand our business and operating results, along with net earnings and other GAAP measures. Our investors can use these non-GAAP measures as supplementary information to evaluate our business. Our non-GAAP measures are not intended to be performance measures that should be regarded as alternatives to or more meaningful than, our GAAP measures. Consolidation Methods We present certain financial amounts under the pro-rata consolidation method because we believe this information is useful to investors as this method reflects the manner in which we operate our business. In line with industry practice, we have made a large number of investments in which our economic ownership is less than 100% as a means of procuring opportunities and sharing risk. Under the pro-rata consolidation method, we generally present our investments proportionate to our economic share of ownership. Under GAAP, the full consolidation method is used to report partnership assets and liabilities consolidated at 100% if deemed to be under our control or if we are deemed to be the primary beneficiary of the variable interest entity (“VIE”), even if our ownership is not 100%. We provide reconciliations from the full consolidation method to the pro-rata consolidation method throughout our supplemental package. Please refer to our property listing for the detail of our consolidated and non-consolidated properties on pages 56-66. 2 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information EBDT We believe that EBDT, along with net earnings, provides additional information about our core operations. While property dispositions, acquisitions or other factors can affect net earnings in the short-term, we believe EBDT presents a more consistent view of the overall financial performance of our business from period-to-period. EBDT is used by the chief operating decision maker and management to assess performance and resource allocations by strategic business unit and on a consolidated basis. EBDT is similar to Funds From Operations (“FFO”), a measure of performance used by publicly traded Real Estate Investment Trusts (“REIT”), but may not be directly comparable to similarly titled measures reported by other companies. (See pages 41-43 for additional discussion of EBDT as well as a reconciliation of EBDT to net earnings.) Supplemental Operating Information The operating information contained in this document includes: occupancy data, comparable NOI, reconciliation of NOI to net earnings, retail and office lease expirations, significant retail and office tenant listings, and our development pipeline. We believe this information will give interested parties a better understanding and more information about the operating performance of our Company. The term “comparable,” which is used throughout this document, is generally defined as including properties that were open and operated in both the fiscal years ended January 31, 2007 and 2006. We believe occupancy rates, retail and office lease expirations, base rent, and significant retail and office tenant listings represent meaningful operating statistics about our Company. This information will give interested parties a better understanding and more information about the operating performance of our Company. Comparable NOI is useful because it measures the performance of the same properties on a period-to-period basis and, along with EBDT (as discussed beginning on page 41), is used to assess operating performance and resource allocation of our strategic business units. While property dispositions, acquisitions or other factors can impact net earnings in the short term, we believe comparable NOI gives a more consistent view of our overall performance from quarter-to-quarter and year-to-year. A reconciliation of net earnings, the most comparable financial measure calculated in accordance with GAAP, to NOI and reconciliation from NOI to comparable NOI are provided on pages 7-10 of this document. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 44-55. 3 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Corporate Headquarters Forest City Enterprises, Inc. Terminal Tower 50 Public Square, Suite 1100 Cleveland, Ohio 44113 Annual Report on Form 10-K A copy of the Annual Report on Form 10-K for the fiscal year ended January 31, 2007 as filed with the Securities and Exchange Commission can be found on our website or may be obtained without charge upon written request to: Thomas T. Kmiecik Assistant Treasurer tomkmiecik@forestcity.net Website www.forestcity.net The information contained on this website is not incorporated herein by reference and does not constitute a part of this supplemental package. Investor Relations Thomas G. Smith Executive Vice President, Chief Financial Officer and Secretary Transfer Agent and Registrar National City Bank Stock Transfer Department P.O. Box 92301 Cleveland, OH 44193-0900 (800) 622-6757 www.shareholder.inquiries@nationalcity.com Stock Exchange Listing NYSE: FCEA and FCEB Dividend Reinvestment and Stock Purchase Plan The Company offers its stockholders the opportunity to purchase additional shares of common stock through the Forest City Enterprises, Inc. Dividend Reinvestment and Stock Purchase Plan (the “Plan”) at 97% of current market value. A copy of the Plan prospectus and an enrollment card may be obtained by contacting National City Bank at (800) 622-6757. 4 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Occupancy Data - January 31, 2007 and 2006 We analyze our occupancy percentages by each of our major product lines as follows: Average Occupancy Year-to-Date January 31, 2007 Average Occupancy Year-to-Date January 31, 2006 Occupancy As of January 31, 2007 Retail Comparable ...................................................... Total ................................................................. Office Comparable ...................................................... Total ................................................................. Residential Comparable ...................................................... Total ................................................................. Hotels Comparable and Total (1) .................................. Comparable ADR and Total ADR (1) ............... Occupancy As of January 31, 2006 94.6 % 93.6 % 93.4 % 90.1 % 93.9 % 91.4 % 94.6 % 93.8 % 93.0 % 91.3 % 95.1 % 91.4 % 69.1 % 143.47 94.7 % 94.0 % 92.5 % 92.6 % 94.4 % 91.6 % 93.5 % 93.1 % 92.8 % 92.9 % 93.4 % 89.2 % 67.2 % 133.87 $ $ Retail and office occupancy as of January 31, 2007 and 2006 is based on square feet leased at the end of the fiscal quarter. Average Occupancy Year-to-Date as of January 31, 2007 and 2006 for retail and office is calculated by dividing the sum of leased square feet at the beginning and end of the period by two. Residential occupancy as of January 31, 2007 and 2006 represents total units occupied divided by total units available. Average residential occupancy year-to-date for 2006 and 2005 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 year ended January 31, 2007 and 2006. (1) Total Hotel Average Occupancy Year-to-Date and Total ADR for January 31, 2006 have been restated to exclude the Hilton Times Square and Embassy Suites Hotel which were sold during the year ended January 31, 2007. 5 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information We use NOI, along with EBDT as discussed on pages 2-3 to assess operating performance. Comparable NOI is defined as NOI from properties opened and operated in both the year ended January 31, 2007 and 2006. The following schedules on pages 7-8 present comparable NOI for each of our major product lines, as well as the strategic business unit under which these product lines operate. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on pages 9-10. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 44-55. Comparable Net Operating Income (NOI) (% change over same period, prior year) Three Months Ended January 31, 2007 Full Pro-Rata Consolidation Consolidation Year Ended January 31, 2007 Full Pro-Rata Consolidation Consolidation Retail .................................................................... 8.5 % 4.0 % 6.6 % 4.9 % Office.................................................................... 0.7 % 2.4 % 2.3 % 2.5 % Hotel ..................................................................... 62.4 % 52.0 % 22.0 % 19.3 % Residential ........................................................... 8.4 % 4.7 % 8.4 % 6.5 % Total ..................................................................... 6.5 % 4.7 % 5.7 % 4.9 % 6 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Net Operating Income (dollars in thousands) Three Months Ended January 31, 2007 Plus Unconsolidated Investments at Pro-Rata Three Months Ended January 31, 2006 Plus Unconsolidated Investments at Pro-Rata % Change Full Consolidation (GAAP) Commercial Group Retail Comparable....................... $ Total.................................. Office Buildings Comparable....................... Total.................................. Hotels Comparable....................... Total.................................. Earnings from Commercial Land Sales ........................... Development Fees ................. Other....................................... Total Commercial Group Comparable....................... Total.................................. Less Minority Interest Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Full Consolidation (GAAP) Less Minority Interest Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Full Consolidation (GAAP) Pro-Rata Consolidation (Non-GAAP) 52,403 63,517 $ 5,684 2,933 $ 806 4,273 $ 186 $ 47,525 65,043 $ 48,307 52,036 $ 5,556 5,730 $ 2,943 3,007 $ 925 $ 45,694 50,238 8.5 % 4.0 % 43,612 43,651 4,868 2,348 1,334 1,261 - 40,078 42,564 43,319 43,251 5,366 5,095 1,201 1,061 - 39,154 39,217 0.7 % 2.4 % 3,418 3,418 - 491 491 (405) 3,909 3,504 2,105 2,105 - 467 467 5,286 2,572 7,858 62.4 % 52.0 % 18,989 160 (9,584) 1,556 64 2,579 395 42 - 17,828 96 (12,121) 30,241 2,897 (5,559) 16,285 1,159 (459) (321) - 13,956 1,738 (5,421) 7 99,433 120,151 10,552 9,480 2,631 6,462 (219) 91,512 116,914 93,731 124,971 10,922 27,810 4,611 4,214 6,211 87,420 107,586 6.1 % 4.7 % Residential Group Apartments Comparable....................... Total.................................. Military Housing Comparable....................... Total.................................. Total Real Estate Groups Comparable....................... Total.................................. Land Development Group ....... The Nets ..................................... Corporate Activities.................. 23,178 43,241 620 1,215 6,256 8,373 1,816 28,814 52,215 21,389 18,454 584 1,440 6,726 8,454 2,712 27,531 28,180 8.4 % 4.7 % 5,577 - 144 - 5,721 2,567 - 38 - 2,605 122,611 168,969 46,777 (619) (10,436) 11,172 10,695 2,269 - 8,887 14,979 130 1 - 1,597 - 120,326 174,850 44,638 (618) (10,436) 115,120 145,992 32,184 (7,537) (10,469) 11,506 29,250 2,128 - 11,337 12,706 162 1,000 - 8,923 - 114,951 138,371 30,218 (6,537) (10,469) 6.5 % 4.7 % Grand Total ............................... $ 204,691 $ 12,964 $ 15,110 $ 1,597 $ 208,434 $ 160,170 $ 31,378 $ 13,868 $ 8,923 $ 151,583 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Net Operating Income (dollars in thousands) Year Ended January 31, 2007 Plus Unconsolidated Investments at Pro-Rata Year Ended January 31, 2006 Plus Unconsolidated Investments at Pro-Rata % Change Full Consolidation (GAAP) Commercial Group Retail Comparable....................... $ Total.................................. Office Buildings Comparable....................... Total.................................. Hotels Comparable....................... Total.................................. Earnings from Commercial Land Sales ........................... Development Fees ................. Other....................................... Total Commercial Group Comparable....................... Total.................................. Less Minority Interest Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Full Consolidation (GAAP) Less Minority Interest Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Full Consolidation (GAAP) Pro-Rata Consolidation (Non-GAAP) 189,225 213,220 $ 20,745 16,926 $ 8,452 13,091 $ 1,994 $ 176,932 211,379 $ 177,580 186,787 $ 20,545 18,437 $ 11,590 11,950 $ 2,647 $ 168,625 182,947 6.6 % 4.9 % 176,097 174,880 21,073 18,764 4,594 4,365 - 159,618 160,481 172,071 173,319 20,811 21,694 4,413 4,025 - 155,673 155,650 2.3 % 2.5 % 14,421 14,421 - 1,947 1,947 10,715 16,368 27,083 11,819 11,819 - 1,899 1,899 21,766 13,718 35,484 22.0 % 19.3 % 37,143 879 (28,997) 2,684 352 6,768 641 145 - 35,100 527 (35,620) 67,990 10,614 (17,466) 18,390 4,247 3,011 (214) - 49,600 6,367 (20,691) 8 379,743 411,546 41,818 45,494 14,993 20,189 12,709 352,918 398,950 361,470 433,063 41,356 65,779 17,902 17,660 24,413 338,016 409,357 5.1 % 4.4 % Residential Group Apartments Comparable....................... Total.................................. Military Housing Comparable....................... Total.................................. Total Real Estate Groups Comparable....................... Total.................................. Land Development Group ....... The Nets ..................................... Corporate Activities.................. 91,990 121,188 2,501 4,082 25,411 31,766 10,390 114,900 159,262 84,837 81,101 2,286 5,050 25,335 30,552 15,261 107,886 121,864 8.4 % 6.5 % 12,052 - 305 - 12,357 4,763 - 1,032 - 5,795 471,733 544,786 99,056 (14,703) (41,196) 44,319 49,576 5,055 - 40,404 52,260 790 2,812 - 23,099 - 467,818 570,569 94,791 (11,891) (41,196) 446,307 518,927 102,002 (24,534) (36,192) 43,642 70,829 5,704 - 43,237 49,244 353 2,992 - 39,674 - 445,902 537,016 96,651 (21,542) (36,192) 5.7 % 4.9 % Grand Total ............................... $ 587,943 $ 54,631 $ 55,862 $ 23,099 $ 612,273 $ 560,203 $ 76,533 $ 52,589 $ 39,674 $ 575,933 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 January 31, 2007 Full Consolidation (GAAP) Revenues from real estate operations ........................................................................ (1) Exclude straight-line rent adjustment ................................................................... Adjusted revenues.................................................................................................... Operating expenses .................................................................................................... (b) Add back depreciation and amortization for non-Real Estate Groups .................. Add back amortization of mortgage procurement costs for non-Real Estate (d) Groups ................................................................................................................. (2) Exclude straight-line rent adjustment ................................................................... Exclude preference payment...................................................................................... Adjusted operating expenses .................................................................................. Add interest and other income................................................................................... Add equity in earnings of unconsolidated entities .................................................... Add back equity method depreciation and amortization expense (see below)........... Net operating income .............................................................................................. Interest expense, including early extinguishment of debt ......................................... Gain on disposition of rental properties and other investments ................................ Provision for decline in real estate ............................................................................ (a) Depreciation and amortization - Real Estate Groups ............................................ (c) Amortization of mortgage procurement costs – Real Estate Groups .................... (1) + (2) Straight-line rent adjustment .......................................................................... Preference payment ................................................................................................... Equity method depreciation and amortization expense (see above) ........................ Earnings before income taxes ................................................................................ Income tax expense ................................................................................................... Earnings (loss) before minority interest and discontinued operations............... Minority Interest ....................................................................................................... Earnings (loss) from continuing operations .......................................................... Discontinued operations, net of tax and minority interest: Operating earnings (loss) from rental properties ................................................ Gain on disposition of rental properties ............................................................... Net earnings ............................................................................................................. (a) Depreciation and amortization - Real Estate Groups ........................................ (b) Depreciation and amortization - Non-Real Estate Groups ................................ Total depreciation and amortization .................................................................. (c) Amortization of mortgage procurement costs - Real Estate Groups ................. (d) Amortization of mortgage procurement costs - Non-Real Estate Groups......... Total amortization of mortgage procurement costs ........................................... $ $ $ $ $ $ 360,379 (6,995) 353,384 225,465 639 97 (2,797) (898) 222,506 31,763 32,731 9,319 204,691 (83,909) (52,154) (2,598) 4,198 (898) (9,319) 60,011 (24,284) 35,727 (5,056) 30,671 292 39,663 39,955 70,626 52,154 639 52,793 2,598 97 2,695 $ $ $ $ $ Less Minority Interest $ 20,389 20,389 7,515 7,515 90 12,964 (4,650) (3,097) (161) 5,056 5,056 (5,056) 3,097 3,097 161 161 $ $ $ $ $ Plus Unconsolidated Investments at Pro-Rata $ 145,274 145,274 94,094 (99) 228 94,223 2,501 (29,123) (9,319) 15,110 (15,110) (8,867) (452) 9,319 8,867 (99) 8,768 452 228 680 $ $ $ $ $ Plus Discontinued Operations $ 2,119 2,119 1,400 1,400 878 1,597 (1,093) 64,641 (14) (11) 65,120 (25,165) 39,955 39,955 (292) (39,663) (39,955) 14 14 11 11 $ $ $ $ $ Pro-Rata Consolidation (Non-GAAP) $ 487,383 (6,995) 480,388 313,444 540 325 (2,797) (898) 310,614 35,052 3,608 208,434 (95,462) 64,641 (57,938) (2,900) 4,198 (898) 120,075 (49,449) 70,626 70,626 70,626 57,938 540 58,478 2,900 325 3,225 $ $ $ $ $ Full Consolidation (GAAP) $ 312,970 (6,334) 306,636 173,246 368 83 (1,349) 172,348 9,292 9,172 7,418 160,170 (69,954) (100) (1,774) (45,756) (2,451) 4,985 (7,418) 37,702 (4,455) 33,247 (22,547) 10,700 (3,156) 20,691 17,535 28,235 45,756 368 46,124 2,451 83 2,534 $ $ $ $ $ $ Three Months Ended January 31, 2006 Less Minority Interest 44,017 44,017 13,598 13,598 959 31,378 (6,488) (26) (2,233) (84) 22,547 22,547 (22,547) 2,233 2,233 84 84 $ $ $ $ $ Plus Unconsolidated Investments at Pro-Rata $ 86,592 86,592 52,252 3,228 1,582 57,062 713 (8,957) (7,418) 13,868 (13,868) (7,080) (338) 7,418 7,080 3,228 10,308 338 1,582 1,920 $ $ $ $ $ $ Plus Discontinued Operations 25,372 (69) 25,303 17,130 (577) 16,553 173 8,923 (9,740) 33,722 (3,599) (214) (508) 28,584 (11,049) 17,535 17,535 3,156 (20,691) (17,535) 3,599 3,599 214 214 $ $ $ $ $ $ Pro-Rata Consolidation (Non-GAAP) 380,917 (6,403) 374,514 229,030 3,596 1,665 (1,926) 232,365 9,219 215 151,583 (87,074) 33,622 (1,748) (54,202) (2,919) 4,477 43,739 (15,504) 28,235 28,235 28,235 54,202 3,596 57,798 2,919 1,665 4,584 9 (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 January 31, 2007, and the three months ended January 31, 2006, no equity method properties were sold. Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (GAAP) (in thousands): Year Ended January 31, 2007 Full Consolidation (GAAP) Revenues from real estate operations ........................................................................ (1) Exclude straight-line rent adjustment ................................................................... Adjusted revenues.................................................................................................... Operating expenses .................................................................................................... (b) Add back depreciation and amortization for non-Real Estate Groups .................. Add back amortization of mortgage procurement costs for non-Real Estate (d) Groups ................................................................................................................. (2) Exclude straight-line rent adjustment ................................................................... Exclude preference payment...................................................................................... Adjusted operating expenses .................................................................................. Add interest and other income................................................................................... Add equity in earnings of unconsolidated entities .................................................... Remove gain on disposition of equity method rental properties ............................... Add back provision for decline recorded on equity method ..................................... Add back equity method depreciation and amortization expense (see below)........... Net operating income .............................................................................................. Interest expense, including early extinguishment of debt ......................................... (e) Gain on disposition of equity method rental properties ........................................ Gain on disposition of rental properties and other investments ................................ Provision for decline in real estate ............................................................................ Provision for decline in real estate of equity method rental properties..................... (a) Depreciation and amortization - Real Estate Groups ............................................ (c) Amortization of mortgage procurement costs – Real Estate Groups .................... (1) + (2) Straight-line rent adjustment .......................................................................... Preference payment ................................................................................................... Equity method depreciation and amortization expense (see above) ........................ Earnings before income taxes ................................................................................ Income tax expense ................................................................................................... Earnings before minority interest and discontinued operations......................... Minority Interest ....................................................................................................... Earnings from continuing operations .................................................................... Discontinued operations, net of tax and minority interest: Operating earnings (loss) from rental properties ................................................ Gain on disposition of rental properties ............................................................... Net earnings ............................................................................................................. (a) Depreciation and amortization - Real Estate Groups ........................................ (b) Depreciation and amortization - Non-Real Estate Groups ................................ Total depreciation and amortization .................................................................. (c) Amortization of mortgage procurement costs - Real Estate Groups ................. (d) Amortization of mortgage procurement costs - Non-Real Estate Groups......... Total amortization of mortgage procurement costs ........................................... $ 1,168,835 (15,950) 1,152,885 709,343 1,571 333 (6,299) (898) 704,050 61,737 48,542 (7,662) 400 36,091 587,943 (295,978) 7,662 (1,923) (400) (179,558) (10,570) 9,651 (898) (36,091) 79,838 (34,412) 45,426 (15,187) 30,239 3,520 143,492 147,012 $ 177,251 $ 179,558 1,571 $ 181,129 $ $ 10,570 333 10,903 $ $ $ $ $ Less Minority Interest $ 98,001 98,001 46,132 1 46,133 2,763 54,631 (24,557) (13,811) (1,076) 15,187 15,187 (15,187) 13,811 13,811 1,076 1 1,077 $ $ $ $ $ Plus Unconsolidated Investments at Pro-Rata $ 355,457 355,457 234,796 7,174 819 242,789 3,301 (31,278) 7,662 (400) (36,091) 55,862 (55,862) (34,779) (1,312) 36,091 34,779 7,174 41,953 1,312 819 2,131 $ $ $ $ $ Plus Discontinued Operations $ 58,198 (44) 58,154 37,497 (938) 36,559 1,504 23,099 (10,053) 233,852 (6,219) (192) (894) 239,593 (92,581) 147,012 147,012 (3,520) (143,492) (147,012) 6,219 6,219 192 192 $ $ $ $ $ Pro-Rata Consolidation (Non-GAAP) $ 1,484,489 (15,994) 1,468,495 935,504 8,745 1,151 (7,237) (898) 937,265 63,779 17,264 612,273 (337,336) 7,662 233,852 (1,923) (400) (206,745) (10,998) 8,757 (898) 304,244 (126,993) 177,251 177,251 177,251 206,745 8,745 215,490 10,998 1,151 12,149 $ Full Consolidation (GAAP) $ 1,128,472 (18,229) 1,110,243 644,765 1,104 369 (5,394) 640,844 27,773 55,201 (21,023) 704 28,149 560,203 (264,834) 21,023 506 (7,874) (704) (163,293) (9,610) 12,835 (28,149) 120,103 (25,564) 94,539 (30,027) 64,512 (7,498) 26,505 19,007 83,519 $ $ $ $ $ Less Minority Interest $ 129,043 129,043 55,114 55,114 2,604 76,533 (28,667) (1,432) (15,341) (1,066) 30,027 30,027 (30,027) 15,341 15,341 1,066 1,066 $ $ $ $ $ Year Ended January 31, 2006 Plus Unconsolidated Investments at Pro-Rata $ 318,282 318,282 194,900 13,086 2,035 210,021 1,218 (49,060) 21,023 (704) (28,149) 52,589 (52,589) (26,905) (1,244) 28,149 26,905 13,086 39,991 1,244 2,035 3,279 $ $ $ $ $ $ Plus Discontinued Operations 115,392 (163) 115,229 78,436 (2,338) 76,098 543 39,674 (30,062) 43,198 (17,858) (1,790) (2,175) 30,987 (11,980) 19,007 19,007 7,498 (26,505) (19,007) 17,858 17,858 1,790 1,790 $ $ $ $ $ $ Pro-Rata Consolidation (Non-GAAP) 1,433,103 (18,392) 1,414,711 862,987 14,190 2,404 (7,732) 871,849 26,930 6,141 575,933 (318,818) 21,023 43,704 (6,442) (704) (192,715) (11,578) 10,660 121,063 (37,544) 83,519 83,519 83,519 192,715 14,190 206,905 11,578 2,404 13,982 10 $ 163,293 1,104 $ 164,397 $ $ 9,610 369 9,979 (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 year ended January 31, 2007, one equity method property was sold Midtown Plaza, resulting in a pre-tax gain on disposition of $7,662. For the year ended January 31, 2006, three equity method investments were sold including Flower Park Plaza, Showcase and Colony Place, resulting in a pre-tax gain on disposition of $21,023. Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Retail Lease Expirations as of January 31, 2007 AVERAGE BASE RENT PER SQUARE FEET EXPIRING (3) $ 22.81 27.28 25.28 29.83 29.22 27.42 30.31 27.77 29.53 38.49 19.17 26.35 EXPIRATION YEAR 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thereafter Total (1) (2) NUMBER OF EXPIRING LEASES 187 183 256 225 340 136 142 164 178 251 110 2,172 SQUARE FEET OF EXPIRING LEASES (3) 550,515 642,023 815,898 614,631 1,275,549 700,286 605,902 664,014 752,914 1,251,435 3,524,421 11,397,588 PERCENTAGE OF TOTAL LEASED GLA (1) 4.83 % 5.63 7.16 5.39 11.19 6.14 5.32 5.83 6.61 10.98 30.92 100.00 % NET BASE RENT EXPIRING (2) $ 9,839,783 13,490,698 15,635,289 14,626,649 32,099,720 15,704,759 17,261,556 12,980,802 18,903,884 33,915,256 59,258,125 243,716,521 PERCENTAGE OF TOTAL BASE RENT 4.03 % 5.54 6.42 6.00 13.17 6.44 7.08 5.33 7.76 13.92 24.31 100.00 % $ $ (3) GLA = Gross Leasable Area. Net base rent expiring is an operating statistic and is not comparable to rental revenue, a GAAP financial measure. The primary differences arise because net base rent is determined using the tenant’s contractual rental agreements at the Company’s ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of contingent rental payments, which are not reasonably estimatable, and straightline rent. Square feet of expiring leases and average base rent per square feet are operating statistics that represent 100% of the square footage and base rental income per square foot from expiring leases. 11 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Office Lease Expirations as of January 31, 2007 AVERAGE BASE RENT PER SQUARE FEET EXPIRING (3) $ 22.38 21.80 25.25 24.74 28.37 29.95 24.84 28.36 19.73 23.33 30.31 27.16 EXPIRATION YEAR 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thereafter Total (1) (2) NUMBER OF EXPIRING LEASES 72 72 53 45 28 20 22 9 5 11 35 372 SQUARE FEET OF EXPIRING LEASES (3) 528,288 530,451 447,779 986,907 495,749 832,718 732,407 535,175 189,840 471,699 3,159,976 8,910,989 PERCENTAGE OF TOTAL LEASED GLA (1) 5.93 5.95 5.03 11.08 5.56 9.34 8.22 6.01 2.13 5.29 35.46 100.00 % $ NET BASE RENT EXPIRING (2) 8,755,715 9,567,521 9,198,728 18,635,667 9,978,116 24,372,858 16,997,146 11,816,486 2,381,720 9,571,272 87,541,806 208,817,035 PERCENTAGE OF TOTAL BASE RENT 4.20 % 4.58 4.41 8.92 4.78 11.67 8.14 5.66 1.14 4.58 41.92 100.00 % % $ $ (3) GLA = Gross Leasable Area. Net base rent expiring is an operating statistic and is not comparable to rental revenue, a GAAP financial measure. The primary differences arise because net base rent is determined using the tenant’s contractual rental agreements at the Company’s ownership share of the base rental income from expiring leases as determined within the rent agreement and it does not include adjustments such as the impact of contingent rental payments, which are not reasonably estimatable, and straightline rent. 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. 12 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Schedule of Significant Retail Tenants as of January 31, 2007 (Based on net base rent 1% or greater of the Company’s ownership share) PERCENTAGE OF TOTAL RETAIL SQUARE FEET 4.06 3.33 2.59 2.47 2.39 2.33 1.99 1.78 1.75 1.26 1.08 1.02 26.05 73.95 100.00 % % TENANT AMC Entertainment, Inc.................................................... Regal Entertainment Group ............................................... The Gap ............................................................................. The Home Depot................................................................ TJX Companies ................................................................. The Limited ....................................................................... Dick’s Sporting Goods ...................................................... Abercrombie & Fitch Stores, Inc. ...................................... Circuit City Stores, Inc. ..................................................... Footlocker, Inc................................................................... Pathmark Stores, Inc.......................................................... Ahold USA (Stop & Shop) ................................................ Subtotal.............................................................................. All Others .......................................................................... Total .................................................................................. NUMBER OF LEASES 5 5 23 2 8 41 3 27 6 39 2 2 163 2,009 2,172 LEASED SQUARE FEET 462,863 379,072 295,345 282,000 272,554 265,927 226,408 203,427 199,107 143,467 123,500 115,861 2,969,531 8,428,057 11,397,588 13 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Schedule of Significant Office Tenants as of January 31, 2007 (Based on net base rent 2% or greater of the Company’s ownership share) PERCENTAGE OF TOTAL OFFICE SQUARE FEET 9.99 8.06 6.64 4.99 4.84 4.40 3.76 3.68 3.63 3.28 2.36 1.53 1.36 58.52 41.48 100.00 % % TENANT City of New York ............................................................. Millennium Pharmaceuticals, Inc. ................................... U.S. Government ............................................................. Morgan Stanley & Co. ..................................................... Securities Industry Automation Corp. .............................. Wellchoice, Inc. ............................................................... Keyspan Energy................................................................ Forest City Enterprises, Inc. (1) ......................................... Bank of New York............................................................ Bear Stearns...................................................................... Alkermes, Inc. .................................................................. Partners Health Care System, Inc. ................................... University of Pennsylvania............................................... Subtotal............................................................................. All Others ......................................................................... Total ................................................................................. (1) All intercompany rental income is eliminated in consolidation. LEASED SQUARE FEET 890,185 718,576 591,374 444,685 431,036 392,514 335,318 328,021 323,043 292,142 210,248 136,150 121,630 5,214,922 3,696,067 8,910,989 14 Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Development Pipeline January 31, 2007 2006 Openings and Acquisitions (14) Cost at FCE Pro-Rata Share (Non-GAAP)(b) (2)X(3) Property Retail Centers: Northfield at Stapleton Metreon (c) San Francisco Centre (c) Location Dev.(D) Acq.(A) Date Opened/ Acquired FCE Legal Pro-Rata Ownership%(i) FCE % (i) (1) (2) Cost at Full Consolidation (GAAP)(a) Total Cost at 100% (3) (in millions) Sq. Ft./ No. of Units Gross Leasable Area Denver, CO San Francisco, CA San Francisco, CA D A/D A/D Q4-05/Q1-06/ Q3-06 Q1-06 Q3-06 95.0% 50.0% 50.0% 97.9% 50.0% 50.0% $ $ 182.5 0.0 0.0 182.5 5.1 0.0 0.0 10.3 31.1 23.3 35.2 105.0 109.5 16.0 4.8 130.3 $ $ $ 182.5 40.0 598.0 820.5 5.1 10.7 28.0 10.3 31.1 23.3 35.2 143.7 109.5 16.0 4.8 130.3 $ $ $ 178.5 20.0 299.0 497.5 5.1 5.1 14.0 9.3 31.1 23.3 35.2 123.1 109.5 16.0 4.8 130.3 1,170,000 290,000 1,462,000 2,922,000 40,000 88,000 87,000 45,000 225,000 127,000 142,000 754,000 411 91 12 514 560,000 (g) 290,000 812,000 (h) 1,662,000 Office: Resurrection Health Care Advent Solar (c) Bulletin Building (c) Stapleton Medical Office Building Illinois Science and Technology Park – Building A Illinois Science and Technology Park – Building P Edgeworth Building Residential: Sky55 1251 S. Michigan Cutters Ridge at Tobacco Row Skokie, IL Albuquerque, NM San Francisco, CA Denver, CO Skokie, IL Skokie, IL Richmond, VA A D A/D D A/D A/D D Q1-06 Q3-06 Q3-06 Q3-06 Q4-06 Q4-06 Q4-06 100.0% 47.5% 50.0% 90.0% 100.0% 100.0% 100.0% 100.0% 47.5% 50.0% 90.0% 100.0% 100.0% 100.0% $ $ $ $ $ $ $ $ 15 Chicago, IL Chicago, IL Richmond, VA D D D Q1-06 Q1-06 Q4-06 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% $ $ Units Sold at 1/31/07 Condominiums: 1100 Wilshire (c) Los Angeles, CA D Q4-06 40.0% 40.0% $ $ $ $ 0.0 417.8 0.0 417.8 $ 132.0 $ $ $ $ 52.8 803.7 52.8 750.9 228 139 Total openings (d) LESS: Above properties to be sold as condominiums Total Openings less Condominiums $ 1,226.5 $ 132.0 $ 1,094.5 Residential Phased-In Units (c)(e) Arbor Glenn Woodgate/Evergreen Farms Pine Ridge Expansion Cobblestone Court Total (f) Twinsburg, OH Olmsted Township, OH Willoughby Hills, OH Painesville, OH D D D D 2004-07 2004-06 2005-07 2006-08 50.0% 33.0% 50.0% 50.0% 50.0% 33.0% 50.0% 50.0% $ 0.0 0.0 0.0 0.0 0.0 $ 18.4 22.0 16.4 24.6 81.4 $ 9.2 7.3 8.2 12.3 37.0 Opened in ’06 / Total 48 / 288 144 / 348 53 / 162 112 / 304 357 / 1,102 $ $ $ See attached footnotes. Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Development Pipeline January 31, 2007 Under Construction or to be Acquired (18) FCE Legal Ownership%(i) (1) Cost at FCE Pro-Rata Share (Non-GAAP)(b) (2)X(3) Property Retail Centers: Promenade Bolingbrook Rancho Cucamonga Leggio Orchard Town Center Shops at Wiregrass (c) East River Plaza (c) Location Dev.(D) Acq.(A) Anticipated Opening Pro-Rata FCE % (i) (2) Cost at Full Consolidation (GAAP)(a) Total Cost at 100% (3) (in millions) Total Sq. Ft./ No. of Units Gross Leasable Area PreLeased % Bolingbrook, IL Rancho Cucamonga, CA Westminster, CO Tampa, FL Manhattan, NY D D D D D Q1-07 Q2-07 2008 Q3-08 Q3-08 100.0% 80.0% 100.0% 50.0% 35.0% 100.0% 80.0% 100.0% 66.7% 50.0% $ $ Office: New York Times Illinois Science and Technology Park– Building Q Johns Hopkins – 855 North Wolfe Street 135.0 41.2 143.0 0.0 0.0 319.2 $ $ 135.0 41.2 143.0 123.7 347.0 789.9 $ $ 135.0 33.0 143.0 82.5 173.5 567.0 736,000 180,000 971,000 530,000 514,000 2,931,000 409,000 (l) 180,000 557,000 (m) 380,000 514,000 2,040,000 72% 100% 28% 50% 64% Manhattan, NY Skokie, IL East Baltimore, MD D A/D D Q3-07 Q3-07 Q1-08 70.0% 100.0% 76.6% 79.5% 100.0% 76.6% $ 517.5 46.4 102.2 666.1 $ 517.5 46.4 102.2 666.1 $ 411.4 46.4 78.3 536.1 736,000 (n) 160,000 278,000 1,174,000 80% 16% 36% $ Residential: Sterling Glen of Roslyn (o) Stapleton Town Center – Botanica Phase II Uptown Apartments (c) Ohana Military Communities, Hawaii Increment I (c) (e) Dallas Mercantile Lucky Strike Military Housing – Navy Midwest (c) Military Housing – Marines, Hawaii Increment II (c) Military Housing – Navy, Hawaii Increment III (c) $ $ Roslyn, NY Denver, CO Oakland, CA Honolulu, HI Dallas, TX Richmond, VA Chicago, IL Honolulu, HI Honolulu, HI D D D D D D D D D Q2-07 Q3-07 Q2-08 2005-2008 Q1-08/Q3-08 Q1-08 Q1-09 2007-2010 2007-2010 40.0% 90.0% 50.0% 10.0% 100.0% 100.0% 25.0% 10.0% 10.0% 100.0% 90.0% 50.0% 10.0% 100.0% 100.0% 25.0% 10.0% 10.0% $ 79.7 26.3 0.0 0.0 132.6 37.8 0.0 0.0 0.0 276.4 $ 79.7 26.3 200.3 316.5 132.6 37.8 264.9 294.7 547.8 1,900.6 $ 79.7 23.7 100.2 31.7 132.6 37.8 66.2 29.5 54.8 556.2 158 154 665 1,952 366 (p) 131 1,658 1,175 2,519 8,778 Units Sold at 1/31/07 16 $ $ $ Condominiums: Mercury (c) Los Angeles, CA D Q3-07 50.0% 50.0% $ $ $ 0.0 1,261.7 0.0 1,261.7 $ $ $ 150.6 3,507.2 150.6 3,356.6 $ $ $ 75.3 1,734.6 75.3 1,659.3 238 62 Total Under Construction (j) LESS: Above properties to be sold as condominiums Under Construction less Condominiums Residential Phased-In Units Under Construction:(c) (e) Arbor Glen Twinsburg, OH Pine Ridge Expansion Willoughby Hills, OH Cobblestone Court Painesville, OH Sutton Landing Brimfield, OH Stratford Crossing Wadsworth, OH Total (k) D D D D D 2004-07 2005-07 2006-08 2007-08 2007-09 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% $ 0.0 0.0 0.0 0.0 0.0 0.0 $ 18.4 16.4 24.6 15.9 24.1 99.4 $ 9.2 8.2 12.3 8.0 12.1 49.8 Under Const./Total 48 / 288 40 / 162 192 / 304 132 / 216 108 / 348 520 / 1,318 $ $ $ See attached footnotes. Forest City Enterprises, Inc. and Subsidiaries Supplemental Operating Information Development Pipeline January 31, 2007 Footnotes (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) 17 (k) (l) (m) (n) (o) (p) 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”). 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. 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. The difference between the full consolidation amount (GAAP) of $417.8 million of cost to the Company’s pro-rata share (a non-GAAP measure) of $803.7 million of cost consists of a reduction to full consolidation for minority interest of $5.0 million of cost and the addition of its share of cost for unconsolidated investments of $390.9 million. Phased-in openings. Costs are representative of the total project. The difference between the full consolidation cost amount (GAAP) of $-0- million to the Company’s pro-rata share (a non-GAAP measure) of $37.0 million of cost consists of the Company’s share of cost for unconsolidated investments of $37.0 million. Includes all phases of Northfield at Stapleton including Phase I which opened in Q4-05. Also, includes 34,000 square feet of office space. Includes San Francisco Centre and Emporium which were previously reported separately. Includes 235,000 square feet of office space. 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. The Company consolidates its investments in these projects in accordance with FIN No. 46 (R) at a consolidation percentage that is reflected in the Pro-Rata FCE % column. The difference between the full consolidation cost amount (GAAP) of $1,261.7 million to the Company’s pro-rata share (a non-GAAP measure) of $1,734.6 million of cost consists of a reduction to full consolidation for minority interest of $140.8 million of cost and the addition of its share of cost for unconsolidated investments of $613.7 million. The difference between the full consolidation cost amount (GAAP) of $-0- million to the Company’s pro-rata share (a non-GAAP measure) of $49.8 million of cost consists of Forest City’s share of cost for unconsolidated investments of $49.8 million. Includes 39,000 square feet of office space. 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. Includes 23,000 square feet of retail space. Supported-living property. Project includes 18,000 square feet of retail space. Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Mortgage Financings Our primary capital strategy seeks to isolate the financial risk at the property level to maximize returns and reduce risk on and of our equity capital. Our mortgage debt is nonrecourse, including our construction loans. We operate as a C-corporation and retain substantially all of our internally generated cash flows. We recycle this cash flow, together with refinancing and property sale proceeds to fund new development and acquisitions that drive favorable returns for our shareholders. This strategy provides us with the necessary liquidity to take advantage of investment opportunities. We use taxable and tax-exempt nonrecourse debt for our real estate projects. For those operating projects financed with taxable debt, we generally seek long-term, fixed-rate financing for those real estate project loans which mature within the next 12 months, as well as those real estate projects which are projected to open and achieve stabilized operations during that same time frame. For real estate projects financed with tax-exempt debt, we generally utilize variable-rate debt. For construction loans, we generally pursue variablerate financings with maturities ranging from two to five years. We are actively working to extend the maturities and/or refinance the nonrecourse debt that is coming due in 2007 and 2008. During the year ended January 31, 2007, we completed the following financings: Plus Unconsolidated Investments at Pro-Rata 288,916 233,325 93,210 615,451 Purpose of Financing Full Consolidation Less Minority Interest Pro-Rata Consolidation $ 932,949 505,876 406,262 1,845,087 (in thousands) Refinancings ........................................................................ $ Development projects - commitment................................... Loan extensions/additional fundings ................................... $ 658,033 $ 319,290 318,616 1,295,939 $ 14,000 $ 46,739 5,564 66,303 $ $ 18 Scheduled Maturities Table: Nonrecourse Mortgage Debt (dollars in thousands) As of January 31, 2007 Fiscal Year Ending January 31, 2008 Full Consolidation Less Minority Interest Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation Full Consolidation Fiscal Year Ending January 31, 2009 Less Minority Interest Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation Fixed: Fixed-rate debt ............................... $ Weighted average rate.................... Variable: Variable-rate debt........................... Weighted average rate.................... Tax-Exempt.................................... Weighted average rate.................... Total variable-rate debt.................. Total Nonrecourse Mortgage Debt .................................................. $ Weighted Average Rate ................... 161,725 6.78 $ % 18,775 $ 6.78 % 63,237 7.53 $ % 206,187 7.01 % $ 104,983 6.65 % $ 5,039 6.81 % $ 86,564 6.77 % $ 186,508 6.70 % 448,545 7.39 191,609 4.70 640,154 % 55,033 8.68 % 2,900 4.38 % 57,933 105,713 7.79 33,599 5.03 139,312 % 499,225 7.33 % 222,308 4.75 % 721,533 302,878 6.68 % 61,565 4.50 % 364,443 676 7.17 % 676 27,459 6.98 % 103 4.14 % 27,562 329,661 6.70 % 61,668 4.50 % 391,329 % % 801,879 $ 6.62 % 76,708 $ 8.06 % 202,549 $ 7.25 % 927,720 6.64 % $ 469,426 6.39 % $ 5,715 $ 6.85 % 114,126 $ 6.82 % 577,837 6.47 % Fiscal Year Ending January 31, 2010 Full Consolidation Less Minority Interest Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation Full Consolidation Fiscal Year Ending January 31, 2011 Less Minority Interest Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation Fixed: Fixed-rate debt ............................... $ Weighted average rate.................... Variable: Variable-rate debt........................... Weighted average rate.................... Tax-Exempt.................................... Weighted average rate.................... Total variable-rate debt .................. Total Nonrecourse Mortgage Debt .................................................. $ Weighted Average Rate ................... 371,240 7.09 $ % 29,568 7.38 $ % 43,112 6.67 $ % 384,784 7.02 % $ 207,294 7.03 % $ 16,464 2.62 % $ 19,932 7.27 % $ 210,762 7.39 % 19 8,184 6.01 206,335 4.23 214,519 % 6,000 4.18 6,000 19,510 7.47 120,113 4.11 139,623 % 27,694 7.03 % 320,448 4.19 % 348,142 48,258 5.26 % 31,530 4.47 % 79,788 - 11,121 8.62 % 6,118 4.16 % 17,239 59,379 5.89 % 37,648 4.42 % 97,027 % % % 585,759 $ 6.07 % 35,568 $ 6.84 % 182,735 $ 5.07 % 732,926 5.78 % $ 287,082 6.45 % $ 16,464 $ 2.62 % 37,171 $ 7.16 % 307,789 6.74 % Scheduled Maturities Table: Nonrecourse Mortgage Debt (dollars in thousands) (continued) As of January 31, 2007 Fiscal Year Ending January 31, 2012 Full Consolidation Less Minority Interest Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation Full Consolidation Less Minority Interest Thereafter Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation Fixed: Fixed-rate debt ............................... $ Weighted average rate.................... Variable: Variable-rate debt........................... Weighted average rate.................... Tax-Exempt.................................... Weighted average rate.................... Total variable-rate debt .................. Total Nonrecourse Mortgage Debt ............................................. $ Weighted Average Rate ................... 360,269 7.12 $ % 19,539 7.22 $ % 33,816 6.97 % $ 374,546 7.10 % $ 2,524,856 5.77 $ % 156,395 5.91 $ % 603,328 $ 5.66 % 2,971,789 5.74 % 3,123 5.29 14,810 4.16 17,933 % - 3,795 7.14 % 3,795 6,918 6.31 % 14,810 4.16 % 21,728 59,143 5.01 232,025 4.66 291,168 % 9,881 4.37 9,881 86,691 6.48 % 43,998 5.13 % 130,689 145,834 5.89 % 266,142 4.75 % 411,976 % % % 378,202 $ 6.99 % 19,539 7.22 $ % 37,611 $ 6.98 % 396,274 6.98 % $ 2,816,024 5.67 $ % 166,276 5.82 $ % 734,017 $ 5.72 % 3,383,765 5.67 % Total Full Consolidation Less Minority Interest Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation Fixed: Fixed-rate debt ............................... $ Weighted average rate.................... Variable: Variable-rate debt........................... Weighted average rate.................... Tax-Exempt.................................... Weighted average rate.................... Total variable-rate debt .................. Total Nonrecourse Mortgage Debt ............................................. $ Weighted Average Rate ................... 20 3,730,367 6.17 % $ 245,780 6.06 % $ 849,989 6.05 % $ 4,334,576 6.16 % 870,131 6.84 % 737,874 4.52 % 1,608,005 55,709 8.67 % 18,781 4.31 % 74,490 254,289 7.26 % 203,931 4.36 % 458,220 1,068,711 6.85 % 923,024 4.49 % 1,991,735 5,338,372 $ 6.05 % 320,270 $ 6.41 % 1,308,209 $ 6.02 % 6,326,311 6.03 % Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information As discussed on page 2, we present certain financial amounts under the pro-rata consolidation method (a non-GAAP measure). This information is useful to our investors because we believe that it more accurately reflects the manner in which we operate our business. This is because, in line with industry practice, we have a large number of investments in which our economic ownership is less than 100% as a means of procuring opportunities and sharing risk. The tables below present amounts for both full consolidation, a GAAP measure, and pro-rata consolidation, providing a reconciliation of the difference between the two methods. Under the pro-rata consolidation method, we present our partnership investments proportionate to our share of ownership for each line item of our consolidated financial statements. Under full consolidation, partnership assets and liabilities are reported as consolidated at 100% if deemed to be under our control or if we are deemed to be the primary beneficiary for our investments in a VIE. Partnership assets and liabilities are reported on the equity or cost method of accounting if we do not have control, or, in the case of investments in VIEs, the Company is not deemed the primary beneficiary. Consolidated Balance Sheet Information – January 31, 2007 (unaudited) Full Consolidation (GAAP) Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation (Non-GAAP) Less Minority Interest (in thousands) Assets Real Estate Completed rental properties...................................... $ Projects under development...................................... Land held for development or sale ........................... Total Real Estate .................................................. Less accumulated depreciation ................................. Real Estate, net ..................................................... Cash and equivalents.................................................... Restricted cash ............................................................. Notes and accounts receivable, net............................... Investments in and advances to affiliates ..................... Other assets .................................................................. Total Assets ......................................................... $ Liabilities and Shareholders’ Equity Liabilities Mortgage debt, nonrecourse ......................................... $ Notes payable ............................................................... Bank revolving credit facility....................................... Senior and subordinated debt ....................................... Accounts payable and accrued expenses ...................... Deferred income taxes.................................................. Total Liabilities................................................... Minority Interest........................................................... Total Shareholders’ Equity................................ Total Liabilities and Shareholders’ Equity ...... $ 6,659,054 1,396,083 174,136 8,229,273 (1,085,978) 7,143,295 254,213 292,461 287,615 333,782 670,238 8,981,604 $ 346,323 126,660 6,032 479,015 (70,863) 408,152 24,545 25,028 26,619 29,260 $ 1,207,591 298,665 78,578 1,584,834 (286,054) 1,298,780 32,997 168,062 9,458 (95,710) 95,834 $ 7,520,322 1,568,088 246,682 9,335,092 (1,301,169) 8,033,923 262,665 435,495 270,454 238,072 736,812 $ 513,604 $ 1,509,421 $ 9,977,421 5,338,372 96,127 886,900 772,964 486,329 7,580,692 375,101 1,025,811 8,981,604 $ 320,270 1,167 15,711 337,148 176,456 - $ 1,308,209 88,244 112,968 1,509,421 - $ 6,326,311 183,204 886,900 870,221 486,329 8,752,965 198,645 1,025,811 $ 513,604 $ 1,509,421 $ 9,977,421 21 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Consolidated Balance Sheet Information – January 31, 2006 (unaudited) Full Consolidation (GAAP) Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation (Non-GAAP) Less Minority Interest (in thousands) Assets Real Estate Completed rental properties...................................... $ Projects under development...................................... Land held for development or sale ........................... Total Real Estate .................................................. Less accumulated depreciation ................................. Real Estate, net ..................................................... Cash and equivalents.................................................... Restricted cash ............................................................. Notes and accounts receivable, net............................... Investments in and advances to affiliates ..................... Other assets .................................................................. Total Assets ......................................................... $ Liabilities and Shareholders’ Equity Liabilities Mortgage debt, nonrecourse ......................................... $ Notes payable ............................................................... Bank revolving credit facility....................................... Senior and subordinated debt ....................................... Accounts payable and accrued expenses ...................... Deferred income taxes.................................................. Total Liabilities................................................... Minority Interest........................................................... Total Shareholders’ Equity................................ Total Liabilities and Shareholders’ Equity ...... $ 6,162,995 886,256 105,875 7,155,126 (986,594) 6,168,532 254,734 430,264 265,264 361,942 509,605 7,990,341 $ 765,827 84,241 3,420 853,488 (147,375) 706,113 33,026 31,942 30,562 37,042 $ 931,183 394,648 97,566 1,423,397 (269,412) 1,153,985 13,522 51,241 (2,045) (155,245) 93,873 $ 6,328,351 1,196,663 200,021 7,725,035 (1,108,631) 6,616,404 235,230 449,563 232,657 206,697 566,436 $ 838,685 $ 1,155,331 $ 8,306,987 5,159,432 73,823 82,500 599,400 690,300 387,788 6,993,243 102,716 894,382 7,990,341 $ 625,600 19,214 91,155 735,969 102,716 - $ 966,107 91,710 97,514 1,155,331 - $ 5,499,939 146,319 82,500 599,400 696,659 387,788 7,412,605 894,382 $ 838,685 $ 1,155,331 $ 8,306,987 22 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Consolidated Earnings Information – Three Months Ended January 31, 2007 (unaudited) Full Consolidation (GAAP) Less Minority Interest Plus Unconsolidated Investments at Pro-Rata (in thousands) Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Revenues from real estate operations ........................................... $ Expenses Operating expenses ...................................................................... Depreciation and amortization ..................................................... Provision for decline in real estate ............................................... 360,379 $ 20,389 $ 145,274 $ 2,119 $ 487,383 225,465 52,793 278,258 (83,909) (2,695) 31,763 32,731 60,011 7,515 3,097 10,612 (4,650) (161) 90 5,056 94,094 8,768 102,862 (15,110) (680) 2,501 (29,123) - 1,400 14 1,414 (1,093) (11) 878 64,641 65,120 313,444 58,478 371,922 (95,462) (3,225) 35,052 3,608 64,641 120,075 Interest expense, including early extinguishment of debt ................. Amortization of mortgage procurement costs................................... Interest and other income ................................................................. Equity in earnings of unconsolidated entities ................................... Gain on disposition of rental properties and Lumber Group ............ Earnings before income taxes........................................................ Income tax expense (benefit) Current ......................................................................................... Deferred ....................................................................................... 1,119 23,165 24,284 35,727 (5,056) 30,671 5,056 (5,056) - - (3,320) 28,485 25,165 39,955 39,955 (2,201) 51,650 49,449 70,626 70,626 Earnings before minority interest and discontinued operations ........ Minority interest............................................................................... Earnings from continuing operations ........................................... Discontinued operations, net of tax and minority interest: Operating earnings from rental properties.................................... Gain on disposition of rental properties ....................................... Gain on disposition of Lumber Group.......................................... 292 39,197 466 39,955 70,626 $ $ $ (292) (39,197) (466) (39,955) $ 70,626 Net earnings .................................................................................... $ 23 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Consolidated Earnings Information – Year Ended January 31, 2007 (unaudited) Full Consolidation (GAAP) Less Minority Interest Plus Unconsolidated Investments at Pro-Rata (in thousands) Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Revenues from real estate operations .......................................... $ Expenses Operating expenses ..................................................................... Depreciation and amortization .................................................... Provision for decline in real estate .............................................. 1,168,835 $ 98,001 $ 355,457 $ 58,198 $ 1,484,489 709,343 181,129 1,923 892,395 (295,978) (10,903) 61,737 48,542 79,838 46,132 13,811 59,943 (24,557) (1,077) 2,763 15,187 234,796 41,953 400 277,149 (55,862) (2,131) 3,301 (31,278) 7,662 - 37,497 6,219 43,716 (10,053) (192) 1,504 233,852 239,593 935,504 215,490 2,323 1,153,317 (337,336) (12,149) 63,779 17,264 241,514 304,244 Interest expense, including early extinguishment of debt ................ Amortization of mortgage procurement costs.................................. Interest and other income ................................................................ Equity in earnings of unconsolidated entities (Note 1).................... Gain on disposition of rental properties and Lumber Group ........... Earnings before income taxes....................................................... Income tax expense (benefit) Current ........................................................................................ Deferred ...................................................................................... (13,428) 47,840 34,412 45,426 (15,187) 30,239 15,187 (15,187) - - 15,371 77,210 92,581 147,012 147,012 1,943 125,050 126,993 177,251 177,251 Earnings before minority interest and discontinued operations ....... Minority interest.............................................................................. Earnings from continuing operations (Note 1) ............................ Discontinued operations, net of tax and minority interest: Operating earnings from rental properties................................... Gain on disposition of rental properties ...................................... Gain on disposition of Lumber Group......................................... 3,520 143,026 466 147,012 177,251 $ $ $ (3,520) (143,026) (466) (147,012) $ 177,251 Net earnings ................................................................................... $ Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the year ended January 31, 2007, one equity method investment was sold, Midtown Plaza. A pre-tax gain of $7,662 ($4,700 net of tax) has been reported in equity in earnings of unconsolidated entities in the Consolidated Statements of Earnings, and therefore is included in earnings from continuing operations. 24 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Consolidated Earnings Information – Three Months Ended January 31, 2006 (unaudited) Full Consolidation (GAAP) Less Minority Interest Plus Unconsolidated Investments at Pro-Rata (in thousands) $ 86,592 Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Revenues from real estate operations .......................................... $ Expenses Operating expenses ..................................................................... Depreciation and amortization .................................................... Provision for decline in real estate .............................................. 312,970 $ 44,017 $ 25,372 $ 380,917 173,246 46,124 1,774 221,144 (69,954) (2,534) 9,292 9,172 (100) 37,702 13,598 2,233 26 15,857 (6,488) (84) 959 22,547 52,252 10,308 62,560 (13,868) (1,920) 713 (8,957) - 17,130 3,599 20,729 (9,740) (214) 173 33,722 28,584 229,030 57,798 1,748 288,576 (87,074) (4,584) 9,219 215 33,622 43,739 Interest expense, including early extinguishment of debt ................ Amortization of mortgage procurement costs.................................. Interest and other income ................................................................ Equity in earnings of unconsolidated entities ................................. Gain (loss) on disposition of rental properties and other investments................................................................................ Earnings before income taxes....................................................... Income tax expense (benefit) Current ........................................................................................ Deferred ...................................................................................... (3,057) 7,512 4,455 33,247 (22,547) 10,700 22,547 (22,547) - - (2,474) 13,523 11,049 17,535 17,535 (5,531) 21,035 15,504 28,235 28,235 Earnings before minority interest and discontinued operations ....... Minority interest.............................................................................. Earnings from continuing operations ......................................... Discontinued operations, net of tax and minority interest: Operating (loss) from rental properties ....................................... Gain on disposition of rental properties ...................................... (3,156) 20,691 17,535 28,235 $ $ $ 3,156 (20,691) (17,535) $ 28,235 Net earnings ................................................................................... $ 25 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Consolidated Earnings Information – Year Ended January 31, 2006 (unaudited) Full Consolidation (GAAP) Less Minority Interest Plus Unconsolidated Investments at Pro-Rata (in thousands) $ 318,282 Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Revenues from real estate operations .......................................... $ Expenses Operating expenses ..................................................................... Depreciation and amortization .................................................... Provision for decline in real estate .............................................. 1,128,472 $ 129,043 $ 115,392 $ 1,433,103 644,765 164,397 7,874 817,036 (264,834) (9,979) 27,773 55,201 506 120,103 55,114 15,341 1,432 71,887 (28,667) (1,066) 2,604 30,027 194,900 39,991 704 235,595 (52,589) (3,279) 1,218 (49,060) 21,023 - 78,436 17,858 96,294 (30,062) (1,790) 543 43,198 30,987 862,987 206,905 7,146 1,077,038 (318,818) (13,982) 26,930 6,141 64,727 121,063 Interest expense, including early extinguishment of debt ................ Amortization of mortgage procurement costs.................................. Interest and other income ................................................................ Equity in earnings of unconsolidated entities (Note 1).................... Gain on disposition of rental properties and other investments ....... Earnings before income taxes....................................................... Income tax expense (benefit) Current ........................................................................................ Deferred ...................................................................................... 4,000 21,564 25,564 94,539 (30,027) 64,512 30,027 (30,027) - - (6,960) 18,940 11,980 19,007 19,007 (2,960) 40,504 37,544 83,519 83,519 Earnings before minority interest and discontinued operations ....... Minority interest.............................................................................. Earnings from continuing operations (Note 1) ............................ Discontinued operations, net of tax and minority interest: Operating (loss) from rental properties ....................................... Gain on disposition of rental properties ...................................... (7,498) 26,505 19,007 83,519 $ $ $ 7,498 (26,505) (19,007) $ 83,519 Net earnings ................................................................................... $ Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the year ended January 31, 2006, three equity method investments were sold, Showcase, Colony Place and Flower Park Plaza. A pre-tax gain of $21,023 ($12,900 net of tax) has been reported in equity in earnings of unconsolidated entities in the Consolidated Statements of Earnings, and therefore is included in earnings from continuing operations. 26 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information The following schedules present information on investments in and advances to affiliates. Investments in and Advances to Affiliates Included in Investments in and Advances to Affiliates in the Consolidated Balance Sheet Information tables are unconsolidated investments in entities which we do not control and/or are not the primary beneficiary, and which are accounted for under the equity method of accounting, as well as advances to partners and other affiliates. Following is a reconciliation of members’ and partners’ equity to our carrying value in the accompanying Consolidated Balance Sheet Information: January 31, 2007 (in thousands) 2006 $ 564,280 409,035 155,245 206,697 361,942 Members’ and partners’ equity as below .................................... Equity of other members and partners ........................................ Company’s investment in partnerships ....................................... Advances to and on behalf of other affiliates (1) ......................... Total investments in and advances to affiliates .................. (1) $ 592,681 496,971 95,710 238,072 333,782 $ $ As is customary within the real estate industry, the Company invests in certain projects through joint ventures. The Company provides funding for certain of its partners’ equity contributions. Historically, the most significant partnership for which the Company provides funding relates to Forest City Ratner Companies (“FCRC”), representing the Commercial Group’s New York City operations and one unconsolidated project reported in the Residential Group. The Company consolidates the majority of its investments in these Commercial Group projects. The Company’s partner, Bruce C. Ratner, is the President and Chief Executive Officer of FCRC and is the cousin to five executive officers of the Company. The FCRC portfolio became a wholly-owned subsidiary of the Company upon the issuance of the Class A Common Units in exchange for Bruce C. Ratner’s minority interests. At January 31, 2007 and 2006, amounts advanced for projects on behalf of this partner were $0 and $38,817, respectively, of the $238,072 and $206,697 presented above for “Advances to and on behalf of other affiliates.” These advances entitled the Company to a preferred return on and of the outstanding balances, which are payable solely from cash flows of each respective property, as well as a deficit restoration obligation provided by the partner. These advances were repaid upon the issuance of the Class A Common Units on November 8, 2006. Summarized financial information for the equity method investments is as follows: Combined (100%) (GAAP) 2006 2007 (in thousands) Year Ended January 31, Pro-Rata Share (Non-GAAP) 2006 2007 (in thousands) Balance sheet: Completed rental properties ....................................... $ Projects under development ....................................... Land held for development or sale............................. Accumulated depreciation.......................................... Restricted cash (2) ........................................................ Other assets ................................................................ Total assets ............................................................. $ Mortgage debt, nonrecourse (2) ................................... $ Other liabilities........................................................... Members’ and partners’ equity .................................. Total liabilities and members’/partners’ equity...... $ (2) 2,697,454 777,419 160,296 (554,910) 1,432,636 526,142 5,039,037 3,834,085 612,271 592,681 5,039,037 $ $ $ 1,946,922 854,316 181,315 (529,501) 317,850 469,676 3,240,578 2,145,146 531,152 564,280 3,240,578 $ $ $ 1,207,591 298,665 78,578 (286,054) 168,062 138,289 1,605,131 1,308,209 201,212 95,710 1,605,131 $ $ $ 931,183 394,648 97,566 (269,412) 51,241 105,350 1,310,576 966,107 189,224 155,245 1,310,576 $ $ $ The increase in restricted cash and nonrecourse debt is primarily related to bond proceeds held in escrow related to Phase 2 and Phase 3 of development at Ohana Military Communities. 27 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Investments in and Advances to Affiliates (continued) Combined (100%) (GAAP) 2006 2007 Pro-Rata Share (Non-GAAP) 2006 2007 Year Ended January 31, (in thousands) Operations: Revenues............................................................................................... $ Equity in earnings of unconsolidated entities on a pro-rata basis ......... Operating expenses............................................................................... Interest expense including early extinguishment of debt ...................... Provision for decline in real estate........................................................ Depreciation and amortization.............................................................. Interest income...................................................................................... Earnings from continuing operations ................................................ Discontinued operations: Gain on disposition of rental properties (3) ............................................ Operating earnings (loss) from rental properties................................... 797,745 $ 686,455 (425,308) (119,470) (112,312) 9,472 38,837 $ 354,935 17,264 (234,685) (55,566) (300) (43,996) 3,277 40,929 $ 314,702 6,141 (193,376) (51,002) (42,813) 1,064 34,716 (547,825) (145,755) (900) (110,587) 23,879 16,557 15,325 4 15,329 31,886 $ 85,802 (206) 85,596 124,433 $ 7,662 (49) 7,613 48,542 $ 21,023 (538) 20,485 55,201 Net Earnings (pre-tax)....................................................................... $ (3) The following table shows the detail of gain on disposition of rental properties that were held by equity method investments: Combined (100%) (GAAP) 2007 Year Ended January 31, 2006 2007 (in thousands) $ 71,005 10,703 4,094 85,802 $ 7,662 7,662 $ Pro-Rata Share (Non-GAAP) 2006 Midtown Plaza (Specialty Retail Center)......................................................... (Parma, Ohio) Showcase (Specialty Retail Center) ...................................................... (Las Vegas, Nevada) Colony Place (Apartments) ...................................................................(Fort Myers, Florida) Flower Park Plaza (Apartments) ....................................................... (Santa Ana, California) Total................................................................................................................................... $ $ 15,325 15,325 $ $ $ 13,145 5,352 2,526 21,023 28 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Real Estate and Related Nonrecourse Mortgage Debt January 31, 2007 Less Accumulated Depreciation Net Cost (in thousands) Nonrecourse Mortgage Debt Total Cost Full Consolidation: Completed rental properties Residential........................................................................ $ Commercial Retail centers ................................................................ Office and other buildings ............................................ Corporate and other equipment ........................................ Projects under development Residential Under construction........................................................ In development ............................................................ Commercial Retail centers Under construction.................................................... In development ......................................................... Office and other buildings Under construction.................................................... In development ......................................................... Land held for development or sale................................ Total real estate and mortgage debt ............................. $ Less Minority Interest: Completed rental properties Residential........................................................................ $ Commercial Retail centers ................................................................ Office and other buildings ............................................ Corporate and other equipment ........................................ Projects under development Residential Under construction........................................................ In development ............................................................. Commercial Retail centers Under construction.................................................... In development ......................................................... Office and other buildings Under construction.................................................... In development ......................................................... Land held for development or sale................................ Total real estate and mortgage debt ............................. $ 1,608,777 2,596,216 2,444,476 9,585 6,659,054 $ 207,792 333,875 538,765 5,546 1,085,978 $ 1,400,985 2,262,341 1,905,711 4,039 5,573,076 $ 1,109,476 2,094,902 1,548,345 4,752,723 109,118 221,107 - 109,118 221,107 70,927 63,000 159,065 133,610 446,167 327,016 1,396,083 174,136 8,229,273 $ 1,085,978 $ 159,065 133,610 446,167 327,016 1,396,083 174,136 7,143,295 $ 71,633 215,687 114,407 535,654 49,995 5,338,372 57,671 96,237 192,415 346,323 $ 6,971 9,273 54,619 70,863 $ 50,700 86,964 137,796 275,460 $ 48,550 94,052 121,607 264,209 - - - - 5,450 7,554 113,656 126,660 6,032 479,015 $ 70,863 $ 5,450 7,554 113,656 126,660 6,032 408,152 $ 6,400 427 46,983 53,810 2,251 320,270 29 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Real Estate and Related Nonrecourse Mortgage Debt (continued) January 31, 2007 Less Accumulated Depreciation Net Cost (in thousands) Total Cost Plus Unconsolidated Investments at Pro-Rata: Completed rental properties Residential........................................................................ $ Commercial Retail centers ................................................................ Office and other buildings ............................................ Corporate and other equipment ........................................ Projects under development Residential Under construction........................................................ In development ............................................................. Commercial Retail centers Under construction.................................................... In development ......................................................... Office and other buildings Under construction.................................................... In development ......................................................... Land held for development or sale................................ Total real estate and mortgage debt ............................. $ Pro-Rata Consolidation (Non-GAAP): Completed rental properties Residential........................................................................ $ Commercial Retail centers ................................................................ Office and other buildings ............................................ Corporate and other equipment ........................................ Projects under development Residential Under construction........................................................ In development ............................................................ Commercial Retail centers Under construction.................................................... In development ......................................................... Office and other buildings Under construction.................................................... In development ......................................................... Land held for development or sale................................ Total real estate and mortgage debt ............................. $ Nonrecourse Mortgage Debt 634,745 389,786 183,059 1 1,207,591 $ 182,008 41,157 62,889 286,054 $ 452,737 348,629 120,170 1 921,537 $ 543,823 387,053 102,693 1,033,569 132,243 6,728 - 132,243 6,728 153,085 - 77,452 51,922 83 30,237 298,665 78,578 1,584,834 $ 286,054 $ 77,452 51,922 83 30,237 298,665 78,578 1,298,780 $ 65,000 7,522 8,554 234,161 40,479 1,308,209 2,185,851 2,889,765 2,435,120 9,586 7,520,322 $ 382,829 365,759 547,035 5,546 1,301,169 $ 1,803,022 2,524,006 1,888,085 4,040 6,219,153 $ 1,604,749 2,387,903 1,529,431 5,522,083 241,361 227,835 - 241,361 227,835 224,012 63,000 231,067 185,532 438,696 243,597 1,568,088 246,682 9,335,092 $ 1,301,169 $ 231,067 185,532 438,696 243,597 1,568,088 246,682 8,033,923 $ 130,233 7,522 215,260 75,978 716,005 88,223 6,326,311 30 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Rental Properties Corporation (“Rental Properties”) is a wholly-owned subsidiary of Forest City Enterprises, Inc. engaged in the ownership, development, acquisition and management of real estate projects, including apartment complexes, regional malls and retail centers, hotels, office buildings and mixed-use facilities, as well as large land development projects. Consolidated Balance Sheet information and Consolidated Earnings information for Rental Properties and its subsidiaries follow. Forest City Rental Properties Corporation and Subsidiaries Consolidated Balance Sheet Information – January 31, 2007 (unaudited) Plus Unconsolidated Investments at Pro-Rata Full Consolidation (GAAP) Less Minority Interest Pro-Rata Consolidation (Non-GAAP) (in thousands) Assets Real Estate Completed rental properties ..................................... $ Projects under development ..................................... Land for development or sale ................................... Total Real Estate .................................................. Less accumulated depreciation................................. Real Estate, net ..................................................... Cash and equivalents.................................................... Restricted cash ............................................................. Notes and accounts receivable, net .............................. Investments in and advances to affiliates..................... Other assets .................................................................. Total Assets ......................................................... $ Liabilities and Shareholders’ Equity Liabilities Mortgage debt, nonrecourse......................................... $ Notes payable............................................................... Bank revolving credit facility ...................................... Senior and subordinated debt....................................... Accounts payable and accrued expenses (1) .................. Deferred income taxes ................................................. Total Liabilities................................................... Minority Interest .......................................................... Total Shareholders’ Equity ............................... Total Liabilities and Shareholders’ Equity ...... $ (1) 6,649,471 1,396,083 58,408 8,103,962 (1,080,432) 7,023,530 159,635 289,081 261,796 279,489 580,911 8,594,442 $ 346,323 126,660 5,517 478,500 (70,863) 407,637 24,532 25,028 25,477 29,260 $ 1,207,589 298,665 27,018 1,533,272 (286,054) 1,247,218 25,986 167,610 4,494 (69,604) 95,462 $ 7,510,737 1,568,088 79,909 9,158,734 (1,295,623) 7,863,111 161,089 431,663 240,813 209,885 647,113 $ 511,934 $ 1,471,166 $ 9,553,674 5,310,876 82,188 20,400 1,254,846 547,516 7,215,826 374,428 1,004,188 8,594,442 $ 320,270 1,167 14,714 336,151 175,783 - $ 1,279,543 86,251 105,372 1,471,166 - $ 6,270,149 167,272 20,400 1,345,504 547,516 8,350,841 198,645 1,004,188 $ 511,934 $ 1,471,166 $ 9,553,674 Included in the Full Consolidation balance is $635,013 of liabilities payable to Forest City Enterprises, Inc. 31 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Rental Properties Corporation and Subsidiaries Consolidated Balance Sheet Information – January 31, 2006 (unaudited) Plus Unconsolidated Investments at Pro-Rata Full Consolidation (GAAP) Less Minority Interest Pro-Rata Consolidation (Non-GAAP) (in thousands) Assets Real Estate Completed rental properties ..................................... $ Projects under development ..................................... Land held for development or sale ........................... Total Real Estate .................................................. Less accumulated depreciation................................. Real Estate, net ..................................................... Cash and equivalents.................................................... Restricted cash ............................................................. Notes and accounts receivable, net .............................. Investments in and advances to affiliates..................... Other assets .................................................................. Total Assets ......................................................... $ Liabilities and Shareholders’ Equity Liabilities Mortgage debt, nonrecourse......................................... $ Notes payable............................................................... Bank revolving credit facility ...................................... Senior and subordinated debt....................................... Accounts payable and accrued expenses (1) .................. Deferred income taxes ................................................. Total Liabilities................................................... Minority Interest .......................................................... Total Shareholders’ Equity ............................... Total Liabilities and Shareholders’ Equity ...... $ (1) 6,153,835 886,256 38,091 7,078,182 (982,249) 6,095,933 141,471 429,176 242,952 298,596 429,496 7,637,624 $ 765,827 84,241 3,420 853,488 (147,375) 706,113 33,026 31,942 30,562 37,042 $ 931,181 394,648 15,604 1,341,433 (269,412) 1,072,021 9,675 50,516 (3,885) (111,992) 93,415 $ 6,319,189 1,196,663 50,275 7,566,127 (1,104,286) 6,461,841 118,120 447,750 208,505 186,604 485,869 $ 838,685 $ 1,109,750 $ 7,908,689 5,130,324 61,879 82,500 20,400 985,788 428,453 6,709,344 102,716 825,564 7,637,624 $ 625,600 19,214 91,155 735,969 102,716 - $ 928,502 88,822 92,426 1,109,750 - $ 5,433,226 131,487 82,500 20,400 987,059 428,453 7,083,125 825,564 $ 838,685 $ 1,109,750 $ 7,908,689 Included in the Full Consolidation balance is $398,895 of liabilities payable to Forest City Enterprises, Inc. 32 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Rental Properties Corporation and Subsidiaries Consolidated Earnings Information – Year Ended January 31, 2007 (unaudited) Full Consolidation (GAAP) Revenues from real estate operations........................................................ $ Expenses Operating expenses ................................................................................... Depreciation and amortization .................................................................. Provision for decline in real estate............................................................ 1,118,688 $ Less Minority Interest 96,481 Plus Unconsolidated Investments at Pro-Rata (in thousands) $ 293,731 Plus Discontinued Operations $ 58,198 Pro-Rata Consolidation (Non-GAAP) $ 1,374,136 631,914 179,558 1,923 813,395 (292,273) (10,570) 59,528 28,896 90,874 45,038 13,811 58,849 (24,557) (1,076) 2,754 14,753 183,702 41,942 400 226,044 (55,071) (1,831) 3,116 (21,563) 7,662 - 37,497 6,219 43,716 (10,053) (192) 1,504 233,092 238,833 808,075 213,908 2,323 1,024,306 (332,840) (11,517) 61,394 7,333 240,754 314,954 Interest expense, including early extinguishment of debt............................. Amortization of mortgage procurement costs............................................... Interest and other income ............................................................................. Equity in earnings of unconsolidated entities (Note 1)................................. Gain on disposition of rental properties ....................................................... Earnings before income taxes..................................................................... Income tax expense (benefit) Current....................................................................................................... Deferred..................................................................................................... (6,505) 45,889 39,384 51,490 (14,753) 36,737 14,753 (14,753) - - 15,371 76,916 92,287 146,546 146,546 8,866 122,805 131,671 183,283 183,283 Earnings before minority interest and discontinued operations.................... Minority interest ............................................................................................ Earnings from continuing operations (Note 1) ......................................... Discontinued operations, net of tax and minority interest Operating earnings from rental properties ................................................ Gain on disposition of rental properties ................................................... 3,520 143,026 146,546 183,283 $ $ $ (3,520) (143,026) (146,546) $ 183,283 Net earnings.................................................................................................. $ Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the year ended January 31, 2007, one equity method investment was sold, Midtown Plaza. A pre-tax gain of $7,662 ($4,700 net of tax) has been reported in equity in earnings of unconsolidated entities in the Consolidated Statements of Earnings, and therefore is included in earnings from continuing operations. 33 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Rental Properties Corporation and Subsidiaries Consolidated Earnings Information – Year Ended January 31, 2006 (unaudited) Full Consolidation (GAAP) Less Minority Interest Plus Unconsolidated Investments at Pro-Rata (in thousands) $ 273,959 $ Plus Discontinued Operations Pro-Rata Consolidation (Non-GAAP) Revenues from real estate operations.......................................... $ Expenses Operating expenses ..................................................................... Depreciation and amortization .................................................... Provision for decline in real estate.............................................. 1,099,473 $ 129,043 115,392 $ 1,359,781 585,022 163,293 6,356 754,671 (261,013) (9,610) 26,031 34,588 134,798 55,114 15,341 1,432 71,887 (28,667) (1,066) 2,604 30,027 168,761 39,783 704 209,248 (52,269) (2,963) 1,078 (31,580) 21,023 - 78,436 17,858 96,294 (30,062) (1,790) 543 43,198 30,987 777,105 205,593 5,628 988,326 (314,677) (13,297) 25,048 3,008 64,221 135,758 Interest expense, including early extinguishment of debt............... Amortization of mortgage procurement costs................................. Interest and other income ............................................................... Equity in earnings of unconsolidated entities (Note 1)................... Gain on disposition of rental properties ......................................... Earnings before income taxes....................................................... Income tax expense (benefit) Current......................................................................................... Deferred....................................................................................... 2,968 25,963 28,931 105,867 (30,027) 75,840 30,027 (30,027) - - (6,960) 18,940 11,980 19,007 19,007 (3,992) 44,903 40,911 94,847 94,847 Earnings before minority interest and discontinued operations...... Minority interest .............................................................................. Earnings from continuing operations (Note 1) ........................... Discontinued operations, net of tax and minority interest Operating loss from rental properties ......................................... Gain on disposition of rental properties ..................................... (7,498) 26,505 19,007 94,847 $ $ $ 7,498 (26,505) (19,007) $ 94,847 Net earnings.................................................................................... $ Note 1) Properties accounted for on the equity method do not meet the definition of a component of an entity under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” and therefore are reported in continuing operations when sold. For the year ended January 31, 2006, three equity method investments were sold, Showcase, Colony Place, and Flower Park Plaza. A pre-tax gain of $21,023 ($12,900 net of tax) has been reported in equity in earnings of unconsolidated entities in the Consolidated Statements of Earnings, and therefore is included in earnings from continuing operations. 34 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information The following is a summary of the real estate activity of the Company’s Real Estate Groups as presented on pro-rata consolidation including a reconciliation from full consolidation to pro-rata consolidation. Forest City Rental Properties Corporation – Real Estate Activity (1) Pro-Rata Consolidation (Non-GAAP) January 31, 2006 2005 2004 (in thousands) 2007 Forest City Rental Properties Corporation – Real Estate Activity (1) Real estate – end of year Completed rental properties ......................................... $ 7,510,737 Projects under development ......................................... 1,568,088 Land held for development or sale ............................... 79,909 Real estate, at cost ................................................... 9,158,734 Less accumulated depreciation..................................... (1,295,623) Total real estate........................................................ $ 7,863,111 Real estate activity during the year Completed rental properties Capital expenditures ................................................ $ Transferred from projects under development ......... Acquisitions............................................................. Exchange of cash and Class A Common Units for partner’s interest ........................................... Other (7) .................................................................... Total additions ..................................................... Dispositions ............................................................. Completed rental properties, net additions ................... Projects under development New development .................................................... Transferred to completed rental properties .............. Cost of Land Sales................................................... Other........................................................................ Projects under development, net additions ................... Land held for development or sale, net change ............ Increase in real estate, at cost ....................................... $ 2003 6,319,189 1,196,663 50,275 7,566,127 (1,104,286) $ 6,461,841 $ $ $ 5,776,806 869,265 53,007 6,699,078 (975,063) 5,724,015 $ $ 4,786,035 541,476 53,089 5,380,600 (816,395) 4,564,205 $ $ 4,082,080 575,558 51,751 4,709,389 (697,055) 4,012,334 87,237 547,667 314,779 228,958 310,275 1,488,916 (297,368) (2) 1,191,548 957,227 (547,667) (38,135) 371,425 29,634 1,592,607 $ 66,239 534,820 58,667 81,396 741,122 (198,739)(3) 542,383 926,217 (534,820) (63,999) 327,398 (2,732) 867,049 $ 127,486 612,111 115,185 337,293 1,192,075 (201,304)(4) 990,771 885,320 (612,111) 54,580 327,789 (82) 1,318,478 $ 38,890 377,578 374,305 790,773 (86,818)(5) 703,955 343,496 (377,578) (34,082) 1,338 671,211 $ 43,266 305,982 172,860 522,108 (54,448)(6) 467,660 397,810 (305,982) 91,828 (7,624) 551,864 $ $ $ $ 35 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Rental Properties Corporation – Real Estate Activity (1) - (Continued) Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation (Non-GAAP) Years Ended January 31, 2007 Real estate – end of year Completed rental properties...................................... Projects under development...................................... Land held for development or sale ........................... Real estate, at cost ................................................ Less accumulated depreciation ................................. Total real estate .................................................... Real estate activity during the year Completed rental properties Capital expenditures ............................................. Transferred from projects under development...... Acquisitions.......................................................... Exchange of cash and Class A Common Units for partner’s interest .......................................... Other (7) ................................................................. Total additions .................................................. Dispositions.......................................................... Completed rental properties, net additions ........... Projects under development New development................................................. Transferred to completed rental properties........... Cost of Land Sales................................................ Projects under development, net additions ........... Land held for development or sale, net change .... Increase (decrease) in real estate, at cost .................. 2006 Real estate – end of year Completed rental properties...................................... Projects under development...................................... Land held for development or sale ........................... Real estate, at cost ................................................ Less accumulated depreciation ................................. Total real estate .................................................... Real estate activity during the year Completed rental properties Capital expenditures ............................................. Transferred from projects under development...... Acquisitions.......................................................... Other (7) ................................................................. Total additions .................................................. Dispositions.......................................................... Completed rental properties, net additions ........... Projects under development New development................................................. Transferred to completed rental properties........... Cost of Commercial Group Land Sales ................ Projects under development, net additions .......... Land held for development or sale, net change .... Increase in real estate, at cost ................................... Full Consolidation Less Minority Interest (in thousands) $ $ 6,649,471 1,396,083 58,408 8,103,962 (1,080,432) 7,023,530 $ $ 346,323 126,660 5,517 478,500 (70,863) 407,637 $ $ 1,207,589 298,665 27,018 1,533,272 (286,054) 1,247,218 7,510,737 1,568,088 79,909 9,158,734 (1,295,623) $ 7,863,111 $ $ 78,663 359,649 218,763 228,958 32,884 918,917 (423,281) 495,636 898,561 (359,649) (29,085) 509,827 20,317 1,025,780 $ 17,488 6,835 17,785 (330,388) (288,280) (131,224) (419,504) 49,927 (6,835) (673) 42,419 2,097 (374,988) $ 26,062 194,853 113,801 (52,997) 281,719 (5,311) 276,408 108,593 (194,853) (9,723) (95,983) 11,414 191,839 $ 87,237 547,667 314,779 228,958 310,275 1,488,916 (297,368) (2) 1,191,548 957,227 (547,667) (38,135) 371,425 29,634 1,592,607 $ $ $ $ $ $ 6,153,835 886,256 38,091 7,078,182 (982,249) 6,095,933 $ $ 765,827 84,241 3,420 853,488 (147,375) 706,113 $ $ 931,181 394,648 15,604 1,341,433 (269,412) 1,072,021 $ $ 6,319,189 1,196,663 50,275 7,566,127 (1,104,286) 6,461,841 $ 78,132 490,278 58,667 627,077 (164,403) 462,674 807,768 (490,278) (65,675) 251,815 (2,455) 712,034 36 $ 1,855 11,968 (86,432) (72,609) (5,195) (77,804) 78,696 (11,968) (2,787) 63,941 (157) (14,020) $ (10,038) 56,510 (5,036) 41,436 (39,531) 1,905 197,145 (56,510) (1,111) 139,524 (434) 140,995 $ 66,239 534,820 58,667 81,396 741,122 (198,739)(3) 542,383 926,217 (534,820) (63,999) 327,398 (2,732) 867,049 $ $ $ $ Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Rental Properties Corporation – Real Estate Activity (1) - (Continued) Plus Unconsolidated Investments at Pro-Rata Years Ended January 31, Full Consolidation Less Minority Interest Pro-Rata Consolidation (Non-GAAP) (in thousands) 2005 Real estate – end of year Completed rental properties...................................... Projects under development...................................... Land held for development or sale ........................... Real estate, at cost ................................................ Less accumulated depreciation ................................. Total real estate .................................................... Real estate activity during the year Completed rental properties Capital expenditures ............................................. Transferred from projects under development...... Acquisitions.......................................................... Other (7) ................................................................ Total additions .................................................. Dispositions.......................................................... Completed rental properties, net additions ........... Projects under development New development................................................. Transferred to completed rental properties........... Other..................................................................... Projects under development, net transfers ............ Land held for development or sale, net change .... Increase in real estate, at cost ................................... 2004 Real estate – end of year Completed rental properties...................................... Projects under development...................................... Land held for development or sale ........................... Real estate, at cost ................................................ Less accumulated depreciation ................................. Total real estate .................................................... Real estate activity during the year Completed rental properties Capital expenditures ............................................. Transferred from projects under development...... Acquisitions.......................................................... Total additions .................................................. Dispositions.......................................................... Completed rental properties, net additions ........... Projects under development New development................................................. Transferred to completed rental properties........... Projects under development, net additions .......... Land held for development or sale, net change .... Increase in real estate, at cost ................................... $ $ 5,691,161 634,441 40,546 6,366,148 (861,516) 5,504,632 $ $ 843,631 20,300 3,577 867,508 (141,674) 725,834 $ $ 929,276 255,124 16,038 1,200,438 (255,221) 945,217 $ $ 5,776,806 869,265 53,007 6,699,078 (975,063) 5,724,015 $ 93,664 643,324 108,076 538,173 1,383,237 (187,651) 1,195,586 771,183 (643,324) 127,859 3,142 1,326,587 $ 11,524 39,168 (6,201) 111,815 156,306 (18,721) 137,585 44,142 (39,168) (54,580) (49,606) 484 88,463 $ 45,346 7,955 908 (89,065) (34,856) (32,374) (67,230) 158,279 (7,955) 150,324 (2,740) 80,354 $ 127,486 612,111 115,185 337,293 1,192,075 (201,304) (4) 990,771 885,320 (612,111) 54,580 327,789 (82) 1,318,478 $ $ $ $ $ $ 4,495,575 506,582 37,404 5,039,561 (710,986) 4,328,575 $ $ 706,046 69,906 3,093 779,045 (109,941) 669,104 $ $ 996,506 104,800 18,778 1,120,084 (215,350) 904,734 $ $ 4,786,035 541,476 53,089 5,380,600 (816,395) 4,564,205 $ 36,159 304,321 382,472 722,952 (68,179) 654,773 274,469 (304,321) (29,852) 1,362 626,283 $ 4,806 53,599 24,021 82,426 (10,384) 72,042 48,953 (53,599) (4,646) 213 67,609 $ 7,537 126,856 15,854 150,247 (29,023) 121,224 117,980 (126,856) (8,876) 189 112,537 $ 38,890 377,578 374,305 790,773 (86,818)(5) 703,955 343,496 (377,578) (34,082) 1,338 671,211 $ $ $ $ 37 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Rental Properties Corporation – Real Estate Activity (1) - (Continued) Plus Unconsolidated Investments at Pro-Rata Pro-Rata Consolidation (Non-GAAP) Years Ended January 31, 2003 Real estate – end of year Completed rental properties.......................................... Projects under development.......................................... Land held for development or sale ............................... Real estate, at cost .................................................... Less accumulated depreciation ..................................... Total real estate ........................................................ Real estate activity during the year Completed rental properties Capital expenditures ................................................. Transferred from projects under development.......... Acquisitions.............................................................. Total additions ...................................................... Dispositions.............................................................. Completed rental properties, net additions ............... Projects under development New development..................................................... Transferred to completed rental properties............... Projects under development, net transfers ............... Land held for development or sale, net additions ..... Increase in real estate, at cost ....................................... (1) Full Consolidation Less Minority Interest (in thousands) $ $ 3,840,802 536,434 36,042 4,413,278 (597,787) 3,815,491 $ $ 634,004 74,552 2,880 711,436 (96,033) 615,403 $ $ 875,282 113,676 18,589 1,007,547 (195,301) 812,246 $ $ 4,082,080 575,558 51,751 4,709,389 (697,055) 4,012,334 $ 37,909 265,720 158,872 462,501 (53,268) 409,233 383,459 (265,720) 117,739 (6,467) 520,505 $ 14,539 26,514 24 41,077 (61) 41,016 61,947 (26,514) 35,433 (495) 75,954 $ 19,896 66,776 14,012 100,684 (1,241) 99,443 76,298 (66,776) 9,522 (1,652) 107,313 $ 43,266 305,982 172,860 522,108 (54,448) (6) 467,660 397,810 (305,982) 91,828 (7,624) 551,864 $ $ $ $ The table includes only the real estate activity for the Company’s Real Estate Groups owned by Forest City Rental Properties Corporation, a wholly-owned subsidiary engaged in the ownership, development, acquisition and management of real estate projects, including apartment complexes, regional malls and retail centers, hotels, office buildings and mixed-use facilities, as well as large land development projects. Primarily reflects the dispositions of Providence at Palm Harbor, Mount Vernon Square, Midtown Plaza, G Street, Battery Park City, Embassy Suites Hotel, and Hilton Times Square. Providence at Palm Harbor is a 236-units apartment community in Tampa, Florida. Mount Vernon Square is a 1,387-units apartment community in Alexandria, Virginia. Midtown Plaza has 240,000 square feet in Parma, Ohio. G Street has 13,000 square feet in Philadelphia, Pennsylvania. Battery Park City has 166,000 square feet in Manhattan, New York. Embassy Suites Hotel and Hilton Times Square have 463 and 444 rooms respectively in Manhattan, New York. Primarily reflects the dispositions of Cherrywood Village, Ranchstone, Colony Place, Enclave, Flower Park, and Showcase. Cherrywood Village and Ranchstone are apartment communities in Denver, Colorado with 360 and 368 units, respectively. Colony Place is a 300-unit apartment community in Fort Myers, Florida. Enclave is a 637-unit apartment community in San Jose, California. Flower Park is a 199-unit apartment community in Santa Ana, California. Showcase has 186,000 square feet in Las Vegas, Nevada. Primarily reflects the dispositions of Woodlake, Regency Towers, Bridgewater, Arboretum Place, Trellis at Lee’s Mill, Silver Hill, Colony Woods, Manhattan Town Center, Chapel Hill Mall, Chapel Hill Suburban, Pavilion, Flatbush Avenue, and Hunting Park. Woodlake is a 534-unit apartment community in Silver Spring, Maryland. Regency Towers is a 372-unit apartment community in Jackson, New Jersey. Arboretum Place, Silver Hill, and Trellis at Lee’s Mill are apartment communities in Newport News, Virginia with 184, 153 and 176 units, respectively. Bridgewater is a 216-unit apartment community in Hampton, Virginia. Colony Woods is a 396-unit apartment community in Bellevue, Washington. Chapel Hill Mall and Chapel Hill Suburban have 860,000 and 117,000 square feet, respectively in Akron, Ohio. Pavilion has 250,000 square feet in San Jose, California. Flatbush Avenue has 142,000 square feet in Brooklyn, New York. Hunting Park has 125,000 square feet in Philadelphia, Pennsylvania. Manhattan Town Center has 392,000 square feet in Manhattan, Kansas. Primarily reflects the dispositions of Waterford Village, Laurels and Vineyards. Waterford Village is a 576-unit apartment community in Indianapolis, Indiana. Laurels is a 520-unit apartment community in Justice, Illinois and Vineyards is a 386-unit apartment community in Broadview Heights, Ohio. Primarily reflects the dispositions of Courtland Center and Bay Street. Courtland Center has 458,000 square feet in Flint, Michigan. Bay Street has 16,000 square feet in Staten Island, New York. Primarily relates to changes in ownership percentage and non cash items. (2) (3) (4) (5) (6) (7) 38 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Results of Operations Net Earnings – Net earnings for the year ended January 31, 2007 were $177,251,000 versus $83,519,000 for the year ended January 31, 2006. Although we have substantial recurring revenue sources from our properties, we also enter into significant one-time transactions which could create substantial variances in net earnings between periods. This variance to the prior year is primarily attributable to the following increases, which are net of tax and minority interest: • $143,026,000 ($233,092,000, pre-tax) related to the 2006 gains on disposition of six consolidated properties, Mount Vernon Square, an apartment community located in Alexandria, Virginia, Providence at Palm Harbor, an apartment community located in Tampa, Florida, Hilton Times Square, a 444-room hotel located in Manhattan, New York, G Street, a specialty retail center located in Philadelphia, Pennsylvania, Embassy Suites Hotel a 463-room hotel located in Manhattan, New York, and Battery Park City, a retail center located in Manhattan, New York; $15,781,000 ($25,719,000, pre-tax) related to income recognition on the sale of state and federal Historical Preservation Tax Credits; $5,765,000 ($9,831,000, pre-tax) related to the decreased losses from our equity investment in the New Jersey Nets basketball team; and $4,700,000 ($7,662,000, pre-tax) related to the 2006 gain on disposition of one equity method Commercial property, Midtown Plaza, a specialty retail center located in Parma, Ohio. • • • These increases were partially offset by the following decreases, net of tax and minority interest: • $26,505,000 ($43,198,000, pre-tax) related to the 2005 gains on disposition of three consolidated properties, Enclave, an apartment community located in San Jose, California, and Cherrywood Village and Ranchstone, apartment communities located in Denver, Colorado; $9,913,000 ($16,155,000, pre-tax) related to decreases in Commercial Group sales of land, outlots, and development projects. These decreases are made up of $7,008,000, pre-tax, related to a 2005 land sale at Twelve MetroTech Center, $7,174,000, pre-tax, in outlot land sales for our consolidated properties primarily at Victoria Gardens, Simi Valley and Wadsworth, and $4,528,000, pre-tax, related to the sale of a development project in Las Vegas, Nevada. These decreases were partially offset by increased land sales of $2,555,000, pre-tax, for our unconsolidated properties at Victor Village and Charleston Mall; $12,900,000 ($21,023,000, pre-tax) related to the 2005 gains on disposition of three equity method properties, Showcase, a specialty retail center located in Las Vegas, Nevada, Colony Place, an apartment community located in Fort Myers, Florida and Flower Park Plaza, an apartment community located in Santa Ana, California; $10,000,000 related to the one-time reduction of deferred income taxes which resulted from a favorable change in our effective tax rate due to a change in the rate in the State of Ohio during 2005; $5,759,000 ($9,386,000, pre-tax) related to the fair market value adjustments of certain of our 10-year forward swaps which were marked to market as additional interest expense as a result of the derivatives not qualifying for hedge accounting; $3,583,000 ($5,840,000, pre-tax) related to our development fee revenue at Twelve MetroTech Center that did not recur; and $3,469,000 ($4,738,000, pre-tax) related to the expensing of stock options upon our adoption of SFAS No. 123 (Revised), “Share-Based Payment” (“SFAS No. 123(R)”), on February 1, 2006. • • • • • • Net earnings for the year ended January 31, 2006 were $83,519,000 versus $85,206,000 for the year ended January 31, 2005. This variance to the prior year is primarily attributable to the following decreases, which are net of tax and minority interest: • $40,893,000 ($67,645,000, pre-tax) related to the 2004 gains on disposition of ten consolidated properties, Regency Towers, Woodlake, Bridgewater, Pavilion, Trellis at Lee’s Mill, Hunting Park, Arboretum, Flatbush Avenue, Colony Woods and Silver Hill; $19,341,000 ($31,996,000, pre-tax) due to the gains on disposition of three equity method properties in 2004, Manhattan Town Center Mall, a regional mall located in Manhattan, Kansas, Chapel Hill Suburban, a specialty retail center located in Akron, Ohio and Chapel Hill Mall, a regional mall located in Akron, Ohio; 39 • Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information • $13,745,000 ($22,737,000, pre-tax) related to Stapleton Land, LLC’s retained interest in a trust. Of this amount, $12,445,000 was earned in 2004 but attributable to other comprehensive income (“OCI”) in previous fiscal years and deferred until 2004 under the cost recovery method. The remaining amount of $1,300,000 was earned and recognized during the year ended January 31, 2005; $11,501,000 ($20,920,000, pre-tax) related to the 2004 gain on disposition of Lumber Group and a decrease of $4,545,000 ($9,390,000 pre-tax) related to Lumber Group’s 2004 earnings with no corresponding amount in 2005; $9,999,000 ($13,645,000, pre-tax) related to our increased loss from our equity investment in the New Jersey Nets basketball team, which we did not own during the first half of 2004; $8,134,000 ($13,552,000, pre-tax) related to our development fee revenue at Twelve MetroTech Center that did not recur at the same level in 2005; and $5,981,000 in interest expense as a result of the issuance of $150,000,000 senior notes in January 2005. • • • • These decreases were partially offset by the following increases in earnings, net of tax and minority interest: • $26,830,000 ($48,001,000 pre-tax) related to increases in Commercial Group sales of land, outlots, and development projects. These increases are made up of $7,008,000, pre-tax, related to the 2005 land sale at Twelve MetroTech Center, $34,195,000, pre-tax, in outlot land sales for our consolidated properties primarily at Victoria Gardens and Simi Valley, $4,528,000, pre-tax, related to the sale of a development project in Las Vegas, Nevada, and $2,270,000, pre-tax, related to land sales for our unconsolidated properties; $26,505,000 ($43,198,000, pre-tax) related to the 2005 gains on disposition of three consolidated residential properties, Enclave, Cherrywood Village and Ranchstone; $23,706,000 ($37,892,000, pre-tax) related to land sales reported in the Land Development Group primarily at Grass Farms in Manatee County, Florida, Central Station in Chicago, Illinois and Stapleton in Denver, Colorado; $12,900,000 ($21,023,000, pre-tax) related to the 2005 gains on disposition of three equity method properties, Showcase, Colony Place and Flower Park Plaza; $11,261,000 related to the prior year charge for cumulative effect of change in accounting principle as a result of our implementation of FIN No. 46 (R), which did not recur; and $10,000,000 related to the one-time reduction of deferred income taxes which resulted from a favorable change in our effective tax rate due to a change in the rate in the State of Ohio during 2005. • • • • • Net Operating Income (NOI) from Real Estate Groups - NOI, a non-GAAP measure, is defined as revenues (excluding straightline rent adjustments) less operating expenses (including depreciation and amortization for non-real estate groups) plus interest income plus equity in earnings of unconsolidated entities (excluding gain on disposition of equity method operating properties) plus equity method depreciation and amortization. We believe NOI provides us, as well as our investors, additional information about our core business operations and, along with earnings, is necessary to understand our business and operating results. Under the full consolidation method (GAAP), NOI from the combination of the Commercial Group and the Residential Group (“Real Estate Groups”) for the three months ended January 31, 2007 was $168,969,000 compared to $145,992,000 for the three months ended January 31, 2006, a 15.7% increase. NOI for the year ended January 31, 2007 was $544,786,000 compared to $518,927,000 for the year ended January 31, 2006, a 5.0% increase. A reconciliation of NOI to the most comparable GAAP measure, net earnings, is presented on pages 8-9. A reconciliation of NOI to net earnings for each strategic business unit can be found on pages 44-55. Management also analyzes property NOI using the pro-rata consolidation method because it provides operating data at our ownership share, and we publicly disclose and discuss our performance using this method of consolidation to complement our GAAP disclosures. Under the pro-rata consolidation method, NOI from the combination of the Commercial Group and the Residential Group for the three months ended January 31, 2007 was $174,850,000 compared to $138,371,000 for the three months ended January 31, 2006, a 26.4% increase. NOI for the year ended January 31, 2007 was $570,569,000 compared to $537,016,000 for the year ended January 31, 2006, a 6.2% increase. Comparable NOI increased 4.9% for the year ended January 31, 2007 compared to the prior year. Comparable NOI for our retail portfolio is up 4.9% from the prior year and our residential portfolio has generated an increase of 6.5%. Including the expected NOI for the twelve months following stabilization for the properties that were opened, expanded or acquired through 40 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information January 31, 2007, less the actual annual NOI of property disposals through January 31, 2007, NOI for Real Estate Groups would be approximately $620,000,000 for the year ended January 31, 2007. This amount includes Commercial Group land sales of $35,100,000 and income recognition on the sale of state and federal Historical Preservation Tax Credits of $25,719,000. EBDT - We use an additional measure, along with net earnings, to report our operating results. This non-GAAP measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”), is not a measure of operating results or cash flows from operations as defined by GAAP and may not be directly comparable to similarly-titled measures reported by other companies. We believe that EBDT provides additional information about our core operations and, along with net earnings, is necessary to understand our operating results. EBDT is used by the chief operating decision maker and management in assessing operating performance and to consider capital requirements and allocation of resources by segment and on a consolidated basis. We believe EBDT is important to investors because it provides another method for the investor to measure our long-term operating performance as net earnings can vary from year to year due to property dispositions, acquisitions and other factors that have a short-term impact. EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of rental properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) non-cash charges from real estate operations of Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., for depreciation, amortization, amortization of mortgage procurement costs and deferred income taxes; iv) provision for decline in real estate (net of tax); v) extraordinary items (net of tax); and vi) cumulative effect of change in accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment equals net earnings. EBDT is reconciled to net earnings, the most comparable financial measure calculated in accordance with GAAP, below. The adjustment to recognize rental revenues and rental expenses on the straight-line method is excluded because it is management’s opinion that rental revenues and expenses should be recognized when due from the tenants or due to the landlord. We exclude depreciation and amortization expense related to real estate operations from EBDT because we believe the values of our properties, in general, have appreciated over time in excess of their original cost. Deferred taxes from real estate operations, which are the result of timing differences of certain net expense items deducted in a future year for federal income tax purposes, are excluded until the year in which they are reflected in our current tax provision. The provision for decline in real estate is excluded from EBDT because it varies from year to year based on factors unrelated to our overall financial performance and is related to the ultimate gain on dispositions of operating properties. Our EBDT may not be directly comparable to similarly-titled measures reported by other companies. Our EBDT for the year ended January 31, 2007 increased by 5.3% to $284,954,000 from $270,496,000 for the year ended January 31, 2006. This variance to the prior year is primarily attributable to the strong performance of our Commercial and Residential operating portfolios, as evidenced by comparable NOI growth, improved occupancies, and NOI generated from new property openings. EBDT in our comparable portfolio increased $8,592,000. In addition, EBDT was impacted by increases in our Military Housing business of $6,143,000, Historic Preservation Tax Credit income of $25,719,000 and decreased losses from the Nets of $5,765,000. These increases were partially offset by the consequences of our rate hedging transactions of $9,386,000, decreases in Commercial land sales and development fees $19,104,000 and the expensing of stock options $3,800,000 upon our adoption of SFAS No. 123 (Revised), “Share-Based Payment.” Stock-Based Compensation - We adopted SFAS No. 123 (Revised), “Share-Based Payment” (“SFAS No. 123(R)”) on February 1, 2006 which required the recognition of additional compensation costs related to the estimated fair value of our employee stock options. Previously, we did not expense stock options. We have and will continue to expense restricted stock consistent with prior quarters because the accounting treatment remains substantially the same under SFAS No. 123(R). The adoption of this standard lowered net earnings and EBDT by $3,469,000 and $3,807,000, respectively, for the year ended January 31, 2007. Diluted net earnings per share and EBDT per share were lower by $0.03 for the year ended January 31, 2007 due to SFAS No. 123(R). Summary of EBDT - The information in the tables on pages 42-53 present amounts for both full consolidation and pro-rata consolidation, providing a reconciliation of the difference between the two methods, as well as reconciliation from NOI to EBDT to net earnings. Under the pro-rata consolidation method, we present our partnership investments proportionate to our pro-rata share for each line item of our consolidated financial statements. Under full consolidation, partnership assets and liabilities are reported as consolidated at 100% if deemed under our control or if we are deemed to be the primary beneficiary for investments in the VIEs, or on the equity method of accounting if we do not have control or are not the primary beneficiary for investments in VIEs. 41 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Reconciliation of Net Earnings to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2) Three Months Ended January 31, 2006 2007 (in thousands) Years Ended January 31, 2006 2007 (in thousands) Net earnings ................................................................................................................... Depreciation and amortization – Real Estate Groups (4) ................................................. Amortization of mortgage procurement costs – Real Estate Groups (4) ......................... Deferred income tax expense – Real Estate Groups (5) ................................................... Deferred income tax expense – Non Real-Estate Groups: (5) Gain on disposition of other investments ................................................................... Provision for decline in real estate recorded on equity method ................................. Provision for decline in real estate ............................................................................. Current income tax expense on non-operating earnings: (5) Gain on disposition of other investments ................................................................... Gain on disposition included in discontinued operations........................................... Gain on disposition of equity method rental properties ............................................. Straight-line rent adjustment (3) ....................................................................................... Preference payment ......................................................................................................... Provision for decline in real estate, net of minority interest........................................... Provision for decline in real estate of equity method rental properties .......................... Gain on disposition of equity method rental properties.................................................. Loss (gain) on disposition of other investments ............................................................. Discontinued operations: (1) Gain on disposition of rental properties ..................................................................... Minority interest – Gain on disposition...................................................................... Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2) ....... (1) (2) $ 70,626 57,938 2,900 47,102 294 - $ 28,235 54,202 2,919 26,089 (39) (587) $ 177,251 206,745 10,998 120,230 294 - $ 83,519 192,715 11,578 43,981 135 (587) (3,369) (4,198) 898 - (811) (4,477) 1,748 100 13,829 2,657 (8,757) 898 1,923 400 (7,662) - 60 (811) 8,147 (10,660) 6,442 704 (21,023) (506) (64,641) $ 107,550 $ (33,722) 73,657 $ (351,861) 118,009 284,954 $ (43,198) 270,496 Pursuant to the definition of a component of an entity of SFAS No. 144, assuming no significant continuing involvement, all earnings of properties and a division which have been sold or held for sale are reported as discontinued operations. 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) noncash charges from Forest City Rental Properties Corporation, a wholly-owned subsidiary of Forest City Enterprises, Inc., for depreciation, amortization (including amortization of mortgage procurement costs) and deferred income taxes; iv) provision for decline in real estate (net of tax); v) extraordinary items (net of tax); and vi) cumulative effect of change in accounting principle (net of tax). 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. The following table provides detail of depreciation and amortization and amortization of mortgage procurement costs. The Company’s Real Estate Groups are owned by Forest City Rental Properties Corporation, a wholly-owned subsidiary engaged in the ownership, development, acquisition and management of real estate projects, including apartment complexes, regional malls and retail centers, hotels, office buildings and mixed-use facilities, as well as large land development projects. (3) (4) Depreciation and Amortization Three Months Ended Years Ended January 31, January 31, 2006 2006 2007 2007 Full Consolidation................................................. $ Non-Real Estate Groups........................................ Real Estate Groups Full Consolidation................. Real Estate Groups related to minority interest .... Real Estate Groups Equity Method....................... Real Estate Groups Discontinued Operations....... Real Estate Groups Pro-Rata Consolidation ......... $ 52,793 (639) 52,154 (3,097) 8,867 14 57,938 $ 46,124 (368) 45,756 (2,233) 7,080 3,599 54,202 $ 181,129 (1,571) 179,558 (13,811) 34,779 6,219 206,745 $ 164,397 (1,104) 163,293 (15,341) 26,905 17,858 192,715 $ Amortization of Mortgage Procurement Costs Three Months Ended Years Ended January 31, January 31, 2006 2006 2007 2007 2,695 (97) 2,598 (161) 452 11 2,900 $ 2,534 (83) 2,451 (84) 338 214 2,919 $ 10,903 (333) 10,570 (1,076) 1,312 192 10,998 $ 9,979 (369) 9,610 (1,066) 1,244 1,790 11,578 $ $ $ $ $ $ $ 42 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Reconciliation of Net Earnings to Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) (2) (continued) (5) The following table provides detail of Income Tax Expense (Benefit): Three Months Ended January 31, 2006 2007 (in thousands) Years Ended January 31, 2006 2007 (in thousands) $ (16,085) 48,433 32,348 (743) (155) (898) 2,657 305 2,962 (13,428) 47,840 34,412 $ (4,207) 24,215 20,008 (2,490) (272) (2,762) 60 135 195 8,147 (24) 8,123 4,000 21,564 25,564 (A) Operating earnings Current ....................................................................................................... Deferred ..................................................................................................... Provision for decline in real estate Deferred ..................................................................................................... Deferred-Equity method investment ......................................................... Gain on disposition of other investments Current – Non-Real Estate Groups............................................................ Deferred – Non-Real Estate Groups.......................................................... Gain on disposition of equity method rental properties Current ....................................................................................................... Deferred ..................................................................................................... Subtotal (A) (B) (C) (D) Current ....................................................................................................... Deferred ..................................................................................................... Income tax expense ................................................................................... $ 1,119 23,165 24,284 1,119 23,165 24,284 $ (3,057) 8,227 5,170 (676) (676) (39) (39) (3,057) 7,512 4,455 (B) (C) (D) (E) Discontinued operations – Rental Properties Operating earnings Current ....................................................................................................... Deferred ..................................................................................................... Gain on disposition of rental properties Current ....................................................................................................... Deferred ..................................................................................................... 49 138 187 (3,369) 28,053 24,684 24,871 294 294 25,165 (1,663) (319) (1,982) (811) 13,842 13,031 11,049 11,049 1,542 679 2,221 13,829 76,237 90,066 92,287 294 294 92,581 (6,149) 1,436 (4,713) (811) 17,504 16,693 11,980 11,980 Deferred gain on disposition of Lumber Group Current ....................................................................................................... Deferred ..................................................................................................... Subtotal Grand Total (A) (B) (C) (D) (E) Current ....................................................................................................... Deferred ..................................................................................................... $ Recap of Grand Total: Real Estate Groups Current ....................................................................................................... Deferred ..................................................................................................... Non-Real Estate Groups Current ....................................................................................................... Deferred ..................................................................................................... Grand Total .................................................................................................. $ (2,201) 51,650 49,449 $ (5,531) 21,035 15,504 $ 1,943 125,050 126,993 $ (2,960) 40,504 37,544 98 47,102 47,200 (2,299) 4,548 2,249 49,449 (8,215) 26,089 17,874 2,684 (5,054) (2,370) 15,504 15,802 120,230 136,032 (13,859) 4,820 (9,039) 126,993 5,356 43,981 49,337 (8,316) (3,477) (11,793) 37,544 $ $ $ 43 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended January 31, 2007 (in thousands) Commercial Group 2006 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 242,641 (7,020) Exclude straight-line rent adjustment .......................................................................... 235,621 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Exclude preference payment........................................................................................ Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... 135,906 (2,797) (898) 132,211 3,582 9,189 3,970 120,151 47,745 (3,414) 5,825 (105) 69,890 $ Less Minority Interest $ 13,874 13,874 3,815 3,815 (579) 9,480 3,655 5,825 $ Plus Unconsolidated Investments at Pro-Rata $ 36,189 36,189 21,446 21,446 1,813 (6,124) (3,970) 6,462 6,462 $ Plus Discontinued Operations $ (318) (318) 173 173 272 (219) (44) (70) 105 $ Pro-Rata Consolidation (Non-GAAP) $ 264,638 (7,020) 257,618 153,710 (2,797) (898) 150,015 6,246 3,065 116,914 50,508 (3,484) 69,890 $ Full Consolidation (GAAP) $ 66,352 24 66,376 45,822 45,822 20,465 2,450 5,349 48,818 20,665 9,683 390 560 18,640 $ Less Minority Interest $ 2,435 2,435 1,230 1,230 10 1,215 825 390 $ Residential Group 2006 Plus Unconsolidated Investments at Pro-Rata $ 48,782 48,782 32,498 32,498 575 (2,993) (5,349) 8,517 8,517 $ Plus Discontinued Operations $ 2,437 2,437 1,227 1,227 606 1,816 1,137 119 (560) $ Pro-Rata Consolidation (Non-GAAP) $ 115,136 24 115,160 78,317 78,317 21,636 (543) 57,936 29,494 9,802 18,640 44 Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Preference payment ................................................................................................ Gain on disposition of rental properties, net of tax ................................................ Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Deferred gain on disposition of Lumber Group ............................................... Net earnings........................................................................................................... $ 69,890 (39,024) (2,129) (14,321) 4,223 (898) - $ - $ - $ (4) - $ 69,890 (39,024) (2,129) (14,325) 4,223 (898) - $ 18,640 (18,855) (760) 6,555 (24) - $ - $ - $ (14) (11) (134) 39,197 $ 18,640 (18,869) (771) 6,421 (24) 39,197 (4) 17,737 $ $ $ 4 $ 17,737 $ (14) (11) (134) 39,197 44,594 $ $ $ 14 11 134 (39,197) $ 44,594 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended January 31, 2007 (in thousands) (continued) Land Development Group 2006 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 51,386 1 Exclude straight-line rent adjustment .......................................................................... 51,387 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Exclude preference payment........................................................................................ Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... 33,138 33,138 6,818 21,710 46,777 2,368 5,473 2,099 36,837 $ Less Minority Interest $ 4,080 4,080 2,470 2,470 659 2,269 170 2,099 $ Plus Unconsolidated Investments at Pro-Rata $ 60,303 60,303 39,648 39,648 112 (20,637) 130 130 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 107,609 1 107,610 70,316 70,316 6,271 1,073 44,638 2,328 5,473 36,837 $ Full Consolidation (GAAP) $ (619) (619) 1,417 (2,036) $ Less Minority Interest $ $ The Nets 2006 Plus Unconsolidated Investments at Pro-Rata $ 631 631 1 631 1 1 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 631 631 1 12 (618) 1 1,417 (2,036) 45 Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Preference payment ................................................................................................ Gain on disposition of rental properties, net of tax ................................................ Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Deferred gain on disposition of Lumber Group ............................................... Net earnings........................................................................................................... $ 36,837 (45) (11,725) (1) - $ - $ - $ - $ 36,837 (45) (11,725) (1) - $ (2,036) - $ - $ - $ - $ (2,036) - 25,066 $ $ $ $ 25,066 $ (2,036) $ $ $ $ (2,036) Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended January 31, 2007 (in thousands) (continued) Corporate Activities 2006 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ Exclude straight-line rent adjustment .......................................................................... Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Exclude preference payment........................................................................................ Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... 11,335 11,335 898 1 (10,436) 13,131 (7,786) (15,781) $ Less Minority Interest $ $ Plus Unconsolidated Investments at Pro-Rata $ $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 11,335 11,335 898 1 (10,436) 13,131 (7,786) (15,781) Full Consolidation (GAAP) $ 360,379 (6,995) 353,384 226,201 (2,797) (898) 222,506 31,763 32,731 9,319 204,691 83,909 5,373 8,314 455 $ 107,550 $ Less Minority Interest $ 20,389 20,389 7,515 7,515 90 12,964 4,650 8,314 $ Total 2006 Plus Unconsolidated Investments at Pro-Rata $ 145,274 145,274 94,223 94,223 2,501 (29,123) (9,319) 15,110 15,110 $ Plus Discontinued Operations $ 2,119 2,119 1,400 1,400 878 1,597 1,093 49 (455) $ Pro-Rata Consolidation (Non-GAAP) $ 487,383 (6,995) 480,388 314,309 (2,797) (898) 310,614 35,052 3,608 208,434 95,462 5,422 107,550 46 Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Preference payment ................................................................................................ Gain on disposition of rental properties, net of tax ................................................ Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Deferred gain on disposition of Lumber Group ............................................... Net earnings........................................................................................................... $ (15,781) 580 - $ - $ - $ 466 $ (15,781) 580 466 $ 107,550 (57,924) (2,889) (18,911) 4,198 (898) - $ - $ - $ (14) (11) (138) 39,663 $ 107,550 (57,938) (2,900) (19,049) 4,198 (898) 39,663 466 (14,735) $ $ $ (466) $ (14,735) $ (14) (11) (138) 39,197 466 70,626 $ $ $ 14 11 138 (39,197) (466) $ 70,626 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Year Ended January 31, 2007 (in thousands) Commercial Group 2006 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 811,315 (15,965) Exclude straight-line rent adjustment .......................................................................... 795,350 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Exclude preference payment........................................................................................ Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Remove gain on disposition of equity method rental properties ................................. Add back provision for decline in real estate of equity method rental properties....... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... 428,132 (6,299) (898) 420,935 8,019 23,936 (7,662) 400 12,438 411,546 179,164 2,708 24,699 7,261 $ Less Minority Interest $ 80,330 80,330 35,829 35,829 993 45,494 20,795 24,699 $ Plus Unconsolidated Investments at Pro-Rata $ 110,529 110,529 64,952 64,952 1,825 (22,037) 7,662 (400) (12,438) 20,189 20,189 $ Plus Discontinued Operations $ 41,880 (44) 41,836 30,943 (938) 30,005 878 12,709 5,296 152 (7,261) $ Pro-Rata Consolidation (Non-GAAP) $ 883,394 (16,009) 867,385 488,198 (7,237) (898) 480,063 9,729 1,899 398,950 183,854 2,860 212,236 $ Full Consolidation (GAAP) $ 240,290 12 240,302 164,496 164,496 33,663 118 23,653 133,240 59,853 1,274 971 4,243 75,385 $ Less Minority Interest $ 9,482 9,482 5,434 5,434 34 4,082 3,111 971 $ Residential Group 2006 Plus Unconsolidated Investments at Pro-Rata $ 143,042 143,042 86,731 86,731 1,249 (1,836) (23,653) 32,071 32,071 $ Plus Discontinued Operations $ 16,318 16,318 6,554 6,554 626 10,390 4,757 1,390 (4,243) $ Pro-Rata Consolidation (Non-GAAP) $ 390,168 12 390,180 252,347 252,347 35,504 (1,718) 171,619 93,570 2,664 75,385 47 Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ 212,236 Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ 212,236 Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Preference payment ................................................................................................ Gain on disposition of rental properties and other investments, net of tax ............ Provision for decline in real estate, net of tax and minority interest ...................... Gain on disposition of equity method rental properties, net of tax ........................ Provision for decline in real estate of equity method rental properties, net of tax......................................................................................................................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Deferred gain on disposition of Lumber Group ............................................... (131,182) (7,904) (31,796) 9,666 (898) (1,180) 4,700 (245) (3,497) (125) (970) (894) 99,323 - $ - $ 4,700 (245) (4,700) 245 - $ (3,497) (125) (970) (894) 99,323 3,497 125 970 894 (99,323) - $ 212,236 (134,679) (8,029) (32,766) 8,772 (898) 104,023 (1,425) - $ 75,385 (69,184) (2,902) 997 (12) (2,722) (67) 291 43,703 - $ - $ - $ (2,722) (67) 291 43,703 2,722 67 (291) (43,703) - $ 75,385 (71,906) (2,969) 1,288 (12) 43,703 - Net earnings........................................................................................................... $ 147,234 $ - $ - $ - $ 147,234 $ 45,489 $ - $ - $ - $ 45,489 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Year Ended January 31, 2007 (in thousands) (continued) Land Development Group 2006 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 117,230 3 Exclude straight-line rent adjustment .......................................................................... 117,233 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Exclude preference payment........................................................................................ Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Remove gain on disposition of equity method rental properties ................................. Add back provision for decline in real estate of equity method rental properties....... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Preference payment ................................................................................................ Gain on disposition of rental properties and other investments, net of tax ............ Provision for decline in real estate, net of tax and minority interest ...................... Gain on disposition of equity method rental properties, net of tax ........................ Provision for decline in real estate of equity method rental properties, net of tax......................................................................................................................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Deferred gain on disposition of Lumber Group ............................................... Net earnings........................................................................................................... $ 62,145 (160) (10,448) (3) 51,534 $ $ $ $ $ $ $ $ 62,145 (160) (10,448) (3) 51,534 $ $ (10,342) (10,342) $ $ $ $ $ $ $ $ (10,342) (10,342) 75,546 75,546 18,179 39,190 99,056 8,875 23,632 4,404 62,145 $ Less Minority Interest $ 8,189 8,189 4,870 4,870 1,736 5,055 651 4,404 $ Plus Unconsolidated Investments at Pro-Rata $ 82,750 82,750 60,147 60,147 246 (22,059) 790 790 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 191,791 3 191,794 130,823 130,823 16,689 17,131 94,791 9,014 23,632 62,145 $ Full Consolidation (GAAP) $ (14,703) (14,703) (4,361) (10,342) $ Less Minority Interest $ $ The Nets 2006 Plus Unconsolidated Investments at Pro-Rata $ 19,136 19,136 30,959 30,959 (19) 14,654 2,812 2,812 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 19,136 19,136 30,959 30,959 (19) (49) (11,891) 2,812 (4,361) (10,342) 48 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Year Ended January 31, 2007 (in thousands) (continued) Corporate Activities 2006 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ Exclude straight-line rent adjustment .......................................................................... Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Exclude preference payment........................................................................................ Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Remove gain on disposition of equity method rental properties ................................. Add back provision for decline in real estate of equity method rental properties....... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Preference payment ................................................................................................ Gain on disposition of rental properties and other investments, net of tax ............ Provision for decline in real estate, net of tax and minority interest ...................... Gain on disposition of equity method rental properties, net of tax ........................ Provision for decline in real estate of equity method rental properties, net of tax......................................................................................................................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Deferred gain on disposition of Lumber Group ............................................... Net earnings........................................................................................................... $ (54,470) (2,660) 466 (56,664) $ $ $ $ $ $ 466 (466) $ $ (54,470) (2,660) 466 (56,664) $ 284,954 (200,526) (10,806) (43,907) 9,651 (898) (1,180) 4,700 (245) (6,219) (192) (679) (894) 143,026 466 $ 177,251 $ $ $ $ 4,700 (245) (4,700) 245 $ $ (6,219) (192) (679) (894) 143,492 6,219 192 679 894 (143,026) (466) $ $ 284,954 (206,745) (10,998) (44,586) 8,757 (898) 148,192 (1,425) 177,251 43,073 43,073 1,876 1 (41,196) 48,086 (34,812) (54,470) $ Less Minority Interest $ $ Plus Unconsolidated Investments at Pro-Rata $ $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 43,073 43,073 1,876 1 (41,196) 48,086 (34,812) (54,470) Full Consolidation (GAAP) $ 1,168,835 (15,950) 1,152,885 711,247 (6,299) (898) 704,050 61,737 48,542 (7,662) 400 36,091 587,943 295,978 (11,559) 30,074 11,504 $ 284,954 $ Less Minority Interest $ 98,001 98,001 46,133 46,133 2,763 54,631 24,557 30,074 $ Total 2006 Plus Unconsolidated Investments at Pro-Rata $ 355,457 355,457 242,789 242,789 3,301 (31,278) 7,662 (400) (36,091) 55,862 55,862 $ Plus Discontinued Operations $ 58,198 (44) 58,154 37,497 (938) 36,559 1,504 23,099 10,053 1,542 (11,504) $ Pro-Rata Consolidation (Non-GAAP) $ 1,484,489 (15,994) 1,468,495 945,400 (7,237) (898) 937,265 63,779 17,264 612,273 337,336 (10,017) 284,954 49 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended January 31, 2006 (in thousands) Commercial Group 2005 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 229,045 (6,308) Exclude straight-line rent adjustment .......................................................................... 222,737 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Gain on disposition of rental properties, net of tax ................................................ Provision of decline in real estate, net of tax and minority interest ....................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Net earnings........................................................................................................... $ 69,637 (31,001) (2,169) (22,685) 4,959 $ $ $ (1,971) (185) 430 (508) $ 69,637 (32,972) (2,354) (22,255) 4,451 $ 9,223 (19,558) (536) 8,380 11 $ $ $ (1,628) (29) (111) 20,691 $ 9,223 (21,186) (565) 8,269 11 20,691 105,462 (1,349) 104,113 1,302 2,300 2,745 124,971 44,689 (11,692) 22,394 57 69,637 $ Less Minority Interest $ 37,388 37,388 9,857 9,857 279 27,810 5,416 22,394 $ Plus Unconsolidated Investments at Pro-Rata $ 23,457 23,457 13,947 13,947 (153) (2,398) (2,745) 4,214 4,214 $ Plus Discontinued Operations $ 19,454 (69) 19,385 13,815 (577) 13,238 64 6,211 7,089 (935) (57) $ Pro-Rata Consolidation (Non-GAAP) $ 234,568 (6,377) 228,191 123,367 (1,926) 121,441 934 (98) 107,586 50,576 (12,627) 69,637 $ Full Consolidation (GAAP) $ 53,297 (11) 53,286 38,851 38,851 1,399 514 4,673 21,021 10,449 1,639 499 789 9,223 $ Less Minority Interest $ 3,819 3,819 2,406 2,406 27 1,440 941 499 $ Residential Group 2005 Plus Unconsolidated Investments at Pro-Rata $ 29,837 29,837 16,733 16,733 719 (658) (4,673) 8,492 8,492 $ Plus Discontinued Operations $ 5,918 5,918 3,315 3,315 109 2,712 2,651 (728) (789) $ Pro-Rata Consolidation (Non-GAAP) $ 85,233 (11) 85,222 56,493 56,493 2,200 (144) 30,785 20,651 911 9,223 50 (1,971) (185) 430 (508) 16,507 $ $ $ 1,971 185 (430) 508 $ 16,507 $ (1,628) (29) (111) 20,691 16,443 $ $ $ 1,628 29 111 (20,691) $ 16,443 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended January 31, 2006 (in thousands) (continued) Land Development Group 2005 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 30,628 (15) Exclude straight-line rent adjustment .......................................................................... 30,613 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Gain on disposition of rental properties, net of tax ................................................ Provision of decline in real estate, net of tax and minority interest ....................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Net earnings........................................................................................................... $ 20,158 (44) (4,371) 15 (1,072) $ $ $ $ 20,158 (44) (4,371) 15 (1,072) $ (5,679) $ $ $ $ (5,679) 18,559 18,559 6,214 13,916 32,184 1,979 8,050 1,997 20,158 $ Less Minority Interest $ 2,810 2,810 1,335 1,335 653 2,128 131 1,997 $ Plus Unconsolidated Investments at Pro-Rata $ 25,767 25,767 12,246 12,246 26 (13,385) 162 162 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 53,585 (15) 53,570 29,470 29,470 5,587 531 30,218 2,010 8,050 20,158 $ Full Consolidation (GAAP) $ (7,537) (7,537) (1,858) (5,679) $ Less Minority Interest $ $ The Nets 2005 Plus Unconsolidated Investments at Pro-Rata $ 7,531 7,531 14,136 14,136 121 7,484 1,000 1,000 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 7,531 7,531 14,136 14,136 121 (53) (6,537) 1,000 (1,858) (5,679) 51 14,686 $ $ $ $ 14,686 $ (5,679) $ $ $ $ (5,679) Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Three Months Ended January 31, 2006 (in thousands) (continued) Corporate Activities 2005 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ Exclude straight-line rent adjustment .......................................................................... Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ Depreciation and amortization – Real Estate Groups............................................. Amortization of mortgage procurement costs – Real Estate Groups ..................... Deferred taxes – Real Estate Groups ...................................................................... Straight-line rent adjustment .................................................................................. Gain on disposition of rental properties, net of tax ................................................ Provision of decline in real estate, net of tax and minority interest ....................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Net earnings........................................................................................................... $ (19,682) 6,021 (61) $ $ $ $ (19,682) 6,021 (61) $ 73,657 (50,603) (2,705) (12,655) 4,985 (61) (1,072) $ $ $ (3,599) (214) 319 (508) 20,691 $ 73,657 (54,202) (2,919) (12,336) 4,477 20,630 (1,072) 10,825 10,825 377 (21) (10,469) 12,837 (3,624) (19,682) $ Less Minority Interest $ $ Plus Unconsolidated Investments at Pro-Rata $ $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 10,825 10,825 377 (21) (10,469) 12,837 (3,624) (19,682) $ Full Consolidation (GAAP) $ 312,970 (6,334) 306,636 173,697 (1,349) 172,348 9,292 9,172 7,418 160,170 69,954 (7,485) 24,890 846 73,657 $ Less Minority Interest $ 44,017 44,017 13,598 13,598 959 31,378 6,488 24,890 $ Total 2005 Plus Unconsolidated Investments at Pro-Rata $ 86,592 86,592 57,062 57,062 713 (8,957) (7,418) 13,868 13,868 $ Plus Discontinued Operations $ 25,372 (69) 25,303 17,130 (577) 16,553 173 8,923 9,740 (1,663) (846) $ Pro-Rata Consolidation (Non-GAAP) $ 380,917 (6,403) 374,514 234,291 (1,926) 232,365 9,219 215 151,583 87,074 (9,148) 73,657 52 (13,722) $ $ $ $ (13,722) $ (3,599) (214) 319 (508) 20,691 28,235 $ $ $ 3,599 214 (319) 508 (20,691) $ 28,235 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Year Ended January 31, 2006 (in thousands) Commercial Group 2005 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 824,337 (18,174) Exclude straight-line rent adjustment .......................................................................... 806,163 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Remove gain on disposition of equity method rental properties ................................. Add back provision for decline in real estate of equity method rental properties....... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... 406,316 (5,394) 400,922 4,415 24,637 (13,145) 704 11,211 433,063 170,722 641 42,417 10,589 $ Less Minority Interest $ 106,236 106,236 41,258 41,258 801 65,779 23,362 42,417 $ Plus Unconsolidated Investments at Pro-Rata $ 96,766 96,766 54,970 54,970 (863) (24,503) 13,145 (704) (11,211) 17,660 17,660 $ Plus Discontinued Operations $ 86,121 (163) 85,958 64,095 (2,338) 61,757 212 24,413 18,009 (4,185) (10,589) $ Pro-Rata Consolidation (Non-GAAP) $ 900,988 (18,337) 882,651 484,123 (7,732) 476,391 2,963 134 409,357 183,029 (3,544) 229,872 $ Full Consolidation (GAAP) $ 196,266 (40) 196,226 137,079 137,079 3,842 13,815 (7,878) 16,938 85,864 41,503 (4,050) 179 5,172 53,404 $ Less Minority Interest $ 14,944 14,944 9,934 9,934 40 5,050 4,871 179 $ Residential Group 2005 Plus Unconsolidated Investments at Pro-Rata $ 121,084 121,084 67,861 67,861 1,656 (14,235) 7,878 (16,938) 31,584 31,584 $ Plus Discontinued Operations $ 29,271 29,271 14,341 14,341 331 15,261 12,053 (1,964) (5,172) $ Pro-Rata Consolidation (Non-GAAP) $ 331,677 (40) 331,637 209,347 209,347 5,789 (420) 127,659 80,269 (6,014) 53,404 53 Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ 229,872 Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ 229,872 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 and other investments, net of tax ............ Provision for decline in real estate, net of tax and minority interest ...................... Gain on disposition of equity method rental properties, net of tax ........................ Provision for decline in real estate of equity method rental properties, net of tax......................................................................................................................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Net earnings........................................................................................................... $ (119,633) (7,440) (33,019) 12,780 (920) 8,064 (432) (10,723) (1,609) (1,059) (2,175) 73,706 $ - $ 8,064 (432) (8,064) 432 - $ (10,723) (1,609) (1,059) (2,175) 10,723 1,609 1,059 2,175 - $ 229,872 (130,356) (9,049) (34,078) 10,605 8,064 (1,352) - $ 53,404 (55,034) (2,348) 7,825 40 (1,960) 4,836 (7,135) (181) (377) 26,505 $ - $ 4,836 (4,836) - $ (7,135) (181) (377) 26,505 7,135 181 377 (26,505) $ 53,404 (62,169) (2,529) 7,448 40 31,341 (1,960) - $ - $ - $ - $ 73,706 $ 25,575 $ - $ - $ - $ 25,575 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Year Ended January 31, 2006 (in thousands) (continued) Land Development Group 2005 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ 107,869 (15) Exclude straight-line rent adjustment .......................................................................... 107,854 Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Remove gain on disposition of equity method rental properties ................................. Add back provision for decline in real estate of equity method rental properties....... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. 64,872 64,872 17,716 41,304 102,002 7,606 29,789 5,270 59,337 $ Less Minority Interest $ 7,863 7,863 3,922 3,922 1,763 5,704 434 5,270 $ Plus Unconsolidated Investments at Pro-Rata $ 73,102 73,102 38,112 38,112 137 (34,774) 353 353 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 173,108 (15) 173,093 99,062 99,062 16,090 6,530 96,651 7,525 29,789 59,337 $ Full Consolidation (GAAP) $ (24,534) (24,534) (8,427) (16,107) $ Less Minority Interest $ $ The Nets 2005 Plus Unconsolidated Investments at Pro-Rata $ 27,330 27,330 49,078 49,078 288 24,452 2,992 2,992 $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 27,330 27,330 49,078 49,078 288 (82) (21,542) 2,992 (8,427) (16,107) 54 Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ 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 and other investments, net of tax ............ Provision for decline in real estate, net of tax and minority interest ...................... Gain on disposition of equity method rental properties, net of tax ........................ Provision for decline in real estate of equity method rental properties, net of tax......................................................................................................................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Net earnings........................................................................................................... $ 59,337 (190) (6,004) 15 (1,072) 52,086 $ - $ - $ - $ 59,337 (190) (6,004) 15 (1,072) - $ (16,107) - $ - $ - $ - $ (16,107) - $ - $ - $ - $ 52,086 $ (16,107) $ - $ - $ - $ (16,107) Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Summary of Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) — Year Ended January 31, 2006 (in thousands) (continued) Corporate Activities 2005 Full Consolidation (GAAP) Revenues from real estate operations .......................................................................... $ Exclude straight-line rent adjustment .......................................................................... Adjusted revenues........................................................................................................ Operating expenses, including depreciation and amortization, and amortization of mortgage procurement costs for non-Real Estate Groups .................................. Exclude straight-line rent adjustment .......................................................................... Adjusted operating expenses ....................................................................................... Add interest and other income..................................................................................... Add equity in earnings of unconsolidated entities....................................................... Remove gain on disposition of equity method rental properties ................................. Add back provision for decline in real estate of equity method rental properties....... Add back equity method depreciation and amortization expense ............................... Net operating income................................................................................................. Interest expense, including early extinguishment of debt ........................................... Income tax expense (benefit)....................................................................................... Minority interest in earnings before depreciation and amortization ........................... Add: EBDT from discontinued operations .................................................................. Earnings before depreciation, amortization and deferred taxes (EBDT) ............ $ Reconciliation to net earnings: Earnings before depreciation, amortization and deferred taxes (EBDT) ............... $ 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 and other investments, net of tax ............ Provision for decline in real estate, net of tax and minority interest ...................... Gain on disposition of equity method rental properties, net of tax ........................ Provision for decline in real estate of equity method rental properties, net of tax......................................................................................................................... Discontinued operations, net of tax and minority interest: Depreciation and amortization – Real Estate Groups....................................... Amortization of mortgage procurement costs – Real Estate Groups ............... Deferred taxes – Real Estate Groups ................................................................ Straight-line rent adjustment ............................................................................ Gain on disposition of rental properties ........................................................... Net earnings........................................................................................................... $ (56,010) 3,958 311 (51,741) $ $ $ $ $ $ $ $ (56,010) 3,958 311 (51,741) $ $ 270,496 (174,857) (9,788) (27,240) 12,835 311 (3,952) 12,900 (432) (17,858) (1,790) (1,436) (2,175) 26,505 83,519 $ $ $ $ 12,900 (432) (12,900) 432 $ $ (17,858) (1,790) (1,436) (2,175) 26,505 17,858 1,790 1,436 2,175 (26,505) $ $ 270,496 (192,715) (11,578) (28,676) 10,660 39,716 (4,384) 83,519 37,971 37,971 1,800 (21) (36,192) 45,003 (25,185) (56,010) $ Less Minority Interest $ $ Plus Unconsolidated Investments at Pro-Rata $ $ Plus Discontinued Operations $ $ Pro-Rata Consolidation (Non-GAAP) $ 37,971 37,971 1,800 (21) (36,192) 45,003 (25,185) (56,010) Full Consolidation (GAAP) $ 1,128,472 (18,229) 1,110,243 646,238 (5,394) 640,844 27,773 55,201 (21,023) 704 28,149 560,203 264,834 (7,232) 47,866 15,761 $ 270,496 $ Less Minority Interest $ 129,043 129,043 55,114 55,114 2,604 76,533 28,667 47,866 $ Total 2005 Plus Unconsolidated Investments at Pro-Rata $ 318,282 318,282 210,021 210,021 1,218 (49,060) 21,023 (704) (28,149) 52,589 52,589 $ Plus Discontinued Operations $ 115,392 (163) 115,229 78,436 (2,338) 76,098 543 39,674 30,062 (6,149) (15,761) $ Pro-Rata Consolidation (Non-GAAP) $ 1,433,103 (18,392) 1,414,711 879,581 (7,732) 871,849 26,930 6,141 575,933 318,818 (13,381) 270,496 55 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate COMMERCIAL GROUP OFFICE BUILDINGS Date of Opening/ Acquisition/ Expansion 2004 2002 2003 1999 2001 2002 2005 1991 2006 1995 2003 1986 2003 Leasable Square Feet 399,000 202,000 215,000 277,000 122,000 145,000 176,000 119,000 142,000 216,000 653,000 412,000 146,000 Leasable Square Feet at ProRata % 399,000 202,000 215,000 277,000 122,000 145,000 176,000 119,000 142,000 184,000 620,000 412,000 110,000 Name Consolidated Office Buildings 2 Hanson Place ....................................... 35 Landsdowne Street............................. 40 Landsdowne Street............................. 45/75 Sidney Street................................. 65/80 Landsdowne Street........................ 88 Sidney Street...................................... Ballston Common Office Center............. Chase Financial Tower ........................... + Edgeworth Building................................ Eleven MetroTech Center ....................... Fifteen MetroTech Center....................... Halle Building......................................... Harlem Center......................................... Legal Ownership (1) 100.00 100.00 100.00 100.00 100.00 100.00 50.00 95.00 100.00 85.00 95.00 75.00 75.00 % % % % % % % % % % % % % Pro-Rata Ownership (2) 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 85.00 95.00 100.00 75.00 % % % % % % % % % % % Location Brooklyn, NY Cambridge, MA Cambridge, MA Cambridge, MA Cambridge, MA Cambridge, MA Arlington, VA Cleveland, OH Richmond, VA Brooklyn, NY Brooklyn, NY Major Tenants Bank of New York, HSBC Millennium Pharmaceuticals Millennium Pharmaceuticals Millennium Pharmaceuticals Partners HealthCare System Alkermes, Inc. US Coast Guard Chase Manhattan Mortgage Corporation Heushler Flieshler City of New York - CDCSA; E-911 Empire Blue Cross and Blue Shield; City of New York - HRA Case Western Reserve University; First American Equity; Liggett-Stashower Office of General Services-Temporary Disability & Assistance; State Liquor Authority Evanston Northwestern Hospital Nanoink, Inc. Leasing in Progress Ariad Pharmaceuticals Johns Hopkins, Spec Biotech Knight Ridder; Merrill Lynch; Calpine; UBS Financial; Camera 12 Cinemas Washington Group; Chase Manhattan Mortgage Corporation; Quicken Loans; Educational Loan Servicing Corp. Legg Mason; Covington & Burling; Osler Hoskin City of New York - Fire Department Keyspan; Bear Stearns Morgan Stanley; Goldman Sachs; U.S. Attorney Resurrection Health Care Genzyme Biosurgery; Alkermes, Inc. 56 % Cleveland, OH % Manhattan, NY + + * * Illinois Science and Technology Park – Building A ......................................... – Building P.......................................... – Building Q ......................................... Jackson Building..................................... Johns Hopkins – 855 North Wolfe Street .................................................... Knight Ridder Building at Fairmont Plaza ..................................................... M. K. Ferguson Plaza ............................. 2006 2006 2007 1987 2008 1998 1990 100.00 100.00 100.00 100.00 76.60 85.00 1.00 % % % % % % % 100.00 100.00 100.00 100.00 76.60 85.00 1.00 % % % % Skokie, IL Skokie, IL Skokie, IL Cambridge, MA 225,000 127,000 160,000 99,000 278,000 404,000 478,000 225,000 127,000 160,000 99,000 213,000 343,000 5,000 % East Baltimore, MD % San Jose, CA % Cleveland, OH * New York Times..................................... Nine MetroTech Center North ................ One MetroTech Center ........................... One Pierrepont Plaza .............................. 2007 1997 1991 1988 2006 1990 70.00 85.00 82.50 91.70 100.00 100.00 % % % % % % 79.50 85.00 82.50 91.70 100.00 100.00 % Manhattan, NY % Brooklyn, NY % Brooklyn, NY % Brooklyn, NY % Skokie, IL % Cambridge, MA 736,000 317,000 933,000 656,000 40,000 126,000 585,000 269,000 770,000 602,000 40,000 126,000 + Resurrection Health Care........................ Richards Building ................................... Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate COMMERCIAL GROUP OFFICE BUILDINGS (continued) Date of Opening/ Acquisition/ Expansion 1991 2006 1992 1983 2004 1990 2004 Leasable Square Feet 320,000 45,000 409,000 577,000 177,000 521,000 123,000 Leasable Square Feet at ProRata % 320,000 41,000 409,000 577,000 142,000 430,000 123,000 8,729,000 Name Consolidated Office Buildings (continued) Skylight Office Tower ............................ + Legal Ownership (1) 92.50 90.00 100.00 100.00 80.00 82.50 100.00 % % % % % % % Pro-Rata Ownership (2) 100.00 90.00 100.00 100.00 80.00 82.50 100.00 Location Major Tenants Cap Gemini; Travelers Indemnity; Ulmer & Berne, LLP University of Colorado Hospital Internal Revenue Service Forest City Enterprises, Inc.; Greater Cleveland Growth Association Leasing in progress Securities Industry Automation Corp.; City of New York - Board of Education University of Pennsylvania % Cleveland, OH % Denver, CO % Brooklyn, NY % Cleveland, OH % Brooklyn, NY % Brooklyn, NY % Philadelphia, PA Stapleton Medical Office Building ......... Ten MetroTech Center............................ Terminal Tower ...................................... Twelve MetroTech Center ..................... Two MetroTech Center........................... University of Pennsylvania ..................... Consolidated Office Buildings Subtotal...................................................................................................................................................................................................... 9,975,000 Unconsolidated Office Buildings 350 Massachusetts Ave........................... + Advent Solar ........................................... + Bulletin Building .................................... Chagrin Plaza I & II................................ Clark Building ........................................ Emery-Richmond.................................... Enterprise Place ...................................... Liberty Center......................................... One International Place........................... Signature Square I................................... Signature Square II ................................. 57 1998 2006 2006 1969 1989 1991 1998 1986 2000 1986 1989 50.00 47.50 50.00 66.67 50.00 50.00 50.00 50.00 50.00 50.00 50.00 % % % % % % % % % % % 50.00 47.50 50.00 66.67 50.00 50.00 50.00 50.00 50.00 50.00 50.00 % Cambridge, MA % Albuquerque, NM % San Francisco, CA % % % % Beachwood, OH Cambridge, MA Warrensville Hts., OH Beachwood, OH % Pittsburgh, PA % Cleveland, OH % Beachwood, OH % Beachwood, OH Star Market; Tofias Advent Solar Great West Life and Annuity; Corinthian School National City Bank; Benihana; H&R Block Acambis Allstate Insurance University of Phoenix; Advance Payroll; PS Executive Centers Federated Investors Fort Dearborn Life Ins.; Battelle Memorial; Transportation Security Administration Ciuni & Panichi Cleveland Clinic Ophthalmology; Allen Telecom, Inc. 169,000 88,000 87,000 114,000 122,000 5,000 132,000 527,000 88,000 79,000 82,000 85,000 42,000 44,000 76,000 61,000 3,000 66,000 264,000 44,000 40,000 41,000 Unconsolidated Office Buildings Subtotal.................................................................................................................................................................................................. 1,493,000 766,000 9,495,000 8,532,000 Total Office Buildings at January 31, 2007..................................................................................................................................................................................................... 11,468,000 Total Office Buildings at January 31, 2006..................................................................................................................................................................................................... 11,185,000 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate COMMERCIAL GROUP RETAIL CENTERS Total Square Feet at Pro-Rata % 776,000 578,000 1,048,000 872,000 1,171,000 Gross Leasable Area at Pro-Rata % 236,000 310,000 330,000 318,000 397,000 Name Consolidated Regional Malls Antelope Valley Mall............. Ballston Common Mall.......... Gallaria at Sunset................... Mall at Robinson.................... Mall at Stonecrest .................. 58 Opening/ Acquisition/ Expansion 1990/1999 1986/1999 1996/2002 2001 2001 Legal Ownership (1) 78.00 % 100.00 % 100.00 % 56.67 % 66.67 % Pro-Rata Ownership (2) 78.00 100.00 100.00 100.00 100.00 Location Major Tenants Sears; JCPenney; Dillard's; Harris Gottschalks; Mervyn’s Macy’s; Sport & Health; Regal Cinemas Dillard’s; Macy’s; Mervyn’s; JCPenney; Galyan’s Macy’s; Sears; JCPenney; Dick's Sporting Goods Parisian; Sears; JCPenney; Dillard's; AMC Theatre; Macy’s Bass Pro; Target; Foley's; Harkins Theatre JCPenney; Macy’s; Target Bass Pro; Macy’s JCPenney; Sears; RobinsonsMay; Macy's; Edwards Cinema Nordstrom; Hecht's; Dillard's; Dick's Sporting Goods Macy's Macy's; Mervyn’s; Nordstrom; AMC Theater Macy's; JCPenney; AMC Theater Total Square Feet 995,000 578,000 1,048,000 872,000 1,171,000 Gross Leasable Area 303,000 310,000 330,000 318,000 397,000 % Palmdale, CA % Arlington, VA % Henderson, NV % Pittsburgh, PA % Atlanta, GA ^+ ^* * Northfield at Stapleton........... Orchard Town Center ............ Promenade Bolingbrook ........ Promenade in Temecula......... Short Pump Town Center....... Simi Valley Town Center ...... South Bay Galleria................. Victoria Gardens.................... 2005/2006 2008 2007 1999/2002 2003/2005 2005 1985/2001 2004 95.00 % 100.00 % 100.00 % 75.00 % 50.00 % 85.00 % 100.00 % 40.00 % 97.90 100.00 100.00 100.00 100.00 100.00 100.00 80.00 % Denver, CO % Westminister, CO % Bolingbrook, IL % Temecula, CA % Richmond, VA % Simi Valley, CA % Redondo Beach, CA % Rancho Cucamonga, CA 1,170,000 971,000 736,000 1,013,000 1,193,000 612,000 955,000 1,139,000 12,453,000 1,145,000 971,000 736,000 1,013,000 1,193,000 612,000 955,000 911,000 560,000 557,000 409,000 425,000 590,000 365,000 387,000 670,000 548,000 557,000 409,000 425,000 590,000 365,000 387,000 536,000 5,408,000 Consolidated Regional Malls Subtotal............................................................................................................................................................................... 11,981,000 5,621,000 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate COMMERCIAL GROUP RETAIL CENTERS (continued) Total Square Feet at Pro-Rata % 306,000 399,000 17,000 373,000 Opening/ Acquisition/ Name Expansion Consolidated Specialty Retail Centers 42nd Street ................................. Atlantic Center ........................... Atlantic Center Site V ................ Atlantic Terminal ....................... 1999 1996 1998 2004 Legal Ownership (1) 100.00 100.00 100.00 100.00 % % % % Pro-Rata (2) Ownership 100.00 100.00 100.00 100.00 % % % % Location Manhattan, NY Brooklyn, NY Brooklyn, NY Brooklyn, NY Major Tenants AMC Theaters; Modell's; Dave & Buster’s; Madame Tussaud’s Wax Museum Pathmark; OfficeMax; Old Navy; Marshall's; Sterns; Circuit City; NYC - Dept. of Motor Vehicles Modell's Target; Designer Shoe Warehouse; Chuck E. Cheese's; Daffy's Total Square Feet 306,000 399,000 17,000 373,000 Gross Leasable Area 306,000 399,000 17,000 373,000 Gross Leasable Area at Pro-Rata % 306,000 399,000 17,000 373,000 Avenue at Tower City Center .................................. Brooklyn Commons ................... Bruckner Boulevard ................... Columbia Park Center................ Court Street ................................ Eastchester.................................. Forest Avenue ............................ Grand Avenue ............................ Gun Hill Road ............................ Harlem Center ............................ Kaufman Studios........................ Market at Tobacco Row............. Northern Boulevard.................... Quartermaster Plaza ................... Quebec Square ........................... Queens Place .............................. * 1990 2004 1996 1999 2000 2000 2000 1997 1997 2002 1999 2002 1997 2004 2002 2001 100.00 100.00 100.00 75.00 100.00 100.00 100.00 100.00 100.00 75.00 100.00 100.00 100.00 100.00 90.00 100.00 % % % % % % % % % % % % % % % % 100.00 100.00 100.00 75.00 100.00 100.00 100.00 100.00 100.00 75.00 100.00 100.00 100.00 100.00 90.00 100.00 % Cleveland, OH % % % % % % % % % % % % % % % Brooklyn, NY Bronx, NY North Bergen, NJ Brooklyn, NY Bronx, NY Staten Island, NY Queens, NY Bronx, NY Manhattan, NY Queens, NY Richmond, VA Queens, NY Philadelphia, PA Denver, CO Queens, NY Hard Rock Café; Morton's of Chicago; Cleveland Cinemas Lowe's Conway; Seaman's; Old Navy Shop Rite; Old Navy; Circuit City; Staples; Bally's; Shopper's World United Artists; Barnes & Noble Pathmark United Artists Stop & Shop Home Depot; Chuck E. Cheese's Marshall's; CVS/Pharmacy; Staples; H&M United Artists Rich Foods; CVS/Pharmacy Stop & Shop; Marshall’s; Old Navy A.J. Wright; Home Depot; BJ's Wholesale; Staples; PetSmart; Walgreen's Wal-Mart; Home Depot; Sam's Club; Ross Dress for Less; Office Depot; PetSmart Target; Best Buy; Macy's Furniture; Designer Shoe Warehouse 367,000 151,000 113,000 347,000 103,000 63,000 70,000 100,000 147,000 126,000 84,000 43,000 218,000 459,000 740,000 455,000 367,000 151,000 113,000 260,000 103,000 63,000 70,000 100,000 147,000 95,000 84,000 43,000 218,000 459,000 666,000 455,000 367,000 151,000 113,000 347,000 103,000 63,000 70,000 100,000 147,000 126,000 84,000 43,000 218,000 459,000 218,000 221,000 367,000 151,000 113,000 260,000 103,000 63,000 70,000 100,000 147,000 95,000 84,000 43,000 218,000 459,000 196,000 221,000 59 Rancho Cucamonga Leggio ... Richmond Avenue...................... Saddle Rock Village................... South Bay Southern Center........ Station Square ............................ Woodbridge Crossing ................ 2007 1998 2005 1978 1994/2002 2002 80.00 100.00 80.00 100.00 100.00 100.00 % % % % % % 80.00 100.00 100.00 100.00 100.00 100.00 % Rancho Cucamonga, CA % % % % % Staten Island, NY Aurora, CO Redondo Beach, CA Pittsburgh, PA Woodbridge, NJ Bass Pro Circuit City; Staples Target; JoAnn Fabrics CompUSA Hard Rock Café; Grand Concourse Restaurant; Buca Di Beppo Great Indoors; Linens-N-Things; Circuit City; Modell's; Thomasville Furniture; Party City 180,000 76,000 271,000 78,000 288,000 284,000 144,000 76,000 271,000 78,000 288,000 284,000 180,000 76,000 97,000 78,000 288,000 284,000 144,000 76,000 97,000 78,000 288,000 284,000 Consolidated Specialty Retail Centers Subtotal ......................................................................................................................................................................... 5,858,000 Consolidated Retail Centers Total .............................................................................................................................................................................................. 18,311,000 5,630,000 17,611,000 4,928,000 10,549,000 4,752,000 10,160,000 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate COMMERCIAL GROUP RETAIL CENTERS (continued) Date of Opening/ Acquisition/ Expansion 1996/2000 1983 2006 2008 Total Square Feet 908,000 897,000 1,462,000 530,000 3,797,000 Total Square Feet at Pro-Rata % 454,000 449,000 731,000 354,000 1,988,000 Gross Leasable Area 331,000 361,000 812,000 380,000 1,884,000 Gross Leasable Area at Pro-Rata % 166,000 181,000 406,000 253,000 1,006,000 Name Unconsolidated Regional Malls Boulevard Mall.................. Charleston Town Center ... San Francisco Centre ........ + ^* Shops at Wiregrass............ Legal Ownership (1) 50.00 % 50.00 % 50.00 % 50.00 % Pro-Rata Ownership (2) 50.00 50.00 50.00 66.70 % % % % Location Amherst, NY Charleston, WV San Francisco, CA Tampa, FL Major Tenants JCPenney; Macy’s; Sears; Michael’s Macy’s; JCPenney; Sears Nordstrom’s; Bloomingdale’s; Century Theaters JCPenney Unconsolidated Regional Malls Subtotal .......................................................................................................................................................................... Unconsolidated Specialty Retail Centers East River Plaza ................ 2008 * Golden Gate ...................... 1958 Marketplace at Riverpark........................... + Metreon ............................. Plaza at Robinson Town Center............................ 1996 60 35.00 % 50.00 % 50.00 % 50.00 50.00 50.00 % % % Manhattan, NY Mayfield Hts., OH Fresno, CA 2006 1989 50.00 % 50.00 % 50.00 50.00 % % San Francisco, CA Pittsburgh, PA Home Depot; Target; Best Buy OfficeMax; Old Navy; Linens-N-Things; Marshall’s; Cost Plus JCPenney; Best Buy; Linens-N-Things; Marshall’s; Office Max; Old Navy; Target; Sports Authority Lowes; IMAX TJ Maxx; Marshall’s; CompUSA; IKEA; Value City; JoAnn Fabrics 514,000 362,000 471,000 257,000 181,000 236,000 514,000 362,000 296,000 257,000 181,000 148,000 290,000 507,000 145,000 254,000 290,000 507,000 145,000 254,000 Unconsolidated Specialty Retail Centers Subtotal............................................................................................................................................................ Unconsolidated Retail Centers Subtotal............................................................................................................................................................................ 2,144,000 5,941,000 1,073,000 3,061,000 20,672,000 17,735,000 1,969,000 3,853,000 14,402,000 12,955,000 985,000 1,991,000 12,151,000 10,427,000 Total Retail Centers at January 31, 2007 ............................................................................................................................................................................... 24,252,000 Total Retail Centers at January 31, 2006 ............................................................................................................................................................................... 21,745,000 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate COMMERCIAL GROUP HOTELS Opening/ Acquisition/ Expansion 1983 1990 1998/2001 Legal Ownership (1) 95.00 % 95.00 % 100.00 % Pro-Rata Ownership (2) Hotel Rooms at Pro-Rata % 352 206 399 957 Name Consolidated Hotels Charleston Marriott .................................................................................... Ritz-Carlton, Cleveland.............................................................................. Sheraton Station Square ............................................................................. Location Rooms 352 206 399 957 100.00 % Charleston, WV 100.00 % Cleveland, OH 100.00 % Pittsburgh, PA Consolidated Hotels Subtotal ....................................................................................................................................................................................................... Unconsolidated Hotels Courtyard by Marriott ................................................................................ University Park at MIT............................................................................... Westin Convention Center ......................................................................... 61 1985 1998 1986 3.97 % 50.00 % 50.00 % 3.97 % Detroit, MI 50.00 % Cambridge, MA 50.00 % Pittsburgh, PA 250 210 616 1,076 2,033 2,496 10 105 308 423 1,380 1,613 Unconsolidated Hotels Subtotal............................................................................................................................................................................................... Total Hotel Rooms at January 31, 2007 ....................................................................................................................................................................................... Total Hotel Rooms at January 31, 2006 ....................................................................................................................................................................................... Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate RESIDENTIAL GROUP APARTMENTS Date of Opening/ Acquisition/ Expansion Name Consolidated Apartment Communities 100 Landsdowne Street .................................................................. 2005 101 San Fernando........................................................................... 2000 + 1251 S. Michigan ........................................................................... 2006 23 Sidney Street ............................................................................. 2005 American Cigar Company.............................................................. 2000 Ashton Mill .................................................................................... 2005 Autumn Ridge ................................................................................ 2002 2004 Botanica on the Green (East 29th Avenue Town Center)................ Botanica II...................................................................................... 2007 * Bowin ............................................................................................. 1998 Cambridge Towers ......................................................................... 2002 Consolidated-Carolina.................................................................... 2003 Coraopolis Towers ......................................................................... 2002 Crescent Flats (East 29th Avenue Town Center)............................. 2004 Cutters Ridge at Tobacco Row....................................................... 2006 + Dallas Mercantile ........................................................................... 2007-2008 ^* Donora Towers............................................................................... 2002 Drake.............................................................................................. 1998 Emerald Palms................................................................................ 1996/2004 Grand.............................................................................................. 1999 Grand Lowry Lofts......................................................................... 2000 Grove.............................................................................................. 2003 Heritage .......................................................................................... 2002 Independence Place II .................................................................... 2003 Kennedy Biscuit Lofts.................................................................... 1990 Knolls ............................................................................................. 1995 Lakeland......................................................................................... 1998 Landings of Brentwood .................................................................. 2002 Lenox Club..................................................................................... 1991 Lenox Park ..................................................................................... 1992 Lofts at 1835 Arch.......................................................................... 2001 Lucky Strike ................................................................................... 2007 * Metro 417 ....................................................................................... 2005 Metropolitan................................................................................... 1989 Museum Towers............................................................................. 1997 One Franklintown........................................................................... 1988 Parmatown Towers and Gardens.................................................... 1972-1973 Legal Ownership (1) 100.00 66.50 100.00 100.00 100.00 90.00 100.00 90.00 90.00 1.99 100.00 89.99 80.00 90.00 100.00 100.00 100.00 1.99 100.00 85.50 0.10 100.00 100.00 100.00 2.99 1.00 1.98 100.00 95.00 95.00 1.99 100.00 75.00 100.00 100.00 100.00 100.00 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Pro-Rata Ownership (2) 100.00 95.00 100.00 100.00 100.00 100.00 100.00 90.00 90.00 95.05 100.00 100.00 80.00 90.00 100.00 100.00 100.00 95.05 100.00 85.50 90.00 100.00 100.00 100.00 100.00 100.00 94.10 100.00 95.00 95.00 95.05 100.00 100.00 100.00 100.00 100.00 100.00 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Location Cambridge, MA San Jose, CA Chicago, IL Cambridge, MA Richmond, VA Cumberland, RI Sterling Heights, MI Denver, CO Denver, CO Detroit, MI Detroit, MI Richmond, VA Coraopolis, PA Denver, CO Richmond, VA Dallas, TX Donora, PA Philadelphia, PA Miami, FL North Bethesda, MD Denver, CO Ontario, CA San Diego, CA Parma Heights, OH Cambridge, MA Orange, CA Waterford, MI Nashville, TN Arlington, VA Silver Spring, MD Philadelphia, PA Richmond, VA Los Angeles, CA Los Angeles, CA Philadelphia, PA Philadelphia, PA Parma, OH Leasable Units 203 323 91 51 171 193 251 78 154 193 250 158 200 66 12 366 103 282 505 549 261 101 230 201 142 260 200 724 385 406 191 131 277 270 286 335 412 Leasable Units at Pro-Rata % 203 307 91 51 171 193 251 70 139 183 250 158 160 59 12 366 103 268 505 469 235 101 230 201 142 260 188 724 366 386 182 131 277 270 286 335 412 62 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate RESIDENTIAL GROUP APARTMENTS (continued) Date of Opening/ Acquisition/ Expansion 1992 2003 1990 2006 2002 1994-1995 Name Consolidated Apartment Communities (continued) Pavilion .......................................................................................... Plymouth Square ............................................................................ Queenswood................................................................................... Sky55 ............................................................................................. + Southfield ....................................................................................... Village Green ................................................................................. Legal Ownership (1) 95.00 100.00 99.00 100.00 100.00 100.00 % % % % % % Pro-Rata Ownership (2) 95.00 100.00 100.00 100.00 100.00 100.00 % % % % % % Location Chicago, IL Detroit, MI Corona, NY Chicago, IL White Marsh, MD Beachwood, OH Leasable Units 1,114 280 296 411 212 360 11,684 Leasable Units at Pro-Rata % 1,058 280 296 411 212 360 11,352 Consolidated Apartment Communities Subtotal ............................................................................................................................................................................ Consolidated Supported-Living Apartments Forest Trace.................................................................................... Sterling Glen of Bayshore .............................................................. Sterling Glen of Center City........................................................... Sterling Glen of Darien .................................................................. Sterling Glen of Forest Hills........................................................... Sterling Glen of Lynbrook ............................................................. Sterling Glen of Plainview ............................................................. Sterling Glen of Roslyn.................................................................. * Sterling Glen of Rye Brook............................................................ Sterling Glen of Stamford .............................................................. 2000 2001 2002 2001 2001 2005 2000 2007 2004 2000 100.00 80.00 80.00 80.00 56.00 80.00 80.00 80.00 40.00 80.00 % % % % % % % % % % 100.00 100.00 100.00 100.00 70.00 100.00 100.00 100.00 50.00 100.00 % % % % % % % % % % Lauderhill, FL Bayshore, NY Philadelphia, PA Darien, CT Forest Hills, NY Lynbrook, NY Plainview, NY Roslyn, NY Ryebrook, NY Stamford, CT 322 85 135 80 83 130 79 158 168 166 1,406 13,090 322 85 135 80 58 130 79 158 84 166 1,297 12,649 63 Consolidated Supported-Living Apartments Subtotal.................................................................................................................................................................... Consolidated Apartment Total....................................................................................................................................................................................................... Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate RESIDENTIAL GROUP APARTMENTS (continued) Date of Opening/ Acquisition/ Expansion 2001-2007 1988-1989 1996-2001 1969 1976 1979 1999 1967 2002 1974 1996-2000 1969 1963 2006-2008 2003 1981 1998 1987-1989 2002-2004 1980 1982 1979 1981 1975 1983 1966 1969 1990 1973 1979-1986 2005 1969 1985 1980 Name Unconsolidated Apartment Communities ^*++ Arbor Glen ..................................................................................... Bayside Village .............................................................................. Big Creek ....................................................................................... Boulevard Towers .......................................................................... (3) Brookpark Place ............................................................................. Brookview Place ............................................................................ (3) Burton Place ................................................................................... Camelot .......................................................................................... (3) Carl D. Perkins ............................................................................... (3) Cedar Place..................................................................................... Cherry Tree .................................................................................... Chestnut Lake................................................................................. Clarkwood ...................................................................................... ^*++ Cobblestone Court.......................................................................... Colonial Grand ............................................................................... Connellsville Towers...................................................................... Coppertree ...................................................................................... Deer Run ........................................................................................ Eaton Ridge.................................................................................... (3) Farmington Place............................................................................ Fenimore Court .............................................................................. Fort Lincoln II ................................................................................ Fort Lincoln III & IV...................................................................... (3) Frenchtown Place ........................................................................... (3) Glendora Gardens........................................................................... Granada Gardens ............................................................................ Hamptons ....................................................................................... Hunter’s Hollow............................................................................. Independence Place I...................................................................... Liberty Hills ................................................................................... Met Lofts........................................................................................ Midtown Towers ............................................................................ (3) Millender Center ............................................................................ (3) Miramar Towers............................................................................. Legal Ownership (1) 50.00 50.00 50.00 50.00 100.00 3.00 90.00 50.00 100.00 2.39 50.00 50.00 50.00 50.00 50.00 7.96 50.00 43.03 50.00 100.00 7.06 45.00 24.90 4.92 1.99 50.00 50.00 50.00 50.00 50.00 50.00 63.00 3.97 1.99 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Pro-Rata Ownership (2) 50.00 50.00 50.00 50.00 100.00 3.00 90.00 50.00 100.00 100.00 50.00 50.00 50.00 50.00 50.00 7.96 50.00 43.03 50.00 100.00 50.00 45.00 24.90 100.00 99.00 50.00 50.00 50.00 50.00 50.00 50.00 63.00 100.00 100.00 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Location Twinsburg, OH San Francisco, CA Parma Hts., OH Amherst, NY Wheeling, WV Dayton, OH Burton, MI Parma, OH Pikeville, KY Lansing, MI Strongsville, OH Strongsville, OH Warrensville Hts., OH Painesville, OH Tampa, FL Connellsville, PA Mayfield Hts., OH Twinsburg, OH Sagamore Hills, OH Farmington, MI Detroit, MI Washington, D.C. Washington, D.C. Monroe, MI Glendora, CA Warrensville Hts., OH Beachwood, OH Strongsville, OH Parma Hts., OH Solon, OH Los Angeles, CA Parma, OH Detroit, MI Los Angeles, CA Leasable Units 288 862 516 402 152 232 200 151 150 220 442 789 568 304 176 111 342 562 260 153 144 176 306 151 105 940 651 208 202 396 264 635 339 157 Leasable Units at Pro-Rata % 144 431 258 201 152 7 180 76 150 220 221 395 284 152 88 9 171 242 130 153 72 79 76 151 104 470 326 104 101 198 132 400 339 157 64 Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate RESIDENTIAL GROUP APARTMENTS (continued) Date of Opening/ Acquisition/ Expansion 2007-2010 2007-2010 2009 2002-2005 1979 1981 1980 2005-2008 1978 1975 2001-2002 1995-1996 1973 1973 1967-1974, 2005-2007 1981 2002 1977 2001-2004 1980 2002 2007-2009 1970 2007-2008 1990-2001 1981 2002 1975 1966 2008 1978 2002 2004-2006 2003 1978 Name Unconsolidated Apartment Communities (continued) ^* Military Housing – Marines, Hawaii Increment II ......................... Military Housing – Navy, Hawaii Increment III ............................ ^* ^* Military Housing – Navy Midwest ................................................. Newport Landing............................................................................ Noble Towers ................................................................................. Nu Ken Tower (Citizen’s Plaza) .................................................... (3) Oceanpointe Towers....................................................................... Ohana Military Communities, Hawaii Increment I ........................ ^* (3) Panorama Towers........................................................................... (3) Park Place Towers .......................................................................... Parkwood Village........................................................................... Pebble Creek .................................................................................. (3) Perrytown ....................................................................................... (3) Pine Grove Manor .......................................................................... ^ (3) (3) Legal Ownership (1) 10.00 10.00 25.00 50.00 50.00 8.84 1.99 10.00 99.00 2.39 50.00 50.00 4.92 1.99 50.00 1.99 25.00 2.96 50.00 100.00 35.22 50.00 50.00 50.00 50.00 1.99 100.00 4.43 50.00 50.00 100.00 50.00 33.00 50.00 100.00 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Pro-Rata Ownership (2) 10.00 10.00 25.00 50.00 50.00 50.00 100.00 10.00 99.00 100.00 50.00 50.00 100.00 100.00 50.00 100.00 40.00 100.00 50.00 100.00 35.22 50.00 50.00 50.00 50.00 100.00 100.00 100.00 50.00 50.00 100.00 50.00 33.00 50.00 100.00 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Location Honolulu, HI Honolulu, HI Chicago, IL Coventry, OH Pittsburgh, PA New Kensington, PA Long Branch, NJ Honolulu, HI Los Angeles, CA Mt. Clemens, MI Brunswick, OH Twinsburg, OH Pittsburgh, PA Muskegon Township, MI Willoughby Hills, OH Keyser, WV Cambridge, MA Coshocton, OH Streetsboro, OH Stamford, CT Newark, NJ Wadsworth, OH Eastlake, OH Brimfield, OH Willoughby, OH La Mesa, CA Kent, OH Ypsilanti, MI Denver, CO Oakland, CA Williamsville, NY Tampa, FL Olmsted Township, OH Manhattan, NY Livonia, MI Leasable Units 1,175 2,519 1,658 336 133 101 151 1,952 154 187 204 148 231 172 1,309 141 135 100 408 148 360 348 246 216 642 129 101 170 254 665 100 340 348 330 141 27,306 Leasable Units at Pro-Rata % 118 252 415 168 67 51 151 195 152 187 102 74 231 172 655 141 54 100 204 148 127 174 123 108 321 129 101 170 127 333 100 170 115 165 141 12,414 65 (3) ^* ^* (3) (3) (3) * (3) (3) Pine Ridge Valley........................................................................... Potomac Heights Village................................................................ Residences at University Park ........................................................ Riverside Towers............................................................................ Settler’s Landing at Greentree........................................................ Shippan Avenue ............................................................................. St. Mary’s Villa .............................................................................. Stratford Crossing .......................................................................... Surfside Towers.............................................................................. Sutton Landing ............................................................................... Tamarac.......................................................................................... The Springs .................................................................................... Tower 43 ........................................................................................ Towne Centre Place........................................................................ Twin Lake Towers ......................................................................... Uptown Oakland ............................................................................ Village Square ................................................................................ Westwood Reserve ......................................................................... Woodgate/Evergreen Farms ........................................................... Worth Street ................................................................................... Ziegler Place................................................................................... Unconsolidated Apartment Communities Subtotal ........................................................................................................................................................................ Forest City Enterprises, Inc. and Subsidiaries Supplemental Financial Information Forest City Enterprises, Inc. Portfolio of Real Estate RESIDENTIAL GROUP APARTMENTS (continued) Date of Opening/ Acquisition/ Expansion 1989 1990 2000 2000 2000 Name Unconsolidated Supported-Living Apartments Classic Residence by Hyatt ................................................................ Classic Residence by Hyatt ................................................................ Classic Residence by Hyatt ................................................................ Sterling Glen of Glen Cove ............................................................... Sterling Glen of Great Neck ............................................................... Legal Ownership (1) 50.00 50.00 50.00 40.00 40.00 % % % % % Pro-Rata Ownership (2) 50.00 50.00 50.00 50.00 50.00 % % % % % Location Teaneck, NJ Chevy Chase, MD Yonkers, NY Glen Cove, NY Great Neck, NY Leasable Units 220 339 310 80 142 1,091 28,397 41,487 1,765 43,252 38,440 Leasable Units at Pro-Rata % 110 170 155 40 71 546 12,960 25,609 Unconsolidated Supported-Living Apartments Subtotal.................................................................................................................................................................... Unconsolidated Apartments Total ..................................................................................................................................................................................................... Combined Apartments Total .............................................................................................................................................................................................................. Federally Subsidized Housing (Total of 10 Buildings) ......................................................................................................................................................................... Total Apartments at January 31, 2007 .................................................................................................................................................................................................. Total Apartments at January 31, 2006 .................................................................................................................................................................................................. 66 CONDOMINIUMS Date of Opening/ Acquisition/ Expansion Units Sold as of 1/31/07 139 62 571 772 Units Sold as of 1/31/07 at Pro-Rata % 56 31 143 230 Name Unconsolidated For Sale Condominiums 1100 Wilshire .......................................................... 2006-2007 + Mercury ................................................................... 2007-2008 * Central Station......................................................... 1995-2009 ^* Legal Ownership (1) 40.00 % 50.00 % 25.00 % Pro-Rata Ownership (2) Location Total Units 228 238 2,140 2,606 2,606 Total Units at Pro-Rata % 91 119 535 745 40.00 % Los Angeles, CA 50.00 % Los Angeles, CA 25.00 % Chicago, IL Unconsolidated For Sale Condominiums Total ................................................................................................................................. Total For Sale Condominiums at January 31, 2007 ............................................................................................................................. * ** + ++ ^ (1) (2) (3) Property under construction as of January 31, 2007. Expansion of property under construction as of January 31, 2007. Property opened or acquired in 2006. Expansion of property. Property to open in phases. Represents the Company’s share of a property’s profits and losses upon settlement of any preferred returns to which the Company or its partner(s) may be entitled. Represents the Company’s share of a property’s profits and losses adjusted for any preferred returns to which the Company or its partner(s) may be entitled. This property is reported on the equity method of accounting as the U.S. Department of Housing and Urban Development is the primary beneficiary of the property primarily due to the fact that they are either the lender on the mortgage or the guarantor of the mortgage.