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Forest City Reports Fiscal 2009 Full-Year and Fourth-Quarter Results

CLEVELAND, Ohio, March 30, 2010 /PRNewswire via COMTEX/ --Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced EBDT, net earnings and revenues for the fourth quarter and full year ended January 31, 2010.

EBDT

EBDT (Earnings Before Depreciation, Amortization and Deferred Taxes) for the full year ended January 31, 2010, was $301.1 million, a 37.5 percent increase compared with last year's $218.9 million. EBDT for the fourth quarter was $78.4 million, an 11.2 percent increase compared with last year's fourth-quarter EBDT of $70.5 million.

On a per-share basis, full-year 2009 EBDT was $2.00, a 2.4 percent decrease from the prior year's $2.05. Per-share EBDT for the fourth quarter of 2009 was $0.43, a 34.8 percent decrease from $0.66 per share in the fourth quarter of 2008. Per-share data for both the fourth quarter and full year of 2009 reflect the dilutive effect of new Class A common shares issued by the Company during the second quarter of 2009, and the "if-converted" effect of two convertible debt transactions executed during the third quarter. For an explanation of the EBDT and EBDT per share variances, see the section titled "Review and Discussion of Results" in this news release.

EBDT and EBDT per share are non-Generally Accepted Accounting Principle (GAAP) measures. A reconciliation of net earnings (the most directly comparable GAAP measure to EBDT) to EBDT is provided in the Financial Highlights table in this news release.

Net Earnings/Loss

For the full year, the net loss attributable to Forest City Enterprises, Inc. was $30.7 million, or $0.22 per share, compared with a net loss of $113.2 million, or $1.10 per share, in 2008. For the fourth quarter of 2009, net earnings attributable to Forest City Enterprises, Inc. were $6.2 million, or $0.04 per share, compared with a net loss of $45.3 million, or $0.44 in the fourth quarter of 2008.

Revenues

Revenues for the year ended January 31, 2010, were $1.26 billion, a 1.8 percent decrease compared with prior year revenues. Fourth-quarter consolidated revenues were $324.3 million compared with $320.6 million last year.

Liquidity

At January 31, 2010, the Company had $275.0 million ($251.4 million at full consolidation) in cash on its balance sheet and $220.5 million of available capacity on the Company's revolving line of credit.

Review and Discussion of Results

Fourth-Quarter EBDT

In the fourth quarter, total EBDT for the Company was $78.4 million.

For the quarter, pre-tax EBDT from the Company's combined Commercial and Residential segments increased by $27.9 million compared with the same period in 2008. The variance was primarily due to the mark-to-market change in the fair market value of forward swaps of $18.7 million, increased income from the sale of tax credits of $17.3 million, income of $11.0 million as a result of changes in the treatment of Housing and Urban Development (HUD) replacement reserves, and decreased write-offs of abandoned development projects of $5.3 million, compared with the fourth quarter of 2008.

These increases were partially offset by decreases of $11.5 million in pre-tax EBDT from reduced commercial outlot sales, and $2.1 million in reduced EBDT from properties sold.

In addition, pre-tax EBDT in the Company's Land segment decreased $7.3 million, primarily due to lower land sales. Pre-tax EBDT for the fourth quarter was also negatively impacted by a larger reported share of losses for the Nets basketball team of $4.5 million and by a smaller tax benefit of $8.4 million, compared with the fourth quarter of 2008.

Full-year EBDT

(An exhibit illustrating factors impacting the Company's full-year 2009 EBDT results is available on the investor relations page of the Company's website, www.forestcity.net.)

For the year, total EBDT for the Company was $301.1 million.

Pre-tax EBDT in the Company's combined Commercial and Residential segments increased $92.0 million compared with the prior year, due to a combination of core portfolio factors as well as transactional items. Core portfolio factors included positive variances of $27.1 million from gain on early extinguishment of debt, $21.5 million in reduced interest expense on the mature portfolio, increased income from the sale of tax credits of $21.5 million, and $6.4 million in EBDT from newly opened properties, offset by a decrease of $12.4 million in commercial outlot sales, $8.6 million in reduced fee income from military housing as initial development and construction phases conclude at certain of the Company's military family housing neighborhoods, and $4.0 million in reduced EBDT from properties sold.

Positive 2009 transactional variances related to the rental properties portfolio included decreased project write-offs of $23.1 million, lower losses due to mark-to-market changes in the fair market value of forward swaps of $19.5 million, and $11.0 million in income as a result of new HUD guidelines on the treatment of replacement reserves. These positive transactional items were offset by 2008 lease termination fee income of $12.2 million which did not recur in 2009.

EBDT in the company's Land segment increased $6.2 million pre-tax compared with 2008 as a result of the 2008 write down of $12.4 million related to the Lehman Brothers, Inc. bankruptcy, which did not recur in 2009, and the gain on early extinguishment of debt of $11.3 million, primarily related to the repurchase of two land loans at a significant discount during the second quarter. These positive factors in the Land segment were offset by decreased EBDT from Land operations of $17.5 million, reflecting the continued deterioration of the traditional land business during 2009.

Finally, 2009 EBDT was impacted by decreased corporate expenses of $5.4 million compared to 2008 due primarily to reduced compensation expense and cost-control efforts. Corporate interest expense increased $16.8 million as a result of increased borrowings on the Company's revolving credit facility, additional interest expense associated with new convertible debt issued in the third quarter, and the non-cash impact of the adoption of accounting guidance for convertible securities in 2009. Finally, the Company's share of operating losses for the Nets basketball team increased by $2.5 million, and the Company had a smaller tax benefit of $2.1 million for 2009 compared with the prior year.

Commentary

Charles A. Ratner, Forest City president and chief executive officer, commented on both the full-year and fourth-quarter results.

"In the context of conditions impacting real estate and the broader economy, 2009 was a successful year for the Company. We overcame significant challenges to achieve record full-year total EBDT, an improved balance sheet, reduced recourse debt, substantive cost reductions, successful project openings, and major development project milestones. Along the way, we also addressed approximately $1.6 billion of property-level, non-recourse debt maturities. In addition, at the end of fiscal 2009 and continuing into early 2010, we executed a series of asset sales and joint ventures at attractive cap rates to take advantage of value in our portfolio, to further bolster our liquidity and to create new long-term strategic partnerships.

"These accomplishments were made possible by continued adherence to the five strategies we implemented in the third quarter of 2008 to address financial and economic turmoil in the market and the real estate industry. Since then, virtually every major action taken by our Company has been driven by these strategies: curtailing development and focusing on our portfolio; driving costs out of the business; generating liquidity from our portfolio and in the capital markets; proactively managing debt maturities; and selectively taking advantage of opportunities created by market dislocations."

"One significant consequence of managing through the challenges of 2009 and early 2010 was dilution of our common stock through issuance of additional Class A common stock, convertible debt and convertible preferred stock. As a result, despite the fact that our total EBDT was up significantly over 2008, per-share EBDT was down. We certainly recognize the impact of this dilution on our shareholders, but we believe the steps taken during 2009 were vital to the Company's future growth and success, and to the long-term interests of shareholders.

"Another accomplishment for the year was our successful and ongoing effort to drive costs out of the business with an emphasis on process improvement and efficiency gains. To date, we have achieved annualized cost savings of $70-$80 million. One painful aspect of this effort was the difficult, but necessary task of reducing our workforce in order to bring the organization into better balance with the near-term opportunity and outlook.

"Turning to our operating results, we were pleased overall with the performance of our portfolio given market and economic conditions in 2009. Overall comparable property net operating income (NOI) from the portfolio was down less than one percent for the year compared with 2008 results - a real success given conditions in the market and the economy. Our office portfolio showed strength throughout 2009, with increases in comparable property NOI for both the fourth quarter and full year. We continued to see areas of weakness in the retail and residential portfolios, although deterioration appears to have slowed. Despite the difficult environment, comparable property occupancies finished the year modestly above 2008 levels in all three major portfolio segments: retail, office and residential.

"Operating results for our Land segment were down meaningfully from 2008 results, reflecting the continued impact of the economy and credit market conditions on builders and consumers. On the positive side, stress in this segment is what allowed us to benefit when we acquired two land loans at a significant discount in the second quarter. It has also enabled us to look at a large number of opportunities to acquire or otherwise participate in deals involving land owners, builders or lenders in distressed situations. To date, only two small transactions in land have met our requirements for investing capital, but we continue to actively evaluate additional opportunities.

"Despite the challenges confronting the Land segment in the current economy, we remain bullish on the long-term viability and profit potential in this part of the business, based on long-term demographic trends in the country and on the severely limited supply of new single-family product coming on the market over the past several years."

Capital Raising Activity

Capital market transactions - During 2009 and early 2010, the Company executed a series of strategic capital market and other financing transactions designed to improve liquidity and take advantage of the window of opportunity created by access to the public markets for real estate companies. These transactions, which total $965 million (before transaction-related fees), included the following:

  • In May 2009, the Company raised $345.0 million through the issuance of 52.3 million Class A common shares. Investor demand for the shares was robust, and the underwriters exercised their full over-allotment option.
  • In early October 2009, the Company executed privately negotiated exchanges for $167 million of 3.625% Puttable Equity-Linked Senior Notes due 2011, and issued $33 million of new notes for a total of $200 million of new 3.625% Puttable Equity-Linked Notes due 2014.
  • In late October 2009, Forest City closed a $200 million offering of 5% Convertible Senior Notes due 2016.
  • In early March 2010, the Company entered into privately negotiated exchanges with certain holders of three separate series of senior notes due 2011, 2015, and 2017. A total of $178.7 million aggregate principal amount of these notes was exchanged for $170.0 million of a new issue of 7% Series A Cumulative Perpetual Convertible Preferred Stock. An additional $50 million of the Convertible Preferred was also issued for cash through a privately negotiated purchase agreement, for a total of $220 million between the exchanges and cash sale.

In addition, in late January 2010, the Company closed a new, two-year, $500 million revolving credit facility with its 15-member bank group. Taken together, these efforts contributed significantly to improving Forest City's balance sheet and enhancing liquidity - the Company's highest priority.

Asset sales and joint ventures - During 2009, and particularly late in the year and continuing through early 2010, Forest City capitalized on firming asset pricing in key real estate segments to unlock value in its portfolio through selective asset sales and joint ventures. These included the following:

  • In April 2009, the Company completed the sale of The Shops at Grand Avenue, a retail center in the Borough of Queens, to an affiliate of AEW Capital Management, for $33.5 million, representing a cap rate of approximately 7.75 percent on in-place income.
  • In late January 2010, the Company closed the sale of its partnership interests in three supported-living apartment communities to CC Development Group, Inc. The transaction yielded proceeds of approximately $30 million.
  • On February 19, 2010, the Company announced the creation of a joint venture with Bernstein Management Corporation for ownership of three residential multifamily properties in Forest City's Washington, D.C. area apartment portfolio. Forest City realized proceeds of approximately $32 million from the creation of the joint venture, equating to a cap rate of 6.5 percent based on the properties' 2009 net operating income.
  • On February 22, 2010, the Company announced a $668 million joint venture with Health Care REIT, Inc. (NYSE: HCN) for ownership of seven life science office buildings at Forest City's University Park at MIT project in Cambridge, Mass. The transaction's implied valuation represents a 7.6 percent cap rate on projected 2010 net operating income for the properties.

NOI, Occupancies and Rent

For the full year, overall comparable property NOI decreased 0.8 percent, with an increase of 5.4 percent in office and decreases of 3.9 percent in retail and 2.8 percent in residential. In the fourth quarter, comparable property NOI decreased 0.5 percent compared with the prior year. Comparable property NOI for the quarter increased in the office portfolio by 4.3 percent, while it decreased in the retail and residential portfolios by 3.9 percent and 2.7 percent, respectively.

Comparable property NOI, defined as NOI from properties operated for the full year in both 2009 and 2008, is a non-GAAP financial measure and is based on the pro-rata consolidation method, also a non-GAAP financial measure. Included in this release is a schedule that presents comparable property NOI on the full consolidation method.

Comparable retail occupancies were 90.1 percent at the end of 2009, while comparable office occupancies were 90.3 percent. In the residential portfolio, comparable average occupancies were 92.2 percent and comparable property net rental income ended the year at 90.2 percent. In our regional malls, leasing spreads were down 4.7 percent for the year. In the office portfolio, leasing spreads increased 7.1 percent. Regional mall sales averaged $386 per square foot on a rolling 12-month basis, while comparable regional mall sales decreased 8.8 percent, a reflection of the economic downturn.

Debt Maturities and Financing Activity

During 2009, Forest City closed on transactions totaling $1.7 at the Company's pro-rata share ($1.6 billion at full consolidation) in nonrecourse mortgage financings, including $313 million at pro-rata ($278 million at full consolidation) in refinancings and $1.4 billion at pro-rata in loan extensions and additional fundings ($1.3 billion at full consolidation). During the fourth quarter, the Company closed 13 loan transactions totaling $287 million at pro-rata ($190 million at full consolidation).

Since January 31, 2010, the Company has addressed, through closed loans and committed financings, $156.2 million at its pro-rata share ($153.1 million at full consolidation) of the $868.9 million at pro-rata ($778.6 million at full consolidation) of net maturities (inclusive of notes payable) coming due in fiscal year 2010. Additionally, since the end of fiscal 2009, the Company's overall reported maturities were further reduced by $388.6 million at pro-rata ($619.8 million at full consolidation) as a result of joint ventures announced with Bernstein Management Corporation and Healthcare REIT, Inc., and retirement of various of the Company's Senior Notes through privately negotiated exchanges with certain holders for a new issue of Series A Cumulative Perpetual Convertible Preferred Stock.

As of January 31, 2010 the Company's weighted average cost of mortgage debt increased to 5.16 percent from 5.00 percent at January 31, 2009 primarily due to an increase in variable-rate mortgage debt. Fixed-rate mortgage debt, which represented 71 percent of the Company's total nonrecourse mortgage debt, and is inclusive of interest rate swaps, decreased from 6.04 percent at January 31, 2009, to 6.00 percent at January 31, 2010. The variable-rate mortgage debt increased from 1.98 percent at January 31, 2009, to 3.06 percent at January 31, 2010. (All interest rates are at full consolidation.)

Project Updates

Openings in 2009

During 2009, Forest City opened or acquired three projects, adding $276.7 million of cost at the Company's pro-rata share and on a full consolidation basis.

Major openings during the year included:

  • Promenade at Temecula expansion, which added a 127,000-square-foot outdoor town center to this 1.1-million-square-foot regional mall. The expansion is currently 71 percent leased and committed, and the balance of the center is 98 percent leased, for a total of 92 percent leased and committed across the entire center.
  • 80 DeKalb Avenue, a 365-unit residential rental community in Brooklyn, which opened for leasing and initial move-ins during the fourth quarter. Currently, signed or pending leases account for approximately half of the total units, and while competitive concessions are being offered, average rents are in line with forecasts for the property.

Under Construction and 2010 openings

At the end of fiscal 2009, Forest City had seven projects under construction with a total project cost of $2.2 billion at the Company's pro-rata share ($2.3 billion at full consolidation).

During the fourth quarter of 2009, Costco at East River Plaza, opened in 110,000 square feet of space at this 527,000-square-foot big-box retail center - the first of its kind - in Manhattan. The balance of the center remains under construction with other committed tenants, including Target, Best Buy, Marshalls, PetSmart and Old Navy, expected to open during 2010. The center is currently 93 percent leased.

On February 11, 2010, Forest City celebrated the grand opening of the 510,000-square-foot Village at Gulfstream Park mixed-use retail center in Hallandale Beach, Florida. The center, which is anchored by Gulfstream Park Racetrack and Casino, is South Florida's newest outdoor shopping and entertainment destination, and will feature approximately 70 stores and 421,000 square feet of retail space, of which 85 percent is currently leased. A number of home furnishing and restaurant tenants were among the first to open and have reported good results to date. Additional tenants will open during the course of 2010. The project also includes 89,000 square feet of class A office space and the potential for future residential units.

In the office portfolio, the first phase of the Waterfront Station redevelopment project in Southwest Washington, D.C., is nearly complete. The first two office buildings, which have been designed to meet LEED Silver standards, total 631,000 square feet of office and ground-level retail space. The office component is fully leased to the District of Columbia for governmental offices, and move-ins are already well under way. The retail space is also substantially leased, and committed tenants are expected to occupy their spaces and open by this summer.

In the residential portfolio, the 161-unit Presidio Landmark, a project at the foot of the Golden Gate Bridge within the Presidio National Park in San Francisco continues under construction. The project has two components: the adaptive re-use of a former U.S. Health Service hospital to create a unique, historically significant apartment community, and a small number of new, three-story townhomes, all of which is being built to a high standard of sustainability. Initial leasing for Presidio Landmark will begin this summer, with first move-ins anticipated by late summer.

In late 2009, construction activity began on the Barclays Center arena at the Company's Atlantic Yards mixed-use project in Brooklyn. It was a watershed year for Atlantic Yards in 2009. Early in the year, the Company secured a refinancing from Gramercy Capital on a key $161.9 million land loan for the project. Throughout the year, a series of lawsuits and appeals filed by project opponents were decided in favor of the project and the Company. The most important of these was a favorable ruling in the final lawsuit challenging the State of New York's use of eminent domain to acquire property within the project footprint. This victory allowed three pivotal events to move forward before yearend: an agreement to sell interests in the NETS team and the Barclays Center arena to affiliates of Onexim Group, completion of the $511 million tax-exempt bond offering to finance a portion of construction for the arena, and execution of the Master Closing for the project.

As a result of these accomplishments, on March 11, 2010, Bruce Ratner, chairman and chief executive officer of Forest City Ratner Companies, the Company's New York-based subsidiary, and other Forest City executives, were joined by New York Governor David Paterson, New York City Mayor Michael Bloomberg, Brooklyn Borough President Marty Markowitz, Barclays PLC President Robert E. Diamond, Jr., NETS President and CEO Brett Yormark, NETS investor and cultural icon Shawn "Jay-Z" Carter and many other community leaders and supporters for a ceremonial groundbreaking at the project site.

A second major residential project under construction is Beekman, a Frank Gehry-designed residential high-rise in lower Manhattan that will have 904 market-rate apartments. The lower floors of the building include space that will be owned and operated by a pre-K-through-eighth-grade public school and an ambulatory care center. In November, union workers and labor leaders, along with government and civic officials gathered to take part in a topping-out ceremony, marking another step toward completion of the 76-story, 1.1-million-square-foot tower. Beekman is already becoming a landmark in the lower Manhattan skyline, and leasing is expected to begin next year with first move-ins by spring 2011.

Also under construction is the 1.3-million-square-foot Westchester's Ridge Hill retail/mixed-use project in Yonkers, New York. In August, the Company reached an agreement with a 13-member bank group on a two-year extension and modification of the $557 million construction financing for the project. The compelling location and demographics of Westchester County continue to make it a premier retail/mixed use project, and Forest City has commitments in place from a number of prominent retailers and is in active discussions with additional prospective tenants.

At The Yards mixed-use project in Washington, D.C., the Company broke ground in the second quarter on the riverfront park that is a key component of the overall development. Construction of the park is publicly funded, and the first phase is expected to open in the third quarter of 2010, adding a distinctive sense of place to this part of Southeast Washington.

Year-End Summary and Outlook

Ratner concluded: "As we reflect on where we were at this same time last year, our country, our industry and our company faced a bleak outlook. Financial markets were in free fall, unemployment was rising rapidly, consumer confidence had plummeted, and real estate fundamentals were deteriorating. Credit markets were essentially frozen solid, and we, along with nearly every other real estate company, were struggling to see our way through the fog of these exceedingly difficult conditions.

"One year ago this week, our stock was at a 10-year-plus low. We were already taking action on a set of strategies focused on generating liquidity by curtailing development, cutting costs, handling maturities one loan at a time, and looking for opportunities to create liquidity or take advantage of market dislocations. We acted conservatively and we made tough choices. And when the window of opportunity in the capital markets opened, we acted quickly and decisively.

"Today, we have reason not only to be grateful for having come through the worst of these conditions, but to take pride in an organization that made significant progress and achieved some remarkable things during the year - record full-year total EBDT, an improved balance sheet, significant cost reductions, successful project openings, and more.

"As we look ahead to the balance of 2010 and beyond, we recognize that there are still many challenges ahead. Markets remain volatile and unemployment continues to be a drag on the economy. Credit market conditions have begun to improve, but remain constrained for real estate, particular in project financing. At the same time, access to the public capital markets for real estate companies, and the firming of asset pricing in the private transaction market are both signs of improving conditions and a more positive outlook among investors.

"We remain cautious, but what we accomplished in 2009 and the signs of improvement we see give us renewed confidence about the future. And while we can't predict the timing or extent of a turnaround, we have reason to be more optimistic. As conditions continue to improve, the actions we've taken in 2009 and early 2010 put our Company in a much better position to leverage the strength in our portfolio and, over the longer term, to take advantage of opportunities in the marketplace and in our development pipeline. I salute the entire management team and all of our associates for the hard work and perseverance that have made that possible."

Corporate Description

Forest City Enterprises, Inc. is a $11.9 billion NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States.

Supplemental Package

Please refer to the Investor Relations section of the Company's website at www.forestcity.net for a Supplemental Package, which the Company will also furnish to the Securities and Exchange Commission ("SEC") on Form 8-K. This Supplemental Package includes operating and financial information for the year ended January 31, 2010, with reconciliations of non-GAAP financial measures, such as EBDT, comparable NOI and pro-rata financial statements, to their most directly comparable GAAP financial measures.

EBDT

The Company uses an additional measure, along with net earnings, to report its operating results. This non-GAAP measure, referred to as Earnings Before Depreciation, Amortization and Deferred Taxes ("EBDT"), is not a measure of operating results or cash flows from operations as defined by GAAP and may not be directly comparable to similarly titled measures reported by other companies.

The Company believes that EBDT provides additional information about its core operations and, along with net earnings, is necessary to understand its operating results. EBDT is used by the chief operating decision maker and management in assessing operating performance and to consider capital requirements and allocation of resources by segment and on a consolidated basis. The Company believes EBDT is important to investors because it provides another method for the investor to measure its long-term operating performance, as net earnings can vary from year to year due to property dispositions, acquisitions and other factors that have a short-term impact.

EBDT is defined as net earnings excluding the following items: i) gain (loss) on disposition of rental properties, divisions and other investments (net of tax); ii) the adjustment to recognize rental revenues and rental expense using the straight-line method; iii) non-cash charges for real estate depreciation, amortization, amortization of mortgage procurement costs and deferred income taxes; iv) preferred payment classified as noncontrolling interest expense on the Company's Consolidated Statements of Operations; v) impairment of real estate (net of tax); vi) extraordinary items (net of tax); and vii) cumulative or retrospective effect of change in accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment equals net earnings.

EBDT is reconciled to net earnings (loss), the most comparable financial measure calculated in accordance with GAAP, in the table titled Financial Highlights below and in the Company's Supplemental Package, which the Company will also furnish to the SEC on Form 8-K. The adjustment to recognize rental revenues and rental expenses on the straight-line method is excluded because it is management's opinion that rental revenues and expenses should be recognized when due from the tenants or due to the landlord. The Company excludes depreciation and amortization expense related to real estate operations from EBDT because it believes the values of its properties, in general, have appreciated over time in excess of their original cost. Deferred taxes from real estate operations, which are the result of timing differences of certain net expense items deducted in a future year for federal income tax purposes, are excluded until the year in which they are reflected in the Company's current tax provision. The impairment of real estate is excluded from EBDT because it varies from year to year based on factors unrelated to the Company's overall financial performance and is related to the ultimate gain on dispositions of operating properties. The Company's EBDT may not be directly comparable to similarly titled measures reported by other companies.

Pro-Rata Consolidation Method

This press release contains certain financial measures prepared in accordance with GAAP under the full consolidation accounting method and certain financial measures prepared in accordance with the pro-rata consolidation method (non-GAAP). The Company presents certain financial amounts under the pro-rata method because it believes this information is useful to investors as this method reflects the manner in which the Company operates its business. In line with industry practice, the Company has made a large number of investments in which its economic ownership is less than 100 percent as a means of procuring opportunities and sharing risk. Under the pro-rata consolidation method, the Company presents its investments proportionate to its economic share of ownership. Under GAAP, the full consolidation method is used to report partnership assets and liabilities consolidated at 100 percent if deemed to be under its control or if the Company is deemed to be the primary beneficiary of the variable interest entities ("VIE"), even if its ownership is not 100 percent. The Company provides reconciliations from the full consolidation method to the pro-rata consolidation method in the exhibits below and throughout its Supplemental Package, which the Company will also furnish to the SEC on Form 8-K.

Safe Harbor Language

Statements made in this news release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The Company's actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the impact of current lending and capital market conditions on our liquidity, ability to finance or refinance projects and repay our debt, the impact of the current economic environment on our ownership, development and management of our real estate portfolio, general real estate investment and development risks, liquidity risks we could face if we do not close the transaction with Onexim Group to create a strategic partnership for our Brooklyn Atlantic Yards project, vacancies in our properties, further downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, anchor store consolidations or closings, international activities, the impact of terrorist acts, risks associated with an investment in a professional sports team, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our credit facility and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, the impact of credit rating downgrades, effects of uninsured or underinsured losses, environmental liabilities, conflicts of interest, risks associated with the sale of tax credits, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, volatility in the market price of our publicly traded securities, litigation risks, as well as other risks listed from time to time in the Company's SEC filings, including but not limited to, the Company's annual and quarterly reports.



                   Forest City Enterprises, Inc. and Subsidiaries
                                Financial Highlights
                      Year Ended January 31, 2010 and 2009
                  (dollars in thousands, except per share data)


                            Three Months Ended
                                January 31,              Increase (Decrease)
                                -----------              -------------------
                            2010            2009         Amount      Percent
                            ----            ----         ------      -------
    Operating
     Results:
    Earnings
     (loss) from
     continuing
     operations            $5,894        $(45,800)       $51,694
    Discontinued
     operations,
     net of tax               718           3,949         (3,231)
                              ---           -----         ------
    Net earnings
     (loss)                 6,612         (41,851)        48,463

    Net earnings
     attributable
     to noncontrolling
     interest                (411)         (3,493)         3,082
                             ----          ------          -----
    Net earnings
     (loss)
     attributable
     to Forest City
     Enterprises, Inc.     $6,201        $(45,344)       $51,545
                           ======        ========        =======

    Earnings
     Before
     Depreciation,
     Amortization
     and
     Deferred
     Taxes (EBDT)
     (2)                  $78,407         $70,502         $7,905       11.2%
                          =======         =======         ======

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

      Net earnings
       (loss)
       attributable
       to Forest
       City
       Enterprises,
       Inc.             $6,201           $(45,344)       $51,545

      Depreciation
       and
       amortization
       -Real
       Estate
       Groups (8)       75,433             75,556           (123)

      Amortization
       of mortgage
       procurement
       costs -Real
       Estate
       Groups (8)        3,850              3,779             71

      Deferred
       income tax
       expense -
       Real Estate
       Groups (9)      (10,558)            (1,082)        (9,476)

      Deferred
       income tax
       expense -
       Non-Real
       Estate
       Groups: (9)
         Gain on
          disposition
          of other
          investments      454                428             26

    Current income tax
     expense on non-
     operating
     earnings:(9)
      Gain on
       disposition
       included in
       discontinued
       operations            -             20,439        (20,439)
      Gain on
       disposition
       of unconsolidated
       entities         27,471                  -         27,471

    Straight-
     line rent
     adjustment
     (4)                (3,689)             4,284         (7,973)
    Preference
     payment (6)           585                585              -

    Preferred
     return on
     disposition             -                731           (731)

    Impairment of
     real estate        23,402              1,262         22,140

    Impairment of
     unconsolidated
     entities            1,693             15,259        (13,566)

    Gain on
     disposition
     of
     unconsolidated
     entities          (45,263)                 -        (45,263)

    Gain on
     disposition
     of other
     investments             -                  -              -

    Discontinued
     operations:
     (1)
      Gain on
       disposition
       of rental
       properties       (1,172)            (5,778)         4,606
      Impairment of
       real estate           -                  -              -

    Retrospective
     adoption of
     accounting
     guidance for
     convertible
     debt instruments (7)    -                383           (383)
                           ---                ---           -----

    Earnings
     Before
     Depreciation,
     Amortization
     And Deferred
     Taxes
     (EBDT) (2)        $78,407            $70,502         $7,905         11.2%
                       =======            =======         ======

    Diluted
     Earnings per
     Common
     Share:

    Earnings
     (loss) from
     continuing
     operations          $0.03             $(0.45)         $0.48
    Discontinued
     operations,
     net of tax           0.01               0.04          (0.03)
                          ----               ----          -----
    Net earnings
     (loss)               0.04              (0.41)          0.45

    Net earnings
     attributable
     to
     noncontrolling
     interest                -              (0.03)          0.03
                           ---              -----           ----
    Net earnings
     (loss)
     attributable
     to Forest
     City
     Enterprises,
     Inc.                $0.04             $(0.44)         $0.48
                         =====             ======          =====

    Earnings
     Before
     Depreciation,
     Amortization
     and Deferred
     Taxes (EBDT)
     (2) (3) (5)         $0.43              $0.66         $(0.23)    (34.8%)
                         =====              =====         ======

    Operating
     earnings
     (loss), net
     of tax (a
     non-GAAP
     financial
     measure)           $(0.04)            $(0.34)         $0.30

    Impairment of
     real estate,
     net of tax          (0.10)             (0.10)             -

    Gain on
     disposition
     of rental
     properties
     and other
     investments,
     net of tax           0.18               0.03           0.15

    Net earnings
     attributable
     to
     noncontrolling
     interest                -              (0.03)          0.03
                           ---              -----           ----


    Net earnings
     (loss)
     attributable
     to Forest
     City
     Enterprises,
     Inc.                $0.04             $(0.44)         $0.48
                         =====             ======          =====

    Basic
     weighted
     average
     shares
     outstanding
     (5)           155,324,478        102,876,107     52,448,371
                   ===========        ===========     ==========

    Diluted
     weighted
     average
     shares
     outstanding
     (5)           187,453,699        106,534,313     80,919,386
                   ===========        ===========     ==========



                        Year Ended January 31,            Increase (Decrease)
                        ----------------------            -------------------
                        2010               2009           Amount      Percent
                        ----               ----           ------      -------
    Operating
     Results:
    Earnings
     (loss) from
     continuing
     operations       $(22,456)         $(109,700)       $87,244
    Discontinued
     operations,
     net of tax         (1,585)            10,270        (11,855)
                        ------             ------        -------
    Net earnings
     (loss)            (24,041)           (99,430)        75,389

    Net earnings
     attributable
     to
     noncontrolling
     interest           (6,610)           (13,817)         7,207
                        ------            -------          -----
    Net earnings
     (loss)
     attributable
     to Forest
     City
     Enterprises,
     Inc.             $(30,651)         $(113,247)       $82,596
                      ========          =========        =======

    Earnings
     Before
     Depreciation,
     Amortization
     and
     Deferred
     Taxes (EBDT)
     (2)              $301,106           $218,937        $82,169       37.5%
                      ========           ========        =======

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

      Net earnings
       (loss)
       attributable
       to Forest
       City
       Enterprises,
       Inc.           $(30,651)         $(113,247)       $82,596

      Depreciation
       and
       amortization
       -Real
       Estate
       Groups (8)      293,869            290,949          2,920

      Amortization
       of mortgage
       procurement
       costs -Real
       Estate
       Groups (8)       15,583             13,788          1,795

      Deferred
       income tax
       expense -
       Real Estate
       Groups (9)      (12,852)            (6,348)        (6,504)

      Deferred
       income tax
       expense -
       Non-Real
       Estate
       Groups: (9)
         Gain on
          disposition
          of other
          investments      454                486            (32)

      Current
       income tax
       expense on
       non-
       operating
       earnings:
       (9)
         Gain on
          disposition
          included in
          discontinued
          operations       754             20,439        (19,685)
         Gain on
          disposition
          of
          unconsolidated
          entities      27,674                506         27,168

    Straight-
     line rent
     adjustment
     (4)               (13,242)              (358)       (12,884)
    Preference
     payment (6)         2,341              3,329           (988)

    Preferred
     return on
     disposition             -                939           (939)

    Impairment of
     real estate        26,526              1,262         25,264

    Impairment of
     unconsolidated
     entities           36,356             21,285         15,071

    Gain on
     disposition
     of
     unconsolidated
     entities          (49,761)            (1,081)       (48,680)

    Gain on
     disposition
     of other
     investments             -               (150)           150

    Discontinued
     operations:
     (1)
      Gain on
       disposition
       of rental
       properties       (5,720)           (14,405)         8,685
      Impairment of
       real estate       9,775                  -          9,775

    Retrospective
     adoption of
     accounting
     guidance for
     convertible
     debt
     instruments
     (7)                     -              1,543         (1,543)
                           ---              -----         ------


    Earnings
     Before
     Depreciation,
     Amortization
     and
     Deferred
     Taxes (EBDT)
     (2)              $301,106           $218,937        $82,169       37.5%
                      ========           ========        =======

    Diluted
     Earnings per
     Common
     Share:

    Earnings
     (loss) from
     continuing
     operations         $(0.16)            $(1.07)         $0.91
    Discontinued
     operations,
     net of tax          (0.01)              0.10          (0.11)
                         -----               ----          -----
    Net earnings
     (loss)              (0.17)             (0.97)          0.80

    Net earnings
     attributable
     to
     noncontrolling
     interest            (0.05)             (0.13)          0.08
                         -----              -----           ----
    Net earnings
     (loss)
     attributable
     to Forest
     City
     Enterprises,
     Inc.               $(0.22)            $(1.10)         $0.88
                        ======             ======          =====

    Earnings
     Before
     Depreciation,
     Amortization
     and Deferred
     Taxes (EBDT)
     (2) (3) (5)         $2.00              $2.05         $(0.05)     (2.4%)
                         =====              =====         ======

    Operating
     earnings
     (loss), net
     of tax (a
     non-GAAP
     financial
     measure)           $(0.09)            $(0.93)         $0.84

    Impairment of
     real estate,
     net of tax          (0.32)             (0.13)         (0.19)

    Gain on
     disposition
     of rental
     properties
     and other
     investments,
     net of tax           0.24               0.09           0.15

    Net earnings
     attributable
     to
     noncontrolling
     interest            (0.05)             (0.13)          0.08
                         -----              -----           ----


    Net earnings
     (loss)
     attributable
     to Forest
     City
     Enterprises,
     Inc.               $(0.22)            $(1.10)         $0.88
                        ======             ======          =====

    Basic
     weighted
     average
     shares
     outstanding
     (5)           139,825,349        102,755,315     37,070,034
                   ===========        ===========     ==========

    Diluted
     weighted
     average
     shares
     outstanding
     (5)           151,890,543        106,968,999     44,921,544
                   ===========        ===========     ==========



                       Forest City Enterprises, Inc. and Subsidiaries
                                   Financial Highlights
                         Year Ended January 31, 2010 and 2009
                                  (dollars in thousands)


                        Three Months Ended January 31,   Increase (Decrease)
                        ------------------------------   -------------------
                             2010              2009      Amount       Percent
                             ----              ----      ------       -------
    Operating
     Earnings
     (a non-
     GAAP
     financial
     measure)
     and
     Reconciliation
     to Net
     Earnings:
    Revenues
     from real
     estate
     operations
      Commercial
       Group             $252,983          $250,792       $2,191
      Residential
       Group               64,574            59,778        4,796
      Land
       Development
       Group                6,776            10,004       (3,228)
      Corporate
       Activities               -                 -            -
                              ---               ---          ---
           Total
            Revenues      324,333           320,574        3,759       1.2%

    Operating
     expenses            (184,571)         (187,492)       2,921
    Interest
     expense              (91,836)         (104,888)      13,052
    Gain (loss)
     on early
     extinguishment
     of debt               (1,396)             (620)        (776)
    Amortization
     of
     mortgage
     procurement
     costs (8)             (3,329)           (3,306)         (23)
    Depreciation
     and
     amortization
     (8)                  (67,749)          (68,175)         426
    Interest
     and other
     income                30,081            14,430       15,651
    Equity in
     earnings
     (loss),
     including
     impairment,
     of
     unconsolidated
     entities              30,087           (16,798)      46,885
    Impairment
     of
     unconsolidated
     entities               1,693            15,259      (13,566)
    Gain on
     disposition
     of
     unconsolidated
     entities             (45,263)                -      (45,263)
    Preferred
     return on
     disposition                -               731         (731)
    Revenues
     and
     interest
     income
     from
     discontinued
     operations
     (1)                        -             4,051       (4,051)
    Expenses
     from
     discontinued
     operations
     (1)                        -            (3,394)       3,394
                              ---            ------        -----

    Operating
     loss (a
     non-GAAP
     financial
     measure)              (7,950)          (29,628)      21,678
                           ------           -------       ------

    Income tax
     expense
     (9)                   (6,324)            1,737       (8,061)
    Income tax
     expense
     from
     discontinued
     operations
     (1) (9)                 (454)           (2,486)       2,032
    Income tax
     expense on
     non-
     operating
     earnings
     items (see
     below)                 8,275            (4,468)      12,743
                            -----            ------       ------

    Operating
     earnings
     (loss),
     net of tax
     (a non-
     GAAP
     financial
     measure)              (6,453)          (34,845)      28,392
                           ------           -------       ------

    Impairment
     of real
     estate               (23,402)           (1,262)     (22,140)

    Impairment
     of
     unconsolidated
     entities              (1,693)          (15,259)      13,566

    Gain on
     disposition
     of
     unconsolidated
     entities              45,263                 -       45,263

    Preferred
     return on
     disposition                -              (731)         731

    Gain on
     disposition
     of other
     investments                -                 -            -

    Gain on
     disposition
     of rental
     properties
     included
     in
     discontinued
     operations
     (1)                    1,172             5,778       (4,606)

    Impairment
     of real
     estate
     included
     in
     discontinued
     operations
     (1)                        -                 -            -

    Income tax
     benefit
     (expense)
     on non-
     operating
     earnings:
     (9)
         Impairment
          of real
          estate            9,077               488        8,589
         Impairment
          of
          unconsolidated
          entities            656             5,930       (5,274)
         Gain on
          disposition
          of other
          investments           -                 -            -
         Gain on
          disposition
          of
          unconsolidated
          entities        (17,554)              283      (17,837)
         Gain on
          disposition
          of rental
          properties
          included
          in
          discontinued
          operations         (454)           (2,233)       1,779
         Impairment
          of real
          estate
          included
          in
          discontinued
          operations            -                 -            -
                              ---               ---          ---
    Income tax
     expense on
     non-
     operating
     earnings
     (see
     above)                (8,275)            4,468      (12,743)
                           ------             -----      -------

    Net
     earnings
     (loss)                 6,612           (41,851)      48,463

    Net
     earnings
     attributable
     to
     noncontrolling
     interest                (411)           (3,493)       3,082
                             ----            ------        -----

    Net
     earnings
     (loss)
     attributable
     to Forest
     City
     Enterprises,
     Inc.                  $6,201          $(45,344)     $51,545
                           ======          ========      =======



                              Year Ended January 31,       Increase (Decrease)
                              ----------------------       -------------------
                              2010              2009      Amount       Percent
                              ----              ----      ------       -------
    Operating
     Earnings
     (a non-
     GAAP
     financial
     measure)
     and
     Reconciliation
     to Net
     Earnings:
    Revenues
     from real
     estate
     operations
      Commercial
       Group              $973,738          $966,783       $6,955
      Residential
       Group               263,217           279,939      (16,722)
      Land
       Development
       Group                20,267            33,848      (13,581)
      Corporate
       Activities                -                 -            -
                               ---               ---          ---
           Total
            Revenues     1,257,222         1,280,570      (23,348)    (1.8%)

    Operating
     expenses             (716,571)         (780,798)      64,227
    Interest
     expense              (350,270)         (364,338)      14,068
    Gain (loss)
     on early
     extinguishment
     of debt                36,569            (2,159)      38,728
    Amortization
     of
     mortgage
     procurement
     costs (8)             (13,974)          (12,029)      (1,945)
    Depreciation
     and
     amortization
     (8)                  (267,408)         (266,785)        (623)
    Interest
     and other
     income                 54,005            42,417       11,588
    Equity in
     earnings
     (loss),
     including
     impairment,
     of
     unconsolidated
     entities              (15,053)          (35,585)      20,532
    Impairment
     of
     unconsolidated
     entities               36,356            21,285       15,071
    Gain on
     disposition
     of
     unconsolidated
     entities              (49,761)           (1,081)     (48,680)
    Preferred
     return on
     disposition                 -               939         (939)
    Revenues
     and
     interest
     income
     from
     discontinued
     operations
     (1)                     5,476            17,301      (11,825)
    Expenses
     from
     discontinued
     operations
     (1)                    (4,011)          (14,969)      10,958
                            ------           -------       ------

    Operating
     loss (a
     non-GAAP
     financial
     measure)              (27,420)         (115,232)      87,812
                           -------          --------       ------

    Income tax
     expense
     (9)                    19,550            30,119      (10,569)
    Income tax
     expense
     from
     discontinued
     operations
     (1) (9)                 1,005            (6,467)       7,472
    Income tax
     expense on
     non-
     operating
     earnings
     items (see
     below)                 (6,662)           (3,067)      (3,595)
                            ------            ------       ------

    Operating
     earnings
     (loss),
     net of tax
     (a non-
     GAAP
     financial
     measure)              (13,527)          (94,647)      81,120
                           -------           -------       ------

    Impairment
     of real
     estate                (26,526)           (1,262)     (25,264)

    Impairment
     of
     unconsolidated
     entities              (36,356)          (21,285)     (15,071)

    Gain on
     disposition
     of
     unconsolidated
     entities               49,761             1,081       48,680

    Preferred
     return on
     disposition                 -              (939)         939

    Gain on
     disposition
     of other
     investments                 -               150         (150)

    Gain on
     disposition
     of rental
     properties
     included
     in
     discontinued
     operations
     (1)                     5,720            14,405       (8,685)

    Impairment
     of real
     estate
     included
     in
     discontinued
     operations
     (1)                    (9,775)                -       (9,775)

    Income tax
     benefit
     (expense)
     on non-
     operating
     earnings:
     (9)
         Impairment
          of real
          estate            10,288               488        9,800
         Impairment
          of
          unconsolidated
          entities          14,100             8,258        5,842
         Gain on
          disposition
          of other
          investments            -               (58)          58
         Gain on
          disposition
          of
          unconsolidated
          entities         (19,299)              (55)     (19,244)
         Gain on
          disposition
          of rental
          properties
          included
          in
          discontinued
          operations        (2,218)           (5,566)       3,348
         Impairment
          of real
          estate
          included
          in
          discontinued
          operations         3,791                 -        3,791
                             -----               ---        -----
    Income tax
     expense on
     non-
     operating
     earnings
     (see
     above)                  6,662             3,067        3,595
                             -----             -----        -----

    Net
     earnings
     (loss)                (24,041)          (99,430)      75,389

    Net
     earnings
     attributable
     to
     noncontrolling
     interest               (6,610)          (13,817)       7,207
                            ------           -------        -----

    Net
     earnings
     (loss)
     attributable
     to Forest
     City
     Enterprises,
     Inc.                 $(30,651)        $(113,247)     $82,596
                          ========         =========      =======



                   Forest City Enterprises, Inc. and Subsidiaries
                                Financial Highlights
                       Year Ended January 31, 2010 and 2009
                                  (in thousands)

    1) All earnings of properties that have been sold or are held for sale are
       reported as discontinued operations assuming no significant continuing
       involvement.
    2) The Company uses an additional measure, along with net earnings, to
       report its operating results. This measure, referred to as Earnings
       Before Depreciation, Amortization and Deferred Taxes ("EBDT"), is not a
       measure of operating results as defined by generally accepted
       accounting principles and may not be directly comparable to similarly-
       titled measures reported by other companies. The Company believes that
       EBDT provides additional information about its operations, and along
       with net earnings, is necessary to understand its operating results.
       EBDT is defined as net earnings excluding the following items: i) gain
       (loss) on disposition of operating properties, divisions and other
       investments (net of tax); ii) the adjustment to recognize rental
       revenues and rental expense using the straight-line method; iii) non-
       cash charges for real estate depreciation, amortization (including
       amortization of mortgage procurement costs) and deferred income taxes;
       iv) preferred payment classified as noncontrolling interest expense on
       the Company's Consolidated Statement of Earnings; v) impairment of real
       estate (net of tax); vi) extraordinary items (net of tax); and  vii)
       cumulative or retrospective effect of change in accounting principle
       (net of tax).  See our discussion of EBDT in the news release.
    3) For the three and twelve months ended January 31, 2010, the calculation
       of EBDT per share requires an adjustment for interest of $2,641 and
       $3,051, respectively, related to the 3.625% Puttable Senior Notes and
       the 5% Convertible Senior Notes. Therefore EBDT for purposes of
       calculating per share data is $81,048 and $304,157 for the three and
       twelve months ended  January 31, 2010, respectively.
    4) The Company recognizes minimum rents on a straight-line basis over the
       term of the related lease pursuant to accounting for leases.  The
       straight-line rent adjustment is recorded as an increase or decrease to
       revenue 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.
    5) For the three and twelve months ended January 31, 2010, the effect of
       32,129,221 and 12,065,194 shares of dilutive securities were not
       included in the computation of diluted earnings per share because their
       effect is anti-dilutive to the loss from continuing operations.  (Since
       these shares are dilutive for the computation of EBDT per share for the
       three and twelve months ended January 31, 2010, diluted weighted
       average shares outstanding 187,453,699 and 151,890,543 were used to
       arrive at $0.43/share and $2.00/share, respectively.)

       For the three and twelve months ended January 31, 2009, the effect of
       3,658,206 and 4,213,684 shares of dilutive securities were not included
       in the computation of diluted earnings per share because their effect
       is anti-dilutive to the loss from continuing operations.  (Since
       these shares are dilutive for the computation of EBDT per share for the
       three and twelve months ended January 31, 2009, diluted weighted
       average shares outstanding 106,534,313 and 106,968,999 were used to
       arrive at $0.66/share and $2.05/share, respectively.)
    6) The preference payment represents the respective period's share of the
       annual preferred payment in connection with the issuance of Class A
       Common Units in exchange for Bruce C. Ratner's noncontrolling interest
       in the Forest City Ratner Company portfolio.
    7) Effective February 1, 2009, we were required to adopt new accounting
       guidance on accounting for convertible debt instruments that may be
       settled in cash upon conversion (including partial cash settlement).
       These new accounting standards required us to adjust the prior year
       financial statements to show retrospective application upon adoption.
    8) The following table provides detail of depreciation and amortization
       and amortization of mortgage procurement costs.


               Depreciation and Amortization  Depreciation and Amortization
               -----------------------------  -----------------------------
               Three Months Ended January 31,   Year Ended January 31,
               -----------------------------    ---------------------
                       2010       2009              2010       2009
                       ----       ----              ----       ----

      Full
       Consolidation $67,749     68,175           $267,408   $266,785
      Non-Real
       Estate         (3,108)    (3,416)           (13,480)   (13,356)
                      ------     ------            -------    -------
      Real Estate
       Groups Full
       Consolidation  64,641     64,759            253,928    253,429
      Real Estate
       Groups
       related to
       noncontrolling
       interest       (1,862)      (787)            (5,274)    (3,142)
      Real Estate
       Groups
       Unconsolidated 12,654     10,553              43,868     35,720
      Real Estate
       Groups
       Discontinued
       Operations          -      1,031               1,347      4,942
                         ---      -----               -----      -----
      Real Estate
       Groups Pro-
       Rata
       Consolidation $75,433    $75,556            $293,869   $290,949
                     =======    =======            ========   ========


                            Amortization of         Amortization of
                                Mortgage                Mortgage
                           Procurement Costs       Procurement Costs
                          ------------------      ------------------
                          Three Months Ended       Year Ended January
                              January 31,                   31,
                         -------------------       -------------------
                                2010       2009         2010       2009
                                ----       ----         ----       ----

      Full
       Consolidation          $3,329     $3,306      $13,974    $12,029
      Non-Real
       Estate                      -          -            -          -
                                 ---        ---          ---        ---
      Real Estate
       Groups Full
       Consolidation            3,329      3,306       13,974     12,029
      Real Estate
       Groups
       related to
       noncontrolling
       interest                  (118)      (119)        (567)      (502)
      Real Estate
       Groups
       Unconsolidated             639        513        2,126      1,843
      Real Estate
       Groups
       Discontinued
       Operations                   -         79           50        418
                                  ---         --           --        ---
      Real Estate
       Groups Pro-
       Rata
       Consolidation           $3,850     $3,779      $15,583    $13,788
                               ======     ======      =======    =======



                                  Three Months Ended
                                      January 31,       Year Ended January 31,
                                 -------------------    ----------------------
                                   2010       2009         2010       2009
                                   ----       ----         ----       ----
    9) The following
        table provides
        detail of Income Tax
        Expense (Benefit):         (in thousands)          (in thousands)
      (A) Operating earnings
           Current              $(12,518)  $(12,543)    $(22,258)  $(28,093)
           Deferred               11,021     17,507        7,797      6,607
                                  ------     ------        -----      -----
                                  (1,497)     4,964      (14,461)   (21,486)
                                  ------      -----      -------    -------

      (B) Impairment of real
           estate
           Deferred               (9,077)      (488)     (10,288)      (488)
           Deferred -
            Unconsolidated
            entities                (656)    (5,930)     (14,100)    (8,258)
              Subtotal            (9,733)    (6,418)     (24,388)    (8,746)
                                  ------     ------      -------     ------

      (C) Gain on disposition
           of other investments
            Current -
             Non-Real
             Estate
             Groups                    -          -            -          -
            Deferred -
             Non-Real
             Estate
             Groups                    -          -            -         58
                                     ---        ---          ---        ---
                                       -          -            -         58
                                     ---        ---          ---        ---
      (D) Gain on disposition
           of unconsolidated
           entities
             Current              27,471          -       27,674        506
             Deferred             (9,917)      (283)      (8,375)      (451)
                                  ------       ----       ------       ----
                                  17,554       (283)      19,299         55
                                  ------       ----       ------        ---

          Subtotal
           (A) (B) (C) (D)
             Current              14,953    (12,543)       5,416    (27,587)
             Deferred             (8,629)    10,806      (24,966)    (2,532)
                                  ------     ------      -------     ------
             Income tax
              expense              6,324     (1,737)     (19,550)   (30,119)
                                   -----     ------      -------    -------

      (E) Discontinued operations
           Operating earnings
             Current                   -        236           94       (400)
             Deferred                  -         17          474      1,301
                                     ---        ---          ---      -----
                                       -        253          568        901

           Gain on
            disposition
            of rental
            properties
             Current                   -     20,439          754     20,439
             Deferred                  -    (18,634)       1,010    (15,301)
                                     ---    -------        -----    -------
                                       -      1,805        1,764      5,138
           Gain on
            disposition
            of Lumber
            Group
             Current                    -          -            -          -
             Deferred                 454        428          454        428
                                      ---        ---          ---        ---
                                      454        428          454        428
                                      ---        ---          ---        ---
           Impairment of
            real estate
             Current                     -          -            -          -
             Deferred                    -          -       (3,791)         -
                                       ---        ---       ------        ---
                                         -          -       (3,791)         -
                                       ---        ---       ------        ---
                                       454      2,486       (1,005)     6,467
                                       ---      -----       ------      -----

           Grand Total
            (A) (B) (C)  (D) (E)
             Current                14,953      8,132        6,264     (7,548)
             Deferred               (8,175)    (7,383)     (26,819)   (16,104)
                                    ------     ------      -------    -------
                                    $6,778       $749     $(20,555)  $(23,652)
                                    ------       ----     --------   --------

           Recap of Grand Total:
             Real Estate Groups
              Current               15,766        430       14,740       (140)
              Deferred             (10,558)    (1,082)     (12,852)    (6,348)
                                   -------     ------      -------     ------
                                     5,208       (652)       1,888     (6,488)
            Non-Real Estate
             Groups
              Current                 (813)     7,702       (8,476)    (7,408)
              Deferred               2,383     (6,301)     (13,967)    (9,756)
                                     -----     ------      -------     ------
                                     1,570      1,401      (22,443)   (17,164)
                                     -----      -----      -------    -------
             Grand Total            $6,778       $749     $(20,555)  $(23,652)
                                    ======       ====     ========   ========



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

                           Three Months Ended January 31, 2010
                           -----------------------------------
                                              Plus
                                            Unconsol-                 Pro-
                     Full         Less       idated        Plus       Rata
                   Consol-   Noncontrolling  Invest-   Discontinued  Consol-
                   idation      Interest     ments at   Operations   idation
                   (GAAP)                   Pro-Rata                (Non-GAAP)
                   -------   -------------- --------   ------------ ----------
    Revenues
     from
     real
     estate
     operations   $324,333        $12,731    $92,375             $-  $403,977
    Exclude
      straight-
      line
      rent
      adjustment
      (1)           (5,283)             -          -              -    (5,283)
                    ------            ---        ---            ---    ------
    Adjusted
     revenues      319,050         12,731     92,375              -   398,694

     Add
      interest
      and
      other
      income        30,081            175       (556)             -    29,350
     Add
      equity
      in
      earnings
      (loss),
      including
      impairment
      of
      unconsolidated
      entities      30,087              5    (30,338)             -      (256)
     Exclude
      gain on
      disposition
      of
      unconsolidated
      entities     (45,263)             -     45,263              -         -
     Exclude
      impairment
      of
      unconsolidated
      entities       1,693              -     (1,693)             -         -
     Exclude
      depreciation
      and
      amortization
      of
      unconsolidated
      entities
      (see
      below)        13,293              -    (13,293)             -         -
                    ------            ---    -------            ---       ---

        Adjusted
         total
         income    348,941         12,911     91,758              -   427,788

     Operating
      expenses     184,571          6,591     71,105              -   249,085
     Add back
      non-
      Real
      Estate
      depreciation
      and
      amortization
      (b)            3,108              -      2,583              -     5,691
     Add back
      amortization
      of
      mortgage
      procurement
      costs
      for non-
      Real
      Estate
      Groups
      (d)                -              -        161              -       161
     Exclude
      straight-
      line
      rent
      adjustment
      (2)           (1,594)             -          -              -    (1,594)
     Exclude
      preference
      payment         (585)             -          -              -      (585)
                      ----            ---        ---            ---      ----
        Adjusted
         operating
         expenses  185,500          6,591     73,849              -   252,758

     Net
      Operating
      Income       163,441          6,320     17,909              -   175,030

     Interest
      expense      (91,836)        (3,929)   (16,955)             -  (104,862)

     Loss on
      early
      extinguishment
      of debt       (1,396)             -       (954)             -    (2,350)

     Equity in
      earnings
      (loss),
      including
      impairment
      of
      unconsolidated
      entities     (30,087)            (5)    30,338              -       256

     Gain on
      disposition
      of
      unconsolidated
      entities      45,263              -          -              -    45,263

      Impairment
      of
      unconsolidated
      entities      (1,693)             -          -              -    (1,693)

      Depreciation
      and
      amortization
      of
      unconsolidated
      entities
      (see above)  (13,293)             -     13,293              -         -

     Gain on
      disposition
      of
      rental
      properties
      and
      other
      investments        -              -          -          1,172     1,172

     Preferred
      return on
      disposition        -              -          -              -         -

      Impairment
      of real
      estate       (23,402)             -          -              -   (23,402)

      Depreciation
      and
      amortization
      -Real
      Estate
      Groups
      (a)          (64,641)        (1,862)   (12,654)             -   (75,433)

      Amortization
      of
      mortgage
      procurement
      costs -
      Real
      Estate
      Groups
      (c)           (3,329)          (118)      (639)             -    (3,850)

     Straight-
      line rent
      adjustment
      (1) + (2)      3,689              -          -              -     3,689

      Preference
      payment         (585)             -          -              -      (585)
                      ----            ---        ---            ---      ----

     Earnings
      (loss)
      before
      income
      taxes        (17,869)           406     30,338          1,172    13,235

     Income
      tax
      provision     (6,324)             -          -           (454)   (6,778)
     Equity in
      earnings
      (loss),
      including
      impairment
      of
      unconsolidated
      entities      30,087              5    (30,338)             -      (256)
                    ------            ---    -------            ---      ----
     Earnings
      (loss)
      from
      continuing
      operations     5,894            411          -            718     6,201

      Discontinued
      operations,
      net of
      tax              718              -          -           (718)        -
                       ---            ---        ---           ----       ---


     Net
      earnings
      (loss)         6,612            411          -              -     6,201
     Net
      earnings
      attributable
      to
      noncontrolling
      interest        (411)          (411)         -              -         -
                      ----           ----        ---            ---       ---


     Net
      earnings
      (loss)
      attributable
      to
      Forest
      City
      Enterprises,
      Inc.          $6,201             $-         $-             $-    $6,201
                    ======            ===        ===            ===    ======


    (a) Depreciation
     and amortization
     -Real Estate
     Groups        $64,641         $1,862    $12,654             $-   $75,433
    (b) Depreciation
     and amortization
     - Non-Real
     Estate          3,108              -      2,583              -     5,691
                     -----            ---      -----            ---     -----
     Total depreciation
      and amort-
      ization      $67,749         $1,862    $15,237             $-   $81,124
                   =======         ======    =======            ===   =======
    (c) Amortization
     of mortgage
     procurement
     costs - Real
     Estate
     Groups         $3,329           $118       $639             $-    $3,850
    (d) Amortization
     of mortgage
     procurement
     costs - Non-
     Real Estate         -              -        161              -       161
                       ---            ---        ---            ---       ---
      Total
       amortization
       of
       mortgage
       procurement
       costs        $3,329           $118       $800             $-    $4,011
                    ======           ====       ====            ===    ======



                          Three Months Ended January 31, 2009
                          -----------------------------------
                                             Plus
                                            Unconsol-                 Pro-
                     Full         Less       idated        Plus       Rata
                   Consol-   Noncontrolling  Invest-   Discontinued  Consol-
                   idation      Interest    ments at    Operations   idation
                   (GAAP)                   Pro-Rata                (Non-GAAP)
                   -------   -------------- --------   ------------ ----------
    Revenues
     from real
     estate
     operations   $320,574          $8,437   $93,153         $4,051  $409,341
     Exclude
      straight-
      line rent
      adjustment(1)  1,482               -         -             (6)    1,476
                     -----             ---       ---             ---    -----
     Adjusted
      revenues     322,056           8,437    93,153          4,045   410,817

     Add
      interest
      and other
      income        14,430             387     1,442              -    15,485
     Add equity
      in
      earnings
      (loss),
      including
      impairment
      of
      unconsolidated
      entities     (16,798)            (67)   16,437              -      (294)
     Exclude
      gain on
      disposition
      of
      unconsolidated
      entities           -               -         -              -         -
     Exclude
      impairment
      of
      unconsolidated
      entities       15,259              -   (15,259)             -         -
     Exclude
      depreciation
      and
      amortization
      of
      unconsolidated
      entities
      (see
      below)         11,066              -   (11,066)             -         -
                     ------            ---   -------            ---       ---

        Adjusted
         total
         income     346,013          8,757    84,707          4,045   426,008

     Operating
      expenses      187,492          3,093    60,698            795   245,892
     Add back
      non-Real
      Estate
      depreciation
      and
      amortization
      (b)             3,416              -     5,876              -     9,292
     Add back
      amortization
      of
      mortgage
      procurement
      costs for
      non-Real
      Estate
      Groups (d)          -              -        52              -        52
     Exclude
      straight-
      line rent
      adjustment
      (2)            (2,808)             -         -              -    (2,808)
     Exclude
      preference
      payment          (585)             -         -              -      (585)
                       ----            ---       ---            ---      ----

        Adjusted
         operating
         expenses   187,515          3,093    66,626            795   251,843

     Net
      Operating
      Income        158,498          5,664    18,081          3,250   174,165

     Interest
      expense      (104,888)        (1,265)  (17,350)        (1,489) (122,462)

     Loss on
      early
      extinguishment
      of debt          (620)             -         -              -      (620)

     Equity in
      earnings
      (loss),
      including
      impairment
      of
      unconsolidated
      entities       16,798             67    (16,437)            -       294

     Gain on
      disposition
      of
      unconsolidated
      entities            -              -          -             -         -

     Impairment
      of
      unconsolidated
      entities      (15,259)             -          -             -   (15,259)

      Depreciation
      and
      amortization
      of
      unconsolidated
      entities
      (see
      above)        (11,066)             -     11,066             -         -

     Gain on
      disposition
      of rental
      properties
      and other
      investments         -              -          -         5,778     5,778

     Preferred
      return on
      disposition         -              -       (731)            -      (731)

     Impairment
      of real
      estate         (1,262)             -          -             -    (1,262)

      Depreciation
      and
      amortization
      -Real
      Estate
      Groups (a)    (64,759)          (787)   (10,553)       (1,031)  (75,556)

      Amortization
      of
      mortgage
      procurement
      costs -
      Real
      Estate
      Groups (c)     (3,306)          (119)      (513)          (79)   (3,779)

     Straight-
      line rent
      adjustment
      (1) + (2)      (4,290)             -          -             6    (4,284)

     Preference
      payment          (585)             -          -             -      (585)
                       ----            ---        ---           ---      ----

     Earnings
      (loss)
      before
      income
      taxes         (30,739)         3,560    (16,437)        6,435   (44,301)

     Income tax
      provision       1,737              -          -        (2,486)     (749)
     Equity in
      earnings
      (loss),
      including
      impairment
      of
      unconsolidated
      entities      (16,798)           (67)    16,437             -      (294)
                    -------            ---     ------           ---      ----
     Earnings
      (loss)
      from
      continuing
      operations    (45,800)         3,493          -         3,949   (45,344)

      Discontinued
      operations,
      net of tax      3,949              -          -        (3,949)        -
                      -----            ---        ---        ------       ---

     Net
      earnings
      (loss)        (41,851)        3,493           -             -   (45,344)
     Net
      earnings
      attributable
      to
      noncontrolling
      interest       (3,493)       (3,493)          -             -         -
                     ------        ------         ---           ---       ---

     Net
      earnings
      (loss)
      attributable
      to Forest
      City
      Enterprises,
      Inc.         $(45,344)           $-          $-            $-  $(45,344)
                   ========           ===         ===           ===  ========


     (a) Depreciation
      and amortization
      -Real Estate
      Groups        $64,759          $787     $10,553        $1,031   $75,556
     (b) Depreciation
      and amortization
      - Non-Real
      Estate          3,416             -       5,876             -     9,292
                      -----           ---       -----           ---     -----
        Total
         depreciation
         and
         amortiz-
         ation      $68,175          $787     $16,429        $1,031   $84,848
                    =======          ====     =======        ======   =======

     (c) Amortization
      of mortgage
      procurement
      costs -
      Real
      Estate
      Groups         $3,306          $119        $513           $79    $3,779
     (d) Amortization
      of mortgage
      procurement
      costs -
      Non-Real
      Estate              -             -          52             -        52
                        ---           ---          --           ---        --
        Total
         amortization
         of
         mortgage
         procurement
         costs       $3,306          $119        $565           $79    $3,831
                     ======          ====        ====           ===    ======



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


                               Year Ended January 31, 2010
                               ---------------------------
                                             Plus
                                           Unconsol-               Pro-
                        Full        Less    idated       Plus      Rata
                      Consol-       Non-    Invest-      Dis-     Consol-
                      idation   controlling ments at   continued  idation
                      (GAAP)      Interest  Pro-Rata  Operations (Non-GAAP)
                      -------   ----------- --------  ---------- ---------
    Revenues
     from
     real
     estate
     operations      $1,257,222    $50,739  $355,195    $5,476  $1,567,154
    Exclude
     straight-
     line
     rent
     adjustment
     (1)                (19,681)         -         -       (12)    (19,693)
                        -------        ---       ---       ---     -------
    Adjusted
     revenues         1,237,541     50,739   355,195     5,464   1,547,461

    Add
     interest
     and
     other
     income              54,005        718     2,310         -      55,597
    Add
     equity
     in
     earnings
     (loss),
     including
     impairment
     of
     unconsolidated
     entities           (15,053)       (76)   15,769         -         792
    Exclude
     gain on
     disposition
     of
     unconsolidated
     entities           (49,761)         -    49,761         -           -
    Exclude
     impairment
     of
     unconsolidated
     entities            36,356          -  (36,356)         -           -
    Exclude
     depreciation
     and
     amortization
     of
     unconsolidated
     entities
     (see
     below)              45,994          -  (45,994)         -           -
                         ------        ---   -------       ---         ---

    Adjusted
     total
     income           1,309,082     51,381   340,685     5,464   1,603,850

     Operating
     expenses           716,571     24,169   259,085       430     951,917
    Add back
     non-
     Real
     Estate
     depreciation
     and
     amortization
     (b)                 13,480          -    14,931         -      28,411
    Add back
     amortization
     of
     mortgage
     procurement
     costs
     for
     non-
     Real
     Estate
     Groups
     (d)                      -          -       563         -         563
    Exclude
     straight-
     line
     rent
     adjustment
     (2)                 (6,451)         -         -         -      (6,451)
    Exclude
     preference
     payment             (2,341)         -         -         -      (2,341)
                         ------        ---       ---       ---      ------

    Adjusted
     operating
     expenses           721,259     24,169   274,579       430     972,099

    Net
     Operating
     Income             587,823     27,212    66,106     5,034     631,751

    Interest
     expense           (350,270)   (14,761) (66,850)    (2,184)   (404,543)

    Gain
     (loss)
     on
     early
     extinguishment
     of debt             36,569          -       744         -      37,313

    Equity
     in
     earnings
     (loss),
     including
     impairment
     of
     unconsolidated
     entities            15,053         76  (15,769)         -        (792)

    Gain on
     disposition
     of
     unconsolidated
     entities            49,761          -         -         -      49,761

     Impairment
     of
     unconsolidated
     entities           (36,356)         -         -         -     (36,356)

     Depreciation
     and
     amortization
     of
     unconsolidated
     entities
     (see
     above)             (45,994)         -    45,994         -           -

    Gain on
     disposition
     of
     rental
     properties
     and
     other
     investments              -          -         -     5,720       5,720

     Preferred
     return
     on
     disposition              -          -         -         -           -

     Impairment
     of real
     estate             (26,526)         -         -    (9,775)    (36,301)

     Depreciation
     and
     amortization
     -Real
     Estate
     Groups
     (a)               (253,928)    (5,274) (43,868)    (1,347)   (293,869)

     Amortization
     of
     mortgage
     procurement
     costs -
     Real
     Estate
     Groups
     (c)                (13,974)      (567)   (2,126)      (50)    (15,583)

     Straight-
     line
     rent
     adjustment
     (1) +
     (2)                 13,230          -         -        12      13,242

     Preference
     payment             (2,341)         -         -         -      (2,341)
                         ------        ---       ---       ---      ------

    Earnings
     (loss)
     before
     income
     taxes              (26,953)     6,686  (15,769)    (2,590)    (51,998)

    Income
     tax
     provision           19,550          -         -     1,005      20,555
    Equity
     in
     earnings
     (loss),
     including
     impairment
     of
     unconsolidated
     entities           (15,053)       (76)   15,769         -         792
                        -------        ---    ------       ---         ---
    Earnings
     (loss)
     from
     continuing
     operations         (22,456)     6,610         -    (1,585)    (30,651)

     Discontinued
     operations,
     net of
     tax                 (1,585)         -         -     1,585           -
                         ------        ---       ---     -----         ---

    Net
     earnings
     (loss)             (24,041)     6,610         -         -     (30,651)
    Net
     earnings
     attributable
     to
     noncontrolling
     interest            (6,610)    (6,610)        -         -           -
                         ------     ------       ---       ---         ---

    Net loss
     attributable
     to
     Forest
     City
     Enterprises,
     Inc.              $(30,651)        $-        $-        $-    $(30,651)
                       ========        ===       ===       ===    ========


    (a)
     Depreciation
     and
     amortization
     -Real
     Estate
     Groups            $253,928     $5,274   $43,868    $1,347    $293,869
    (b)
     Depreciation
     and
     amortization
     - Non-
     Real
     Estate              13,480          -    14,931         -      28,411
                         ------        ---    ------       ---      ------
      Total
       depreciation
       and
       amortization    $267,408     $5,274   $58,799    $1,347    $322,280
                       ========     ======   =======    ======    ========

    (c)
     Amortization
     of
     mortgage
     procurement
     costs -
     Real
     Estate
     Groups             $13,974       $567    $2,126       $50     $15,583
    (d)
     Amortization
     of
     mortgage
     procurement
     costs -
      Non-
      Real
     Estate                   -          -       563         -         563
                            ---        ---       ---       ---         ---
      Total
       amortization
       of
       mortgage
       procurement
       costs            $13,974       $567    $2,689       $50     $16,146
                        =======       ====    ======       ===     =======



                             Year Ended January 31, 2009
                             ---------------------------

                                             Plus
                                            Unconsol-               Pro-
                        Full       Less     idated       Plus      Rata
                      Consol-      Non-     Invest-      Dis-     Consol-
                      idation  controlling  ments at   continued  idation
                      (GAAP)     Interest   Pro-Rata  Operations (Non-GAAP)
                      -------  -----------  --------  ---------- ----------
    Revenues
     from
     real
     estate
     operations      $1,280,570   $56,132   $380,297    $17,176  $1,621,911
    Exclude
     straight-
     line
     rent
     adjustment
     (1)                 (6,573)        -          -       (153)     (6,726)
                         ------       ---        ---       ----      ------
    Adjusted
     revenues         1,273,997    56,132    380,297     17,023   1,615,185

    Add
     interest
     and
     other
     income              42,417     1,807      5,127        125      45,862
    Add
     equity
     in
     earnings
     (loss),
     including
     impairment
     of
     unconsolidated
     entities           (35,585)      (84)    36,257          -         756
    Exclude
     gain on
     disposition
     of
     unconsolidated
     entities            (1,081)        -      1,081          -           -
    Exclude
     impairment
     of
     unconsolidated
     entities            21,285         -    (21,285)         -           -
    Exclude
     depreciation
     and
     amortization
     of
     unconsolidated
     entities
     (see
     below)              37,563         -    (37,563)         -           -
                         ------       ---    -------        ---         ---

    Adjusted
     total
     income           1,338,596    57,855    363,914     17,148   1,661,803

     Operating
     expenses           780,798    28,651    272,305      2,399   1,026,851
    Add back
     non-
     Real
     Estate
     depreciation
     and
     amortization
     (b)                 13,356         -     20,641          -      33,997
    Add back
     amortization
     of
     mortgage
     procurement
     costs
     for
     non-
     Real
     Estate
     Groups
     (d)                      -         -        221          -         221
    Exclude
     straight-
     line
     rent
     adjustment
     (2)                 (6,368)        -          -          -      (6,368)
    Exclude
     preference
     payment             (3,329)        -          -          -      (3,329)
                         ------       ---        ---        ---      ------
    Adjusted
     operating
     expenses           784,457    28,651    293,167      2,399   1,051,372

    Net
     Operating
     Income             554,139    29,204     70,747     14,749     610,431

    Interest
     expense           (364,338) (11,624)    (69,757)    (7,210)   (429,681)

    Gain
     (loss)
     on
     early
     extinguishment
     of debt             (2,159)     (119)       (51)         -      (2,091)

    Equity
     in
     earnings
     (loss),
     including
     impairment
     of
     unconsolidated
     entities            35,585        84    (36,257)         -        (756)

    Gain on
     disposition
     of
     unconsolidated
     entities             1,081         -          -          -       1,081

     Impairment
     of
     unconsolidated
     entities           (21,285)        -          -          -     (21,285)

     Depreciation
     and
     amortization
     of
     unconsolidated
     entities
     (see
     above)             (37,563)        -     37,563          -           -

    Gain on
     disposition
     of
     rental
     properties
     and
     other
     investments            150         -          -     14,405      14,555

     Preferred
     return
     on
     disposition              -         -       (939)         -        (939)

     Impairment
     of real
     estate              (1,262)        -          -          -      (1,262)

     Depreciation
     and
     amortization
     -Real
     Estate
     Groups
     (a)               (253,429)   (3,142)   (35,720)    (4,942)   (290,949)

     Amortization
     of
     mortgage
     procurement
     costs -
     Real
     Estate
     Groups
     (c)                (12,029)     (502)    (1,843)      (418)    (13,788)

     Straight-
     line
     rent
     adjustment
     (1) +
     (2)                    205         -          -        153         358

     Preference
     payment             (3,329)        -          -          -      (3,329)
                         ------       ---        ---        ---      ------

    Earnings
     (loss)
     before
     income
     taxes             (104,234)   13,901    (36,257)    16,737    (137,655)

    Income
     tax
     provision           30,119         -          -     (6,467)     23,652
    Equity
     in
     earnings
     (loss),
     including
     impairment
     of
     unconsolidated
     entities           (35,585)      (84)    36,257          -         756
                        -------       ---     ------        ---         ---
    Earnings
     (loss)
     from
     continuing
     operations        (109,700)   13,817          -     10,270    (113,247)

     Discontinued
     operations,
     net of
     tax                 10,270         -          -    (10,270)          -
                         ------       ---        ---    -------         ---

    Net
     earnings
     (loss)             (99,430)   13,817          -          -    (113,247)
    Net
     earnings
     attributable
     to
     noncontrolling
     interest           (13,817) (13,817)          -          -           -
                        -------  -------         ---        ---         ---

    Net loss
     attributable
     to
     Forest
     City
     Enterprises,
     Inc.             $(113,247)       $-         $-         $-   $(113,247)
                      =========       ===        ===        ===   =========


    (a)
     Depreciation
     and
     amortization
     -Real
     Estate
     Groups            $253,429    $3,142    $35,720     $4,942    $290,949
    (b)
     Depreciation
     and
     amortization
     - Non-
     Real
     Estate              13,356         -     20,641          -      33,997
                         ------       ---     ------        ---      ------
      Total
       depreciation
       and
       amortization    $266,785    $3,142    $56,361     $4,942    $324,946
                       ========    ======    =======     ======    ========

    (c)
     Amortization
     of
     mortgage
     procurement
     costs -
     Real
     Estate
     Groups             $12,029      $502     $1,843       $418     $13,788
    (d)
     Amortization
     of
     mortgage
     procurement
     costs -
      Non-
      Real
     Estate                   -         -        221          -         221
                            ---       ---        ---        ---         ---
      Total
       amortization
       of
       mortgage
       procurement
       costs            $12,029      $502     $2,064       $418     $14,009
                        =======      ====     ======       ====     =======



                   Forest City Enterprises, Inc. and Subsidiaries
                        Supplemental Operating Information


                       Net Operating Income (dollars in thousands)
              ---------------------------------------------------------------
                           Three Months Ended January 31, 2010
              ---------------------------------------------------------------

                                            Plus
                                             Un-
                                Less    consolidated   Plus
                    Full        Non-    Investments   Discont-     Pro-Rata
              Consolidation controlling     at         inued    Consolidation
                  (GAAP)      Interest    Pro-Rata   Operations   (Non-GAAP)
              ------------- ----------- ------------ ---------- -------------
    Commercial Group
      Retail

        Comparable  $58,311      $2,559       $5,463         $-       $61,215
        ---------- --------    --------     --------   --------      --------
        Total        62,172       2,678        5,581          -        65,075
      Office
       Buildings

        Comparable   62,600       2,692        2,026          -        61,934
        ---------- --------    --------     --------   --------      --------
        Total        65,240       2,649        2,070          -        64,661
      Hotels

        Comparable    2,704           -            -          -         2,704
        ---------- --------    --------     --------   --------      --------
        Total         2,704           -            -          -         2,704

      Earnings from
       Commercial
       Land Sales      (144)          -            -          -          (144)

      Other  (1)      3,469         315       (1,052)         -         2,102
      ----------   --------    --------     --------   --------      --------

    Total Commercial
     Group

        Comparable  123,615       5,251        7,489          -       125,853
        ---------- --------    --------     --------   --------      --------
        Total       133,441       5,642        6,599          -       134,398

    Residential Group
      Apartments

        Comparable   25,716         714        6,575          -        31,577
        ---------- --------    --------     --------   --------      --------
        Total        37,977         880        8,706          -        45,803

      Military
       Housing
        Comparable
         (2)              -           -            -          -             -
        ---------- --------    --------     --------   --------      --------
        Total         8,522        (451)         311          -         9,284

      Other  (1)      6,250           5            -          -         6,245
      ----------   --------    --------     --------   --------      --------

    Total Residential
     Group

        Comparable   25,716         714        6,575          -        31,577
        ---------- --------    --------     --------   --------      --------
        Total        52,749         434        9,017          -        61,332

    Total Rental
     Properties
        Comparable  149,331       5,965       14,064          -       157,430
        ---------- --------    --------     --------   --------      --------
        Total       186,190       6,076       15,616          -       195,730

    Land Development
     Group              365         244         (323)         -          (202)

    The Nets        (13,648)          -        2,616          -       (11,032)

    Corporate
     Activities      (9,466)          -            -          -        (9,466)
    -----------    --------    --------     --------   --------      --------
    Grand Total    $163,441      $6,320      $17,909         $-      $175,030
    ===========    ========    ========     ========   ========      ========


              ---------------------------------------------------------------
                           Three Months Ended January 31, 2009
              ---------------------------------------------------------------
                                            Plus
                                             Un-
                                Less    consolidated   Plus
                    Full        Non-    Investments   Discont-     Pro-Rata
              Consolidation controlling     at         inued    Consolidation
                  (GAAP)      Interest    Pro-Rata   Operations   (Non-GAAP)
              ------------- ----------- ------------ ---------- -------------

    Commercial Group
      Retail

        Comparable  $60,271     $ 2,091      $ 5,531      $   -       $63,711
        ---------- --------    --------     --------   --------      --------
        Total        64,696       3,182        5,579        560        67,653
      Office Buildings

        Comparable   58,803       2,441        2,999          -        59,361
        ---------- --------    --------     --------   --------      --------
        Total        62,786         738        2,999          -        65,047
      Hotels

        Comparable    2,734           -            -          -         2,734
        ---------- --------    --------     --------   --------      --------
        Total         2,734           -            -          -         2,734

      Earnings from
       Commercial
       Land Sales    11,318           6            -          -        11,312

      Other  (1)     (9,495)        104         (261)         -        (9,860)
      ----------   --------    --------     --------   --------      --------
    Total Commercial
     Group

        Comparable  121,808       4,532        8,530          -       125,806
        ---------- --------    --------     --------   --------      --------
        Total       132,039       4,030        8,317        560       136,886

    Residential Group
      Apartments

        Comparable   27,087         707        6,064          -        32,444
        ---------- --------    --------     --------   --------      --------
        Total        28,451         934        8,531      2,690        38,738

    Military Housing

        Comparable
         (2)              -           -            -          -             -
        ---------- --------    --------     --------   --------      --------
        Total        10,520        (134)         196          -        10,850

      Other (1)       3,034          83            -          -         2,951
      ---------    --------    --------     --------   --------      --------

    Total Residential
     Group

        Comparable   27,087         707        6,064          -        32,444
        ---------- --------    --------     --------   --------      --------
        Total        42,005         883        8,727      2,690        52,539

    Total Rental
     Properties

        Comparable  148,895       5,239       14,594          -       158,250
        ---------- --------    --------     --------   --------      --------
        Total       174,044       4,913       17,044      3,250       189,425

    Land Development
     Group            8,001         751          171          -         7,421

    The Nets         (9,109)          -          866          -        (8,243)

    Corporate
     Activities     (14,438)          -            -          -       (14,438)
    -----------    --------    --------     --------   --------      --------

    Grand Total    $158,498     $ 5,664      $18,081     $3,250      $174,165
    ===========    ========    ========     ========   ========      ========


                                        -------------------------------
                                                   % Change
                                        -------------------------------
                                             Full           Pro-Rata
                                        Consolidation     Consolidation
                                            (GAAP)         (Non-GAAP)
                                        -------------     -------------
    Commercial Group
      Retail

        Comparable                             (3.3%)            (3.9%)
        ----------
        Total
      Office Buildings

        Comparable                               6.5%              4.3%
        ----------
        Total
      Hotels

        Comparable                             (1.1%)            (1.1%)
        ----------
        Total

      Earnings from Commercial
       Land Sales

      Other  (1)
      ----------

    Total Commercial Group

        Comparable                               1.5%              0.0%
        ----------
        Total

    Residential Group
      Apartments

        Comparable                             (5.1%)            (2.7%)
        ----------
        Total

      Military Housing

        Comparable (2)
        ----------
        Total

      Other  (1)


    Total Residential Group

        Comparable                             (5.1%)            (2.7%)
        ----------
        Total

    Total Rental Properties

        Comparable                               0.3%            (0.5%)
        ----------
        Total

    Land Development Group
    The Nets
    Corporate Activities
    --------------------
    Grand Total
    ===========

    (1) Includes write-offs of abandoned development projects, non-
        capitalizable development costs and unallocated management and service
        company overhead, net of historic and new market tax credit income.
        Write-offs of abandoned development projects were $5,490 and $10,760
        at both full and pro-rata consolidation for the three months ended
        January 31, 2010 and 2009, respectively.
    (2) Comparable NOI for Military Housing commences once the operating
        projects complete initial development phase.



                  Forest City Enterprises, Inc. and Subsidiaries
                       Supplemental Operating Information


                     Net Operating Income (dollars in thousands)
              ---------------------------------------------------------------
                                 Year Ended January 31, 2010
              ---------------------------------------------------------------
                                            Plus
                                             Un-
                                Less    consolidated   Plus
                   Full         Non-    Investments   Discont-     Pro-Rata
              Consolidation controlling     at         inued    Consolidation
                  (GAAP)      Interest    Pro-Rata   Operations   (Non-GAAP)
              ------------- ----------- ------------ ---------- -------------
    Commercial
     Group
      Retail

        Comparable $227,183     $11,292      $22,055         $-      $237,946
        ---------- --------    --------     --------   --------      --------
        Total       251,960      11,440       22,350        481       263,351

      Office
       Buildings

        Comparable  202,343       9,967        9,064          -       201,440
        ---------- --------    --------     --------   --------      --------
        Total       255,825      10,486        9,292          -       254,631
      Hotels

        Comparable   13,507           -            -          -        13,507
        ---------- --------    --------     --------   --------      --------
        Total        13,507           -            -          -        13,507

      Earnings from
       Commercial
       Land Sales     5,416         476            -          -         4,940

      Other  (1)     (7,861)        817       (2,561)         -       (11,239)
      ----------   --------    --------     --------   --------      --------

    Total
     Commercial Group

        Comparable  443,033      21,259       31,119          -       452,893
        ---------- --------    --------     --------   --------      --------
        Total       518,847      23,219       29,081        481       525,190

    Residential Group
      Apartments

        Comparable  105,952       2,786       21,281          -       124,447
        ---------- --------    --------     --------   --------      --------
        Total       129,632       3,781       29,842      4,553       160,246

      Military Housing

        Comparable
         (2)              -           -            -          -             -
        ---------- --------    --------     --------   --------      --------
        Total        37,424       (303)        1,044          -        38,771

      Other  (1)    (15,277)         94            -          -       (15,371)
      ----------   --------    --------     --------   --------      --------


    Total
     Residential
     Group

        Comparable  105,952       2,786       21,281          -       124,447
        ---------- --------    --------     --------   --------      --------
        Total       151,779       3,572       30,886      4,553       183,646

    Total Rental
      Properties

        Comparable  548,985      24,045       52,400          -       577,340
        ---------- --------    --------     --------   --------      --------
        Total       670,626      26,791       59,967      5,034       708,836

    Land Development
     Group (3)        2,007         421      (1,925)          -          (339)

    The Nets        (43,489)          -        8,064          -       (35,425)

    Corporate
     Activities     (41,321)          -            -          -       (41,321)
    -----------    --------    --------     --------   --------      --------

    Grand Total    $587,823     $27,212      $66,106     $5,034      $631,751
    =========== ========    ========     ========   ========      ========


              ---------------------------------------------------------------
                                 Year Ended January 31, 2009
              ---------------------------------------------------------------
                                            Plus
                                             Un-
                                Less    consolidated   Plus
                   Full         Non-    Investments   Discont-     Pro-Rata
              Consolidation controlling     at         inued    Consolidation
                  (GAAP)      Interest    Pro-Rata   Operations   (Non-GAAP)
              ------------- ----------- ------------ ---------- -------------
    Commercial
     Group
      Retail

        Comparable $237,608     $11,966      $22,052         $-      $247,694
        ---------- --------    --------     --------   --------      --------
        Total       248,737      12,511       22,298      2,433       260,957
      Office
       Buildings

        Comparable  190,156       9,609       10,570          -       191,117
        ---------- --------    --------     --------   --------      --------
        Total       251,653       7,384       10,677          -       254,946
      Hotels

        Comparable   14,990           -            -          -        14,990
        ---------- --------    --------     --------   --------      --------
        Total        14,990           -            -          -        14,990

      Earnings from
       Commercial
       Land Sales    19,713       2,410            -          -        17,303

      Other (1)     (45,774)        (51)      (1,826)         -       (47,549)
      ---------    --------    --------     --------   --------      --------

    Total Commercial
     Group

        Comparable  442,754      21,575       32,622          -       453,801
        ---------- --------    --------     --------   --------      --------
        Total       489,319      22,254       31,149      2,433       500,647

    Residential Group
      Apartments

        Comparable  107,965       2,895       22,974          -       128,044
        ---------- --------    --------     --------   --------      --------
        Total       117,351       3,107       32,013     12,316       158,573

      Military Housing

        Comparable
         (2)              -           -            -          -             -
        ---------- --------    --------     --------   --------      --------
        Total        51,269       3,794          974          -        48,449

      Other (1)     (20,013)        228            -          -       (20,241)
      ---------    --------    --------     --------   --------      --------


    Total
     Residential
     Group

        Comparable  107,965       2,895       22,974          -       128,044
        ---------- --------    --------     --------   --------      --------
        Total       148,607       7,129       32,987     12,316       186,781

    Total Rental
     Properties

        Comparable  550,719      24,470       55,596          -       581,845
        ---------- --------    --------     --------   --------      --------
        Total       637,926      29,383       64,136     14,749       687,428

    Land Development
     Group (3)        2,914        (179)         538          -         3,631

    The Nets        (40,989)          -        6,073          -       (34,916)

    Corporate
     Activities     (45,712)          -            -          -       (45,712)
    -----------    --------    --------     --------   --------      --------

    Grand Total    $554,139     $29,204      $70,747    $14,749      $610,431
    ===========    ========    ========     ========   ========      ========


                                       -------------------------------
                                                  % Change
                                       -------------------------------
                                            Full            Pro-Rata
                                       Consolidation     Consolidation
                                           (GAAP)          (Non-GAAP)
                                       -------------     -------------
    Commercial Group
      Retail

        Comparable                             (4.4%)            (3.9%)
        ----------
        Total
      Office Buildings

        Comparable                              6.4%              5.4%
        ----------
        Total
      Hotels

        Comparable                             (9.9%)            (9.9%)
        ----------
        Total

      Earnings from Commercial
       Land Sales

      Other  (1)
      ----------

    Total Commercial Group

        Comparable                              0.1%             (0.2%)
        ----------
        Total

    Residential Group
      Apartments

        Comparable                             (1.9%)            (2.8%)
        ----------
        Total

      Military Housing

        Comparable (2)
        --------------
        Total

      Other  (1)
      ----------


    Total Residential Group

        Comparable                             (1.9%)            (2.8%)
        ----------
        Total

    Total Rental Properties

        Comparable                             (0.3%)            (0.8%)
        ----------
        Total

    Land Development Group (3)
    The Nets
    Corporate Activities
    --------------------
    Grand Total
    ===========

    (1) Includes write-offs of abandoned development projects, non-
        capitalizable development costs and unallocated management and service
        company overhead, net of historic and new market tax credit income.
        Write-offs of abandoned development projects were $26,888 and $52,211
        at full consolidation ($26,888 and $49,966 at pro-rata consolidation)
        for the year ended January 31, 2010 and 2009, respectively.
    (2) Comparable NOI for Military Housing commences once the operating
        projects complete initial development phase.
    (3) Includes reduction in fair value of the DURA purchase obligation and
        fee in 2008 of $12,434,000.



    Development Pipeline
    January 31, 2010
    2009 Openings and Acquisitions (3)

                                                                        Pro-
                                                 Date      FCE Legal    Rata
                                         Dev (D) Opened /  Ownership %  FCE %
    Property              Location       Acq (A) Acquired      (a)      (a)(1)
    --------              --------       ------- --------  -----------  ------


    Retail Centers:
    Promenade in Temecula
     Expansion            Temecula, CA      D     Q1-09        75.0%    100.0%
    East River Plaza
     (Costco) (f) (g)     Manhattan, NY     D     Q4-09        35.0%     50.0%


    Residential:
    North Church
     Towers (d)           Parma Heights,
                           OH               A     Q3-09       100.0%    100.0%
    80 DeKalb (e)         Brooklyn, NY      D     Q4-09/10     80.0%    100.0%


    Total Openings
     and Acquisitions


    Residential Phased-In
     Units (e) (f):

    Cobblestone Court     Painesville, OH   D     2006-09      50.0%     50.0%
    Sutton Landing        Brimfield, OH     D     2007-09      50.0%     50.0%
    Stratford Crossing    Wadsworth, OH     D     2007-10      50.0%     50.0%
    Total (h)



                                                Cost at FCE
                                                  Pro-Rata
                    Cost at Full                   Share     Sq. ft./ Gross
                    Consolidation  Total Cost  (Non-GAAP)(c) No. of   Leasable
    Property        (GAAP) (b)     at 100% (2)   (1) X (2)   Units    Area
    --------        ----------     -----------  ------------ -------- --------
                                 (in millions)
                        -------------------------------

    Retail Centers:
    Promenade in
     Temecula Expansion $107.8      $107.8       $107.8      127,000   127,000
    East River Plaza
     (Costco) (f) (g)      0.0         0.0          0.0      110,000   110,000
                           ---         ---          ---      -------   -------
                        $107.8      $107.8       $107.8      237,000   237,000
                        ------      ------       ------      =======   =======

    Residential:
    North Church
     Towers (d)           $5.6        $5.6         $5.6          399
    80 DeKalb (e)        163.3       163.3        163.3          365
                         -----       -----        -----          ---
                        $168.9      $168.9       $168.9          764
                        ------      ------       ------          ===

                        ------      ------       ------
    Total Openings
     and Acquisitions   $276.7      $276.7       $276.7
                        ======      ======       ======



    Residential
     Phased-In
     Units (e) (f):                                      Opened in '09 /
                                                              Total
                                                         ---------------
    Cobblestone Court     $0.0       $30.3        $15.2       96/400
    Sutton Landing         0.0        15.9          8.0       36/216
    Stratford Crossing     0.0        25.3         12.7       36/348
                           ---        ----         ----       ------
    Total (h)             $0.0       $71.5        $35.9      168/964
                          ====       =====        =====      =======

    See attached footnotes.



    Development Pipeline
    January 31, 2010
    Under Construction (7)


                                                          FCE Legal  Pro-Rata
                                   Dev (D)  Anticipated  Ownership %   FCE %
    Property           Location    Acq (A)    Opening       (a)      (a) (1)
    --------           --------    -------  -----------  ----------- --------

    Retail Centers:
    East River
     Plaza (Total
     including
     Costco) (f) (i)   Manhattan, NY    D     2010          35.0%     50.0%
    Village at
     Gulfstream Park   Hallandale       D     Q1-10         50.0%     50.0%
                        Beach, FL
    Ridge Hill (e)     Yonkers, NY      D     2011/2012     70.0%    100.0%


    Office:
    Waterfront
     Station - East
     4th & West 4th
     Buildings         Washington, D.C. D     Q1-10         45.0%     45.0%

    Residential:
    Presidio Landmark  San Francisco,   D     Q3-10        100.0%    100.0%
                        CA
    Beekman (e)        Manhattan, NY    D     Q1-11/12      49.0%     70.0%


    Arena:
    Barclays Center
     (f) (j)           Brooklyn, NY     D     2012          23.3%     23.3%


    Total Under
     Construction
     (k)


    Residential
     Phased-In
     Units (e) (f):
    Stratford
     Crossing (l)      Wadsworth, OH    D     2007-10       50.0%     50.0%


    Fee Development:
    Las Vegas City
     Hall              Las Vegas, NV    D     Q1-12            - (q)     - (q)




                                                       Cost at FCE
                                                        Pro-Rata
                           Cost at Full                   Share     Sq. ft./
                           Consolidation  Total Cost  (Non-GAAP)(c) No. of
    Property               (GAAP) (b)     at 100% (2)   (1) X (2)   Units
    --------               -------------  -----------  ------------ --------
                                      (in millions)
                           ----------------------------------

    Retail Centers:
    East River Plaza
     (Total including
     Costco) (f) (i)           $0.0       $398.1       $199.1      527,000
    Village at
     Gulfstream Park          204.2        204.2        102.1      510,000
    Ridge Hill (e)            798.7        798.7        798.7    1,336,000
                              -----        -----        -----    ---------
                           $1,002.9     $1,401.0     $1,099.9    2,373,000
                           --------     --------     --------    =========
    Office:
    Waterfront
     Station - East
     4th & West 4th
     Buildings               $326.7       $326.7       $147.0      631,000 (o)
                             ------       ------       ------      =======

    Residential:
    Presidio Landmark        $110.9       $110.9       $110.9          161
    Beekman (e)               875.7        875.7        613.0          904
                              -----        -----        -----          ---
                             $986.6       $986.6       $723.9        1,065
                             ------       ------       ------        =====

    Arena:
    Barclays Center (f) (j)    $0.0       $911.1       $212.3      670,000
                               ----       ------       ------      =======

                           --------     --------     --------
    Total Under
     Construction (k)      $2,316.2     $3,625.4     $2,183.1
                           ========     ========     ========


    Residential
     Phased-In Units                                           Under Const. /
     (e) (f):                                                      Total
                                                               --------------
    Stratford
     Crossing (l)              $0.0        $25.3        $12.7       96/348
                               ====        =====        =====       ======

                                                                    Sq.ft
    Fee Development:                                                -----
    Las Vegas City Hall        $0.0       $146.2         $0.0      270,000
                               ====       ======         ====      =======



                                              Gross
    Property                              Leasable Area   Lease Commitment %
    --------                              -------------   ------------------

    Retail Centers:
    East River Plaza (Total including
     Costco) (f) (i)                       527,000                  93%
    Village at Gulfstream Park             510,000  (m)             70%
    Ridge Hill (e)                       1,336,000  (n)             28%
                                         ---------
                                         2,373,000
                                         =========

    Office:
    Waterfront Station - East 4th &
     West 4th Buildings                                             97%

    Residential:
    Presidio Landmark
    Beekman (e)


    Arena:

    Barclays Center (f) (j)           18,000 seats  (p)
                                      ============


    Total Under Construction (k)


    Residential Phased-In Units (e) (f):
    Stratford Crossing (l)


    Fee Development:
    Las Vegas City Hall


    See attached footnotes.

    Military Housing - see footnote r



    Development Pipeline
    January 31, 2010
    Equity Requirements for Projects Under Construction (1)

                                       Less
                                   Unconsolidated     Full          Less
                                     Investments  Consolidation Noncontrolling
                              100%    at 100%       (GAAP) (b)     Interest
                              ---- -------------- ------------- --------------
                                     (dollars in millions)

    Total Cost Under
     Construction          $3,625.4      $1,309.2      $2,316.2         $544.5
    Total Loan Draws
     and Other Sources at
     Completion (2)         2,313.2         646.2       1,667.0          381.6
                            -------         -----       -------          -----
        Net Equity at
         Completion        $1,312.2        $663.0        $649.2         $162.9
                           --------        ------        ------         ------



    Net Costs Incurred to
     Date                  $2,144.4        $543.2      $1,601.2         $423.4
    Loan Draws and
     Other Sources
     to Date                  987.4         (73.7)      1,061.1          274.2
                              -----         -----       -------          -----
        Net Equity to
         Date              $1,157.0        $616.9        $540.1         $149.2
                           --------        ------        ------         ------

        % of Total Equity        88%                         83%



    Remaining Costs        $1,481.0        $766.0        $715.0         $121.1
    Remaining Loan
     Draws and Other
     Sources (3)            1,325.8         719.9         605.9          107.4
                            -------         -----         -----          -----
        Remaining Equity     $155.2         $46.1        $109.1          $13.7
                             ------         -----        ------          -----

        % of Total Equity        12%                         17%


                                                  Plus
                                             Unconsolidated      Pro-Rata
                                              Investments      Consolidation
                                              at Pro-Rata      (Non-GAAP)(c)
                                             --------------    -------------

    Total Cost Under Construction                $411.4          $2,183.1
    Total Loan Draws and Other Sources
     at Completion (2)                            226.6           1,512.0
                                                  -----           -------
        Net Equity at Completion                 $184.8            $671.1
                                                 ------            ------



    Net Costs Incurred to Date                   $233.9          $1,411.7
    Loan Draws and Other Sources to
     Date                                          49.1             836.0
                                                   ----             -----
        Net Equity to Date                       $184.8            $575.7
                                                 ------            ------

        % of Total Equity                                              86%



    Remaining Costs                              $177.5            $771.4
    Remaining Loan Draws and Other
     Sources (3)                                  177.5             676.0
                                                  -----             -----
        Remaining Equity                             $-             $95.4
                                                    ---             -----

        % of Total Equity                                              14%


    (1) This schedule includes only the seven properties listed on page 31 of
        the Supplemental Package.  This does not include costs associated with
        phased-in units, operating property renovations and military housing.
    (2) "Other Sources" includes third party subsidies, tax credit proceeds
        and outlot land sales.
    (3) Three of the loan commitments require specific leasing hurdles to be
        achieved prior to drawing the final amount of the loan.  The Company
        estimates that approximately $141.3 million at 100% and at full
        consolidation and $76.9 million at pro-rata consolidation of loan
        commitments are at risk should these leasing hurdles not be achieved.



    Land Held for Development or Sale
                                     Gross     Saleable      Option
    Location                       Acres (4)   Acres (5)    Acres (6)
    --------                       ---------   ---------    ---------

    Mesa del Sol - Albuquerque, NM   3,023      2,336         5,731
    Florida                          1,654      1,414             -
    Carolinas                        1,344        879           788
    Ohio                             1,119        713           470
    Texas                            1,054        796             -
    Arizona                            967        551             -
    Stapleton - Denver, CO             200        136         1,474
    Central Station - Chicago, IL       30         30             -
    Other                            1,152        901             -
                                     -----        ---           ---
        Total                       10,543      7,756         8,463
                                    ======      =====         =====

    (4) Represent all acres owned including those used for roadways, open
        spaces and parks.
    (5) Saleable acres represent the total of all acres owned and available
        for sales.  It might be the intent of the Land Group to further
        develop some of the acres into completed sublots prior to sale.
    (6) Option acres are those acres that the Land Development group has a
        formal option to acquire the property.   Typically these options are
        in the form of purchase agreements with contingencies for the
        satisfaction of due diligence reviews.



    Development Pipeline

    January 31, 2010 Footnotes
    --------------------------

    ( a ) As is customary within the real estate industry, the Company invests
          in certain real estate projects through joint ventures.  For some of
          these projects, the Company provides funding at percentages that
          differ from the Company's legal ownership.
    ( b ) Amounts are presented on the full consolidation method of
          accounting, a GAAP measure. Under full consolidation, costs are
          reported as consolidated at 100 percent if we are deemed to have
          control or to be the primary beneficiary of our investments in the
          variable interest entity ("VIE").
    ( c ) Cost at pro-rata share represents Forest City's share of cost, based
          on the Company's pro-rata ownership of each property (a non-GAAP
          measure). Under the pro-rata consolidation method of accounting the
          Company determines its pro-rata share by multiplying its pro-rata
          ownership by the total cost of the applicable property.
    ( d ) The Company exchanged its 50% ownership interest in Boulevard
          Towers, an apartment community located in Amherst, New York, for
          100%
          ownership in North Church Towers, in a nonmonetary exchange.
    ( e ) Phased-in openings. Costs are representative of the total project.
    ( f ) Reported under the equity method of accounting. This method
          represents a GAAP measure for investments in which the Company is
          not deemed to have control or to be the primary beneficiary of our
          investments in a VIE.
    ( g ) See the Under Construction pipeline for cost details for the total
          center.
    ( h ) The difference between the full consolidation cost amount (GAAP) of
          $0.0 million to the Company's pro-rata share (a non-GAAP measure) of
          $35.9 million consists of the Company's share of cost for
          unconsolidated investments of $35.9 million.
    ( i ) Phased opening includes the total cost and square footage of the
          center, including Costco which opened in the fourth quarter.  The
          cost of the property also includes construction of the 1,248-space
          parking garage and structural upgrades to accommodate a possible
          future residential project above the retail center.
    ( j ) Upon closing of the strategic partnership with an affiliate of
          Onexim Group, the Company's legal and pro-rata ownership will
          increase to approximately 27%.
    ( k ) The difference between the full consolidation cost amount (GAAP) of
          $2,316.2 million to the Company's pro-rata share (a non-GAAP
          measure) of $2,183.1 million consists of a reduction to full
          consolidation for noncontrolling interest of $544.5 million of cost
          and the addition of its share of cost for unconsolidated investments
          of $411.4 million.
    ( l ) The difference between the full consolidation cost amount (GAAP) of
          $0.0 million to the Company's pro-rata share (a non-GAAP measure) of
          $12.7 million consists of the Company's share of cost for
          unconsolidated investments of $12.7 million.
    ( m ) Includes 89,000 square feet of office space.  Excluding this office
          space from the calculation of the preleased percentage would result
          in the retail space being 85% preleased. In addition, includes
          35,000 square feet site for Crate & Barrel, which opened Q4-09.  The
          remainder of the center opened on February 11, 2010.
    ( n ) Includes 156,000 square feet of office space.
    ( o ) Includes 85,000 square feet of retail space.
    ( p ) The Nets, a member of the NBA, has a 37 year license agreement to
          use the arena.
    ( q ) This is a fee development project, owned by the City of Las Vegas.
          Therefore, these costs are not included on the Company's balance
          sheet.
    ( r ) Below is a summary of our equity method investments for Military
          Housing Development projects. The Company provides development,
          construction, and management services for these projects and
          receives agreed upon fees for these services.  (See pages 14-15 of
          the Supplemental Package for net fee revenue included in NOI.)




                                                     Anticipated     FCE
    Property                           Location        Opening    Pro-Rata %
    --------                           --------      -----------  ----------


    Military Housing - Under
     Construction (7)
    Navy Midwest                      Chicago, IL     2006-2010       *
    Pacific Northwest Communities     Seattle, WA     2007-2010       *
    Midwest Millington                Memphis, TN     2008-2010       *
    Marines, Hawaii Increment II      Honolulu, HI    2007-2011       *
    Navy, Hawaii Increment III        Honolulu, HI    2007-2011       *
    Air Force Academy                 Colorado        2007-2013    50.0%
                                       Springs, CO
    Hawaii Phase IV                   Kaneohe, HI     2007-2014       *
    Total Military Housing - Under
     Construction


                                      Cost at Full    Total Cost  No. of
    Property                          Consolidation   at 100%     Units
    --------                          -------------   ----------  ------
                                              (in millions)
                                             ---------------

    Military Housing - Under Construction (7)
    Navy Midwest                             $0.0     $248.8       1,658
    Pacific Northwest Communities             0.0      280.5       2,986
    Midwest Millington                        0.0       37.0         318
    Marines, Hawaii Increment II              0.0      293.3       1,175
    Navy, Hawaii Increment III                0.0      535.1       2,520
    Air Force Academy                         0.0       69.5         427
    Hawaii Phase IV                           0.0      364.0         917
                                              ---      -----         ---
    Total Military Housing Under
     Construction                            $0.0   $1,828.2      10,001
                                             ====   ========      ======


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





SOURCE Forest City Enterprises, Inc.

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