Forest City Reports Fiscal 2009 Second-Quarter and Year-to-Date Results

CLEVELAND, Sept. 8 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc.
(NYSE: FCEA and FCEB), today announced EBDT, net earnings and revenues for the
three and six months ended July 31, 2009.

EBDT
Second-quarter EBDT (earnings before depreciation, amortization and deferred
taxes) was $95.5 million, an 8.1 percent increase compared with 2008
second-quarter EBDT of $88.3 million. Year-to-date EBDT was $137.1 million, a
31.4 percent increase compared with $104.3 million for the first six months of
fiscal 2008.

On a per share basis, second-quarter 2009 EBDT was $0.64, a 22.0 percent
decrease compared with 2008 second quarter EBDT of $0.82. Year-to-date per
share EBDT was $1.07, a 10.3 percent increase compared with $0.97 per share
for the first six months of 2008. Per-share data for both the second quarter
and six months of 2009 reflect the dilutive effect of approximately 52.3
million new Class A common shares issued by the Company during the second
quarter of 2009.

For an explanation of EBDT 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 Loss
The second-quarter net loss attributable to Forest City Enterprises, Inc. was
$1.8 million, or $0.01 per share, compared with a net loss of $8.4 million, or
$0.08 per share, in the second quarter of 2008. Net loss for the six months
ended July 31, 2009, was $32.5 million, or $0.26 per share, compared with
$48.8 million, or $0.47 per share for the same period in 2008.

Revenues
Second-quarter 2009 consolidated revenues were $316.7 million compared with
$327.6 million last year. First-half 2009 revenues were $629.8 million
compared with $632.6 million for the six months ended July 31, 2008.

Review and Discussion of Results

Second quarter EBDT
For the three months ended July 31, 2009, the Company's Commercial and
Residential Segments together provided a pre-tax EBDT increase of $2.9
million, compared with the same period in 2008. Among the factors
contributing to this increase were $3.3 million in lower interest expense on
the mature portfolio, $4.1 million in increased EBDT from the ramp-up of new
properties, and $2.2 million in reduced interest expense from the change in
fair market value of derivatives between the comparable periods in 2008 and
2009. These increases in the portfolio were partially offset by 2008 lease
termination fee income of $8.3 million, which did not recur in 2009.

The Land Segment provided a pre-tax EBDT increase of $4.5 million compared
with the same period in 2008. This increase included a gain on early
extinguishment of nonrecourse mortgage debt of $9.5 million, which was
partially offset by lower land sales, as well as reduced fee income and profit
participation at the Company's Stapleton project in Denver.

Also impacting EBDT for the second quarter of 2009 was increased corporate
interest expense of $3.6 million, which includes the non-cash impact of the
FSP APB 14-1 accounting standard in 2009. This was offset by reduced expenses
of $4.2 million as a result of cost savings initiatives. Finally, EBDT for
the quarter was negatively impacted by a smaller tax benefit of $1.1 million,
compared with the second quarter of 2008.

Year-to-date EBDT
(An exhibit illustrating factors impacting year-to-date 2009 EBDT results,
compared with results for the first six months of 2008, is available on the
Investor Relations page of the Company's web site: www.forestcity.net)

For the six months ended July 31, 2009, the Commercial and Residential
Segments combined provided a pre-tax EBDT increase of $27.2 million, compared
with the same period in 2008, primarily as the result of decreased interest
expense of $9.0 million on the mature portfolio, increased EBDT of $7.2
million from the ramp up of new properties, and decreased project write-offs
of $9.1 million, compared with the first six months of 2008.

The Land Segment provided a pre-tax EBDT increase of $5.7 million, compared
with the first six months of 2008, driven by $9.5 million for debt forgiveness
related to early extinguishment of nonrecourse mortgage debt, partially offset
by lower land sales and reduced fee income and profit participation at
Stapleton in Denver.

In the Company's Corporate Segment, pre-tax EBDT decreased $9.8 million,
impacted by company-wide severance and outplacement expenses of $8.7 million,
and higher corporate interest expense of $10.8 million, which includes the
non-cash impact of the FSP APB 14-1 accounting standard in 2009. These
decreases were partially offset by $9.7 million in reduced expenses as a
result of cost-reduction initiatives.

Reduced losses on the Nets provided a pre-tax EBDT increase of $3.0 million,
and EBDT was favorably impacted by a larger tax benefit of $6.7 million
compared with the first six months of 2008.

Commentary
"Overall, our results for the first half of 2009 met our expectations, and
we're pleased with our EBDT performance year to date and for the second
quarter, in particular," said Charles A. Ratner, Forest City president and
chief executive officer. "Our core rental properties portfolio was up over
the second quarter of 2008, primarily as a result of reduced project
write-offs and lower interest expense. These factors offset overall lower
comparable property results due to the weak economy and soft near-term
fundamentals.

"Our office portfolio performed well, driven by continued relative strength in
key markets and in the life science segment, and by the expiration of initial
free-rent periods for newer tenants at properties in New York, as well as
filled vacancies at our Illinois Science + Technology Park in Skokie,
Illinois. In addition, our Military Housing business continued to be a solid
contributor to results. As expected, performance in our retail and
residential portfolios was down, reflecting continued recessionary pressure on
consumers and retailers, and the impact of lower occupancies and rent
concessions," Ratner added.

"While we remain very cautious about the second half of 2009, results for the
second quarter and year to date underscore the benefits of the five strategies
we adopted in 2008 to address economic and financial-market turmoil:
curtailing development, driving out costs, raising capital, proactively
managing debt maturities, and taking advantage of opportunities created by
market conditions. Together, these strategies focus our team on creating and
preserving liquidity - our highest priority as we weather this downturn."

NOI, Occupancies and Rent
Overall comparable property net operating income (NOI) decreased 1.4 percent
during the second quarter compared with the same period a year ago. The office
portfolio was up 7.1 percent, while the retail and residential portfolios were
down 4.3 percent and 4.2 percent, respectively. For the year to date, overall
comparable property NOI decreased 0.4 percent compared with the first six
months of 2008. The office portfolio increased 6.7 percent, while the retail
and residential portfolios were down 3.0 percent and 3.1 percent,
respectively.

Comparable property NOI, defined as NOI from properties operated in the three
and six months ended July 31, 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.

At July 31, 2009, comparable retail occupancies were 89.8 percent compared
with 91.8 percent at July 31, 2008, and regional mall sales averaged $401 per
square foot on a rolling 12-month basis. Comparable office occupancies
decreased to 89.4 percent compared with 90.3 percent last year. Comparable
average occupancies for the first half of the year in the residential business
were 90.1 percent compared with 92.5 percent last year. Comparable residential
net rental income (defined as gross rent less vacancies and concessions)
decreased to 86.4 percent, compared with 89.5 percent in the same period in
2008.

Liquidity and Financing Activity
At July 31, 2009, the Company had approximately $838 million in cash and
credit available, including $197 million ($192 million at full consolidation)
in cash on its balance sheet, and $641 million of available capacity on its
$750 million revolving line of credit. Forest City is in active negotiations
with its 14-member bank group to renew its line of credit. In addition,
during the second quarter, as previously announced, the Company generated net
proceeds of $329.9 million from the issuance of new Class A common stock,
which were used to retire then-current borrowings on the line of credit.

Since January 31, 2009, the Company has addressed $542.0 million at full
consolidation ($520.9 million at its pro-rata share) of the $826.6 million
($917.8 million at pro-rata) of total debt (inclusive of notes payable but
exclusive of scheduled amortization payments) maturing in fiscal year 2009,
through closed loans and committed financings. Additionally, the Company
addressed $301.6 million ($310.9 million at pro-rata) of loans maturing in
future years.

As of July 31, 2009, the Company's weighted average cost of mortgage debt
decreased to 5.05 percent from 5.50 percent at July 31, 2008, primarily due to
a decrease in variable-rate mortgage debt. Fixed-rate mortgage debt, which
represented 70 percent of the Company's total nonrecourse mortgage debt, and
is inclusive of interest rate swaps, decreased from 6.07 percent at July 31,
2008, to 6.05 percent at July 31, 2009. Variable-rate mortgage debt decreased
from 3.78 percent at July 31, 2008, to 2.71 percent at July 31, 2009.

The Company continues to actively evaluate potential transactions, primarily
in the form of joint ventures, as a means of generating liquidity. The
property disposition market remains challenging across the industry, with very
few transactions consummated due to illiquidity in the credit markets.
Despite this, Forest City remains committed to pursuing this strategy in order
to maximize value and generate additional liquidity.

Openings and Projects Under Construction
During the first half of 2009, the Company opened a 127,000-square-foot
expansion of its Promenade at Temecula retail center. The expansion is
currently 72 percent leased and committed, and the balance of the 1.1
million-square-foot center is 95 percent leased, for a total of 89 percent
leased and committed across the entire center.

In the second half of the year, Forest City will open the first phase of the
East River Plaza retail project in Manhattan when Costco, the international
wholesale club, opens its doors in the fourth quarter. Additional tenants,
including Target, Best Buy and Marshalls, are expected to open by mid-2010.
The project is currently 76 percent pre-leased and committed. Also in the
second half of 2009, the Company will complete the 80 DeKalb residential
rental community in Brooklyn, with first units available for leasing in 2009
and phased lease-up continuing into 2010.

Among other projects under construction, the 497,000-square-foot Village
atGulfstream Park retail center in Hallandale Beach, FL, is currently 79
percent leased (based on total available retail space) and is expected to open
in February 2010. In early August, the Company announced an additional 13
retail, restaurant and entertainment tenants for this project. Newly
announced tenants include Paradis Latin Miami, an authentic cabaret
experience, Ta-Zin, featuring Moroccan cuisine and entertainment, and
Adrenalina, an extreme sports destination, which join previously announced
tenants including West Elm, Pottery Barn, Crate and Barrel and
Williams-Sonoma. As a result of the level of pre-leasing at Gulfstream, the
Company recently qualified for and closed a 12-month extension of the
project's construction financing.

For Ridge Hill, the retail/mixed-use project in Westchester County, New York,
the Company recently announced a two-year extension of construction financing.
In addition, during the second quarter, the Company announced that it has
received a non-binding letter of intent from Saks Fifth Avenue to become a
major tenant at the center. The additional time allowed by the extension,
together with the opportunity to attract a key major tenant, have put the
Company in the position to deliver a superior product in a great market at the
right time, giving the economy more time to recover.

As noted in the development pipeline included in the Company's second-quarter
supplemental package furnished to the SEC on Form 8-K, costs and total Phase 1
square footage for Ridge Hill have increased as a result of additional tenant
allowances and costs related to the expansion of approximately 130,000 square
feet of additional retail space to accommodate the revised plan. Signed
tenants include Whole Foods, L.L. Bean, The Cheesecake Factory, Sephora and
Cinema De Lux, a multiplex cinema by National Amusements, among others. Grand
opening of the center is expected in 2011.

At The Yards in Washington D.C., the Company broke ground in late May for a
riverfront park that is a central feature of this mixed-use development along
the Anacostia River. The development of the park is financed with
public-sector funding, and the first phase is expected to be complete in
summer 2010.

Forest City ended the second quarter with seven projects under construction
with a total cost of $2.1 billion at the Company's pro-rata share ($2.5
billion at full consolidation). With the exception of the Barclays Arena at
Atlantic Yards in Brooklyn, and the fee-development construction of a new City
Hall project in Las Vegas, the Company does not anticipate commencing
construction on any additional projects in 2009.

Other Milestones
The Company achieved the following additional milestones either during the
second quarter or subsequent to the end of the quarter:

-- In late July, the Company announced that its Washington, D.C., office
had been selected as part of a team of advisors to assist the District
government with master planning, entitlements, financial feasibility
and
other services for Poplar Point, a proposed 130-acre, mixed-use
riverfront project in Southeast Washington.

-- In August, the Company announced that a subsidiary had been selected
by
the Puerto Rico Department of Economic Development and Commerce and
the
Puerto Rico Tourism Company to become program manager for the
mixed-use
redevelopment of a 21-block, 100-acre area of San Juan's waterfront
district.

These two projects, and others previously announced, reflect the Company's
expansion into fee-based investment management and third-party services - part
of Forest City's strategy of taking advantage of opportunities created by
current market conditions.
-- Forest City's Military Housing business completed Navy family
housing neighborhoods in Oak Harbor and Lake Stevens, WA, in June and
August, respectively. In July, the Company announced that one of its
Marine Corps family housing neighborhoods in Honolulu, Hawaii, had
achieved LEED for Neighborhood Development certification from the U.S.
Green Building Council. LEED (Leadership in Energy and Environmental
Design) is an internationally recognized green-building certification
system.

Military Housing continues to contribute meaningfully to the Company's
results. Initially, these projects have both a development/construction fee
component and a management fee component. When development and construction
concludes for each military neighborhood, the income stream for the project
transitions to asset and property management fees for the balance of the
50-year life of the contract. In addition, the Company has a minority
ownership interest in, and participates in the cash flow from, many of its
military housing neighborhoods.

Outlook
"We remain focused on liquidity as our highest priority, and as the most
prudent approach to preserving and building shareholder value in a time of
continuing uncertainty in the marketplace," Ratner said.

"While some see signs of a potential end of the recession, we are taking a
conservative course based on what we can observe and are experiencing
directly: continued weak fundamentals and little improvement in overall
near-term conditions. As a result, we remain very cautious going forward. We
expect the second half of the year to be challenging for our Company and for
the entire industry, and we do not anticipate meaningful improvement in market
conditions in the near or mid-term.

"Despite this cautious outlook, we are focused on those issues that are within
our control, and we are confident in the longer-term. We believe the five
strategies we have put in place are continuing to strengthen our balance sheet
and income statement, which, in turn, gives us the opportunity to take
advantage of dislocations created by current market conditions. We also
continue to nurture key opportunities in our pipeline in order to be prepared
to activate and leverage these projects when economic and financial-market
conditions improve."

Corporate Description
Forest City Enterprises, Inc. is an $11.7 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. For more information, visit
www.forestcity.net.

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 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). 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 market conditions on our liquidity, ability to finance or refinance
projects and repay our debt, general real estate investment and development
risks, vacancies in our properties, further downturns in the housing market,
competition, illiquidity of real estate investments, bankruptcy or defaults of
tenants, anchor store consolidations or closings, international activities,
the impact of terrorist acts, risks associated with an investment in a
professional sports team, our substantial debt leverage and the ability to
obtain and service debt, the impact of restrictions imposed by our credit
facility and senior debt, exposure to hedging agreements, the level and
volatility of interest rates, the continued availability of tax-exempt
government financing, the impact of credit rating downgrades, effects of
uninsured or underinsured losses, environmental liabilities, conflicts of
interest, risks associated with developing and managing properties in
partnership with others, the ability to maintain effective internal controls,
compliance with governmental regulations, 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
Six Months Ended July 31, 2009 and 2008
(dollars in thousands, except per share data)

Three Months Ended Increase
July 31, (Decrease)
---------------- ----------------
2009 2008 Amount Percent
---- ---- ------ -------
Operating Results:
Earnings (loss) from
continuing operations $1,964 $(8,779) $10,743
Discontinued operations,
net of tax - 5,561 (5,561)
--- ----- ------
Net loss 1,964 (3,218) 5,182

Net earnings attributable to
noncontrolling interest (3,753) (5,168) 1,415
------ ------ -----
Net loss attributable to
Forest City Enterprises, Inc. $(1,789) $(8,386) $6,597
======= ======= ======

Earnings Before Depreciation,
Amortization and Deferred Taxes
(EBDT) (2) $95,483 $88,343 $7,140 8.1%
======= ======= ======

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

Net loss attributable to
Forest City Enterprises, Inc. $(1,789) $(8,386) $6,597

Depreciation and amortization -
Real Estate Groups (7) 75,024 73,638 1,386

Amortization of mortgage
procurement costs - Real Estate
Groups (7) 3,823 3,448 375

Deferred income tax expense -
Real Estate Groups (8) 8,099 16,073 (7,974)

Deferred income tax expense -
Non-Real Estate Groups: (8)
Gain on disposition of
other investments - - -

Current income tax expense on
non-operating earnings: (8)
Gain on disposition included
in discontinued operations - - -
Gain on disposition of
unconsolidated entities - 707 (707)

Straight-line rent adjustment (3) (3,614) 4,248 (7,862)

Preference payment (5) 586 931 (345)

Preferred return on disposition - 208 (208)

Impairment of real estate 1,451 - 1,451

Impairment of unconsolidated
entities 11,903 6,026 5,877

Gain on disposition of
unconsolidated entities - - -

Gain on disposition of other
investments - - -

Discontinued operations: (1)
Gain on disposition of
rental properties - (8,627) 8,627

Retrospective effect of FSP
APB 14-1 (6) - 77 (77)

------- ------- ------
Earnings Before Depreciation,
Amortization and Deferred Taxes
(EBDT) (2) $95,483 $88,343 $7,140 8.1%
======= ======= ======

Diluted Earnings per Common Share:

Earnings (loss) from
continuing operations $0.01 $(0.08) $0.09
Discontinued operations, net of tax - 0.05 (0.05)
--- ---- -----
Net earnings (loss) 0.01 (0.03) 0.04

Net earnings attributable to
noncontrolling interest (0.02) (0.05) 0.03
----- ----- ----
Net loss attributable to
Forest City Enterprises, Inc. $(0.01) $(0.08) $0.07
====== ====== =====

Earnings Before Depreciation,
Amortization and Deferred Taxes
(EBDT) (2) (4) $0.64 $0.82 $(0.18) (22.0%)
===== ===== ======

Operating earnings (loss), net
of tax (a non-GAAP financial
measure) $0.07 $(0.04) $0.11

Impairment of real estate,
net of tax (0.06) (0.04) (0.02)

Gain on disposition of rental properties
and other investments, net of tax - 0.05 (0.05)

Net earnings attributable to
noncontrolling interest (0.02) (0.05) 0.03
------ ------ -----
Net loss attributable to
Forest City Enterprises, Inc. $(0.01) $(0.08) $0.07
====== ====== =====

Basic weighted average
shares outstanding (4) 144,547,045 102,682,825 41,864,220
=========== =========== ==========

Diluted weighted average
shares outstanding (4) 148,194,800 107,196,491 40,998,309
=========== =========== ==========

Six Months Ended Increase
July 31, (Decrease)
---------------- -----------------
2009 2008 Amount Percent
---- ---- ------ -------
Operating Results:
Earnings (loss) from
continuing operations $(29,602) $(48,875) $19,273
Discontinued operations,
net of tax 2,820 5,949 (3,129)
----- ----- ------
Net loss (26,782) (42,926) 16,144

Net earnings attributable to
noncontrolling interest (5,686) (5,862) 176
------ ------ ---
Net loss attributable to
Forest City Enterprises, Inc. $(32,468) $(48,788) $16,320
======== ======== =======

Earnings Before Depreciation,
Amortization and Deferred Taxes
(EBDT) (2) $137,087 $104,297 $32,790 31.4%
======== ======== =======

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

Net loss attributable to
Forest City Enterprises,
Inc. $(32,468) $(48,788) $16,320

Depreciation and amortization -
Real Estate Groups (7) 147,152 144,448 2,704

Amortization of mortgage
procurement costs - Real Estate
Groups (7) 7,845 6,791 1,054

Deferred income tax expense -
Real Estate Groups (8) (3,499) 654 (4,153)

Deferred income tax expense -
Non-Real Estate Groups: (8)
Gain on disposition of
other investments - 58 (58)

Current income tax expense on
non-operating earnings: (8)
Gain on disposition included
in discontinued operations 3,785 - 3,785
Gain on disposition of
unconsolidated entities - 1,339 (1,339)

Straight-line rent adjustment (3) (6,389) 1,101 (7,490)

Preference payment (5) 1,171 1,867 (696)

Preferred return on disposition - 208 (208)

Impairment of real estate 2,575 - 2,575

Impairment of unconsolidated
entities 21,463 6,026 15,437

Gain on disposition of
unconsolidated entities - (881) 881

Gain on disposition of other
investments - (150) 150

Discontinued operations: (1)
Gain on disposition of
rental properties (4,548) (8,627) 4,079

Retrospective effect of FSP
APB 14-1 (6) - 251 (251)

Earnings Before Depreciation,
Amortization and Deferred Taxes
(EBDT) (2) $137,087 $104,297 $32,790 31.4%
======== ======== =======

Diluted Earnings per Common Share:

Earnings (loss) from
continuing operations $(0.24) $(0.47) $0.23
Discontinued operations,
net of tax 0.02 0.06 (0.04)
---- ---- -----
Net earnings (loss) (0.22) (0.41) 0.19

Net earnings attributable to
noncontrolling interest (0.04) (0.06) 0.02
----- ----- ----
Net loss attributable to
Forest City Enterprises, Inc. $(0.26) $(0.47) $0.21
====== ====== =====

Earnings Before Depreciation,
Amortization and Deferred Taxes
(EBDT) (2) (4) $1.07 $0.97 $0.10 10.3%
===== ===== =====

Operating earnings (loss),
net of tax (a non-GAAP financial
measure) $(0.12) $(0.43) $0.31

Impairment of real estate,
net of tax (0.12) (0.04) (0.08)

Gain on disposition of rental
properties and other investments,
net of tax 0.02 0.06 (0.04)

Net earnings attributable to
noncontrolling interest (0.04) (0.06) 0.02
------ ------ -----
Net loss attributable to
Forest City Enterprises, Inc. $(0.26) $(0.47) $0.21
====== ====== =====

Basic weighted average
shares outstanding (4) 124,074,311 102,648,700 21,425,611
=========== =========== ==========

Diluted weighted average
shares outstanding (4) 127,729,311 107,213,800 20,515,511
=========== =========== ==========

Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Six Months Ended July 31, 2009 and 2008
(dollars in thousands)

Three Months Ended Increase
July 31, (Decrease)
---------------- -----------------
2009 2008 Amount Percent
---- ---- ------ -------
Operating Earnings (a non-GAAP
financial measure) and Reconciliation
to Net Earnings:
Revenues from real estate
operations
Commercial Group $243,811 $247,054 $(3,243)
Residential Group 68,023 73,378 (5,355)
Land Development Group 4,901 7,159 (2,258)
Corporate Activities - - -
--- --- ---
Total Revenues 316,735 327,591 (10,856) (3.3%)

Operating expenses (165,544) (185,658) 20,114
Interest expense (80,223) (81,403) 1,180
Loss on early extinguishment
of debt 9,063 (52) 9,115
Amortization of mortgage
procurement costs (7) (3,450) (3,082) (368)
Depreciation and
amortization (7) (67,853) (69,616) 1,763
Interest and other income 11,594 12,884 (1,290)
Equity in earnings (loss),
including impairment, of
unconsolidated entities (17,438) (5,942) (11,496)
Impairment of unconsolidated
entities 11,903 6,026 5,877
Gain on disposition of
unconsolidated entities - - -
Preferred return on disposition - 208 (208)
Revenues and interest income from
discontinued operations (1) - 2,844 (2,844)
Expenses from discontinued
operations (1) - (2,409) 2,409
--- ------ -----

Operating loss (a non-GAAP
financial measure) 14,787 1,391 13,396
------ ----- ------

Income tax expense (8) 531 (3,501) 4,032

Income tax expense from
discontinued operations
(1) (8) - (3,501) 3,501

Income tax expense on non-
operating earnings items (see
below) (5,179) 925 (6,104)
------ --- ------

Operating earnings (loss),
net of tax (a non-GAAP financial
measure) 10,139 (4,686) 14,825
------ ------ ------

Impairment of real estate (1,451) - (1,451)

Impairment of unconsolidated
entities (11,903) (6,026) (5,877)

Gain on disposition of
unconsolidated entities - - -

Preferred return on disposition - (208) 208

Gain on disposition of other
investments - - -

Gain on disposition of rental
properties included in discontinued
operations (1) - 8,627 (8,627)

Income tax benefit (expense) on
non-operating earnings: (8)
Impairment of real estate 563 141 422
Impairment of unconsolidated
entities 4,616 2,187 2,429
Gain on disposition of other
investments - - -
Gain on disposition of
unconsolidated entities - 80 (80)
Gain on disposition of rental
properties included in
discontinued operations - (3,333) 3,333
--- ------ -----
Income tax expense on non-
operating earnings (see above) 5,179 (925) 6,104
----- ---- -----

Net earnings (loss) 1,964 (3,218) 5,182

Net earnings attributable to
noncontrolling interest (3,753) (5,168) 1,415
------ ------ -----

Net loss attributable to
Forest City Enterprises, Inc. $(1,789) $(8,386) $6,597
======= ======= ======

Six Months Ended Increase
July 31, (Decrease)
---------------- -----------------
2009 2008 Amount Percent
---- ---- ------ -------

Operating Earnings (a non-GAAP
financial measure) and
Reconciliation to Net Earnings:
Revenues from real estate
operations
Commercial Group $479,438 $468,348 $11,090
Residential Group 142,955 150,672 (7,717)
Land Development Group 7,371 13,581 (6,210)
Corporate Activities - - -
------- ------- -----
Total Revenues 629,764 632,601 (2,837) (0.4%)

Operating expenses (360,391) (393,014) 32,623
Interest expense (171,931) (163,876) (8,055)
Loss on early extinguishment
of debt 9,063 (5,231) 14,294
Amortization of mortgage
procurement costs (7) (7,121) (5,934) (1,187)
Depreciation and
amortization (7) (134,311) (135,622) 1,311
Interest and other income 18,402 21,282 (2,880)
Equity in earnings (loss),
including impairment, of
unconsolidated entities (33,304) (15,589) (17,715)
Impairment of unconsolidated
entities 21,463 6,026 15,437
Gain on disposition of
unconsolidated entities - (881) 881
Preferred return on disposition - 208 (208)
Revenues and interest income from
discontinued operations (1) 813 6,031 (5,218)
Expenses from discontinued
operations (1) (754) (4,964) 4,210
---- ------ -----

Operating loss (a non-GAAP
financial measure) (28,307) (58,963) 30,656
------- ------- ------

Income tax expense (8) 22,802 16,358 6,444

Income tax expense from
discontinued operations
(1) (8) (1,787) (3,745) 1,958

Income tax expense on non-
operating earnings items (see
below) (7,558) 1,323 (8,881)
------ ----- ------

Operating earnings (loss),
net of tax (a non-GAAP financial
measure) (14,850) (45,027) 30,177
------- ------- ------

Impairment of real estate (2,575) - (2,575)

Impairment of unconsolidated
entities (21,463) (6,026) (15,437)

Gain on disposition of
unconsolidated entities - 881 (881)

Preferred return on disposition - (208) 208

Gain on disposition of other
investments - 150 (150)

Gain on disposition of rental
properties included in
discontinued operations (1) 4,548 8,627 (4,079)

Income tax benefit (expense) on
non-operating earnings: (8)
Impairment of real estate 999 141 858
Impairment of unconsolidated
entities 8,323 2,187 6,136
Gain on disposition of other
investments - (58) 58
Gain on disposition of
unconsolidated entities - (260) 260
Gain on disposition of rental
properties included in
discontinued operations (1,764) (3,333) 1,569
------ ------ -----
Income tax expense on non-
operating earnings (see above) 7,558 (1,323) 8,881
----- ------ -----

Net earnings (loss) (26,782) (42,926) 16,144

Net earnings attributable to
noncontrolling interest (5,686) (5,862) 176
------ ------ ---

Net loss attributable to
Forest City Enterprises, Inc. $(32,468) $(48,788) $16,320
======== ======== =======

1) Pursuant to the definition of a component of an entity of SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets",
assuming no significant continuing involvement, all earnings of
properties that have been sold or are held for sale are reported as
discontinued operations.

2) The Company uses an additional measure, along with net earnings, to
report its operating results. This measure, referred to as Earnings
Before Depreciation, Amortization and Deferred Taxes ("EBDT"), is not a
measure of operating results as defined by generally accepted accounting
principles and may not be directly comparable to similarly-titled
measures reported by other companies. The Company believes that EBDT
provides additional information about its operations, and along with net
earnings, is necessary to understand its operating results. EBDT is
defined as net earnings excluding the following items: i) gain (loss) on
disposition of operating properties, divisions and other investments
(net of tax); ii) the adjustment to recognize rental revenues and rental
expense using the straight-line method; iii) non-cash charges for real
estate depreciation, amortization (including amortization of mortgage
procurement costs) and deferred income taxes; iv) preferred payment
classified as non-controlling 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) The Company recognizes minimum rents on a straight-line basis over the
term of the related lease pursuant to the provision of SFAS No. 13,
"Accounting for Leases." The straight-line rent adjustment is recorded as
an increase or decrease to revenue or operating expense from Forest City
Rental Properties Corporation, a wholly-owned subsidiary of Forest City
Enterprises, Inc., with the applicable offset to either accounts
receivable or accounts payable, as appropriate.

4) For the six months ended July 31, 2009, the effect of 3,655,000 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 months ended July 31, 2009,
diluted weighted average shares outstanding of 127,729,311 were used to
arrive at $1.07/share.)

For the three and six months ended July 31, 2008, the effect of 4,513,666
and 4,565,100 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 six
months ended July 31, 2008, diluted weighted average shares outstanding
107,196,491 and 107,213,800 were used to arrive at $0.82/share and
$0.97/share, respectively.)

5) The preference payment represents the respective period's share of the
annual preferred payment in connection with the issuance of Class A
Common Units in exchange for Bruce C. Ratner's noncontrolling interest in
the Forest City Ratner Companies portfolio.

6) Effective February 1, 2009, we adopted Financial Accounting Standards
Board ("FASB") Staff Position ("FSP") No. APB 14-1, "Accounting for
Convertible Debt Instruments That May be Settled in Cash Upon Conversion
(Including Partial Cash Settlement)"("FSP APB 14-1"). This standard
required us to restate the prior year financial statements to show
retrospective application upon adoption.

7) The following table provides detail of depreciation and amortization
and amortization of mortgage procurement costs.

Depreciation and Depreciation and
---------------- ----------------
Amortization Amortization
------------ ------------

Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31,
------- -------
2009 2008 2009 2008
------------- -------------

Full Consolidation $67,853 $69,616 $134,311 $135,622
Non-Real Estate (3,508) (3,502) (6,960) (6,821)
------ ------ ------ ------
Real Estate Groups Full
Consolidation 64,345 66,114 127,351 128,801
Real Estate Groups related to
noncontrolling interest (318) (1,548) (1,725) (2,531)
Real Estate Groups
Unconsolidated 10,997 8,325 21,419 16,768
Real Estate Groups Discontinued
Operations - 747 107 1,410
--- --- --- -----
Real Estate Groups Pro-Rata
Consolidation $75,024 $73,638 $147,152 $144,448
======= ======= ======== ========

Amortization of Amortization of
--------------- ---------------
Mortgage Procurement Mortgage Procurement
-------------------- --------------------
Costs Costs
----- -----

Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31,
------- -------
2009 2008 2009 2008
------------- -------------

Full Consolidation $3,450 $3,082 $7,121 $5,934
Non-Real Estate - - - -
--- --- --- ---
Real Estate Groups Full
Consolidation 3,450 3,082 7,121 5,934
Real Estate Groups related to
noncontrolling interest (163) (117) (323) (269)
Real Estate Groups Unconsolidated 536 396 1,042 942
Real Estate Groups Discontinued
Operations - 87 5 184
--- --- --- ---
Real Estate Groups Pro-Rata
Consolidation $3,823 $3,448 $7,845 $6,791
====== ====== ====== ======

Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Six Months Ended July 31, 2009 and 2008
(in thousands)

Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31,
------- -------
2009 2008 2009 2008
-------------- --------------
(in thousands) (in thousands)

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

(A) Operating earnings
Current $(6,107) $(11,613) $(13,438) $(11,894)
Deferred 10,755 17,522 (42) (2,454)
------ ------ --- ------
4,648 5,909 (13,480) (14,348)
----- ----- ------- -------

(B) Impairment
of real estate
Deferred (563) (141) (999) (141)
Deferred -
Unconsolidated
entities (4,616) (2,187) (8,323) (2,187)
------ ------ ------ ------
Subtotal (5,179) (2,328) (9,322) (2,328)
------ ------ ------ ------

(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 - 707 - 1,339
Deferred - (787) - (1,079)
--- --- --- ------
- (80) - 260
--- --- --- ---

Subtotal (A)
(B) (C) (D)
Current (6,107) (10,906) (13,438) (10,555)
Deferred 5,576 14,407 (9,364) (5,803)
----- ------ ------ ------
Income tax
expense (531) 3,501 (22,802) (16,358)
---- ----- ------- -------

(E) Discontinued
operations
Operating
earnings
Current - (876) (8) (736)
Deferred - 1,044 31 1,148
--- ----- --- -----
- 168 23 412

Gain on disposition of
rental properties
Current - - 3,785 -
Deferred - 3,333 (2,021) 3,333
--- ----- ------ -----
- 3,333 1,764 3,333
--- ----- ----- -----
- 3,501 1,787 3,745
--- ----- ----- -----

Grand Total (A)
(B) (C) (D) (E)
Current (6,107) (11,782) (9,661) (11,291)
Deferred 5,576 18,784 (11,354) (1,322)
----- ------ ------- ------
$(531) $7,002 $(21,015) $(12,613)
----- ------ -------- --------

Recap of Grand Total:
Real Estate Groups
Current (4,290) 7,671 (4,209) 10,072
Deferred 8,099 16,073 (3,499) 654
----- ------ ------ ---
3,809 23,744 (7,708) 10,726
Non-Real
Estate
Groups
Current (1,817) (19,453) (5,452) (21,363)
Deferred (2,523) 2,711 (7,855) (1,976)
------ ----- ------ ------
(4,340) (16,742) (13,307) (23,339)
------ ------- ------- -------
Grand Total $(531) $7,002 $(21,015) $(12,613)
===== ====== ======== ========

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

Three Months Ended July 31, 2009
------------------------------------
Plus
Less Unconsol-
Full Non- idated Plus Pro-Rata
Consol- controll- Invest- Dis- Consol-
idation ing ments at continued idation
(GAAP) Interest Pro-Rata Operations (Non-GAAP)
---- -------- -------- ---------- -------

Revenues from real estate
operations $316,735 $13,142 $97,417 $- $401,010
Exclude straight-line
rent adjustment (1) (5,225) - - - (5,225)
------- ------ ------ ----- ------
Adjusted revenues 311,510 13,142 97,417 - 395,785

Operating expenses 165,544 5,657 72,992 - 232,879
Add back non-Real Estate
depreciation and
amortization (b) 3,508 - 2,839 - 6,347
Add back amortization of
mortgage procurement
costs for non-Real Estate
Groups (d) - - 121 - 121
Exclude straight-line
rent adjustment (2) (1,611) - - - (1,611)
Exclude preference
payment (586) - - - (586)
------- ----- ------ ----- -------
Adjusted operating
expenses 166,855 5,657 75,952 - 237,150

Add interest and other
income 11,594 203 732 - 12,123
Add equity in earnings
(loss), including
impairment of
unconsolidated
entities (17,438) (86) 17,733 - 381
Exclude impairment of
unconsolidated
entities 11,903 - (11,903) - -
Exclude depreciation and
amortization of
unconsolidated entities
(see below) 11,533 - (11,533) - -
------- ----- ------- ----- -------

Net Operating Income 162,247 7,602 16,494 - 171,139

Interest expense (80,223) (3,368) (16,494) - (93,349)

Gain (loss) on early
extinguishment of
debt 9,063 - - - 9,063

Equity in earnings
(loss), including
impairment of
unconsolidated
entities 17,438 86 (17,733) - (381)

Impairment of
unconsolidated
entities (11,903) - - - (11,903)

Depreciation and
amortization of
unconsolidated entities
(see above) (11,533) - 11,533 - -

Gain on disposition of
rental properties - - - - -

Preferred return on
disposition - - - - -

Impairment of real
estate (1,451) - - - (1,451)

Depreciation and
amortization - Real
Estate Groups (a) (64,345) (318) (10,997) - (75,024)

Amortization of mortgage
procurement costs - Real
Estate Groups (c) (3,450) (163) (536) - (3,823)

Straight-line rent
adjustment (1) + (2) 3,614 - - - 3,614

Preference payment (586) - - - (586)
------ ----- ------- ---- ----

Earnings (loss) before
income taxes 18,871 3,839 (17,733) - (2,701)

Income tax provision 531 - - - 531
Equity in earnings
(loss), including
impairment of
unconsolidated
entities (17,438) (86) 17,733 - 381
------- --- ------ ---- ---
Earnings (loss) from
continuing operations 1,964 3,753 - - (1,789)

Discontinued operations,
net of tax - - - - -

----- ----- ----- ---- ------
Net earnings (loss) 1,964 3,753 - - (1,789)
Net earnings attributable
to noncontrolling
interest (3,753) (3,753) - - -

------- ------ ----- ---- -------
Net loss attributable to
Forest City Enterprises,
Inc. $(1,789) $- $- $- $(1,789)
======= ====== ===== ==== =======

(a) Depreciation and
amortization - Real
Estate Groups $64,345 $318 $10,997 $- $75,024
(b) Depreciation and
amortization - Non-Real
Estate 3,508 - 2,839 - 6,347
------- ---- ------- --- -------
Total depreciation
and amortization $67,853 $318 $13,836 $- $81,371
======= ==== ======= === =======

(c) Amortization of
mortgage procurement
costs - Real Estate
Groups $3,450 $163 $536 $- $3,823
(d) Amortization of
mortgage procurement
costs - Non-Real
Estate - - 121 - 121
------ ---- ---- --- ------
Total amortization of
mortgage procurement
costs $3,450 $163 $657 $- $3,944
====== ==== ==== === ======

Three Months Ended July 31, 2008
------------------------------------
Plus
Less Unconsol-
Full Non- idated Plus Pro-Rata
Consol- controll- Invest- Dis- Consol-
idation ing ments at continued idation
(GAAP) Interest Pro-Rata Operations (Non-GAAP)
---- -------- -------- ---------- --------

Revenues from real estate
operations $327,591 $15,053 $108,196 $2,810 $423,544
Exclude straight-line
rent adjustment (1) 2,727 - - (89) 2,638
------- ------ ------- ----- -------
Adjusted revenues 330,318 15,053 108,196 2,721 426,182

Operating expenses 185,658 5,324 80,936 508 261,778
Add back non-Real Estate
depreciation and
amortization (b) 3,502 - 2,828 - 6,330
Add back amortization of
mortgage procurement
costs for non-Real Estate
Groups (d) - - 60 - 60
Exclude straight-line
rent adjustment (2) (1,610) - - - (1,610)
Exclude preference
payment (931) - - - (931)
------- ----- ------ --- -------
Adjusted operating
expenses 186,619 5,324 83,824 508 265,627

Add interest and other
income 12,884 652 1,482 34 13,748
Add equity in earnings
(loss), including
impairment of
unconsolidated
entities (5,942) (146) 6,868 - 1,072
Exclude impairment of
unconsolidated
entities 6,026 - (6,026) - -
Exclude depreciation and
amortization of
unconsolidated entities
(see below) 8,721 - (8,721) - -
------- ------ ------ ----- -------

Net Operating Income 165,388 10,235 17,975 2,247 175,375

Interest expense (81,403) (3,402) (17,767) (1,067) (96,835)

Gain (loss) on early
extinguishment of
debt (52) - - - (52)

Equity in earnings
(loss), including
impairment of
unconsolidated
entities 5,942 146 (6,868) - (1,072)

Impairment of
unconsolidated
entities (6,026) - - - (6,026)

Depreciation and
amortization of
unconsolidated entities
(see above) (8,721) - 8,721 - -

Gain on disposition of
rental properties - - - 8,627 8,627

Preferred return on
disposition - - (208) - (208)

Impairment of real
estate - - - - -

Depreciation and
amortization - Real
Estate Groups (a) (66,114) (1,548) (8,325) (747) (73,638)

Amortization of mortgage
procurement costs - Real
Estate Groups (c) (3,082) (117) (396) (87) (3,448)

Straight-line rent
adjustment (1) + (2) (4,337) - - 89 (4,248)

Preference payment (931) - - - (931)
------ ----- ------ ----- ----

Earnings (loss) before
income taxes 664 5,314 (6,868) 9,062 (2,456)

Income tax provision (3,501) - - (3,501) (7,002)
Equity in earnings
(loss), including
impairment of
unconsolidated
entities (5,942) (146) 6,868 - 1,072
------ ---- ----- ----- ------
Earnings (loss) from
continuing operations (8,779) 5,168 - 5,561 (8,386)

Discontinued operations,
net of tax 5,561 - - (5,561) -

------ ----- --- ------ ------
Net earnings (loss) (3,218) 5,168 - - (8,386)
Net earnings attributable
to noncontrolling
interest (5,168) (5,168) - - -

------- ------ --- --- -------
Net loss attributable to
Forest City Enterprises,
Inc. $(8,386) $- $- $- $(8,386)
======= === === === =======

(a) Depreciation and
amortization - Real
Estate Groups $66,114 $1,548 $8,325 $747 $73,638
(b) Depreciation and
amortization - Non-Real
Estate 3,502 - 2,828 - 6,330
------- ------ ------- ---- -------
Total depreciation
and amortization $69,616 $1,548 $11,153 $747 $79,968
======= ====== ======= ==== =======

(c) Amortization of
mortgage procurement
costs - Real Estate
Groups $3,082 $117 $396 $87 $3,448
(d) Amortization of
mortgage procurement
costs - Non-Real
Estate - - 60 - 60
------ ---- ---- --- ------
Total amortization of
mortgage procurement
costs $3,082 $117 $456 $87 $3,508
====== ==== ==== === ======

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

Six Months Ended July 31, 2009
----------------------------------
Plus
Unconsol- Plus
Full Less idated Dis- Pro-Rata
Consol- Noncon- invest- continued Consol-
idation trolling ments at Oper- idated
(GAAP) Interest Pro-Rata ations (Non-GAAP)
---- -------- -------- ------ --------

Revenues from
real estate
operations $629,764 $25,561 $188,292 $813 $793,308
Exclude straight-
line rent
adjustment (1) (9,624) - - (12) (9,636)
------ --- --- --- ------
Adjusted revenues 620,140 25,561 188,292 801 783,672
Operating expenses 360,391 11,302 136,070 320 485,479
Add back non-Real
Estate depreciation
and amortization (b) 6,960 - 9,997 - 16,957
Add back
amortization of
mortgage procurement
costs for non-Real
Estate Groups (d) - - 241 - 241
Exclude straight-line
rent adjustment (2) (3,247) - - - (3,247)
Exclude preference
payment (1,171) - - - (1,171)
------ --- --- --- ------
Adjusted operating
expenses 362,933 11,302 146,308 320 498,259

Add interest
and other income 18,402 343 1,205 - 19,264
Add equity in
earnings (loss),
including
impairment of
unconsolidated
entities (33,304) (68) 33,685 - 449
Exclude gain on
disposition of
unconsolidated
entities - - - - -
Exclude impairment
of unconsolidated
entities 21,463 - (21,463) - -
Exclude depreciation
and amortization of
unconsolidated
entities (see
below) 22,461 - (22,461) - -
------ --- ------- --- ---

Net Operating Income 286,229 14,534 32,950 481 305,126

Interest expense (171,931) (6,800) (32,774) (322) (198,227)
Gain (loss) on
early
extinguishment
of debt 9,063 - (176) - 8,887
Equity in earnings
(loss), including
impairment of
unconsolidated
entities 33,304 68 (33,685) - (449)
Gain on
disposition of
unconsolidated
entities - - - - -
Impairment of
unconsolidated
entities (21,463) - - - (21,463)
Depreciation and
amortization of
unconsolidated entities
(see above) (22,461) - 22,461 - -
Gain on disposition of
rental properties and
other investments - - - 4,548 4,548
Preferred
return on
disposition - - - - -
Impairment of real estate (2,575) - - - (2,575)
Depreciation and
amortization - Real
Estate Groups (a) (127,351) (1,725) (21,419) (107) (147,152)
Amortization of mortgage
procurement costs
- Real Estate
Groups (c) (7,121) (323) (1,042) (5) (7,845)
Straight-line
rent adjustment
(1) + (2) 6,377 - - 12 6,389
Preference payment (1,171) - - - (1,171)
------ --- --- --- ------
Earnings
(loss) before
income taxes (19,100) 5,754 (33,685) 4,607 (53,932)
Income tax provision 22,802 - - (1,787) 21,015
Equity in earnings
(loss), including
impairment of
unconsolidated entities (33,304) (68) 33,685 - 449
Earnings (loss)
from continuing
operations (29,602) 5,686 - 2,820 (32,468)
Discontinued
operations,
net of tax 2,820 - - (2,820) -
------- --- --- ----- ---
Net earnings (loss) (26,782) 5,686 - - (32,468)
Net earnings
attributable to
noncontrolling
interest (5,686) (5,686) - - -
----- ----- --- --- ---
Net loss attributable
to Forest City
Enterprises, Inc. $(32,468) $- $- $- $(32,468)
====== === === === ======

(a) Depreciation and
amortization - Real
Estate Groups $127,351 $1,725 $21,419 $107 $147,152
(b) Depreciation an
amortization -
Non-Real Estate 6,960 - 9,997 - 16,957
----- --- ----- --- ------
Total depreciation
and amortization $134,311 $1,725 $31,416 $107 $164,109
======== ====== ======= ==== ========
(c) Amortization
of mortgage
procurement
costs - Real
Estate Groups $7,121 $323 $1,042 $5 $7,845
(d) Amortization of
mortgage procurement
costs - Non-Real Estate - - 241 - 241
--- --- --- --- ---
Total amortization
of mortgage
procurement costs $7,121 $323 $1,283 $5 $8,086
====== ==== ====== === ======

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

Six Months Ended July 31, 2008
----------------------------------
Plus
Unconsol- Plus
Full Less idated Dis- Pro-Rata
Consol- Noncon- invest- continued Consol-
idation trolling ments at Oper- idated
(GAAP) Interest Pro-Rata ations (Non-GAAP)
---- -------- -------- ------ --------

Revenues from
real estate
operations $632,601 $31,566 $199,342 $5,990 $806,367
Exclude straight-
line rent
adjustment (1) (1,993) - - (99) (2,092)
----- --- --- --- -----
Adjusted revenues 630,608 31,566 199,342 5,891 804,275

Operating expenses 393,014 17,043 145,511 1,039 522,521
Add back non-Real
Estate depreciation
and amortization (b) 6,821 - 13,439 - 20,260
Add back
amortization of
mortgage procurement
costs for non-Real
Estate Groups (d) - - 105 - 105
Exclude straight-
line rent
adjustment (2) (3,193) - - - (3,193)
Exclude preference
payment (1,867) - - - (1,867)
----- --- --- --- -----
Adjusted operating
expenses 394,775 17,043 159,055 1,039 537,826
Add interest and
other income 21,282 1,127 3,083 41 23,279
Add equity in
earnings (loss),
including
impairment of
unconsolidated
entities (15,589) (127) 15,895 - 433
Exclude gain on
disposition of
unconsolidated
entities (881) - 881 - -
Exclude impairment
of unconsolidated
entities 6,026 - (6,026) - -
Exclude depreciation
and amortization of
unconsolidated entities
(see below) 17,710 - (17,710) - -
------ --- ------ --- ---
Net Operating Income 264,381 15,523 36,410 4,893 290,161
Interest expense (163,876) (6,742) (36,180) (2,331) (195,645)
Gain (loss) on
early extinguishment
of debt (5,231) (119) (22) - (5,134)
Equity in earnings
(loss), including
impairment of
unconsolidated entities 15,589 127 (15,895) - (433)
Gain on disposition of
unconsolidated entities 881 - - - 881
Impairment of
unconsolidated
entities (6,026) - - - (6,026)

Depreciation and
amortization of
unconsolidated entities
(see above) (17,710) - 17,710 - -

Gain on disposition of
rental properties and
other investments 150 - - 8,627 8,777
Preferred return on
disposition - - (208) - (208)

Impairment of real estate - - - - -

Depreciation and
amortization - Real
Estate Groups (a) (128,801) (2,531) (16,768) (1,410) (144,448)
Amortization of mortgage
procurement costs - Real
Estate Groups (c) (5,934) (269) (942) (184) (6,791)
Straight-line
rent adjustment
(1) + (2) (1,200) - - 99 (1,101)
Preference payment (1,867) - - - (1,867)

Earnings (loss) before
income taxes (49,644) 5,989 (15,895) 9,694 (61,834)
Income tax
provision 16,358 - - (3,745) 12,613
Equity in earnings
(loss), including
impairment of
unconsolidated entities (15,589) (127) 15,895 - 433
Earnings (loss)
from continuing
operations (48,875) 5,862 - 5,949 (48,788)
Discontinued
operations,
net of tax 5,949 - - (5,949) -
----- --- --- ----- ---
Net earnings (loss) (42,926) 5,862 - - (48,788)
Net earnings
attributable to
noncontrolling
interest (5,862) (5,862) - - -
----- ----- --- --- ---
Net loss attributable
to Forest City
Enterprises, Inc. $(48,788) $- $- $- $(48,788)
======== === === === ========

(a) Depreciation and
amortization - Real
Estate Groups $128,801 $2,531 $16,768 $1,410 $144,448
(b) Depreciation and
amortization -
Non-Real Estate 6,821 - 13,439 - 20,260
----- --- ------ --- ------
Total depreciation
and amortization $135,622 $2,531 $30,207 $1,410 $164,708
========= ======= ======= ====== ========
(c) Amortization
of mortgage
procurement
costs - Real
Estate Groups $5,934 $269 $942 $184 $6,791
(d) Amortization
of mortgage
procurement
costs - Non-
Real Estate - - 105 - 105
Total amortization
of mortgage
procurement costs $5,934 $269 $1,047 $184 $6,896
====== ==== ====== ==== ======

Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Net Operating Income (dollars in thousands)
Three Months Ended July 31, 2009

Plus
Full Less Unconsoli Plus Pro-Rata
Consolida Non- -dated Dis- Consolida
-tion controlling Investments continued -tion
(GAAP) Interest at Pro-Rata Operations (Non-GAAP)
---- -------- ----------- ---------- --------

Commercial Group
Retail

Comparable $56,098 $3,005 $5,598 $- $58,691
---------- ------- ------ ------ --- -------
Total 63,120 3,014 5,663 - 65,769

Office
Buildings

Comparable 51,674 2,636 2,346 - 51,384
---------- ------- ------ ------ --- -------
Total 66,156 2,741 2,402 - 65,817

Hotels

Comparable 4,144 - - - 4,144
---------- ------- ------ ------ --- -------
Total 4,144 - - - 4,144

Earnings from
Commercial
Land Sales 1,733 257 - - 1,476

Other (1) (1,392) 184 (552) - (2,128)
---------- ------- ------ ------ --- -------

Total Commercial
Group

Comparable 111,916 5,641 7,944 - 114,219
---------- ------- ------ ------ --- -------
Total 133,761 6,196 7,513 - 135,078

Residential Group
Apartments

Comparable 27,834 652 6,050 - 33,232
---------- ------- ------ ------ --- -------
Total 34,363 1,128 6,738 - 39,973

Military
Housing

Comparable (2) - - - - -
---------- ------- ------ ------ --- -------
Total 13,286 138 243 - 13,391

Other (1) (6,846) 36 - - (6,882)
---------- ------- ------ ------ --- -------

Total Residential
Group

Comparable 27,834 652 6,050 - 33,232
---------- ------- ------ ------ --- -------
Total 40,803 1,302 6,981 - 46,482

Total Rental
Properties

Comparable 139,750 6,293 13,994 - 147,451
---------- ------- ------ ------ --- -------
Total 174,564 7,498 14,494 - 181,560

Land Development
Group 2,065 104 48 - 2,009

The Nets (8,307) - 1,952 - (6,355)

Corporate
Activities (6,075) - - - (6,075)
------ --- --- --- ------
Grand Total $162,247 $7,602 $16,494 $- $171,139

Net Operating Income (dollars in thousands)
Three Months Ended July 31, 2008

Plus
Full Less Unconsoli Plus Pro-Rata
Consolida Non- -dated Dis- Consolida
-tion controlling Investments continued -tion
(GAAP) Interest at Pro-Rata Operations (Non-GAAP)
---- -------- ----------- ---------- --------

Commercial Group
Retail

Comparable $58,872 $3,012 $5,470 $- $61,330
---------- ------- ------ ------ --- -------
Total 60,929 3,342 5,515 565 63,667

Office
Buildings

Comparable 47,636 2,124 2,451 - 47,963
---------- ------ ----- ----- --- ------
Total 70,342 2,858 2,451 - 69,935

Hotels

Comparable 5,507 - - - 5,507
---------- ----- --- --- --- -----
Total 5,507 - - - 5,507

Earnings from
Commercial
Land Sales 4,855 2,005 - - 2,850

Other (1) (2,847) 472 (555) - (3,874)
------ --- ---- --- ------

Total Commercial
Group

Comparable 112,015 5,136 7,921 - 114,800
---------- ------- ----- ----- --- -------
Total 138,786 8,677 7,411 565 138,085

Residential Group
Apartments

Comparable 28,743 723 6,666 - 34,686
---------- ------ --- ----- --- ------
Total 29,799 709 7,790 1,682 38,562

Military
Housing

Comparable (2) - - - - -
--------- --- --- --- --- ---
Total 15,679 396 936 - 16,219

Other (1) (6,774) 52 - - (6,826)
------ -- --- --- ------

Total Residential
Group

Comparable 28,743 723 6,666 - 34,686
---------- ------ --- ----- --- ------
Total 38,704 1,157 8,726 1,682 47,955

Total Rental
Properties

Comparable 140,758 5,859 14,587 - 149,486
---------- ------- ----- ------ --- -------
Total 177,490 9,834 16,137 2,247 186,040

Land Development
Group 6,717 401 148 - 6,464

The Nets (8,548) - 1,690 - (6,858)

Corporate
Activities (10,271) - - - (10,271)

Grand Total $165,388 $10,235 $17,975 $2,247 $175,375

% Change

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

Comparable (4.7%) (4.3%)
----------
Total

Office Buildings

Comparable 8.5% 7.1%
----------
Total

Hotels

Comparable (24.8%) (24.8%)
----------
Total

Earnings from Commercial
Land Sales

Other (1)

Total Commercial Group

Comparable (0.1%) (0.5%)
----------
Total

Residential Group
Apartments

Comparable (3.2%) (4.2%)
----------
Total

Military Housing

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

Other (1)

Total Residential Group

Comparable (3.2%) (4.2%)
----------
Total

Total Rental Properties

Comparable (0.7%) (1.4%)
----------
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.
(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)
Six Months Ended July 31, 2009

Plus
Full Less Unconsoli- Plus Pro-Rata
Consolida- Non- dated Dis- Consolida-
tion controlling Investments continued tion
(GAAP) Interest at Pro-Rata Operations (Non-GAAP)
---- -------- ----------- ---------- --------

Commercial
Group
Retail

Comparable $114,736 $5,768 $11,052 $- $120,020
---------- -------- ------ ------- --- --------
Total 126,648 5,486 11,171 481 132,814

Office
Buildings

Comparable 102,066 5,220 4,684 - 101,530
---------- ------- ----- ----- --- -------
Total 129,261 5,303 4,789 - 128,747

Hotels

Comparable 5,330 - - - 5,330
---------- ----- ----- --- --- -------
Total 5,330 - - - 5,330

Earnings from
Commercial
Land Sales 4,471 850 - - 3,621

Other (1) (9,472) 549 (721) - (10,742)
------ --- --- --- ------

Total
Commercial
Group

Comparable 222,132 10,988 15,736 - 226,880
---------- ------- ------ ------ --- -------
Total 256,238 12,188 15,239 481 259,770

Residential Group
Apartments

Comparable 55,244 1,389 12,137 - 65,992
---------- ------ ----- ------ --- ------
Total 65,043 2,186 14,143 - 77,000

Military
Housing

Comparable
(2) - - - - -
--------- --- --- --- --- ---
Total 20,984 38 454 - 21,400

Other (1) (17,205) 72 - - (17,277)
------ --- --- --- ------

Total
Residential
Group

Comparable 55,244 1,389 12,137 - 65,992
---------- ------ ----- ------ --- ------
Total 68,822 2,296 14,597 - 81,123

Total
Rental
Properties

Comparable 277,376 12,377 27,873 - 292,872
---------- ------- ------ ------ --- -------
Total 325,060 14,484 29,836 481 340,893

Land
Development
Group 2,772 50 165 - 2,887

The Nets (18,988) - 2,949 - (16,039)

Corporate
Activities (22,615) - - - (22,615)

Grand Total $286,229 $14,534 $32,950 $481 $305,126

Net Operating Income (dollars in thousands)
Six Months Ended July 31, 2008

Plus
Full Less Unconsoli Plus Pro-Rata
Consolida Non- -dated Dis- Consolida
-tion controlling Investments continued -tion
(GAAP) Interest at Pro-Rata Operations (Non-GAAP)
---- -------- ----------- ---------- --------
Commercial
Group
Retail

Comparable $118,503 $5,699 $10,924 $- $123,728
---------- -------- ------ ------- --- --------
Total 121,514 6,314 11,044 1,217 127,461

Office
Buildings

Comparable 94,225 4,173 5,132 - 95,184
---------- ------ ----- ----- --- ------
Total 125,059 5,247 5,239 - 125,051

Hotels

Comparable 7,104 - - - 7,104
---------- ----- --- --- --- -----
Total 7,104 - - - 7,104

Earnings from
Commercial
Land Sales 5,879 2,242 - - 3,637

Other (1) (27,273) (595) (1,081) - (27,759)
------ --- ----- --- ------

Total
Commercial
Group

Comparable 219,832 9,872 16,056 - 226,016
---------- ------- ----- ------ --- -------
Total 232,283 13,208 15,202 1,217 235,494

Residential Group
Apartments

Comparable 55,884 1,418 13,658 - 68,124
---------- ------ ----- ------ --- ------
Total 60,505 1,409 15,567 3,676 78,339

Military
Housing

Comparable
(2) - - - - -
--------- --- --- --- --- ---
Total 25,639 396 2,060 - 27,303

Other (1) (14,600) 91 - - (14,691)
------- --- --- --- ------

Total
Residential
Group

Comparable 55,884 1,418 13,658 - 68,124
---------- ------ ----- ------ --- ------
Total 71,544 1,896 17,627 3,676 90,951

Total
Rental
Properties

Comparable 275,716 11,290 29,714 - 294,140
---------- ------- ------ ------ --- -------
Total 303,827 15,104 32,829 4,893 326,445

Land
Development
Group 6,158 419 278 - 6,017

The Nets (22,021) - 3,303 - (18,718)

Corporate
Activities (23,583) - - - (23,583)

Grand Total $264,381 $15,523 $36,410 $4,893 $290,161

% Change

Full Pro-Rata
Consolidation Consolidation
(GAAP) (Non-GAAP)
------------- -------------

Commercial Group
Retail

Comparable (3.2%) (3.0%)
----------
Total
Office Buildings

Comparable 8.3% 6.7%
----------
Total
Hotels

Comparable (25.0%) (25.0%)
----------
Total

Earnings from Commercial
Land Sales

Other (1)

Total Commercial Group

Comparable 1.0% 0.4%
----------
Total

Residential Group
Apartments

Comparable (1.1%) (3.1%)
----------
Total

Military Housing

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

Other (1)

Total Residential Group

Comparable (1.1%) (3.1%)
----------
Total

Total Rental Properties

Comparable 0.6% (0.4%)
----------
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.
(2) Comparable NOI for Military Housing commences once the operating
projects complete initial development phase.

Development Pipeline
--------------------------

July 31, 2009
2009 Openings and Acquisitions (1)

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

Retail Centers:
Promenade at
Temecula
Expansion Temecula, CA D Q1-09 75.0% 100.0%

Total Openings
and Acquisitions

Residential
Phased-In
Units (d) (e):
Cobblestone Court Painesville, OH D 2006-10 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 (f)

Cost at FCE
Cost at Full Total Cost Pro-Rata Share Sq. ft./ Gross
Consolidation at 100% (Non-GAAP) (c) No. of Leasable
Property (GAAP) (b) (2) (1) X (2) Units Area
--------- ------------- ----------- ------------ ----- --------
(in millions)
------------------------------------------------------------
Retail Centers:
Promenade at
Temecula
Expansion $106.5 $106.5 $106.5 127,000 127,000
------ ------ ------ ======= =======

------ ------ ------
Total Openings
and Acqui-
sitions $106.5 $106.5 $106.5
====== ====== ======

Residential
Phased-In
Units (d) (e):
Opened in '09 / Total
Cobblestone
Court $0.0 $30.2 $15.1 48/400
Sutton Landing 0.0 15.9 8.0 36/216
Stratford
Crossing 0.0 25.3 12.7 36/348
--- ---- ---- ------
Total (f) $0.0 $71.4 $35.8 120/964
==== ===== ===== =======

See attached footnotes.

Development Pipeline
--------------------------

July 31, 2009
Under Construction (7)

FCE Pro-Rata
Dev (D) Anticipat- Legal Owner- FCE % (a)
Property Location Acq (A) ed Opening ship % (a) (1)
-------- -------- ------ ---------- ----------- ---------

Retail Centers:

East River
Plaza (d) (e) Manhattan, NY D Q4-09/10 35.0% 50.0%
Village at
Gulfstream
Park Hallandale
Beach, FL D Q1-10 50.0% 50.0%
Ridge Hill
(e) (k) 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:
80 Dekalb
Avenue (e) Brooklyn, NY D Q3-09/10 70.0% 100.0%
Presidio San Francisco,
CA D Q2-10 100.0% 100.0%
Beekman (e) Manhattan, NY D Q1-11/12 49.0% 70.0%

Total Under
Construction (g)

Residential
Phased-In
Units (d) (e):
Cobblestone
Court Painesville,
OH D 2006-10 50.0% 50.0%
Stratford
Crossing Wadsworth, OH D 2007-10 50.0% 50.0%

Total (h)

Cost at
Cost at FCE Pro- Gross
Full Consoli- Total Cost Rata Share Sq. ft./ Leas- Lease
dation at 100% (Non-GAAP) (c) No. of able Commit-
Property (GAAP) (b) (2) (1) X (2) Units Area ment
-------- ----------- ----------- -------- ---------- ------ ------
(in millions)
----------------------------------------------------------------
Retail
Centers:
East River
Plaza (d) (e) $0.0 $392.2 $196.1 517,000 517,000 76%
Village at
Gulfstream
Park 207.0 207.0 103.5 497,000 497,000 (i) 65%
Ridge Hill
(e) (k) 798.7 798.7 798.7 1,336,000 1,336,000 (j) 28%
----- ----- ----- --------- ---------
$1,005.7 $1,397.9 $1,098.3 2,350,000 2,350,000
-------- -------- -------- ========= =========

Office:
Waterfront
Station -
East 4th &
West 4th
Buildings $329.9 $329.9 $148.5 628,000 (l) 97%
------ ------ ------ =======

Residential:
80 Dekalb
Avenue (e) $163.3 $163.3 $163.3 365
Presidio 110.5 110.5 110.5 161
Beekman (e) 875.7 875.7 613.0 904
----- ----- ----- ---
$1,149.5 $1,149.5 $886.8 1,430
-------- -------- ----- =====

Total Under
Construction
(g) $2,485.1 $2,877.3 $2,133.6
======== ======== ========

Residential
Phased-In
Units (d) (e): Under Const. / Total
Cobblestone
Court $0.0 $30.2 $15.1 48/400
Stratford
Crossing $0.0 25.3 12.7 96/348
---- ---- ------ -------
Total (h) $0.0 $55.5 $27.8 144/748
===== ===== ======= =======

See attached footnotes.

Military Housing - see footnote m

Development Pipeline

2009 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 ) 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.
( e ) Phased-in openings. Costs are representative of the total project.
( f ) 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
$35.8 million consists of the Company's share of cost for unconsolidated
investments of $35.8 million.
( g ) The difference between the full consolidation cost amount (GAAP) of
$2,485.1 million to the Company's pro-rata share (a non-GAAP measure) of
$2,133.6 million consists of a reduction to full consolidation for
noncontrolling interest of $547.6 million of cost and the addition of its
share of cost for unconsolidated investments of $196.1 million.
( 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
$27.8 million consists of the Company's share of cost for unconsolidated
investments of $27.8 million.
( i ) 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 79% preleased.
( j ) Includes 156,000 square feet of office space.
( k ) Costs and total Phase 1 square footage have increased as a result of
additional tenant allowances and expansion to include retail space
originally planned for a later phase.
( l ) Includes 85,000 square feet of retail space.
( m ) 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.

Antici- FCE Cost at Total Sq.ft./
pated Pro- Full Consoli- Cost No. of
Property Location Opening Rata % (f) dation (a) at 100% Units
-------- -------- ------- --------- ------------ ------ ------
(in millions)
-----------

Military Housing
Under Construc-
tion (7)
Midwest
Millington Memphis, TN 2008-2010 * 0.0 37.0 318
Navy Midwest Chicago, IL 2006-2010 * 0.0 248.8 1,658
Air Force
Academy Colorado
Springs, CO 2007-2009 50.0% 0.0 69.5 427
Marines,
Hawaii
Increment II Honolulu, HI 2007-2011 * 0.0 293.3 1,175
Navy, Hawaii
Increment
III Honolulu, HI 2007-2011 * 0.0 535.1 2,520
Pacific
Northwest
Communities Seattle, WA 2007-2010 * 0.0 280.5 2,986
Hawaii
Phase IV Kaneohe, HI 2007-2014 * 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.

Robert O'Brien, Executive Vice President - Chief Financial Officer,
+1-216-621-6060, or Tom Kmiecik, Assistant Treasurer, +1-216-621-6060, Jeff
Linton, Vice President - Corporate Communication, +1-216-621-6060, all of
Forest City Enterprises, Inc.