CLEVELAND--(Business Wire)--Forest City Enterprises, Inc. (NYSE:FCEA) and (NYSE:FCEB) today
announced revenues, net earnings and EBDT for the third quarter and
nine months ended October 31, 2007.
EBDT (Earnings Before Depreciation, Amortization and Deferred
Taxes) for the third quarter grew to $68.8 million, or $0.64 per
share, a 14.3 percent increase on a per share basis compared with last
year's third-quarter EBDT of $57.4 million, or $0.56 per share. EBDT
for the nine months ended October 31, 2007 was $174.5 million, or
$1.62 per share, a decrease of 5.9 percent on a per share basis
compared with last year's $177.4 million, or $1.72 per share. For an
explanation of the variances, see "Discussion of Results."
The fiscal third-quarter net loss was $10.8 million, or $0.11 per
share, compared with net earnings of $45.9 million, or $0.45 per
share, in the prior year. Net earnings for the nine months were $39.8
million, or $0.38 per share, compared with $106.6 million, or $1.05
per share, in 2006. The primary reason for the decrease in 2007 net
earnings for the quarter and year-to-date was the larger gains on
disposition of properties that occurred in 2006 compared with 2007.
Third-quarter 2007 consolidated revenues were $333.6 million
compared with $262.5 million for the same period last year. Nine-month
revenues were $889.6 million compared with $775.1 million for the nine
months ended October 31, 2006.
EBDT and EBDT per share are non-Generally Accepted Accounting
Principle (GAAP) measures. A reconciliation of net earnings (the most
directly comparable GAAP measure to EBDT) to EBDT is provided in the
Financial Highlights table in this news release.
Discussion of Results
Charles A. Ratner, president and chief executive officer of Forest
City Enterprises, said, "The real estate business is in the midst of
fundamental changes driven by a variety of factors, including the
meltdown in single-family home sales, tightening of credit markets,
declining consumer confidence, and the beginnings of a slowdown in
retail sales. In this environment, real estate stocks, including ours,
have performed poorly in recent months. Notwithstanding these
difficult industry conditions, we continue to create long-term
shareholder value with the opening of new, premier properties in
excellent markets, combined with solid operating results in our core
portfolio. While we face short-term challenges, notably in our land
business, we continue to maintain a robust development pipeline and a
near-record level of liquidity."
Ratner continued, "Our portfolio results are good and the
fundamentals of the real estate business are strong, but the land
business, which has been negatively impacted by the troubled housing
market, continues to be extremely soft. New project openings are
performing at or above expectations and our portfolio of mature
properties continues to deliver solid results as evidenced by stable
occupancies and favorable comparable property NOI performance.
"Our EBDT for the quarter increased $11.4 million primarily due to
the strong performance of our core operating portfolio and the
recognition of an additional gain from the second-quarter sale of an
under construction, supported-living apartment community. These strong
results went straight to the bottom line while our land business was
flat in the third quarter compared to last year. We expect land sales
to be down in the fourth quarter with continuing softness into 2008.
"For the first nine months, our overall EBDT decreased by $2.9
million. Our rental properties business performed well, as EBDT from
our mature portfolio, including the Military Housing business, was up
approximately $17.1 million. The nine-month results were also
favorably impacted by the $9.9 million gain on sale of the
supported-living apartment community (mentioned above) and the change
in market value of $9.5 million of 10-year forward swaps. More than
offsetting these increases were a $25.2 million decrease in EBDT from
lower sales in our Land Development Group combined with a decline in
commercial outlot sales in our Commercial Group; a decrease in
Historic Preservation Tax Credits of $6.2 million; and an increase in
corporate interest expense of $8.3 million, due primarily to the
Senior Notes issued in October 2006."
Comparable property net operating income (NOI) in the third
quarter was up 6.9 percent compared with the same period a year ago.
The retail portfolio was up 10.5 percent, with the strong results for
the quarter spurred by filling several major vacancies in the New York
portfolio. The office and residential portfolios were up 3.0 percent
and 6.8 percent, respectively. Ratner said, "While these Comp NOI
increases are some of the highest in recent history, we expect these
trends to moderate as retail sales have shown recent signs of
softening and the supply of rental residential space grows as a result
of failed condominium units entering the for-rent market." Comparable
property NOI, defined as NOI from properties operated in both 2007 and
2006, is a non-GAAP financial measure, and is based on the pro-rata
consolidation method, also a non-GAAP financial measure. Included in
this release is a schedule that presents comparable property NOI on
the full consolidation method.
Comparable retail occupancies increased to 94.3 percent in 2007
compared with 94.0 percent in 2006. Comparable office occupancies were
93.0 percent in 2007 compared with 93.4 percent last year. Comparable
occupancies in the residential business increased to 95.8 percent
compared with 95.6 percent in the prior year.
Recent Milestones
Opening of New York Times Building
The 1.5-million-square-foot New York Times Building officially
opened to Forest City's tenants in the third quarter. The building's
largest office tenants include the law firm of Goodwin Procter and the
global asset management firm of Legg Mason. Forest City expects that
all signed tenants will have moved in by early 2008. Signed lease
agreements currently represent 93 percent of the 737,000 square feet
of space owned by Forest City. Designed by Pritzker Prize-winning
architect Renzo Piano in the Times Square area of New York City, the
52-story office tower is jointly owned by The New York Times Company
and Forest City.
During the quarter, the Company closed on a $640 million loan with
HSH Nordbank AG to refinance Forest City's portion of the Times
building. The deal is the largest permanent loan in the Company's
history. The Times building represents $517.5 million of cost at
Forest City's share and on a full consolidation basis.
Ratner said, "The New York Times Building now represents the
largest single asset we have ever opened and adds tremendous value to
our ownership position in the core market of New York City. The
building is almost fully leased with great tenants, which is a
testament to the aesthetic and financial success of this property. We
are tremendously proud of the persistence and creativity of our New
York team that made this project a reality."
With the opening of the Times building, Forest City has completed
all 10 projects scheduled for opening in fiscal 2007, representing
$945.0 million at the Company's pro-rata share ($956.0 million on a
full consolidation basis).
Acquisition - Military Family Housing
Shortly after quarter-end, Forest City closed on the acquisition
of 2,986 military family housing units in the U.S. Navy's Northwest
Region, which encompasses multiple neighborhoods associated with three
Naval Installations in the Puget Sound area of the state of
Washington. Forest City has assumed responsibility for demolition,
renovation and new construction of homes, representing approximately
$158 million in development costs, as well as property management.
The acquisition of the Navy Northwest units and ancillary
facilities from American Eagle Communities brings Forest City's
military housing portfolio to more than 11,900 permanent units,
located in Hawaii, the Midwest, and Colorado, in addition to the
Pacific Northwest. Forest City recently received two national awards
for its public-private housing partnership with the Navy in Hawaii,
including the "Navy Installation Housing Team of the Year" award from
the Professional Housing Management Association and a "Project of the
Year" merit award from Multifamily Executive magazine.
Disposition - Hotel
In the fourth quarter, Forest City disposed of its ownership
interest in the 210-room University Park at MIT Hotel, at the
Company's University Park at MIT mixed-use campus in Cambridge,
Massachusetts. The total sales price at 100 percent was $63.2 million,
or $301,000 per room, generating net cash proceeds to Forest City of
approximately $18 million. The ground-leased property was sold at a
cap rate of approximately 6.75 percent. Forest City was a 50 percent
owner in the hotel, which opened in 1998.
The Company uses dispositions to take advantage of market
conditions and high valuations, or to dispose of non-strategic assets.
Despite the benefits of long-term value creation, dispositions can
have a short-term negative effect on earnings, until the capital can
be redeployed in the development pipeline, which ultimately leads to
openings of larger, higher-impact properties.
Award-Winning Projects
Forest City retail centers recently won several major awards,
including both a MAXI Silver Award and an Albert Sussman Humanitarian
Award (for community relations) for Victoria Gardens in Rancho
Cucamonga, California; and a MAXI Silver Award and Superior
Achievement in Design and Imaging (SADI) Award for San Francisco
Centre.
In the residential portfolio, Forest City properties won three
major awards from Multifamily Executive (MFE). Grand awards were given
to two apartment communities at the Company's Central Station
development in Chicago - Sky55 and The Apartments at 1251 South
Michigan. Forest City also earned its first LEED Gold certification
from the U.S. Green Building Council for 3055 Roslyn Street, an office
building located at the Company's Stapleton mixed-use project.
Development Pipeline Highlights
A schedule of the Company's project openings and acquisitions, and
the pipeline of projects under construction, is included in this news
release. The schedule includes comparable project costs on both a full
consolidation and pro-rata share basis. Described below are several of
the Company's projects under construction or under development.
Projects Under Construction
At the end of the third quarter, Forest City's pipeline included
19 projects under construction or to be acquired, representing a total
cost of $2.1 billion of cost at the Company's pro-rata share ($1.4
billion on a full consolidation basis). Seven of these projects are
scheduled to open during 2008, representing $672.4 million at the
Company's share ($523.0 million on a full consolidation basis).
In the retail pipeline, the Company has seven projects currently
under construction, representing 4.7 million square feet. Of these
projects, three retail centers, totaling approximately 2.4 million
square feet, are scheduled to open in 2008. The most recent
groundbreaking was for the 1.2-million-square-foot Ridge Hill
mixed-use project in Yonkers, New York.
Forest City currently has four residential properties, with a
combined 1,467 rental units, under construction. Haverhill rental
residential community, the most recent residential groundbreaking, is
an adaptive re-use project in Haverhill, Massachusetts, and will have
305 historically renovated units, representing $73.6 million of total
cost. Scheduled to open in 2008 are Uptown Apartments in center city
Oakland, California; the Mercantile redevelopment project in downtown
Dallas, Texas; and the Lucky Strike Building at the Company's Tobacco
Row development in Richmond, Virginia.
Projects Under Development
At the end of the third quarter, Forest City had 15 projects under
development, representing approximately $2.0 billion of cost at the
Company's pro-rata share and on a full consolidation basis. Among the
projects under development and scheduled to begin construction during
the next year are 13 projects totaling more than $1.5 billion of cost
at the Company's pro-rata share and on a full consolidation basis.
Forest City's Washington, D.C. portfolio features two major
mixed-use redevelopment projects - Waterfront and The Yards. Forest
City began demolition in the fourth quarter on the site of
Waterfront's first two government office buildings, totaling
600,000-plus square feet. At the 42-acre Yards project, demolition and
construction of infrastructure began in the fall.
In Texas, Forest City continues to identify additional development
opportunities in the Dallas/Fort Worth area, which is home to nearly 2
million people in the nation's second-largest state. Forest City is in
the early stages of development of three Dallas-area projects. The
most notable is in partnership with General Growth Properties - Frisco
in suburban Dallas will be a 400-acre master-planned community that is
expected to include a 1.5-million-square-foot retail destination.
At Atlantic Yards in Brooklyn, Forest City now controls more than
85 percent of the land necessary for the project, which includes up to
6.5 million square feet of developable land on the 22-acre site.
Forest City expects to begin construction in 2008 on the Frank
Gehry-designed Barclays Center arena, which will become the planned
home of the Nets basketball team, in which Forest City has an
ownership interest. The first phase of the project will also include
commercial and residential development, including an affordable
housing component.
Financing Activity
The capital markets for real estate have changed significantly in
the last quarter. Lenders and investors have pulled back from the
market, demanding increased premiums to underwrite risk. Loan
originations for Commercial Mortgage-Backed Securities (CMBS) have
fallen dramatically and pricing power has shifted to the lenders.
Capital for real estate remains available; however, lender spreads
have increased and underwriting criteria have been tightened. "The
Company has successfully closed a number of large financings in this
new environment. The strong relationships we have with our lenders,
together with our proven track record, give us confidence we can
access the capital necessary for our business," Ratner noted.
During the first nine months of 2007, Forest City closed on
transactions totaling $2.5 billion in nonrecourse mortgage financings,
including $1.0 billion in refinancings, $925.7 million in development
projects and acquisitions, and $543.5 million in loan extensions and
additional fundings.
As of October 31, 2007, the Company's weighted average cost of
mortgage debt decreased to 6.06 percent from 6.09 percent at October
31, 2006, primarily due to a decrease in fixed-rate mortgage debt.
Fixed-rate mortgage debt, which represented 62.9 percent of the
Company's total nonrecourse mortgage debt, declined from 6.20 percent
at October 31, 2006 to 6.08 percent at October 31, 2007. The
variable-rate mortgage debt increased from 5.84 percent at October 31,
2006 to 6.02 percent at October 31, 2007.
Outlook
Ratner said, "The real estate industry has changed drastically in
the past few months. In these uncertain times, liquidity is at a
premium - we have maintained and continue to build on our high level
of liquidity to address this uncertainty and take advantage of market
opportunities. As we said at the end of the second quarter, the
current state of the capital markets, general weakness in the economy,
and the timing of transactions make it difficult to have clarity on
how our EBDT will perform in the short term.
"Despite the current challenges and the impact on the short-term
measurement of EBDT, our longer-term focus on value creation is very
clear. We completed all 10 projects scheduled for opening in fiscal
2007, representing more than $900 million. These new assets, together
with the growth in our core operating portfolio, continue to create
value for our shareholders. These projects reflect our belief that
real estate is a long-term business, with long-term growth horizons -
a marathon, not a sprint. We are well positioned to continue to
deliver on projects in our development pipeline, ensuring our future
growth."
Corporate Description
Forest City Enterprises, Inc. is a $10 billion NYSE-listed
national real estate company. The Company is principally engaged in
the ownership, development, management and acquisition of commercial
and residential real estate and land throughout the United States.
Supplemental Package
Please refer to the Investor Relations section of the Company's
website at www.forestcity.net for a Supplemental Package, which the
Company will also furnish to the Securities and Exchange Commission on
Form 8-K. This Supplemental Package includes operating and financial
information for the quarter ended October 31, 2007, 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, is not
a measure of operating results or cash flows from operations as
defined by GAAP and may not be directly comparable to similarly titled
measures reported by other companies.
The Company believes that EBDT provides additional information
about its core operations and, along with net earnings, is necessary
to understand its operating results. EBDT is used by the chief
operating decision maker and management in assessing operating
performance and to consider capital requirements and allocation of
resources by segment and on a consolidated basis. The Company believes
EBDT is important to investors because it provides another method for
the investor to measure its long-term operating performance, as net
earnings can vary from year to year due to property dispositions,
acquisitions and other factors that have a short-term impact.
EBDT is defined as net earnings excluding the following items: i)
gain (loss) on disposition of rental properties, divisions and other
investments (net of tax); ii) the adjustment to recognize rental
revenues and rental expense using the straight-line method; iii)
non-cash charges for real estate depreciation, amortization,
amortization of mortgage procurement costs and deferred income taxes;
iv) preferred payment classified as minority interest expense on the
Company's Consolidated Statement of Earnings; v) provision for decline
in real estate (net of tax); vi) extraordinary items (net of tax); and
vii) cumulative effect of change in accounting principle (net of tax).
Unlike the real estate segments, EBDT for the Nets segment equals net
earnings.
EBDT is reconciled to net earnings, the most comparable financial
measure calculated in accordance with GAAP, in the table titled
Financial Highlights below and in the Company's Supplemental Package,
which the Company will also furnish to the SEC on Form 8-K. The
adjustment to recognize rental revenues and rental expenses on the
straight-line method is excluded because it is management's opinion
that rental revenues and expenses should be recognized when due from
the tenants or due to the landlord. The Company excludes depreciation
and amortization expense related to real estate operations from EBDT
because it believes the values of its properties, in general, have
appreciated over time in excess of their original cost. Deferred taxes
from real estate operations, which are the result of timing
differences of certain net expense items deducted in a future year for
federal income tax purposes, are excluded until the year in which they
are reflected in the Company's current tax provision. The provision
for decline in real estate is excluded from EBDT because it varies
from year to year based on factors unrelated to the Company's overall
financial performance and is related to the ultimate gain on
dispositions of operating properties. The Company's EBDT may not be
directly comparable to similarly titled measures reported by other
companies.
Pro-Rata Consolidation Method
This press release contains certain financial measures prepared in
accordance with GAAP under the full consolidation accounting method
and certain financial measures prepared in accordance with the
pro-rata consolidation method (non-GAAP). The Company presents certain
financial amounts under the pro-rata method because it believes this
information is useful to investors as this method reflects the manner
in which the Company operates its business. In line with industry
practice, the Company has made a large number of investments in which
its economic ownership is less than 100 percent as a means of
procuring opportunities and sharing risk. Under the pro-rata
consolidation method, the Company presents its investments
proportionate to its 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, 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, real estate development and
investment risks, economic conditions in the Company's primary
markets, dependence on rental income from real property, downturns in
the housing market, competition, illiquidity of real estate
investments, bankruptcy or insolvency of tenants, reliance on major
tenants, the impact of terrorist acts, risks associated with an
investment in and the operation of a professional sports franchise,
conflicts of interest, the Company's substantial debt leverage and the
ability to service debt, the impact of restrictions imposed by the
Company's credit facility, changes in interest rates, the continued
availability of tax-exempt government financing, effects of uninsured
losses, environmental liabilities, risks associated with developing
and managing properties in partnership with others, the ability to
maintain effective internal controls, compliance with governmental
regulations, litigation risks, and other risk factors as disclosed
from time to time in the Company's SEC filings, including but not
limited to, the Company's annual and quarterly reports.
-0-
*T
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months and Nine Months Ended October 31, 2007 and 2006
(dollars in thousands, except per share data)
Three Months Ended,
October 31, Increase (Decrease)
--------------------------- -------------------
2007 2006 Amount Percent
------------- ------------- ----------- -------
Operating Results:
Loss from continuing
operations $ (11,414) $ (7,947) $ (3,467)
Discontinued
operations, net of
tax and minority
interest (1) 640 53,822 (53,182)
------------- ------------- -----------
Net earnings $ (10,774) $ 45,875 $(56,649)
============= ============= ===========
Earnings Before
Depreciation,
Amortization and
Deferred Taxes (EBDT)
(2) $ 68,795 $ 57,400 $ 11,395 19.9%
============= ============= ===========
Reconciliation of Net
Earnings to Earnings
Before Depreciation,
Amortization and
Deferred Taxes (EBDT)
(2):
Net Earnings (loss) $ (10,774) $ 45,875 $(56,649)
Depreciation and
amortization - Real
Estate Groups (7) 58,559 47,222 11,337
Amortization of
mortgage
procurement costs -
Real Estate Groups
(7) 3,526 2,743 783
Deferred income tax
expense - Real
Estate Groups (8) (1,456) 29,739 (31,195)
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 of
other
investments 66 - 66
Gain on
disposition
included in
discontinued
operations 18,746 17,227 1,519
Gain on
disposition of
equity method
rental
properties - - -
Straight-line rent
adjustment (3) (1,668) (1,528) (140)
Preference payment (6) 937 - 937
Preferred return on
disposition - - -
Provision for decline
in real estate, net
of minority interest - - -
Provision for decline
in real estate of
equity method rental
properties - - -
Gain on disposition
of equity method
rental properties - - -
Gain on disposition
of other investments (172) - (172)
Discontinued
operations: (1)
Gain on
disposition of
rental
properties 1,031 (143,494) 144,525
Minority interest
- Gain on
disposition - 59,616 (59,616)
------------- ------------- -----------
Earnings Before
Depreciation,
Amortization and
Deferred Taxes
(EBDT) (2) $ 68,795 $ 57,400 $ 11,395 19.9%
============= ============= ===========
Diluted Earnings per
Common Share:
Loss from continuing
operations $ (0.11) $ (0.08) $ (0.03)
Discontinued
operations, net of
tax and minority
interest (1) - 0.53 (0.53)
------------- ------------- -----------
Net earnings (loss)
(5) $ (0.11) $ 0.45 $ (0.56)
============= ============= ===========
Earnings Before
Depreciation,
Amortization and
Deferred Taxes (EBDT)
(2) (4) $ 0.64 $ 0.56 $ 0.08 14.3%
============= ============= ===========
Operating earnings
(loss), net of tax (a
non-GAAP financial
measure) $ (0.08) $ (0.02) $ (0.06)
Provision for decline
in real estate, net
of tax - - -
Gain on disposition of
rental properties and
other investments,
net of tax (0.01) 1.09 (1.10)
Minority interest (0.02) (0.62) 0.60
------------- ------------- -----------
Net earnings (loss)
(5) $ (0.11) $ 0.45 $ (0.56)
============= ============= ===========
Diluted weighted
average shares
outstanding (4) 102,330,172 101,680,649 649,523
============= ============= ===========
Nine Months Ended
October 31, Increase (Decrease)
--------------------------- -------------------
2007 2006 Amount Percent
------------- ------------- ----------- -------
Operating Results:
Loss from continuing
operations $ (24,894) $ (1,120) $ (23,774)
Discontinued
operations, net of tax
and minority interest
(1) 64,714 107,745 (43,031)
------------- ------------- -----------
Net earnings $ 39,820 $ 106,625 $ (66,805)
============= ============= ===========
Earnings Before
Depreciation,
Amortization and
Deferred Taxes (EBDT)
(2) $ 174,530 $ 177,404 $ (2,874) (1.6%)
============= ============= ===========
Reconciliation of Net
Earnings to Earnings
Before Depreciation,
Amortization and
Deferred Taxes (EBDT)
(2):
Net Earnings (loss) $ 39,820 $ 106,625 $ (66,805)
Depreciation and
amortization - Real
Estate Groups (7) 185,558 148,807 36,751
Amortization of
mortgage procurement
costs - Real Estate
Groups (7) 9,983 8,098 1,885
Deferred income tax
expense - Real
Estate Groups (8) 21,581 73,128 (51,547)
Deferred income tax
expense - Non-Real
Estate Groups: (8)
Gain on
disposition of
other investments (57) - (57)
Current income tax
expense on non-
operating earnings:
(8)
Gain on
disposition of
other investments 290 - 290
Gain on
disposition
included in
discontinued
operations 26,834 17,198 9,636
Gain on
disposition of
equity method
rental properties - 2,657 (2,657)
Straight-line rent
adjustment (3) (9,288) (4,559) (4,729)
Preference payment (6) 2,771 - 2,771
Preferred return on
disposition 5,034 - 5,034
Provision for decline
in real estate, net
of minority interest - 1,923 (1,923)
Provision for decline
in real estate of
equity method rental
properties - 400 (400)
Gain on disposition of
equity method rental
properties (2,106) (7,662) 5,556
Gain on disposition of
other investments (603) - (603)
Discontinued
operations: (1)
Gain on
disposition of
rental properties (105,287) (287,220) 181,933
Minority interest
- Gain on
disposition - 118,009 (118,009)
------------- ------------- -----------
Earnings Before
Depreciation,
Amortization and
Deferred Taxes
(EBDT) (2) $ 174,530 $ 177,404 $ (2,874) (1.6%)
============= ============= ===========
Diluted Earnings per
Common Share:
Loss from continuing
operations $ (0.24) $ (0.01) $ (0.23)
Discontinued
operations, net of tax
and minority interest
(1) 0.62 1.06 (0.44)
------------- ------------- -----------
Net earnings (loss) (5)$ 0.38 $ 1.05 $ (0.67)
============= ============= ===========
Earnings Before
Depreciation,
Amortization and
Deferred Taxes (EBDT)
(2) (4) $ 1.62 $ 1.72 $ (0.10) (5.9%)
============= ============= ===========
Operating earnings
(loss), net of tax (a
non-GAAP financial
measure) $ (0.18) $ 0.10 $ (0.28)
Provision for decline
in real estate, net of
tax - (0.01) 0.01
Gain on disposition of
rental properties and
other investments, net
of tax 0.66 2.23 (1.57)
Minority interest (0.10) (1.27) 1.17
------------- ------------- -----------
Net earnings (loss) (5)$ 0.38 $ 1.05 $ (0.67)
============= ============= ===========
Diluted weighted
average shares
outstanding (4) 102,189,119 101,670,129 518,990
============= ============= ===========
*T
-0-
*T
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months and Nine Months Ended October 31, 2007 and 2006
(dollars in thousands)
Three Months Ended,
October 31, Increase (Decrease)
--------------------- -------------------
2007 2006 Amount Percent
--------------------- -------------------
Operating Earnings (a non-
GAAP financial measure)
and Reconciliation to Net
Earnings:
Revenues from real estate
operations
Commercial Group $ 239,039 $ 191,193 $ 47,846
Residential Group 81,170 48,406 32,764
Land Development Group 13,417 22,934 (9,517)
Corporate Activities - - -
--------------------- -----------
Total Revenues 333,626 262,533 71,093 (27.1%)
Operating expenses (201,274) (162,801) (38,473)
Interest expense, including
early extinguishment of
debt (92,960) (68,067) (24,893)
Amortization of mortgage
procurement costs (7) (3,568) (2,719) (849)
Depreciation and
amortization (7) (54,414) (43,173) (11,241)
Interest and other income 17,544 7,023 10,521
Equity in earnings (loss)
of unconsolidated entities (6,526) 9,122 (15,648)
Provision for decline in
real estate of equity
method rental properties - - -
Gain on disposition of
equity method rental
properties - - -
Revenues and interest
income from discontinued
operations (1) 1,544 30,184 (28,640)
Expenses from discontinued
operations (1) 531 (26,471) 27,002
--------------------- -----------
Operating earnings (loss)
(a non-GAAP financial
measure) (5,497) 5,631 (11,128)
--------------------- -----------
Income tax expense (8) (1,706) (6,227) 4,521
Income tax expense from
discontinued operations
(1) (8) (404) (33,894) 33,490
Income tax expense on non-
operating earnings items
(see below) (332) 32,410 (32,742)
--------------------- -----------
Operating earnings (loss),
net of tax (a non-GAAP
financial measure) (7,939) (2,080) (5,859)
--------------------- -----------
Provision for decline in
real estate - - -
Provision for decline in
real estate of equity
method rental properties - - -
Gain on disposition of
equity method rental
properties - - -
Gain on disposition of
other investments 172 - 172
Gain on disposition of
rental properties included
in discontinued operations
(1) (1,031) 143,494 (144,525)
Income tax benefit
(expense) on non-operating
earnings: (8)
Provision for decline in
real estate - - -
Provision for decline in
real estate of equity
method rental
properties - - -
Gain on disposition of
other investments (66) - (66)
Gain on disposition of
equity method rental
properties - - -
Gain on disposition of
rental properties
included in
discontinued operations 398 (32,410) 32,808
--------------------- -----------
Income tax expense on non-
operating earnings (see
above) 332 (32,410) 32,742
--------------------- -----------
Minority interest in
continuing operations (2,308) (3,638) 1,330
Minority interest in
discontinued operations:
(1)
Operating earnings - 125 (125)
Gain on disposition of
rental properties - (59,616) 59,616
--------------------- -----------
- (59,491) 59,491
--------------------- -----------
Minority interest (2,308) (63,129) 60,821
--------------------- -----------
Net earnings $ (10,774) $ 45,875 $ (56,649)
===================== ===========
Nine Months Ended
October 31, Increase (Decrease)
--------------------- -------------------
2007 2006 Amount Percent
--------------------- -------------------
Operating Earnings (a non-
GAAP financial measure) and
Reconciliation to Net
Earnings:
Revenues from real estate
operations
Commercial Group $ 652,792 $ 568,674 $ 84,118
Residential Group 198,029 140,579 57,450
Land Development Group 38,756 65,844 (27,088)
Corporate Activities - - -
--------------------- -----------
Total Revenues 889,577 775,097 114,480 (14.8%)
Operating expenses (547,052) (460,514) (86,538)
Interest expense, including
early extinguishment of
debt (246,651) (206,158) (40,493)
Amortization of mortgage
procurement costs (7) (8,971) (8,051) (920)
Depreciation and
amortization (7) (169,942) (125,032) (44,910)
Interest and other income 52,366 29,740 22,626
Equity in earnings (loss) of
unconsolidated entities 2,608 15,811 (13,203)
Provision for decline in
real estate of equity
method rental properties - 400 (400)
Gain on disposition of
equity method rental
properties (2,106) (7,662) 5,556
Revenues and interest income
from discontinued
operations (1) 26,352 97,633 (71,281)
Expenses from discontinued
operations (1) (26,173) (90,918) 64,745
--------------------- -----------
Operating earnings (loss) (a
non-GAAP financial measure) (29,992) 20,346 (50,338)
--------------------- -----------
Income tax expense (8) 12,943 (9,695) 22,638
Income tax expense from
discontinued operations (1)
(8) (40,752) (67,849) 27,097
Income tax expense on non-
operating earnings items
(see below) 39,785 67,446 (27,661)
--------------------- -----------
Operating earnings (loss),
net of tax (a non-GAAP
financial measure) (18,016) 10,248 (28,264)
--------------------- -----------
Provision for decline in
real estate - (1,923) 1,923
Provision for decline in
real estate of equity
method rental properties - (400) 400
Gain on disposition of
equity method rental
properties 2,106 7,662 (5,556)
Gain on disposition of other
investments 603 - 603
Gain on disposition of
rental properties included
in discontinued operations
(1) 105,287 287,220 (181,933)
Income tax benefit (expense)
on non-operating earnings:
(8)
Provision for decline in
real estate - 743 (743)
Provision for decline in
real estate of equity
method rental properties - 155 (155)
Gain on disposition of
other investments (233) - (233)
Gain on disposition of
equity method rental
properties 1,131 (2,962) 4,093
Gain on disposition of
rental properties
included in discontinued
operations (40,683) (65,382) 24,699
--------------------- -----------
Income tax expense on non-
operating earnings (see
above) (39,785) (67,446) 27,661
--------------------- -----------
Minority interest in
continuing operations (10,375) (10,395) 20
Minority interest in
discontinued operations:
(1)
Operating earnings - (332) 332
Gain on disposition of
rental properties - (118,009) 118,009
--------------------- -----------
- (118,341) 118,341
--------------------- -----------
Minority interest (10,375) (128,736) 118,361
--------------------- -----------
Net earnings $ 39,820 $ 106,625 $ (66,805)
===================== ===========
*T
-0-
*T
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months and Nine Months Ended October 31, 2007 and 2006
(in thousands)
1) Pursuant to the definition of a component of an entity of SFAS No.
144, assuming no significant continuing involvement, all earnings of
properties which have been sold or are held for sale are reported as
discontinued operations.
2) The Company uses an additional measure, along with net earnings, to
report its operating results. This measure, referred to as Earnings
Before Depreciation, Amortization and Deferred Taxes ("EBDT"), is not
a measure of operating results as defined by generally accepted
accounting principles and may not be directly comparable to
similarly-titled measures reported by other companies. The Company
believes that EBDT provides additional information about its
operations, and along with net earnings, is necessary to understand
its operating results. EBDT is defined as net earnings excluding the
following items: i) gain (loss) on disposition of operating
properties, divisions and other investments (net of tax); ii) the
adjustment to recognize rental revenues and rental expense using the
straight-line method; iii) non-cash charges for real estate
depreciation, amortization (including amortization of mortgage
procurement costs) and deferred income taxes; iv) preferred payment
classified as minority interest expense on the Company's Consolidated
Statement of Earnings; v) provision for decline in real estate (net
of tax); vi) extraordinary items (net of tax); and vii) cumulative
effect of change in accounting principle (net of tax). See our
discussion of EBDT in the news release.
3) The Company recognizes minimum rents on a straight-line basis over
the term of the related lease pursuant to the provision of SFAS No.
13, "Accounting for Leases." The straight-line rent adjustment is
recorded as an increase or decrease to revenue 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 three and nine months ended October 31, 2007, the effect of
5,257,146 and 5,490,925 shares respectively 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 nine months ended October 31, 2007,
diluted weighted average shares outstanding of 107,587,318 and
107,680,044 were used to arrive at $0.64/share and $1.62/share,
respectively.)
For the three and nine months ended October 31, 2006, the effect of
1,646,734 and 1,565,938 shares respectively 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 nine months ended October 31, 2006,
diluted weighted average shares outstanding of 103,327,383 and
103,236,067 were used to arrive at $0.56/share and $1.72/share,
respectively.)
5) For the nine months ended October 31, 2007, $595,000 of net
earnings is allocated to participating securities under EITF 03-6
"Participating Securities and the Two-Class Method under FASB 128".
As a result, the net earnings for purposes of calculating basic and
diluted EPS is $39,225,000.
6) The Forest City Ratner Companies portfolio became a wholly-owned
subsidiary of the Company November 8, 2006 upon the issuance of the
Class A Common Units in exchange for Bruce C. Ratner's minority
interests. For the first five years only, the Units that have not
been exchanged are entitled to their proportionate share of an annual
preferred payment of $2,500,000 plus an amount equal to the dividends
paid on the same number of shares of the Company's common stock.
After five years, the Units that have not been exchanged are entitled
to a payment equal to the dividends paid on an equivalent number of
shares of the Company's common stock. At October 31, 2007, the
Company has recorded approximately $2,771,000 related to three
quarters share of the annual preferred payment which is classified as
minority interest expense on the Company's consolidated statement of
earnings.
7) The following table provides detail of depreciation and
amortization and amortization of mortgage procurement costs. The
Company's Real Estate Groups are engaged in the ownership,
development, acquisition and management of real estate projects,
including apartment complexes, regional malls and retail centers,
hotels, office buildings and mixed-use facilities, as well as large
land development projects.
Depreciation and Depreciation and
Amortization Amortization
-------------------- --------------------
Three Months Ended Nine Months Ended
October 31, October 31,
-------------------- --------------------
2007 2006 2007 2006
-------------------- --------------------
Full Consolidation $ 54,414 $43,173 $ 169,942 $125,032
Non-Real Estate (3,411) (236) (7,430) (932)
-------------------- --------------------
Real Estate Groups Full
Consolidation 51,003 42,937 162,512 124,100
Real Estate Groups related
to minority interest (2,343) (3,650) (6,168) (10,514)
Real Estate Groups Equity
Method 9,892 5,710 27,273 25,912
Real Estate Groups
Discontinued Operations 7 2,225 1,941 9,309
-------------------- --------------------
Real Estate Groups Pro-Rata
Consolidation $ 58,559 $47,222 $ 185,558 $148,807
==================== ====================
Amortization of Amortization of
Mortgage Mortgage
Procurement Costs Procurement Costs
-------------------- --------------------
Three Months Ended Nine Months Ended
October 31, October 31,
-------------------- --------------------
2007 2006 2007 2006
-------------------- --------------------
Full Consolidation $ 3,568 $ 2,719 $ 8,971 $ 8,051
Non-Real Estate - (46) - (236)
-------------------- --------------------
Real Estate Groups Full
Consolidation 3,568 2,673 8,971 7,815
Real Estate Groups related
to minority interest (195) (311) (616) (900)
Real Estate Groups Equity
Method 142 293 1,548 860
Real Estate Groups
Discontinued Operations 11 88 80 323
-------------------- --------------------
Real Estate Groups Pro-Rata
Consolidation $ 3,526 $ 2,743 $ 9,983 $ 8,098
==================== ====================
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months and Nine Months Ended October 31, 2007 and 2006
(in thousands)
Three Months Ended Nine Months Ended
October 31, October 31,
-------------------- ---------------------
2007 2006 2007 2006
-------------------- ---------------------
8) The following table (in thousands) (in thousands)
provides detail of Income
Tax Expense (Benefit):
(A) Operating earnings
Current $ (16,419) $(8,484) $ (16,564) $(17,358)
Deferred 18,059 14,711 4,519 24,989
-------------------- ---------------------
1,640 6,227 (12,045) 7,631
-------------------- ---------------------
(B) Provision for
decline in real estate
Deferred - - - (743)
Deferred - Equity
method investment - - - (155)
-------------------- ---------------------
- - - (898)
-------------------- ---------------------
(C) Gain on disposition
of other investments
Current - Non-Real
Estate Groups 66 - 290 -
Deferred - Non-
Real Estate
Groups - - (57) -
-------------------- ---------------------
66 - 233 -
-------------------- ---------------------
(D) Gain on disposition
of equity method rental
properties
Current - - - 2,657
Deferred - - (1,131) 305
-------------------- ---------------------
- - (1,131) 2,962
-------------------- ---------------------
Subtotal (A) (B) (C)
(D)
Current (16,353) (8,484) (16,274) (14,701)
Deferred 18,059 14,711 3,331 24,396
-------------------- ---------------------
Income tax expense 1,706 6,227 (12,943) 9,695
-------------------- ---------------------
(E) Discontinued
operations - Rental
Properties
Operating earnings
Current 781 915 (1,567) 1,647
Deferred 21 569 1,636 820
-------------------- ---------------------
802 1,484 69 2,467
Gain on disposition
of rental
properties
Current 18,746 17,227 26,834 17,198
Deferred (19,144) 15,183 13,849 48,184
-------------------- ---------------------
(398) 32,410 40,683 65,382
-------------------- ---------------------
404 33,894 40,752 67,849
-------------------- ---------------------
Grand Total (A) (B)
(C) (D) (E)
Current 3,174 9,658 8,993 4,144
Deferred (1,064) 30,463 18,816 73,400
-------------------- ---------------------
$ 2,110 $40,121 $ 27,809 $ 77,544
-------------------- ---------------------
Recap of Grand Total:
Real Estate Groups
Current 11,313 13,259 24,287 15,704
Deferred (1,456) 29,739 21,581 73,128
-------------------- ---------------------
9,857 42,998 45,868 88,832
Non-Real Estate
Groups
Current (8,139) (3,601) (15,294) (11,560)
Deferred 392 724 (2,765) 272
-------------------- ---------------------
(7,747) (2,877) (18,059) (11,288)
-------------------- ---------------------
Grand Total $ 2,110 $40,121 $ 27,809 $ 77,544
==================== =====================
*T
-0-
*T
Reconciliation of Net Operating Income (non-GAAP) to Net Earnings
(GAAP) (in thousands):
Three Months Ended October 31, 2007
--------------------------------------------------
Plus
Unconsol- Pro-Rata
Full idated Consol-
Consol- Less Invest- Plus idation
idation Minority ments at Discontinued (Non-
(GAAP) Interest Pro-Rata Operations GAAP)
--------------------------------------------------
Revenues from real
estate operations $333,626 $20,678 $84,006 $1,002 $397,956
Exclude straight-
line rent
adjustment (1) (3,148) - - - (3,148)
--------------------------------------------------
Adjusted revenues 330,478 20,678 84,006 1,002 394,808
Operating expenses 201,274 13,439 59,298 (845) 246,288
Add back non-Real
Estate depreciation
and amortization
(b) 3,411 - 3,754 - 7,165
Add back
amortization of
mortgage
procurement costs
for non-Real Estate
Groups (d) - - 72 - 72
Exclude straight-
line rent
adjustment (2) (1,480) - - - (1,480)
Exclude preference
payment (937) - - - (937)
--------------------------------------------------
Adjusted operating
expenses 202,268 13,439 63,124 (845) 251,108
Add interest income
and other income 17,544 438 2,307 542 19,955
Add equity in
earnings of
unconsolidated
entities (6,526) 112 5,987 - (651)
Add back equity
method depreciation
and amortization
expense (see below) 10,034 - (10,034) - -
--------------------------------------------------
Net Operating Income 149,262 7,789 19,142 2,389 163,004
Interest expense,
including early
extinguishment of
debt (92,960) (2,943) (19,142) (296)(109,455)
Gain (loss) on
disposition of
rental properties
and other
investments 172 - - (1,031) (859)
Depreciation and
amortization - Real
Estate Groups (a) (51,003) (2,343) (9,892) (7) (58,559)
Amortization of
mortgage
procurement costs -
Real Estate Groups
(c) (3,568) (195) (142) (11) (3,526)
Straight-line rent
adjustment (1) +
(2) 1,668 - - - 1,668
Preference payment (937) - - - (937)
Equity method
depreciation and
amortization
expense (see above) (10,034) - 10,034 - -
--------------------------------------------------
Earnings (loss)
before income taxes (7,400) 2,308 - 1,044 (8,664)
Income tax provision (1,706) - - (404) (2,110)
--------------------------------------------------
Earnings (loss)
before minority
interest and
discontinued
operations (9,106) 2,308 - 640 (10,774)
Minority Interest (2,308) (2,308) - - -
--------------------------------------------------
Earnings (loss) from
continuing
operations (11,414) - - 640 (10,774)
Discontinued
operations, net of
tax and minority
interest:
Operating
earnings from
rental
properties 1,273 - - (1,273) -
Gain (loss) on
disposition
of rental
properties (633) - - 633 -
--------------------------------------------------
640 - - (640) -
--------------------------------------------------
Net earnings (loss) $(10,774) $- $- $- $(10,774)
==================================================
(a) Depreciation and
amortization - Real
Estate Groups $51,003 $2,343 $9,892 $7 $58,559
(b) Depreciation and
amortization - Non-
Real Estate 3,411 - 3,754 - 7,165
--------------------------------------------------
Total
depreciation
and
amortization $54,414 $2,343 $13,646 $7 $65,724
==================================================
(c) Amortization of
mortgage
procurement costs -
Real Estate Groups $3,568 $195 $142 $11 $3,526
(d) Amortization of
mortgage
procurement costs -
Non-Real Estate - - 72 - 72
--------------------------------------------------
Total
amortization of
mortgage
procurement
costs $3,568 $195 $214 $11 $3,598
==================================================
Three Months Ended October 31, 2006
--------------------------------------------------
Plus
Unconsol- Pro-Rata
Full idated Consol-
Consol- Less Invest- Plus idation
idation Minority ments at Discontinued (Non-
(GAAP) Interest Pro-Rata Operations GAAP)
--------------------------------------------------
Revenues from real
estate operations $262,533 $25,759 $65,075 $27,685 $329,534
Exclude straight-
line rent
adjustment (1) (2,884) - - (13) (2,897)
--------------------------------------------------
Adjusted revenues 259,649 25,759 65,075 27,672 326,637
Operating expenses 162,801 12,798 43,066 16,958 210,027
Add back non-Real
Estate depreciation
and amortization
(b) 236 - (251) - (15)
Add back
amortization of
mortgage
procurement costs
for non-Real Estate
Groups (d) 46 1 293 - 338
Exclude straight-
line rent
adjustment (2) (1,149) - - (220) (1,369)
Exclude preference
payment - - - - -
--------------------------------------------------
Adjusted operating
expenses 161,934 12,799 43,108 16,738 208,981
Add interest income
and other income 7,023 802 442 156 6,819
Add equity in
earnings of
unconsolidated
entities 9,122 - (3,446) - 5,676
Add back equity
method depreciation
and amortization
expense (see below) 6,003 - (6,003) - -
--------------------------------------------------
Net Operating Income 119,863 13,762 12,960 11,090 130,151
Interest expense,
including early
extinguishment of
debt (68,067) (6,163) (12,960) (4,732) (79,596)
Gain (loss) on
disposition of
rental properties
and other
investments - - - 83,878 83,878
Depreciation and
amortization - Real
Estate Groups (a) (42,937) (3,650) (5,710) (2,225) (47,222)
Amortization of
mortgage
procurement costs -
Real Estate Groups
(c) (2,673) (311) (293) (88) (2,743)
Straight-line rent
adjustment (1) +
(2) 1,735 - - (207) 1,528
Preference payment - - - - -
Equity method
depreciation and
amortization
expense (see above) (6,003) - 6,003 - -
--------------------------------------------------
Earnings (loss)
before income taxes 1,918 3,638 - 87,716 85,996
Income tax provision (6,227) - - (33,894) (40,121)
--------------------------------------------------
Earnings (loss)
before minority
interest and
discontinued
operations (4,309) 3,638 - 53,822 45,875
Minority Interest (3,638) (3,638) - - -
--------------------------------------------------
Earnings (loss) from
continuing
operations (7,947) - - 53,822 45,875
Discontinued
operations, net of
tax and minority
interest:
Operating
earnings from
rental
properties 2,354 - - (2,354) -
Gain (loss) on
disposition
of rental
properties 51,468 - - (51,468) -
--------------------------------------------------
53,822 - - (53,822) -
--------------------------------------------------
Net earnings (loss) $45,875 $- $- $- $45,875
==================================================
(a) Depreciation and
amortization - Real
Estate Groups $42,937 $3,650 $5,710 $2,225 $47,222
(b) Depreciation and
amortization - Non-
Real Estate 236 - (251) - (15)
--------------------------------------------------
Total
depreciation
and
amortization $43,173 $3,650 $5,459 $2,225 $47,207
==================================================
(c) Amortization of
mortgage
procurement costs -
Real Estate Groups $2,673 $311 $293 $88 $2,743
(d) Amortization of
mortgage
procurement costs -
Non-Real Estate 46 1 293 - 338
--------------------------------------------------
Total
amortization of
mortgage
procurement
costs $2,719 $312 $586 $88 $3,081
==================================================
*T
-0-
*T
Reconciliation of Net Operating Income (non-GAAP) to Net Earnings
(GAAP) (in thousands):
Nine Months Ended October 31, 2007
----------------------------------------------------
Plus
Unconsol-
Full idated Pro-Rata
Consol- Less Invest- Plus Consol-
idation Minority ments at Discontinued idation
(GAAP) Interest Pro-Rata Operations (Non-GAAP)
----------------------------------------------------
Revenues from real
estate operations$889,577 $51,323 $257,228 $25,601 $1,121,083
Exclude straight-
line rent
adjustment (1) (16,148) - - - (16,148)
----------------------------------------------------
Adjusted revenues 873,429 51,323 257,228 25,601 1,104,935
Operating expenses 547,052 24,087 172,251 19,885 715,101
Add back non-Real
Estate
depreciation and
amortization (b) 7,430 - 6,271 - 13,701
Add back
amortization of
mortgage
procurement costs
for non-Real
Estate Groups (d) - - 105 - 105
Exclude straight-
line rent
adjustment (2) (6,860) - - - (6,860)
Exclude preference
payment (2,771) - - - (2,771)
----------------------------------------------------
Adjusted operating
expenses 544,851 24,087 178,627 19,885 719,276
Add interest
income and other
income 52,366 1,862 9,158 751 60,413
Add equity in
earnings of
unconsolidated
entities 2,608 696 (3,112) - (1,200)
Remove gain on
disposition
recorded on
equity method (2,106) - 2,106 - -
Add back provision
for decline
recorded on
equity method - - - - -
Add back equity
method
depreciation and
amortization
expense (see
below) 28,821 - (28,821) - -
----------------------------------------------------
Net Operating
Income 410,267 29,794 57,932 6,467 444,872
Interest expense,
including early
extinguishment of
debt (246,651)(12,635) (52,898) (4,267) (291,181)
Gain on
disposition of
equity method
rental properties
(e) 2,106 - - - 2,106
Gain on
disposition of
rental properties
and other
investments 603 - - 105,287 105,890
Preferred return
on disposition - - (5,034) - (5,034)
Provision for
decline in real
estate - - - - -
Provision for
decline in real
estate of equity
method rental
properties - - - - -
Depreciation and
amortization -
Real Estate
Groups (a) (162,512) (6,168) (27,273) (1,941) (185,558)
Amortization of
mortgage
procurement costs
- Real Estate
Groups (c) (8,971) (616) (1,548) (80) (9,983)
Straight-line rent
adjustment (1) +
(2) 9,288 - - - 9,288
Preference payment (2,771) - - - (2,771)
Equity method
depreciation and
amortization
expense (see
above) (28,821) - 28,821 - -
----------------------------------------------------
Earnings (loss)
before income
taxes (27,462) 10,375 - 105,466 67,629
Income tax
provision 12,943 - - (40,752) (27,809)
----------------------------------------------------
Earnings (loss)
before minority
interest and
discontinued
operations (14,519) 10,375 - 64,714 39,820
Minority Interest (10,375)(10,375) - - -
----------------------------------------------------
Earnings (loss)
from continuing
operations (24,894) - - 64,714 39,820
Discontinued
operations, net
of tax and
minority
interest:
Operating
earnings
from rental
properties 110 - - (110) -
Gain on
disposition
of rental
properties 64,604 - - (64,604) -
----------------------------------------------------
64,714 - - (64,714) -
----------------------------------------------------
Net earnings $39,820 $- $- $- $39,820
====================================================
(a) Depreciation
and amortization
- Real Estate
Groups $162,512 $6,168 $27,273 $1,941 $185,558
(b) Depreciation
and amortization
- Non-Real Estate 7,430 - 6,271 - 13,701
----------------------------------------------------
Total
depreciation
and
amortization $169,942 $6,168 $33,544 $1,941 $199,259
====================================================
(c) Amortization
of mortgage
procurement costs
- Real Estate
Groups $8,971 $616 $1,548 $80 $9,983
(d) Amortization
of mortgage
procurement costs
- Non-Real Estate - - 105 - 105
----------------------------------------------------
Total
amortization
of mortgage
procurement
costs $8,971 $616 $1,653 $80 $10,088
====================================================
Nine Months Ended October 31, 2006
--------------------------------------------------
Plus
Unconsol- Pro-Rata
Full idated Consol-
Consol- Less Invest- Plus idation
idation Minority ments at Discontinued (Non-
(GAAP) Interest Pro-Rata Operations GAAP)
--------------------------------------------------
Revenues from real
estate operations $775,097 $76,831 $210,183 $88,657 $997,106
Exclude straight-
line rent
adjustment (1) (8,955) - - (44) (8,999)
--------------------------------------------------
Adjusted revenues 766,142 76,831 210,183 88,613 988,107
Operating expenses 460,514 38,027 140,702 58,871 622,060
Add back non-Real
Estate depreciation
and amortization
(b) 932 - 7,273 - 8,205
Add back
amortization of
mortgage
procurement costs
for non-Real Estate
Groups (d) 236 1 591 - 826
Exclude straight-
line rent
adjustment (2) (3,502) - - (938) (4,440)
Exclude preference
payment - - - - -
--------------------------------------------------
Adjusted operating
expenses 458,180 38,028 148,566 57,933 626,651
Add interest income
and other income 29,740 2,673 800 860 28,727
Add equity in
earnings of
unconsolidated
entities 15,811 - (2,155) - 13,656
Remove gain on
disposition
recorded on equity
method (7,662) - 7,662 - -
Add back provision
for decline
recorded on equity
method 400 - (400) - -
Add back equity
method depreciation
and amortization
expense (see below) 26,772 - (26,772) - -
--------------------------------------------------
Net Operating Income 373,023 41,476 40,752 31,540 403,839
Interest expense,
including early
extinguishment of
debt (206,158) (19,667) (40,752) (14,631)(241,874)
Gain on disposition
of equity method
rental properties
(e) 7,662 - - - 7,662
Gain on disposition
of rental
properties and
other investments - - - 169,211 169,211
Preferred return on
disposition - - - - -
Provision for
decline in real
estate (1,923) - - - (1,923)
Provision for
decline in real
estate of equity
method rental
properties (400) - - - (400)
Depreciation and
amortization - Real
Estate Groups (a) (124,100) (10,514) (25,912) (9,309)(148,807)
Amortization of
mortgage
procurement costs -
Real Estate Groups
(c) (7,815) (900) (860) (323) (8,098)
Straight-line rent
adjustment (1) +
(2) 5,453 - - (894) 4,559
Preference payment - - - - -
Equity method
depreciation and
amortization
expense (see above) (26,772) - 26,772 - -
--------------------------------------------------
Earnings (loss)
before income taxes 18,970 10,395 - 175,594 184,169
Income tax provision (9,695) - - (67,849) (77,544)
--------------------------------------------------
Earnings (loss)
before minority
interest and
discontinued
operations 9,275 10,395 - 107,745 106,625
Minority Interest (10,395) (10,395) - - -
--------------------------------------------------
Earnings (loss) from
continuing
operations (1,120) - - 107,745 106,625
Discontinued
operations, net of
tax and minority
interest:
Operating
earnings from
rental
properties 3,916 - - (3,916) -
Gain on
disposition
of rental
properties 103,829 - - (103,829) -
--------------------------------------------------
107,745 - - (107,745) -
--------------------------------------------------
Net earnings $106,625 $- $- $- $106,625
==================================================
(a) Depreciation and
amortization - Real
Estate Groups $124,100 $10,514 $25,912 $9,309 $148,807
(b) Depreciation and
amortization - Non-
Real Estate 932 - 7,273 - 8,205
--------------------------------------------------
Total
depreciation
and
amortization $125,032 $10,514 $33,185 $9,309 $157,012
==================================================
(c) Amortization of
mortgage
procurement costs -
Real Estate Groups $7,815 $900 $860 $323 $8,098
(d) Amortization of
mortgage
procurement costs -
Non-Real Estate 236 1 591 - 826
--------------------------------------------------
Total
amortization of
mortgage
procurement
costs $8,051 $901 $1,451 $323 $8,924
==================================================
(e) Properties accounted for on the equity method do not meet the
definition of a component of an entity under SFAS No. 144; therefore,
are reported in continuing operations when sold. For the nine months
ended October 31, 2007, one equity method property was sold, White
Acres, resulting in a pre-tax gain on disposition of $2,106. For the
nine months ended October 31, 2006, one equity method property was
sold, Midtown Plaza, resulting in a pre-tax gain on disposition of
$7,662.
*T
-0-
*T
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Net Operating Income (dollars in thousands)
-----------------------------------------------------
Three Months Ended October 31, 2007
----------------------------------------------------
Plus
Unconsol- Pro-Rata
Full idated Consol-
Consol- Less Invest- Plus idation
idation Minority ments at Discontinued (Non-
(GAAP) Interest Pro-Rata Operations GAAP)
----------------------------------------------------
Commercial Group
Retail
Comparable $53,863 $6,393 $3,119 $- $50,589
----------------------------------------------------------------
Total 62,239 2,955 6,498 - 65,782
Office
Buildings
Comparable 45,220 5,227 1,034 - 41,027
----------------------------------------------------------------
Total 49,835 2,167 1,658 - 49,326
Hotels
Comparable 5,000 - 491 - 5,491
----------------------------------------------------------------
Total 4,932 43 491 - 5,380
Earnings from
Commercial
Land Sales 6,038 - - - 6,038
Other (2,271) 1,699 (284) - (4,254)
---------------------------------------------------------------------
Total Commercial
Group
Comparable 104,083 11,620 4,644 - 97,107
----------------------------------------------------------------
Total 120,773 6,864 8,363 - 122,272
Residential
Group
Apartments
Comparable 23,325 699 7,474 - 30,100
----------------------------------------------------------------
Total 31,160 773 8,115 2,389 40,891
Military
Housing
Comparable - - - - -
----------------------------------------------------------------
Total 8,707 89 533 - 9,151
Sale of
Residential
Development
Project 7,545 - - - 7,545
---------------------------------------------------------------------
Total
Residential
Group
Comparable 23,325 699 7,474 - 30,100
----------------------------------------------------------------
Total 47,412 862 8,648 2,389 57,587
Total Rental
Properties
Comparable 127,408 12,319 12,118 - 127,207
----------------------------------------------------------------
Total 168,185 7,726 17,011 2,389 179,859
Land Development
Group 2,282 63 204 - 2,423
The Nets (9,576) - 1,927 - (7,649)
Corporate
Activities (11,629) - - - (11,629)
---------------------------------------------------------------------
Grand Total $149,262 $7,789 $19,142 $2,389 $163,004
---------------------------------------------------------------------
Net Operating Income (dollars in thousands)
------------------------------------------------------
Three Months Ended October 31, 2006
-----------------------------------------------------
Plus
Unconsol- Pro-Rata
Full idated Consol-
Consol- Less Invest- Plus idation
idation Minority ments at Discontinued (Non-
(GAAP) Interest Pro-Rata Operations GAAP)
---------------------------------------------------
Commercial
Group
Retail
Comparable $48,054 $5,169 $2,892 $- $45,777
----------------------------------------------------------------
Total 48,763 4,971 2,952 460 47,204
Office
Buildings
Comparable 44,103 5,293 1,010 - 39,820
----------------------------------------------------------------
Total 42,941 5,150 1,010 - 38,801
Hotels
Comparable 4,777 - 494 - 5,271
----------------------------------------------------------------
Total 4,567 - 494 3,891 8,952
Earnings
from
Commercial
Land Sales 7,647 766 - - 6,881
Other (7,444) 968 (42) - (8,454)
---------------------------------------------------------------------
Total
Commercial
Group
Comparable 96,934 10,462 4,396 - 90,868
----------------------------------------------------------------
Total 96,474 11,855 4,414 4,351 93,384
Residential
Group
Apartments
Comparable 22,345 649 6,486 - 28,182
----------------------------------------------------------------
Total 20,036 1,100 7,835 6,739 33,510
Military
Housing
Comparable - - - - -
----------------------------------------------------------------
Total 2,857 - 61 - 2,918
Sale of
Residential
Development
Project - - - - -
---------------------------------------------------------------------
Total
Residential
Group
Comparable 22,345 649 6,486 - 28,182
----------------------------------------------------------------
Total 22,893 1,100 7,896 6,739 36,428
Total Rental
Properties
Comparable 119,279 11,111 10,882 - 119,050
----------------------------------------------------------------
Total 119,367 12,955 12,310 11,090 129,812
Land
Development
Group 14,302 807 171 - 13,666
The Nets (1,342) - 479 - (863)
Corporate
Activities (12,464) - - - (12,464)
---------------------------------------------------------------------
Grand Total $119,863 $13,762 $12,960 $11,090 $130,151
---------------------------------------------------------------------
Net Operating Income (dollars in thousands)
--------------------------------------------
% Change
--------------------------------------------
Full Consolidation Pro-Rata Consolidation
(GAAP) (Non-GAAP)
-------------------------------------------
Commercial Group
Retail
Comparable 12.1% 10.5%
---------------------
Total
Office Buildings
Comparable 2.5% 3.0%
---------------------
Total
Hotels
Comparable 4.7% 4.2%
---------------------
Total
Earnings from
Commercial Land Sales
Other
--------------------------
Total Commercial Group
Comparable 7.4% 6.9%
---------------------
Total
Residential Group
Apartments
Comparable 4.4% 6.8%
---------------------
Total
Military Housing
Comparable
---------------------
Total
Sale of Residential
Development Project
--------------------------
Total Residential Group
Comparable 4.4% 6.8%
---------------------
Total
Total Rental Properties
Comparable 6.8% 6.9%
---------------------
Total
Land Development Group
The Nets
Corporate Activities
--------------------------
Grand Total
--------------------------
*T
-0-
*T
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Net Operating Income (dollars in thousands)
---------------------------------------------------
Nine Months Ended October 31, 2007
---------------------------------------------------
Plus Pro-Rata
Full Unconsol- Plus Consol-
Consol- Less idated Discon- idation
idation Minority Investments tinued (Non-
(GAAP) Interest at Pro-Rata Operations GAAP)
---------------------------------------------------
Commercial Group
Retail
Comparable $157,886 $17,927 $8,240 $- $148,199
-----------------------------------------------------------------
Total 179,693 9,771 18,079 - 188,001
Office Buildings
Comparable 136,290 15,854 3,286 - 123,722
-----------------------------------------------------------------
Total 144,653 8,404 4,827 - 141,076
Hotels
Comparable 13,119 - 1,458 - 14,577
-----------------------------------------------------------------
Total 13,209 141 1,458 - 14,526
Earnings from
Commercial Land
Sales 8,626 930 (28) - 7,668
Other (11,410) 6,318 (596) - (18,324)
----------------------------------------------------------------------
Total Commercial
Group
Comparable 307,295 33,781 12,984 - 286,498
-----------------------------------------------------------------
Total 334,771 25,564 23,740 - 332,947
Residential Group
Apartments
Comparable 67,498 2,084 21,931 - 87,345
-----------------------------------------------------------------
Total 81,941 3,433 30,007 6,467 114,982
Military Housing
Comparable - - - - -
-----------------------------------------------------------------
Total 13,566 - 1,093 - 14,659
Sale of
Residential
Development
Project 17,635 - - - 17,635
----------------------------------------------------------------------
Total Residential
Group
Comparable 67,498 2,084 21,931 - 87,345
-----------------------------------------------------------------
Total 113,142 3,433 31,100 6,467 147,276
Total Rental
Properties
Comparable 374,793 35,865 34,915 - 373,843
-----------------------------------------------------------------
Total 447,913 28,997 54,840 6,467 480,223
Land Development
Group 12,378 797 403 - 11,984
The Nets (15,053) - 2,689 - (12,364)
Corporate
Activities (34,971) - - - (34,971)
----------------------------------------------------------------------
Grand Total $410,267 $29,794 $57,932 $6,467 $444,872
----------------------------------------------------------------------
Net Operating Income (dollars in thousands)
----------------------------------------------------
Nine Months Ended October 31, 2006
----------------------------------------------------
Plus Pro-Rata
Full Unconsol- Plus Consol-
Consol- Less idated Discon- idation
idation Minority Investments tinued (Non-
(GAAP) Interest at Pro-Rata Operations GAAP)
----------------------------------------------------
Commercial Group
Retail
Comparable $144,486 $15,015 $8,686 $- $138,157
-----------------------------------------------------------------
Total 147,784 13,312 9,157 1,808 145,437
Office
Buildings
Comparable 134,017 16,115 3,105 - 121,007
-----------------------------------------------------------------
Total 131,197 16,486 3,105 - 117,816
Hotels
Comparable 11,001 - 1,456 - 12,457
-----------------------------------------------------------------
Total 10,742 - 1,456 11,120 23,318
Earnings from
Commercial
Land Sales 18,196 924 - - 17,272
Other (16,524) 5,292 9 - (21,807)
----------------------------------------------------------------------
Total Commercial
Group
Comparable 289,504 31,130 13,247 - 271,621
-----------------------------------------------------------------
Total 291,395 36,014 13,727 12,928 282,036
Residential Group
Apartments
Comparable 64,817 1,976 19,972 - 82,813
-----------------------------------------------------------------
Total 67,717 2,676 23,394 18,612 107,047
Military
Housing
Comparable - - - - -
-----------------------------------------------------------------
Total 6,476 - 160 - 6,636
Sale of
Residential
Development
Project - - - - -
----------------------------------------------------------------------
Total Residential
Group
Comparable 64,817 1,976 19,972 - 82,813
-----------------------------------------------------------------
Total 74,193 2,676 23,554 18,612 113,683
Total Rental
Properties
Comparable 354,321 33,106 33,219 - 354,434
-----------------------------------------------------------------
Total 365,588 38,690 37,281 31,540 395,719
Land Development
Group 52,279 2,786 660 - 50,153
The Nets (14,084) - 2,811 - (11,273)
Corporate
Activities (30,760) - - - (30,760)
----------------------------------------------------------------------
Grand Total $373,023 $41,476 $40,752 $31,540 $403,839
----------------------------------------------------------------------
Net Operating Income (dollars in thousands)
-------------------------------------------
% Change
-------------------------------------------
Full Consolidation Pro-Rata Consolidation
(GAAP) (Non-GAAP)
-------------------------------------------
Commercial Group
Retail
Comparable 9.3% 7.3%
----------------------
Total
Office Buildings
Comparable 1.7% 2.2%
----------------------
Total
Hotels
Comparable 19.3% 17.0%
----------------------
Total
Earnings from Commercial
Land Sales
Other
---------------------------
Total Commercial Group
Comparable 6.1% 5.5%
----------------------
Total
Residential Group
Apartments
Comparable 4.1% 5.5%
----------------------
Total
Military Housing
Comparable
----------------------
Total
Sale of Residential
Development Project
---------------------------
Total Residential Group
Comparable 4.1% 5.5%
----------------------
Total
Total Rental Properties
Comparable 5.8% 5.5%
----------------------
Total
Land Development Group
The Nets
Corporate Activities
---------------------------
Grand Total
---------------------------
*T
-0-
*T
Development Pipeline
----------------------------------------------------------------------
October 31, 2007
2007 Openings and Acquisitions (10)
Dev Pro-
(D) Date FCE Legal Rata
Acq Opened / Ownership FCE %
Property/ Location (A) Acquired % (h) (h)(1)
----------------------------------------------------------------------
Retail Centers:
Promenade Bolingbrook/ Bolingbrook, IL D Q1-07 100.0% 100.0%
Victoria Gardens - Bass Pro/ Rancho
Cucamonga, CA D Q2-07 80.0% 80.0%
Office:
Colorado Studios/ Denver, CO A Q1-07 90.0% 90.0%
Commerce Court/ Pittsburgh, PA A Q1-07 70.0% 100.0%
Illinois Science and Technology Park -
Building Q/ Skokie, IL A/D Q1-07 100.0% 100.0%
Richmond Office Park/ Richmond, VA A Q2-07 100.0% 100.0%
New York Times/ Manhattan, NY D Q3-07 70.0% 100.0%
Residential:
Stapleton Town Center - Botanica Phase
II/ Denver, CO D Q2-07 90.0% 90.0%
Tobacco Row - Cameron Kinney/ Richmond,
VA A Q2-07 100.0% 100.0%
Condominiums:
Mercury (c)/ Los Angeles, CA D Q2-07 50.0% 50.0%
Total Openings (d)
LESS: Above properties to be sold as
Condominiums
Openings and Acquisitions less
Condominiums
----------------------------------------------------------------------
Residential Phased-In Units (c) (e):
Arbor Glenn/ Twinsburg, OH D 2004-07 50.0% 50.0%
Pine Ridge Expansion/ Willoughby Hills,
OH D 2005-07 50.0% 50.0%
Stratford Crossing/ Wadsworth, OH D 2007-09 50.0% 50.0%
Cobblestone Court/ Painesville, OH D 2006-08 50.0% 50.0%
Total (g)
----------------------------------------------------------------------
See Attached Footnotes
October 31, 2007
2007 Openings and Acquisitions (10)
Cost at
FCE Pro-
Cost at Rata
Full Share
Consol- Total (Non-
idation Cost GAAP) Sq. ft./ Gross
Property/ (GAAP) at 100% (b) No. of Leasable
Location (a) (2) (1) X (2) Units Area
----------------------------------------------------------------------
(in millions)
--------------------------
Retail Centers:
Promenade
Bolingbrook/
Bolingbrook, IL $148.0 $148.0 $148.0 755,000 429,000(f)
Victoria Gardens
- Bass Pro/
Rancho
Cucamonga, CA 41.2 41.2 33.0 180,000 180,000
------------------------------------- -----------
$189.2 $189.2 $181.0 935,000 609,000
---------------------------========== ===========
Office:
Colorado
Studios/
Denver, CO $2.2 $2.2 $2.0 75,000
Commerce Court/
Pittsburgh, PA 26.5 26.5 26.5 378,000
Illinois Science
and Technology
Park - Building
Q/ Skokie, IL 48.3 48.3 48.3 158,000
Richmond Office
Park/ Richmond,
VA 115.0 115.0 115.0 614,000(i)
New York Times/
Manhattan, NY 517.5 517.5 517.5 737,000(j)
-------------------------------------
$709.5 $709.5 $709.3 1,962,000
---------------------------==========
Residential:
Stapleton Town
Center -
Botanica Phase
II/ Denver, CO $26.3 $26.3 $23.7 154
Tobacco Row -
Cameron Kinney/
Richmond, VA 31.0 31.0 31.0 259
-------------------------------------
$57.3 $57.3 $54.7 413
---------------------------==========
Units Sold
at
Condominiums: 10/31/2007
-----------
Mercury (c)/ Los
Angeles, CA $0.0 $157.6 $78.8 238 57
---------------------------==========
--------------------------
Total Openings
(d) $956.0 $1,113.6 $1,023.8
==========================
LESS: Above
properties to
be sold as
Condominiums $0.0 $157.6 $78.8
--------------------------
Openings and
Acquisitions
less
Condominiums $956.0 $956.0 $945.0
==========================
-----------------------------------------------------
Residential
Phased-In Units Opened in '07 /
(c) (e): Total
--------------------
Arbor Glenn/
Twinsburg, OH $0.0 $18.4 $9.2 48/288
Pine Ridge
Expansion/
Willoughby
Hills, OH 0.0 16.4 8.2 40/162
Stratford
Crossing/
Wadsworth, OH 0.0 25.3 12.7 72/348
Cobblestone
Court/
Painesville, OH 0.0 24.6 12.3 96/304
-------------------------------------
Total (g) $0.0 $84.7 $42.4 256/1,102
=====================================
-----------------------------------------------------
See Attached Footnotes
*T
-0-
*T
Development Pipeline
----------------------------------------------------------------------
October 31, 2007
Under Construction (19)
Pro-
Dev Rata
(D) FCE Legal FCE %
Acq Anticipated Ownership (h)
Property/ Location (A) Opening % (h) (1)
----------------------------------------------------------------------
Retail Centers:
Orchard Town Center/ Westminster, CO D Q1-08 100.0% 100.0%
Shops at Wiregrass (c)/ Tampa, FL D Q3-08 50.0% 50.0%
East River Plaza (c)/ Manhattan, NY D Q1-09 35.0% 50.0%
White Oak Village/ Richmond, VA D Q3-08 50.0% 100.0%
Village at Gulfstream (c)/
Hallandale, FL D Q1-09 50.0% 50.0%
Promenade at Temecula Expansion/
Temecula, CA D Q1-09 75.0% 75.0%
Ridge Hill Retail/ Yonkers, NY D Q4-09 70.0% 100.0%
Office:
Johns Hopkins - 855 North Wolfe
Street/ East Baltimore, MD D Q1-08 76.6% 76.6%
Residential:
Lucky Strike/ Richmond, VA D Q1-08 100.0% 100.0%
Uptown Apartments (c)/ Oakland, CA D Q4-07/Q4-08 50.0% 50.0%
Dallas Mercantile/ Dallas, TX D Q1-08/Q3-08 100.0% 100.0%
Haverhill/ Haverhill, MA D Q1-09 100.0% 100.0%
Military Housing
Ohana Military Communities, Hawaii
Increment I (c) (e)/ Honolulu, HI D 2005-2008 10.0% 10.0%
Midwest Millington (c)/ Memphis, TN D Q3-09 25.0% 25.0%
Military Housing - Navy Midwest (c)
(e)/ Chicago, IL D 2006-2009 25.0% 25.0%
Air Force Academy (c) (e)/ Colorado
Springs, CO D 2007-2009 50.0% 50.0%
Military Housing - Marines, Hawaii
Increment II (c) (e)/ Honolulu, HI D 2007-2010 10.0% 10.0%
Military Housing - Navy, Hawaii
Increment III (c) (e)/ Honolulu, HI D 2007-2010 10.0% 10.0%
Navy Northwest (c)/ Seattle, WA A/D 2010 20.0% 20.0%
Total Under Construction (k)
----------------------------------------------------------------------
Residential Phased-In Units (c) (e):
Cobblestone Court/ Painesville, OH D 2006-08 50.0% 50.0%
Sutton Landing/ Brimfield, OH D 2007-08 50.0% 50.0%
Stratford Crossing/ Wadsworth, OH D 2007-09 50.0% 50.0%
Total (l)
----------------------------------------------------------------------
See Attached Footnotes
October 31, 2007
Under Construction (19)
Cost at
FCE Pro-
Cost at Rata
Full Share
Consol- Total (Non-
idation Cost GAAP) Sq. ft./ Gross Pre-
Property/ (GAAP) at 100% (b) No. of Leasable Leased
Location (a) (2) (1) X (2) Units Area %
----------------------------------------------------------------------
(in millions)
--------------------------
Retail
Centers:
Orchard Town
Center/
Westminster,
CO $160.2 $160.2 $160.2 983,000 569,000(m) 58%
Shops at
Wiregrass
(c)/ Tampa,
FL 0.0 148.2 74.1 646,000 356,000 68%
East River
Plaza (c)/
Manhattan,
NY 0.0 396.4 198.2 517,000 517,000 64%
White Oak
Village/
Richmond, VA 70.1 70.1 70.1 796,000 290,000 70%
Village at
Gulfstream
(c)/
Hallandale,
FL 0.0 146.8 73.4 392,000 392,000(n) 17%
Promenade at
Temecula
Expansion/
Temecula, CA 102.5 102.5 76.9 125,000 125,000 39%
Ridge Hill
Retail/
Yonkers, NY 669.0 669.0 669.0 1,244,000 1,244,000(o) 13%
------------------------------------------------
$1,001.8$1,693.2 $1,321.9 4,703,000 3,493,000
--------------------------======================
Office:
------------------------------------
Johns Hopkins
- 855 North
Wolfe
Street/ East
Baltimore,
MD $109.7 $109.7 $84.0 278,000(p) 42%
--------------------------==========
Residential:
Lucky Strike/
Richmond, VA $40.8 $40.8 $40.8 131
Uptown
Apartments
(c)/
Oakland, CA 0.0 201.9 101.0 665
Dallas
Mercantile/
Dallas, TX 142.2 142.2 142.2 366(q)
Haverhill/
Haverhill,
MA 73.6 73.6 73.6 305
------------------------------------
$256.6 $458.5 $357.6 1,467
--------------------------==========
Military
Housing
Ohana
Military
Communities,
Hawaii
Increment I
(c) (e)/
Honolulu, HI $0.0 $316.5 $31.7 1,952
Midwest
Millington
(c)/
Memphis, TN 0.0 80.4 20.1 318
Military
Housing -
Navy Midwest
(c) (e)/
Chicago, IL 0.0 264.7 66.2 1,658
Air Force
Academy (c)
(e)/
Colorado
Springs, CO 0.0 82.5 41.3 427
Military
Housing -
Marines,
Hawaii
Increment II
(c) (e)/
Honolulu, HI 0.0 338.8 33.9 1,175
Military
Housing -
Navy, Hawaii
Increment
III (c) (e)/
Honolulu, HI 0.0 614.6 61.5 2,519
Navy
Northwest
(c)/
Seattle, WA 0.0 264.5 52.9 2,986
------------------------------------
$0.0$1,962.0 $ 307.6 11,035
--------------------------==========
--------------------------
Total Under
Construction
(k) $1,368.1$4,223.4$ 2,071.1
==========================
-------------------------------------------------
Residential
Phased-In
Units (c) Under Const. /
(e): Total
-------------------
Cobblestone
Court/
Painesville,
OH $0.0 $24.6 $12.3 96/304
Sutton
Landing/
Brimfield,
OH 0.0 15.9 8.0 216/216
Stratford
Crossing/
Wadsworth,
OH 0.0 25.3 12.7 108/348
------------------------------------
Total (l) $0.0 $65.8 $33.0 420/868
====================================
-------------------------------------------------
See Attached Footnotes
*T
-0-
*T
Development Pipeline
----------------------------------------------------------------------
2007 FOOTNOTES
----------------------------------------------------------------------
( a ) Amounts are presented on the full consolidation method of
accounting, a GAAP measure. Under full consolidation, costs are
reported as consolidated at 100 percent if we are deemed to
have control or to be the primary beneficiary of our
investments in the variable interest entity ("VIE").
( b ) Cost at pro-rata share represents Forest City's share of cost,
based on the Company's pro-rata ownership of each property (a
non-GAAP measure). Under the pro-rata consolidation method of
accounting the Company determines its pro-rata share by
multiplying its pro-rata ownership by the total cost of the
applicable property.
( c ) Reported under the equity method of accounting. This method
represents a GAAP measure for investments in which the Company
is not deemed to have control or to be the primary beneficiary
of our investments in a VIE.
( d ) The difference between the full consolidation cost amount (GAAP)
of $956.0 million to the Company's pro-rata share (a non-GAAP
measure) of $1,023.8 million consists of a reduction to full
consolidation for minority interest of $11.0 million of cost
and the addition of its share of cost for unconsolidated
investments of $78.8 million.
( e ) Phased-in openings. Costs are representative of the total
project.
( f ) Includes 39,000 square feet of office space.
( g ) The difference between the full consolidation cost amount (GAAP)
of $0.0 million to the Company's pro-rata share (a non-GAAP
measure) of $42.4 million consists of the Company's share of
cost for unconsolidated investments of $42.4 million.
( h ) As is customary within the real estate industry, the Company
invests in certain real estate projects through joint ventures.
For some of these projects, the Company provides funding at
percentages that differ from the Company's legal ownership.
( i ) Includes 11 office buildings.
( j ) Includes 23,000 square feet of retail space.
( k ) The difference between the full consolidation cost amount (GAAP)
of $1,368.1 million to the Company's pro-rata share (a non-GAAP
measure) of $2,071.1 million consists of a reduction to full
consolidation for minority interest of $51.3 million of cost
and the addition of its share of cost for unconsolidated
investments of $754.3 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 $33.0 million consists of Forest City's share of
cost for unconsolidated investments of $33.0 million.
( m ) Includes 177,000 square feet for Target and 97,000 square feet
for JC Penney that opened in Q3-06, as well as 16,000 square
feet of office space.
( n ) Includes 67,000 square feet of office space.
( o ) Includes 156,000 square feet of office space.
( p ) Includes 22,000 square feet of retail space.
( q ) Includes 18,000 square feet of retail space.
*T
Forest City Enterprises, Inc.
At The Company
Thomas G. Smith, Executive Vice President,
Chief Financial Officer, 216-621-6060
or
Thomas T. Kmiecik, Assistant Treasurer, 216-621-6060
or
On The Web:
www.forestcity.net
Copyright Business Wire 2007
