Forest City Reports Fiscal 2012 Fourth-Quarter and Full-Year Results

     Forest City Reports Fiscal 2012 Fourth-Quarter and Full-Year Results

Full-year FFO, Operating FFO up over prior year

Solid progress on strategies: core markets/products, sustainable capital,
operational excellence

Core portfolio, particularly multifamily, showed strength throughout 2012

New project starts focus on robust demand in multifamily

Completed sale of substantially all land held for divestiture

PR Newswire

CLEVELAND, March 27, 2013

CLEVELAND, March 27, 2013 /PRNewswire/ -- Forest City Enterprises, Inc. (NYSE:
FCEA and FCEB) today announced FFO (funds from operations), Operating FFO, net
earnings/loss and revenues for the fourth quarter and full year ended January
31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20080515/FRSTCTYLOGO )

FFO

Fourth-quarter FFO was $77.5 million, compared with a loss of $40.7 million in
the fourth quarter of 2011. On a fully diluted, per-share basis,
fourth-quarter 2012 FFO was $0.36, compared with a per-share loss of $0.24 in
2011.

Full-year 2012 FFO was $267.4 million, or $1.27 per share, compared with
$178.2 million, or $0.88 per share for 2011. The primary factor contributing
to the year-over-year FFO variance was a decrease in the net loss on land held
for divestiture activities of $123.8 million ($75.8 million net of tax)
related to the company's 2011 decision to divest a significant portion of its
land development business. A full description of factors impacting FFO and
FFO per share for the fourth quarter and full year 2012 is included in the
company's 2012 Supplemental Package furnished to the SEC and available on the
company's website, www.forestcity.net.

FFO and FFO per share are non-GAAP measures commonly used by publicly traded
real estate companies. Included with this press release is a table reconciling
FFO to net earnings (loss), the most comparable GAAP measure.

Operating FFO

In an effort to provide investors with additional information about its core
operations, the company initiated reporting Operating FFO in the second
quarter of 2012. Operating FFO is a non-GAAP measure derived from FFO.
Included with this press release is a table reconciling Operating FFO to FFO.

Fourth-quarter Operating FFO was $41.9 million, compared with fourth-quarter
2011 Operating FFO of $52.4 million. Full-year 2012 Operating FFO was $234.7
million, compared with $227.5 million for fiscal 2011. For additional
explanation of factors impacting Operating FFO variances, see the section
titled "Review of Results" in this press release.

Net Earnings/Loss

Fourth-quarter net earnings attributable to Forest City Enterprises, Inc. were
$58.5 million, compared with a net loss of $105.4 million in the fourth
quarter of 2011. Net earnings for the fiscal year ended January 31, 2013 were
$36.4 million, compared with a net loss of $86.5 million for fiscal 2011.

The company's reported net earnings/loss are impacted by a variety of factors,
including transactions which can create substantial variances in net
earnings/loss between reporting periods. For 2012, the primary factor
impacting the year-over-year variance in net earnings was a decrease in the
net loss on land held for divestiture activities of $123.8 million ($75.8
million net of tax) related to the company's 2011 decision to divest a
significant portion of its land development business. A full description of
factors impacting net earnings/loss is included in the company's 2012
Supplemental Package furnished to the SEC and available on the company's
website.

After preferred stock dividends and inducements related to an exchange
transaction involving preferred stock, fourth-quarter net earnings
attributable to Forest City Enterprises, Inc. common shareholders were $51.8
million, or $0.25 per share, compared with a net loss of $109.2 million, or
$0.65 pershare, for the fourth quarter of 2011. For all of fiscal 2012, net
earnings attributable to common shareholders, after preferred dividends and
inducements related to two separate exchange transactions involving preferred
stock in the third and fourth quarters, were $4.3 million, or $0.02 per share,
compared with a net loss of $101.9 million, or $0.61 per share, in 2011.
Per-share amounts are on a fully diluted basis.

Revenues

Fourth-quarter 2012 consolidated revenues from real estate operations
increased to $305.9 million, from $271.8 million in the fourth quarter of
fiscal 2011. For the full year, 2012 consolidated revenues from real estate
operations were $1.13 billion, compared with $1.05 billion in the prior year.

Commentary

"We're pleased with our results for 2012, which reflect the ongoing execution
of our strategic plan," said David J. LaRue, Forest City president and chief
executive officer. "We have made solid progress on each of the drivers of our
plan: building a strong, sustaining capital structure, focusing on core
markets and core products, and pursuing operational excellence.

"We made significant progress during 2012 in our strategy of building a strong
sustaining capital structure, deleveraging our balance sheet and improving our
debt metrics. We created a strategic capital partnership with the Arizona
State Retirement System for a $400 million multifamily development fund,
initially targeting five of our core markets. We brought TIAA-CREF into our
partnership at 8 Spruce Street in Manhattan, a transaction that generated $129
million in proceeds to Forest City. We exchanged 4.2 million shares of our
preferred stock for common stock and cash, and recently completed redemption
of the remaining outstanding preferred. We redeemed $125 million of our
7.625% Senior Notes due 2015 and expect to complete redemption of the
remaining 2015 notes by the end of March. Finally, as we recently announced,
we negotiated and closed a new, three-year $465 million revolving credit
facility with improved pricing and more flexible, favorable terms.

"In the area of core products and markets, our rental properties portfolio
continued to perform well in 2012, particularly our multifamily properties,
which experienced significant gains in comparable property net operating
income in each quarter. We also opened four properties in three of our core
markets: New York City, Washington, D.C. and Denver. During the year, we
commenced development of seven new projects, six of them multifamily, as we
take advantage of demand for rental apartments. We disposed of 12 non-core
operating properties during 2012, generating cash liquidity of $128.8 million.
In addition, as part of our focus on core rental properties, we successfully
completed the sale of substantially all of our land held for disposition, a
strategic decision we announced at the beginning of 2012.

"Lastly, in our pursuit of operational excellence, we made important strides
during 2012, including a major process improvement and efficiency initiative,
enhanced companywide procurement procedures and systems, and enhanced energy
management practices. Collectively these initiatives have generated gross
savings to date of approximately $19 million, benefiting our tenants, our
partners, and Forest City. In addition, we made strategic investments in our
mature portfolio during 2012, including a major renovation of Charleston Town
Center, our market-dominant regional mall in Charleston, West Virginia. These
initiatives are already resulting in significant cost savings, operating
efficiencies and improved customer experience."

Review of Results

Full year 2012 Operating FFO was $234.7 million, compared with $227.5 million
in 2011.

Operating FFO from the company's Real Estate portfolio increased $11.9 million
for 2012. The primary factors impacting the increase included increased NOI
from the mature portfolio of $18.4 million, lower interest expense on the
mature portfolio of $16.6 million, increased Operating FFO of $11.0 million
from the change in fair market value of derivatives between the comparable
periods which were marked to market through interest expense, increased sales
from our Land Group projects, primarily at Stapleton, of $9.5 million, and the
ramp-up of new properties of $8.1 million. These increases from the portfolio
were partially offset by reduced capitalized interest on projects under
construction and development, including land development, of $35.5 million,
reduced Operating FFO from properties sold of $9.1 million, and non-recurring
2011 lease cancellation fee income of $6.5 million at two Brooklyn office
properties.

Corporate Operating FFO decreased $4.7 million, due to increased interest
expense of $4.5 million, primarily related to certain senior notes, offset by
lower average borrowings on the bank revolving credit facility.

A full description of factors impacting Operating FFO for the full year and
fourth quarter of 2012 is included in the company's 2012 Supplemental Package
furnished to the SEC and available on the company's website.

NOI, Occupancies and Rent

Overall comparable property net operating income (Comp NOI) increased 3.0
percent during the fourth quarter, compared with the same period in 2011, with
increases of 6.4 percent in apartments, 2.8 percent in retail, and 1.2 percent
in office. Overall Comp NOI for the full year was up 3.2 percent, with
increases of 7.3 percent in apartments, 2.1 percent in retail and 2.1 percent
in office, compared with full-year 2011 results.

At January 31, 2013, comparable retail occupancies were 91.3 percent, compared
with 91.4 percent at yearend 2011. Sales in the company's regional malls
averaged $470 per square foot on a rolling 12-month basis, a 6.1 percent
increase compared with the same period in 2011. On a rolling 12-month basis,
new, same-space leases in the company's regional malls increased 11.3 percent
over prior rents.

In the residential portfolio, comparable average occupancies for the year
ended January 31, 2013, were 94.7 percent, up from 94.5 percent last year.
Average monthly residential rents in the company's comparable apartments in
its core markets were $1,597 for the year, a 5.3 percent increase from 2011.
Average monthly rents across all of Forest City's comparable apartments rose
4.7 percent, compared with the prior year.

Comparable office occupancies were 89.5 percent as of January 31, 2013,
compared with 90.7 percent at the end of 2011. On a rolling 12-month basis,
rent per square foot in new office leases decreased 2.8 percent over expiring
leases. The decline in office rent per square foot for new office leases was
primarily driven by the timing of a lease expiration at the company's
University Park at MIT life science office park in Cambridge.

Comparable property NOI, defined as NOI from properties operated in the three
months and full year ended January 31, 2013 and 2012, 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 are schedules that present
comparable property NOI on the full-consolidation method and a reconciliation
of NOI to net earnings (loss).

Debt Maturities, Financing Activity and Liquidity

During fiscal 2012, the company addressed, through closed loans and committed
financings, $1.3 billion ($1.5 billion at the company's pro-rata share) of
financing maturing during the year (including $104 million of amortization).
Additionally, during 2012, the company addressed $81.1 million ($312.0 million
at pro-rata) of loans maturing in future years.

Since January 31, 2013, the company has addressed, through closed loans and
committed financings, $117.0 million at full consolidation ($98.3 million at
its pro-rata share) of the $783.1 million ($938.2 million at pro-rata) of
long-term debt maturities coming due in fiscal year 2013.

In financing its real estate assets, the company uses nonrecourse mortgage
debt at the property level and seeks to fix interest rates on its mortgage
debt through long-term financings in order to take advantage of historically
low interest rates in the current environment.For fiscal 2012, the company's
overall weighted-average cost of debt decreased to 5.04 percent, compared with
5.05 percentat January 31, 2012. Fixed-rate debt represented 83 percent of
total debt at January 31, 2013. The company's weighted-average life of its
debt increased to 7.0 years at January 31, 2013, from 5.9 years at January 31,
2012.

At January 31, 2013, the company had $333.2 million ($364.9 million at its
pro-rata share) in cash on its balance sheet and $382.5 million of available
capacity on its revolving bank line of credit.

2012 Openings and Projects Under Construction

During 2012, Forest City opened four new properties in three of its core
markets: New York City, Washington, D.C., and Denver. As of January 31, 2013,
the company had eight projects under construction at a total cost of $535.6
million ($597.3 million at the company's pro-rata share). This compares with
projects totaling $1.0 billion ($434.8 million at the company's pro-rata
share) at January 31, 2012.

The largest of the 2012 openings was Barclays Center arena, an anchor element
of the Atlantic Yards mixed-use project in Brooklyn. Home of the NBA Brooklyn
Nets, Barclays Center opened in September and has already welcomed
approximately 1.4 million visitors for concerts, professional and collegiate
sports, family entertainment and other events. In October, Forest City
announced that the NHL New York Islanders will play their home games at the
arena beginning in the 2015-16 season. Eighty-two percent of forecasted
contractually obligated revenues for the arena are currently in place and
day-of-event revenues (including single-ticket sales and concessions) have
been in line with expectations to date.

During the fourth quarter, the company began construction on B2 BKLYN, the
first residential tower at Atlantic Yards, adjacent to Barclays Center. The
32-story tower will have 363 units, half of which will be reserved for low,
moderate and middle income households. B2 BKLYN will be built using a modular
construction process in partnership with Skanska USA, the U.S.-based unit of
one of the world's largest construction groups and an international leader in
prefabricated building components. The company anticipates that the modular
approach will contribute to greater construction efficiencies as it moves
forward with future properties at Atlantic Yards. Production of the modules is
expected to begin by mid-summer at a 100,000-square-foot facility in the
Brooklyn Navy Yard, with delivery to the site thereafter. B2 BKLYN is expected
to be the first development project to receive an equity investment from
Forest City's strategic capital partnership with the Arizona State Retirement
System.

At The Yards in Washington, D.C., Forest City opened Boilermaker Shops, a
39,000-square-foot, mixed-use, office/retail property during the fourth
quarter. Boilermaker Shops, which is 63 percent leased, joins the 170-unit
Foundry Lofts apartment property and a beautiful waterfront public park as the
initial completed elements of The Yards. Two additional properties at The
Yards are currently under construction. The first is Lumber Shed, a
32,000-square-foot, adaptive-reuse office building with street-level retail,
which is expected to open in the third quarter of 2013. The other is
Twelve12, a mixed-use project with 218 rental apartments above a
50,000-square-foot Harris Teeter grocery store and a 28,000-square-foot Vida
Fitness facility. Twelve12 is expected to open in the third quarter of 2014.

At Stapleton in Denver, the company opened two new multifamily properties in
2012. In the first quarter, the 85-unit first phase of Aster Town Center
opened and is 91 percent leased. At the beginning of the third quarter, the
first phase of Botanica Eastbridge, a 118-unit apartment community opened and
is 53 percent leased. 

In 2011, a new interchange opened on Interstate 70 in Denver that greatly
enhances access to Stapleton, particularly the northern portion of the
project, opening the area for additional development. During the fourth
quarter, the company began construction on Aster Northfield a new, 352-unit
multifamily project at Stapleton and the first multifamily project to be
constructed north of I-70.

2012 marked the tenth anniversary of the first residents moving into
Stapleton. Today, this 4,700-acre, mixed-use community is home to an
estimated 15,000 residents and includes 4,700 homes, 779 rental apartments,
2.1 million square feet of retail, nearly 400,000 square feet of office space,
1.2 million square feet of flex/R&D space, 8 schools, and 800 acres of parks,
open space and trails. Of the total acreage designated for development at
Stapleton, Forest City has acquired approximately 1,800 acres to date, with
1,142 acres remaining for future development.

After the end of the fiscal year, construction was completed and the company
opened the Continental Building, a 203-unit, adaptive-reuse apartment
community in downtown Dallas at the Mercantile Place on Main development.
First residents' move-ins occurred in March 2013. The Continental Building
brings the number of Forest City's completed rental apartments in downtown
Dallas to more than 700. During the fourth quarter, the company began
construction on West Village, a new, 381-unit multifamily project in the
Uptown area of Dallas. Initial phased opening of West Village is expected in
the third quarter of 2014.

In Boston, construction continues on 120 Kingston, a 240-unit apartment
building. The project is located on the Rose Kennedy Greenway near the border
of the city's financial district and Chinatown neighborhoods, and is expected
to be completed in the second quarter of 2014.

Construction also continues on Stratford Avenue, a 128-unit multifamily
project in Fairfield, Connecticut. Completion is expected in late 2013.

Outlook

"We are pleased with our results for the full year and fourth quarter of 2012,
which continue to demonstrate the strength of our portfolio," said LaRue. "As
we look to 2013 and beyond, we will continue to execute our strategic plan by
further improving our balance sheet and debt metrics, focusing on our core
markets and products, and pursuing operational excellence throughout our
business.

"We recognize there is more to be done, and there will be challenges to
overcome, both in our business and in the macro environment, but we are
confident in our value-creation model and our ability to execute against our
strategies while remaining flexible to new opportunities. We are building a
stronger company, one that is able to take advantage of a range of options to
deploy capital and create value for shareholders, business partners,
communities and our associates."

Corporate Description

Forest City Enterprises, Inc. is an NYSE-listed national real estate company
with $10.6 billion in total assets. 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.

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 SEC on Form 8-K. This Supplemental Package includes operating
and financial information for the three months and year ended January 31,
2013, with reconciliations of non-GAAP financial measures, such as FFO,
Operating FFO, EBDT, comparable NOI and results prepared using the pro-rata
consolidation method, to their most directly comparable GAAP financial
measures.

FFO

The company uses FFO, along with EBDT and net earnings (loss) to report its
operating results. The majority of the company's peers in the publically
traded real estate industry are Real Estate Investment Trusts ("REITs") and
report operations using FFO as defined by the National Association of Real
Estate Investment Trusts ("NAREIT"). FFO provides supplemental information
about the company's operations. Although FFO is not presented in accordance
with GAAP, the company believes it is necessary to understand its business and
operating results, along with net earnings, the most comparable GAAP measure.

FFO is defined by NAREIT as net earnings excluding the following items: i)
gain (loss) on disposition of rental properties, divisions and other
investments (net of tax); ii) non-cash charges for real estate depreciation
and amortization; iii) impairment of depreciable real estate (net of tax); iv)
extraordinary items (net of tax); and v) cumulative or retrospective effect of
change in accounting principle (net of tax). FFO is reconciled to net earnings
(loss), the most comparable financial measure calculated in accordance with
GAAP, in the table titled Reconciliation of FFO and EBDT to Net Earnings/Loss
below and in the company's Supplemental Package, which the company will also
furnish to the SEC on Form 8-K.

Operating FFO

Operating FFO is defined as FFO, as defined by NAREIT, adjusted to exclude: i)
activity related to our land held for divestiture (including impairment
charges); ii) impairment of Land Group projects; iii) write-offs of abandoned
development projects; iv) income recognized on state and federal historic and
other tax credits; v) gains or losses from extinguishment of debt; vi) gains
or losses on change in control of interests; vii) the adjustment to recognize
rental revenues and rental expense using the straight-line method; viii) other
non-recurring items such as income generated from the casino land sale; ix)
the Nets pre-tax FFO; and x) income taxes on FFO. The company believes its
presentation of FFO and Operating FFO provides important supplemental
information to its investors.

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.

NOI

NOI, a non-GAAP measure, is defined as revenues (excluding straight-line rent
adjustments) less operating expenses (including depreciation and amortization
for non-real estate groups) plus interest income plus equity in earnings
(loss) of unconsolidated entities (excluding gain on disposition and
impairment of unconsolidated entities) plus interest expense, gain (loss) on
extinguishment of debt, depreciation and amortization of unconsolidated
entities. We believe NOI provides us, as well as our investors, additional
information about our core business operations and, along with earnings, is
necessary to understand our business and operating results.

Safe Harbor Language

Statements made in this news release that state the company's or management's
intentions, hopes, beliefs, expectations or predictions of the future are
forward-looking statements. The company's actual results could differ
materially from those expressed or implied in such forward-looking statements
due to various risks, uncertainties and other factors. Risks and factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, the impact of
current lending and capital market conditions on its liquidity, ability to
finance or refinance projects and repay its debt, the impact of the current
economic environment on its ownership, development and management of its
commercial real estate portfolio, general real estate investment and
development risks, using and investing in modular construction as a new
construction methodology, vacancies in its 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 of owning and
operating an arena, risks associated with an investment in a professional
sports team, its substantial debt leverage and the ability to obtain and
service debt, the impact of restrictions imposed by its 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, effects of a downgrade or failure of its insurance carriers,
environmental liabilities, conflicts of interest, risks associated with the
sale of tax credits, risks associated with developing and managing properties
in partnership with others, the ability to maintain effective internal
controls, compliance with governmental regulations, increased legislative and
regulatory scrutiny of the financial services industry, changes in federal,
state or local tax laws, volatility in the market price of its publicly traded
securities, inflation risks, litigation risks, cybersecurity risks and cyber
incidents, 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.



Reconciliation of FFO and EBDT to Net Earnings (Loss)
                  Three Months Ended   Three Months Ended    Year Ended           Year Ended
                  January 31, 2013     January 31, 2012      January 31, 2013     January 31, 2012
                  FFO       EBDT       FFO       EBDT        FFO       EBDT       FFO       EBDT
                  (in thousands)
Net earnings
(loss)            $     $      $     $       $     $      $     $    
attributable to                                                          
Forest City       58,468   58,468     (105,386) (105,386)  36,425   36,425    (86,486) (86,486)
Enterprises, Inc.
Depreciation and
Amortization—Real 85,001    85,001     72,642    72,642      301,437   301,437    281,704   281,704
Estate Groups
Impairment of
depreciable       —         —          1,095     1,095       35,304    35,304     54,211    54,211
rental properties
Gain on
disposition of
rental properties (107,681) (107,681)  (14,114)  (14,114)    (151,001) (151,001)  (82,028)  (82,028)
and partial
interests in
rental properties
Income tax
expense (benefit)
adjustments —
current and
deferred ^(1)
Gain on
disposition of
rental properties 41,761    41,761     5,473     5,473       58,935    58,935     31,812    31,812
and partial
interests in
rental properties
Impairment of
depreciable       —         —          (424)     (424)       (13,692)  (13,692)   (21,024)  (21,024)
rental properties
Straight-line     —         (3,442)    —         (4,213)     —         (15,159)   —         (7,208)
rent adjustments
Net gain on
change in control —         —          —         —           —         (4,064)    —         —
of interests
Net (gain) loss
on land held for  —         (18,112)   —         153,363     —         33,463     —         157,313
divestiture
activity
Amortization of
mortgage
procurement       —         3,652      —         3,571       —         14,992     —         14,670
costs—Real Estate
Groups
Preference        —         —          —         (24)        —         —          —         1,732
payment
Allowance for
projects under    —         —          —         1,000       —         —          —         (1,000)
development
revision
Income tax
expense (benefit)
adjustments —
current and
deferred ^(1)
Deferred income
tax expense
(benefit) on      —         (5,597)    —         5,321       —         12,058     —         51,699
operating
earnings
Net gain (loss)
on land held for  —         7,025      —         (59,479)    —         (12,978)   —         (61,011)
divestiture
activity
Net gain on
change in control —         —          —         —           —         1,576      —         —
of interests
                  $     $      $     $       $     $      $     $    
FFO/EBDT                                                                
                  77,549   61,075     (40,714)  58,825     267,408  297,296   178,189  334,384
(1) The
following table
provides detail
of Income Tax
Expense
(Benefit):
                  Three Months Ended                         Years Ended January
                  January 31,                                31,
                  2013      2012                             2013      2012
                  (in thousands)                             (in thousands)
Current taxes
Operating         $     $                            $     $    
earnings                  (10,257)                        (13,483) (48,160)
                  (4,271)
Gain on
disposition of
rental properties 22,589    (935)                            857       38,244
and partial
interests in
rental properties
Net gain (loss)
on land held for  (29,869)  —                                (46,168)  —
divestiture
activity
Subtotal          (11,551)  (11,192)                         (58,794)  (9,916)
Discontinued
operations
Operating         (120)     (102)                            212       15
earnings
Gain on
disposition of
rental properties 40,146    8,948                            61,738    11,740
and partial
interests in
rental properties
Subtotal          40,026    8,846                            61,950    11,755
Total Current     28,475    (2,346)                          3,156     1,839
taxes
Deferred taxes
Operating         (5,592)   5,281                            12,182    51,140
earnings
Gain on
disposition of
rental properties (14,282)  1,544                            12,684    (28,185)
and partial
interests in
rental properties
Impairment of
depreciable       —         (424)                            (12,042)  (15,714)
rental properties
Net gain (loss)
on land held for  36,894    (59,479)                         33,190    (61,011)
divestiture
activity
Net gain on
change in control —         —                                1,576     —
of interests
Subtotal          17,020    (53,078)                         47,590    (53,770)
Discontinued
operations
Operating         (5)       40                               (124)     559
earnings
Gain on
disposition of
rental properties (6,692)   (4,084)                          (16,344)  10,013
and partial
interests in
rental properties
Impairment of     —         —                                (1,650)   (5,310)
real estate
Subtotal          (6,697)   (4,044)                          (18,118)  5,262
Total Deferred    10,323    (57,122)                         29,472    (48,508)
taxes
                  $     $                            $     $    
Grand Total               (59,468)                         32,628  (46,669)
                  38,798



Reconciliation of Operating FFO to FFO
Pro-Rata              Three Months Ended            Years Ended January
Consolidation         January 31,                   31,
                      2013      2012      % Change  2013      2012      %
                                                                        Change
                      (in thousands)                (in thousands)
Portfolio Pre-tax
FFO:
                      $     $               $     $    
Commercial Group                                    
                      31,388    58,021            266,656  311,912
Residential Group     30,436    27,026              126,983   97,973
Arena                 (174)     1,525               4,716     8,197
Land Group            24,145    (148,930)           (22,782)  (149,061)
Adjustments to
Portfolio Pre-Tax
FFO:
Net loss (gain) on
land held for         (18,112)  153,363             33,463    157,313
divestiture activity
Abandoned
development project   12,821    907                 26,575    8,838
write-offs
Tax credit income     (5,585)   (4,009)             (22,317)  (28,793)
(Gain) loss on
extinguishment of     (354)     (236)               (7,529)   (18,383)
portfolio debt
Net gain on change
in control of         —         —                   (4,064)   —
interests
Straight-line rent    (3,442)   (4,213)             (15,159)  (7,208)
adjustments
Casino land sale      —         —                   (36,484)  (42,622)
Adjustments to
Portfolio Pre-Tax     (14,672)  145,812             (25,515)  69,145
FFO subtotal
Portfolio Pre-tax     71,123    83,454    (14.8)%   350,058   338,166   3.5 %
Operating FFO
Corporate Group       (29,244)  (31,028)            (116,108) (121,475)
Pre-tax FFO
Loss on
extinguishment of     —         —                   789       10,800
debt - Corporate
Group
Operating FFO         41,879    52,426    (20.1)%   234,739   227,491   3.2 %
Nets Pre-tax FFO      18,035    (11,845)            (4,672)   (26,814)
Add back adjustments
to Portfolio Pre-Tax  14,672    (145,812)           25,515    (69,145)
FFO above
Add back loss on
extinguishment of     —         —                   (789)     (10,800)
debt - Corporate
Group
Income tax benefit    2,963     64,517              12,615    57,457
(expense) on FFO
                      $     $               $     $    
FFO                             290.5 %              50.1 %
                      77,549   (40,714)           267,408  178,189



Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (Loss) (GAAP) (in thousands)
                  Three Months Ended January 31, 2013                                     Three Months Ended January 31, 2012
                  Full          Less           Plus           Plus         Pro-Rata       Full          Less           Plus           Plus         Pro-Rata
                  Consolidation Noncontrolling Unconsolidated Discontinued Consolidation  Consolidation Noncontrolling Unconsolidated Discontinued Consolidation
                  (GAAP)        Interest       Investments at Operations   (Non-GAAP)     (GAAP)        Interest       Investments at Operations   (Non-GAAP)
                                               Pro-Rata                                                                Pro-Rata
Net operating     $           $          $        $        $           $           $          $        $         $  
income            169,428      9,546          —            1,291        161,173        133,672      4,061          —            5,487       135,098
Interest expense  (84,594)      (7,077)        (26,493)       (833)        (104,843)      (61,305)      (2,788)        (26,457)       (2,894)      (87,868)
Interest expense
of unconsolidated (26,493)      —              26,493         —            —              (26,457)      —              26,457         —            —
entities
Gain (loss) on
extinguishment of (192)         —              818            (272)        354            256           134            114            —            236
debt
Gain on
extinguishment of
debt of           818           —              (818)          —            —              114           —              (114)          —            —
unconsolidated
entities
Equity in
(earnings) loss
of unconsolidated (62,564)      (87)           43,661         —            (18,816)       43,402        413            (31,469)       —            11,520
entities,
including
impairment
Net gain (loss)
on land held for  12,131        (4,588)        1,393          —            18,112         (113,804)     (243)          (39,802)       —            (153,363)
divestiture
activity
Net gain (loss)
on land held for
divestiture       1,393         —              (1,393)        —            —              (39,802)      —              39,802         —            —
activity of
unconsolidated
entities
Net gain on
disposition of
rental properties —             —              34,959         72,722       107,681        2,255         —              —              11,859       14,114
and partial
interests in
rental properties
Gain on
disposition of    34,959        —              (34,959)       —            —              —             —              —              —            —
unconsolidated
entities
Impairment of
consolidated and  —             —              —              —            —              —             —              (1,095)        —            (1,095)
unconsolidated
real estate
Impairment of
unconsolidated    —             —              —              —            —              (1,095)       —              1,095          —            —
real estate
Depreciation and
amortization—Real (68,868)      (4,157)        (19,842)       (448)        (85,001)       (50,393)      (714)          (20,131)       (2,832)      (72,642)
Estate Groups (a)
Amortization of
mortgage
procurement       (3,128)       (223)          (740)          (7)          (3,652)        (2,596)       (86)           (858)          (203)        (3,571)
costs—Real Estate
Groups
Depreciation and
amortization of   (20,582)      —              20,582         —            —              (20,989)      —              20,989         —            —
unconsolidated
entities
Straight-line     3,494         —              —              (52)         3,442          4,208         —              —              5            4,213
rent adjustment
Preference        —             —              —              —            —              24            —              —              —            24
payment
Earnings (loss)
before income     (44,198)      (6,586)        43,661         72,401       78,450         (132,510)     777            (31,469)       11,422       (153,334)
taxes
Income tax        (5,469)       —              —              (33,329)     (38,798)       64,270        —              —              (4,802)      59,468
benefit (expense)
Equity in
earnings (loss)
of unconsolidated
entities,         61,171        87             (42,268)       —            18,816         (3,600)       (413)          (8,333)        —            (11,520)
including
impairment of
depreciable real
estate
Net gain (loss)
on land held for
divestiture       1,393         —              (1,393)        —            —              (39,802)      —              39,802         —            —
activity of
unconsolidated
entities
                  62,564        87             (43,661)       —            18,816         (43,402)      (413)          31,469         —            (11,520)
Earnings (loss)
from continuing   12,897        (6,499)        —              39,072       58,468         (111,642)     364            —              6,620        (105,386)
operations
Discontinued
operations, net   39,132        60             —              (39,072)     —              6,078         (542)          —              (6,620)      —
of tax
Net earnings      52,029        (6,439)        —              —            58,468         (105,564)     (178)          —              —            (105,386)
(loss)
Noncontrolling
interests
(Earnings) loss
from continuing
operations        6,499         6,499          —              —            —              (364)         (364)          —              —            —
attributable to
noncontrolling
interests
(Earnings) loss
from discontinued
operations        (60)          (60)           —              —            —              542           542            —              —            —
attributable to
noncontrolling
interests
                  6,439         6,439          —              —            —              178           178            —              —            —
Net earnings
(loss)            $          $        $        $       $           $            $        $        $       $ 
attributable to   58,468        —             —            —           58,468         (105,386)     —             —            —           (105,386)
Forest City
Enterprises, Inc.
Preferred
dividends and
inducements of    (6,698)       —              —              —            (6,698)        (3,850)       —              —              —            (3,850)
preferred stock
conversion
Net earnings
(loss)
attributable to   $          $        $        $       $           $            $        $        $       $ 
Forest City       51,770        —             —            —           51,770        (109,236)     —             —            —           (109,236)
Enterprises, Inc.
common
shareholders
(a) Depreciation
and amortization  $          $          $           $        $           $          $        $           $         $   
- Real Estate     68,868       4,157         19,842        448         85,001        50,393       714            20,131        2,832        72,642
Groups
 Depreciation
and amortization  1,132         —              —              —            1,132          847           —              —              —            847
- Non-Real Estate
Total             $          $          $           $        $           $          $        $           $         $   
depreciation and  70,000       4,157         19,842        448         86,133        51,240       714            20,131        2,832        73,489
amortization



Reconciliation of Net Operating Income (non-GAAP) to Net Earnings (Loss) (GAAP) (in
thousands)
                      Year Ended January 31, 2013                                             Year Ended January 31, 2012
                      Full          Less           Plus           Plus         Pro-Rata       Full          Less           Plus           Plus         Pro-Rata
                      Consolidation Noncontrolling Unconsolidated Discontinued Consolidation  Consolidation Noncontrolling Unconsolidated Discontinued Consolidation
                      (GAAP)        Interest       Investments at Operations   (Non-GAAP)     (GAAP)        Interest       Investments at Operations   (Non-GAAP)
                                                   Pro-Rata                                                                Pro-Rata
Net operating income  $   648,885 $           $        $         $   640,003  $   622,299 $          $        $          $  
                                    23,092         —            14,210                                    18,037          —            27,523      631,785
Interest expense      (269,229)     (16,485)       (102,723)      (7,251)      (362,718)      (249,799)     (11,713)       (100,958)      (13,085)     (352,129)
Interest expense of
unconsolidated        (102,723)     —              102,723        —            —              (100,958)     —              100,958        —            —
entities
Gain (loss) on
extinguishment of     7,096         (603)          (495)          (464)        6,740          9,590         1,641          (366)          —            7,583
debt
Loss on
extinguishment of
debt of               (495)         —              495            —            —              (366)         —              366            —            —
unconsolidated
entities
Equity in (earnings)
loss of
unconsolidated        (44,631)      (347)          45,074         —            790            61,039        185            (34,545)       —            26,309
entities, including
impairment
Net gain (loss) on
land held for         6,480         (834)          (40,777)       —            (33,463)       (115,654)     (243)          (41,902)       —            (157,313)
divestiture activity
Net loss on land held
for divestiture
activity of           (40,777)      —              40,777         —            —              (41,902)      —              41,902         —            —
unconsolidated
entities
Net gain on
disposition of rental
properties and        —             —              51,066         99,935       151,001        17,665        —              12,567         51,796       82,028
partial interests in
rental properties
Gain on disposition
of unconsolidated     51,066        —              (51,066)       —            —              12,567        —              (12,567)       —            —
entities
Impairment of
consolidated and      (30,660)      —              (390)          (4,254)      (35,304)       (235)         —              (40,284)       (13,692)     (54,211)
unconsolidated real
estate
Impairment of
unconsolidated real   (390)         —              390            —            —              (40,284)      —              40,284         —            —
estate
Depreciation and
amortization—Real     (226,296)     (8,852)        (77,834)       (6,159)      (301,437)      (205,554)     (4,973)        (67,855)       (13,268)     (281,704)
Estate Groups (a)
Amortization of
mortgage procurement  (12,112)      (526)          (3,163)        (243)        (14,992)       (11,317)      (509)          (3,015)        (847)        (14,670)
costs—Real Estate
Groups
Depreciation and
amortization of       (80,997)      —              80,997         —            —              (70,870)      —              70,870         —            —
unconsolidated
entities
Straight-line rent    15,024        —              —              135          15,159         6,326         —              —              882          7,208
adjustment
Preference payment    —             —              —              —            —              (1,732)       —              —              —            (1,732)
Earnings (loss)       (79,759)      (4,555)        45,074         95,909       65,779         (109,185)     2,425          (34,545)       39,309       (106,846)
before income taxes
Income tax benefit    11,204        —              —              (43,832)     (32,628)       63,686        —              —              (17,017)     46,669
(expense)
Net gain on change in 6,766         2,702          —              —            4,064          —             —              —              —            —
control of interests
Equity in earnings
(loss) of
unconsolidated
entities, including   85,408        347            (85,851)       —            (790)          (19,137)      (185)          (7,357)        —            (26,309)
impairment of
depreciable real
estate
Net loss on land held
for divestiture
activity of           (40,777)      —              40,777         —            —              (41,902)      —              41,902         —            —
unconsolidated
entities
                      44,631        347            (45,074)       —            (790)          (61,039)      (185)          34,545         —            (26,309)
Earnings (loss) from  (17,158)      (1,506)        —              52,077       36,425         (106,538)     2,240          —              22,292       (86,486)
continuing operations
Discontinued
operations, net of    53,429        1,352          —              (52,077)     —              105,970       83,678         —              (22,292)     —
tax
Net earnings (loss)   36,271        (154)          —              —            36,425         (568)         85,918         —              —            (86,486)
Noncontrolling
interests
(Earnings) loss from
continuing operations
attributable to       1,506         1,506          —              —            —              (2,240)       (2,240)        —              —            —
noncontrolling
interests
Earnings from
discontinued
operations            (1,352)       (1,352)        —              —            —              (83,678)      (83,678)       —              —            —
attributable to
noncontrolling
interests
                      154           154            —              —            —              (85,918)      (85,918)       —              —            —
Net earnings (loss)
attributable to       $          $        $        $       $           $          $        $        $       $   
Forest City           36,425         —             —            —           36,425         (86,486)      —             —            —           (86,486)
Enterprises, Inc.
Preferred dividends
and inducements of    (32,129)      —              —              —            (32,129)       (15,400)      —              —              —            (15,400)
preferred stock
conversion
Net earnings (loss)
attributable to       $         $        $        $       $          $           $        $        $       $  
Forest City           4,296          —             —            —           4,296          (101,886)     —             —            —           (101,886)
Enterprises, Inc.
common shareholders
(a) Depreciation and                $          $           $                        $          $          $                        $   
amortization—Real     $   226,296 8,852         77,834        6,159        $   301,437  205,554      4,973         67,855        $   13,268 281,704
Estate Groups
 Depreciation and
amortization—Non-Real 3,365         —              —              —            3,365          3,247         —              —              —            3,247
Estate
Total depreciation    $   229,661 $          $           $         $   304,802  $          $          $           $   13,268 $   
and amortization                    8,852         77,834        6,159                       208,801      4,973         67,855                     284,951



            Net Operating Income (in thousands)
            Three Months Ended January 31, 2013                      Three Months Ended January 31, 2012                     % Change
            Full          Less           Plus         Pro-Rata       Full          Less           Plus         Pro-Rata      Full          Pro-Rata
            Consolidation Noncontrolling Discontinued Consolidation  Consolidation Noncontrolling Discontinued Consolidation Consolidation Consolidation
            (GAAP)        Interest       Operations   (Non-GAAP)     (GAAP)        Interest       Operations   (Non-GAAP)    (GAAP)        (Non-GAAP)
Commercial
Group
Retail
            $       $        $       $        $       $        $       $      
Comparable     58,991      1,752            57,239      57,443      1,788            55,655  2.7 %         2.8 %
                                          —                                                      —
Total       59,602        1,972          —            57,630         56,616        1,859          2,103        56,860
Office
Buildings
Comparable  59,929        2,201          —            57,728         58,779        1,733          —            57,046        2.0 %         1.2 %
Total       57,373        2,225          1,130        56,278         60,721        2,369          1,451        59,803
Hotels      1,966         —              —            1,966          1,979         —              (15)         1,964
Land Sales  —             —              —            —              690           —              —            690
Other ^(1)  (18,496)      (69)           —            (18,427)       (4,061)       —              525          (3,536)
Total
Commercial
Group
Comparable  118,920       3,953          —            114,967        116,222       3,521          —            112,701       2.3 %         2.0 %
Total       100,445       4,128          1,130        97,447         115,945       4,228          4,064        115,781
Arena       8,271         3,784          —            4,487          (4,091)       (1,715)        —            (2,376)
Residential
Group
Apartments
Comparable  35,536        751            —            34,785         33,360        662            —            32,698        6.5 %         6.4 %
Total       38,017        1,104          161          37,074         33,618        558            1,423        34,483
Subsidized
Senior      3,158         95             —            3,063          2,120         (416)          —            2,536
Housing
Military    7,936         492            —            7,444          9,521         585            —            8,936
Housing
Other ^(1)  (796)         (1,030)        —            234            (1,282)       114            —            (1,396)
Total
Residential
Group
Comparable  35,536        751            —            34,785         33,360        662            —            32,698        6.5 %         6.4 %
Total       48,315        661            161          47,815         43,977        841            1,423        44,559
Total
Rental
Properties
Comparable  154,456       4,704          —            149,752        149,582       4,183          —            145,399       3.3 %         3.0 %
Total       157,031       8,573          1,291        149,749        155,831       3,354          5,487        157,964
Land
Development 6,916         973            —            5,943          6,071         707            —            5,364
Group
The Nets    18,035        —              —            18,035         (11,845)      —              —            (11,845)
Corporate   (12,554)      —              —            (12,554)       (16,385)      —              —            (16,385)
Activities
            $       $        $       $        $       $        $       $      
Grand Total   169,428       9,546            161,173      133,672       4,061            135,098
                                         1,291                                                    5,487
(1) Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead,
net of tax credit income.



            Net Operating Income (in thousands)
            Year Ended January 31, 2013                              Year Ended January 31, 2012                             % Change
            Full          Less           Plus         Pro-Rata       Full          Less           Plus         Pro-Rata      Full          Pro-Rata
            Consolidation Noncontrolling Discontinued Consolidation  Consolidation Noncontrolling Discontinued Consolidation Consolidation Consolidation
            (GAAP)        Interest       Operations   (Non-GAAP)     (GAAP)        Interest       Operations   (Non-GAAP)    (GAAP)        (Non-GAAP)
Commercial
Group
Retail
            $       $        $       $        $       $        $       $      
Comparable    231,901       6,809           225,092      227,382       6,852           220,530   2.0 %         2.1 %
                                          —                                                      —
Total       240,552       7,617          3,021        235,956        238,112       9,179          7,801        236,734
Office
Buildings
Comparable  245,086       8,286          —            236,800        238,415       6,424          —            231,991       2.8 %         2.1 %
Total       245,441       8,620          6,264        243,085        245,903       7,021          9,602        248,484
Hotels      10,975        —              —            10,975         9,977         —              1,885        11,862
Land Sales  40,201        —              —            40,201         43,491        (782)          684          44,957
^(1)
Other ^(2)  (35,953)      (253)          822          (34,878)       (4,285)       1,959          2,070        (4,174)
Total
Commercial
Group
Comparable  476,987       15,095         —            461,892        465,797       13,276         —            452,521       2.4 %         2.1 %
Total       501,216       15,984         10,107       495,339        533,198       17,377         22,042       537,863
Arena       (960)         277            —            (1,237)        (10,652)      (4,567)        —            (6,085)
Residential
Group
Apartments
Comparable  136,141       2,748          —            133,393        126,870       2,520          —            124,350       7.3 %         7.3 %
Total       148,237       3,554          4,103        148,786        128,845       2,354          5,481        131,972
Subsidized
Senior      18,740        354            —            18,386         14,531        (65)           —            14,596
Housing
Military    29,369        1,021          —            28,348         29,314        920            —            28,394
Housing
Land Sales  —             —              —            —              204           16             —            188
Other ^(2)  (6,372)       (614)          —            (5,758)        (3,788)       541            —            (4,329)
Total
Residential
Group
Comparable  136,141       2,748          —            133,393        126,870       2,520          —            124,350       7.3 %         7.3 %
Total       189,974       4,315          4,103        189,762        169,106       3,766          5,481        170,821
Total
Rental
Properties
Comparable  613,128       17,843         —            595,285        592,667       15,796         —            576,871       3.5 %         3.2 %
Total       690,230       20,576         14,210       683,864        691,652       16,576         27,523       702,599
Land
Development 17,271        2,516          —            14,755         11,298        1,461          —            9,837
Group
The Nets    (4,672)       —              —            (4,672)        (26,814)      —              —            (26,814)
Corporate   (53,944)      —              —            (53,944)       (53,837)      —              —            (53,837)
Activities
            $       $        $       $        $       $        $       $      
Grand Total   648,885      23,092              640,003      622,299      18,037              631,785
                                         14,210                                                   27,523
(1) Includes $36,484 and $42,622 of NOI generated from the casino land sale at full and pro-rata consolidation for the years ended January 31, 2013 and
2012, respectively.
(2) Includes write-offs of abandoned development projects, non-capitalizable development costs and unallocated management and service company overhead,
net of tax credit income.



SOURCE Forest City Enterprises, Inc.

Website: http://www.forestcity.net
Contact: Robert O'Brien, Executive Vice President - Chief Financial Officer,
216-621-6060, or Jeff Linton, Senior Vice President - Corporate Communication,
216-621-6060
 
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