Forest City Reports Fiscal 2006 First-Quarter Results.CLEVELAND Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and -- Forest City Enterprises, Inc. (NYSE NYSE See: New York Stock Exchange :FCEA FCEA Federal Contested Elections Act )(NYSE:FCEB FCEB Fingal County Enterprise Board (Ireland) ) today announced revenues, net earnings and EBDT for the fiscal first quarter ended April 30, 2006. EBDT (Earnings Before Depreciation, Amortization and Deferred Taxes) was $63.3 million, or $0.61 per share, a 7.6 percent decrease on a per share basis compared with last year's EBDT of $67.7 million, or $0.66 per share. This decline was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to decreased EBDT from land sales in the Land Development Group. Fiscal first-quarter net earnings were $53.3 million, or $0.52 per share, compared with $22.2 million, or $0.22 per share, in the prior year. The increase in net earnings was primarily due to the gain on sale of operating properties in the first quarter of 2006. First-quarter consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenues were $289.4 million compared with $294.6 million last year. All fiscal 2005 per-share figures are adjusted for the Company's two-for-one stock split effective July July: see month. 11, 2005. EBDT and EBDT per share are non-Generally Accepted Accounting Principle (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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 Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by A. Ratner, president and chief executive officer of Forest City Enterprises, said, "Our real estate portfolio did very well, led by the continued strong performance of our retail properties, as well as the ongoing rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. residential market. In fact, two key performance measures - comparable net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and occupancies - were up overall, continuing the momentum that we built throughout 2005. In general, new project openings are performing at or above expectations and projects under construction are leasing well." Comparable property net operating income (NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics ) increased 5.9 percent in 2006 from the prior year's first quarter. The retail and office portfolios were up 7.0 percent and 2.6 percent, respectively. In the residential portfolio, comparable property NOI increased 6.8 percent. Comparable property NOI, defined as NOI from properties operated in both 2006 and 2005, is a non-GAAP financial measure, and is based on the pro-rata Pro-rata Used to describe a proportionate allocation. Notes: For example, a pro-rata dividend means that every shareholder gets an equal proportion for each share they own. See also: Dividend 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. Fiscal 2006 first-quarter comparable occupancies were up overall compared with the same period a year ago. Retail occupancies were 94.3 percent in 2006 compared with 93.9 percent in 2005. Office occupancies were 92.4 percent compared with 92.5 percent last year. Comparable occupancies in the residential business increased to 94.8 percent compared with 93.0 percent last year. Major Year-To-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Milestones During the first quarter, the Company sold Hilton Hil·ton , Conrad Nicholson 1887-1979. American hotel-chain organizer who acquired hotels in many American cities and in 1946 founded the Hilton Hotel Corporation. Times Square Hotel in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. for $242 million, or $545,000 per room, generating a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $75 million and $83 million in cash proceeds. In early June June: see month. , the Company announced the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of its partner's interest in the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times headquarters project, which is currently under construction, and where the office building's first lease, for 100,000 square feet, was recently signed by a national law firm. Ratner said, "The sale of the Hilton Times Square Hotel and the acquisition of our partner's share of the New York Times building The New York Times Building is a skyscraper on the west side of Midtown Manhattan, New York that was completed in 2007. Its chief tenant is The New York Times Company, publisher of the The New York Times, The Boston Globe, the International Herald Tribune are the latest examples of our proactive disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of strategy. We have been an aggressive seller of real estate during the past several years and have taken advantage of the unprecedented market valuations by disposing of multiple assets where we have achieved premium pricing Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. , raising substantial equity capital. The short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. decline in earnings resulting from these dispositions will be more than offset by the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value of reinvesting the proceeds in future development projects at higher returns." Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. continues to grow as one of Forest City's core markets. During the first quarter, the Company took over management and began development of its Military Housing - Navy Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians project, which includes a combination of demolition Demolition is the opposite of construction: the tearing-down of buildings and other structures. It contrasts with deconstruction, which is the taking down of a building while carefully preserving valuable elements for re-use. , renovation and new construction, resulting in approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1,650 Navy family homes located primarily in the North Shore suburbs of Chicago. At its Central Station project, Forest City opened two new residential communities, representing a total cost of $128.2 million. Sky55 is a 411-unit apartment tower that offers panoramic pan·o·ram·a n. 1. An unbroken view of an entire surrounding area. 2. A comprehensive presentation; a survey: a panorama of American literature. 3. views of Lake Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). and downtown Downtown (called a "city centre" in British English) is a term used in North America when referring to a city's core, usually both in a geographical and commercial / community sense. Chicago, and 1251 South Michigan is an adjacent 91-unit senior-housing community. The buildings feature affordable-housing and senior-housing components that enabled Forest City to secure advantaged financing, including tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. and tax increment financing Tax Increment Financing, or TIF, is a tool which has been used for redevelopment and community improvement projects throughout the United States for more than half a century. . The new openings bring the Company's rental units in the Chicago area to more than 1,600. In addition, Forest City continues to work with its partners to develop condominiums at Central Station. Forest City was honored hon·or n. 1. High respect, as that shown for special merit; esteem: the honor shown to a Nobel laureate. 2. a. Good name; reputation. b. to have recently received two Urban Land Institute Awards for Excellence - for its Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. Stapleton Stapleton may refer to: Places United Kingdom
adj. Containing or zoned for commercial and residential facilities or development: a 40-story mixed-use tower; a mixed-use parcel of land. urban redevelopment, and for its 1.2-million-square-foot Victoria Gardens open-air regional lifestyle center in Rancho Cucamonga, California Rancho Cucamonga is a city in San Bernardino County, California, United States. As of the 2000 census, the city had a total population of 127,743. By July 1, 2002 Census the fast-growing city's population had reached 143,711. . 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 first quarter, Forest City's pipeline included 18 projects under construction or to be acquired, representing a total cost of $852.1 million on a full consolidation basis and $1.5 billion of cost at the Company's pro-rata share. Including the five projects opened or acquired in the first quarter, a total of 14 projects - four retail centers, five small office buildings, three apartment communities and two condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. buildings - are scheduled to open in fiscal 2006. These projects represent $513.3 million of cost on a full consolidation basis and $887.5 million of cost at the Company's pro-rata share. First-Quarter Groundbreakings: --Science + Technology Park at Johns Hopkins University Johns Hopkins University, mainly at Baltimore, Md. Johns Hopkins in 1867 had a group of his associates incorporated as the trustees of a university and a hospital, endowing each with $3.5 million. Daniel C. in East Baltimore, Maryland "Baltimore" redirects here. For the surrounding county, see Baltimore County, Maryland. For other uses, see Baltimore (disambiguation). Baltimore is an independent city located in the state of Maryland in the United States. , where the Company broke ground on the first 279,000-square-foot building for life science office space. Johns Hopkins' Institute for Basic Biomedical Sciences Noun 1. biomedical science - the application of the principles of the natural sciences to medicine bioscience, life science - any of the branches of natural science dealing with the structure and behavior of living organisms has committed to occupy at least 100,000 square feet of the first building. --Orchard Town Center, a 972,000-square-foot main street-style shopping village, to be anchored by Macy's Macy's formerly R.H. Macy & Co., Inc. Major U.S. department-store chain. Its former flagship, an 11-story store that occupies a city block in New York City's Herald Square, was for many years the largest single store in the country. Rowland H. , JCPenney, Target and AMC Theatres This article or section has multiple issues: * Its tone or style may not be appropriate for Wikipedia. * It reads like an advertisement and needs to be rewritten in a neutral point of view. , in the Denver suburb suburb, a community in an outlying section of a city or, more commonly, a nearby, politically separate municipality with social and economic ties to the central city. In the 20th cent. of Westminster Westminster. 1 Residential city (1990 pop. 78,118), Orange co., S Calif.; founded 1870 as a temperance colony for Presbyterians, inc. 1957. It has several industrial parks. A U.S. naval weapons station and Los Alamitos Naval Air Base are nearby. . Construction Milestones: --San Francisco Francisco may refer to:
1 City (1990 pop. 38,372), Hampden co., SW Mass., a residential and industrial suburb of Springfield, on the Westfield River; settled c.1660, inc. as a city 1920. Bicycles, machinery, and paper and metal products are made. acquired San Francisco's 290,000-square-foot Metreon retail and entertainment venue venue In law, the place or county in which the events giving rise to a legal action take place and from which a jury may be drawn to try the case. Venue statutes usually specify that a trial must take place in the district that has jurisdiction over the matter. directly across the street from the new center. --NorthField at Stapleton - An 18-screen Harkins movie theatre complex opened in the first quarter, and additional phases of the 1.1-million-square-foot retail center in Denver, including the project's main street featuring a 140,000-square-foot Macy's, will open later in the year. Super Target, Circuit City and Colorado's first Bass Pro Shops Bass Pro Shops is a privately held sporting goods and outdoor goods store headquartered in Springfield, Missouri. The original Outdoor World store, referred to as the "Grand Daddy" is located at the corner of Sunshine and Campbell in Springfield. Outdoor World opened as anchors in 2005. --1100 Wilshire Not to be confused with Wiltshire. Wilshire may refer to:
Mercury, in astronomy, nearest planet to the sun, at a mean distance of 36 million mi (58 million km); its period of revolution is 88 days. , a second office-building-to-condominium conversion located in the Koreatown Koreatown (Korean: 코리아타운) is a term to describe the Korean ethnic enclave within a city or metropolitan area. Argentina Buenos Aires neighborhood of Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. that is scheduled to open in early fiscal 2007, was well received with a significant amount of deposits taken. Projects Under Development At the end of the first quarter, Forest City had more than 25 projects under development, representing more than $2 billion of cost on a full consolidation basis and at the Company's share. Among the projects under development and scheduled to begin construction later this year are: the 547,000-square-foot East River Plaza For the hotel in New York City, see . Plaza (IPA /'plaθa/ or /'plasa/ retail center in Manhattan Manhattan, indigenous people of North America Manhattan (mănhăt`ən), indigenous people of North America of the Algonquian-Wakashan linguistic stock (see Native American languages). ; 523,000-square-foot The Shops at Wiregrass wire·grass n. Any of various grasses, such as Bermuda grass, having tough wiry roots or rootstocks. retail center in Tampa Tampa (tăm`pə), city (1990 pop. 280,015), seat of Hillsborough co., W Fla., a port of entry with an impressive harbor on Tampa Bay; inc. 1855. ; 665-unit Uptown Apartments in center city Oakland Oakland, city (1990 pop. 372,242), seat of Alameda co., W Calif., on the eastern side of San Francisco Bay; inc. 1852. Together with San Francisco and San Jose, the city comprises the fourth largest metropolitan area in the United States. ; the redevelopment of the Lucky Strike building at Richmond's Tobacco Row into 131 rental residential units; and the 154-unit Botanica bo·tan·i·ca n. A shop that sells herbs, charms, and other religious or spiritual items, especially those associated with Santeria. [American Spanish botánica, from Greek Phase II, which will be the fifth apartment community at the Company's Denver Stapleton mixed-use project. Major projects under development, which represent long-term growth opportunities for Forest City, include three projects in the Company's New York City core market: the 1.2-million-square-foot Ridge ridge (rij) a linear projection or projecting structure; a crest. dental ridge any linear elevation on the crown of a tooth. dermal ridges cristae cutis. Hill Village mixed-use project in Yonkers Yonkers (yŏn`kərz), city (1990 pop. 188,082), Westchester co., SE N.Y., on the east bank of the Hudson, in a hilly region just N of the Bronx (New York City); inc. 1855. Its elevator works date from 1852. ; 481-unit Beekman Beekman is a Dutch surname, most common in Gelderland. It is a toponym, literally translating to "creek man". It may refer to: People
 k`lĭn), borough of New York City (1990 pop. 2,300,664), 71 sq mi (184 sq km), coextensive with Kings co., SE N.Y. Atlantic Yards The Atlantic Yards is a mixed-use commercial and residential development project of 16 buildings, currently proposed in the neighborhoods of Prospect Heights and Park Slope, adjacent to Downtown Brooklyn and Fort Greene in Brooklyn, New York City. mixed-use
community. In addition, Forest City is pursuing two long-term mixed-use
developments Mixed-use development refers to the practice of allowing more than one type of use in a building or set of buildings. In planning zone terms, this can mean some combination of residential, commercial, industrial, office, institutional, or other land uses. in Washington Washington, town, EnglandWashington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C. - the 42-acre Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. ; and Fitzsimons, a 160-acre private-sector bioscience bioscience /bio·sci·ence/ (-si´ens) the study of biology wherein all the applicable sciences (physics, chemistry, etc.) are applied. bi·o·sci·ence n. See life science. park adjacent to the Company's Stapleton project. Financing Activity Forest City continues to take advantage of current interest rates and attractive debt markets for its project financings Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. , with primary emphasis on locking in fixed-rate nonrecourse Nonrecourse In the case of default, the lender has no ability to claim assets over and above what the limited partners contributed. mortgages. During the first fiscal quarter, Forest City closed on transactions totaling $186.0 million in nonrecourse mortgage financings, including $138.0 million in refinancings, and $48.0 million in loan extensions and additional fundings. As of April 30, 2006, the Company's weighted average cost of mortgage debt increased to 6.10 percent from 5.94 percent at April 30, 2005, primarily due to the general increase in short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. . Fixed-rate mortgage debt, which represented 73 percent of the Company's total nonrecourse mortgage debt, decreased from 6.43 percent at April 30, 2005 to 6.24 percent at April 30, 2006. The variable-rate mortgage var·i·a·ble-rate mortgage n. Abbr. VRM See adjustable-rate mortgage. debt increased from 4.86 percent at April 30, 2005 to 5.72 percent at April 30, 2006. In an effort to lock in historically low rates for known/planned financing activity over the next 24 months, the Company has executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. $607.7 million of 10-year forward starting swaps at a weighted average rate of 5.69 percent with commencement dates ranging from December December: see month. 2006 through April 2009. Outlook Ratner said, "The increases in our comparable property NOI and the projects we have opened in recent years continue to drive our near-term near-term adj. Of, for, or involving a short period of time in the near future. growth. Our current development pipeline contains more than 40 projects under construction and under development that will be an ongoing source of long-term growth. These developments represent some of the largest projects in Company history, which include mixed-use projects, open-air regional lifestyle centers, life science office parks, military family housing, and condominiums. "The attractive capital markets and historically high property valuations in the U.S. provide for a strong real estate environment. These fundamentals are somewhat tempered by rising interest rates and construction costs, which will put pressure on our profit spreads. We are cautiously cau·tious adj. 1. Showing or practicing caution; careful. 2. Tentative or restrained; guarded: felt a cautious optimism that the offer would be accepted. optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future, but are well aware of the risks inherent in our business - which we will attempt to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. by
operating with the strategic discipline we have been practicing for
decades. With a strong first quarter and the momentum we expect to build
throughout the year, we are confident in our ability to deliver our 27th
consecutive year of EBDT growth in fiscal 2006, and to continue to build
shareholder value."Corporate Description Forest City Enterprises, Inc. is a $7.8 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 throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Supplemental Package Please refer to the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.forestcity.net for a Supplemental Package, which the Company will also furnish fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. to the Securities and Exchange Commission on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. . This Supplemental Package includes operating and financial information for the quarter ended April 30, 2006, 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 Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. and allocation of resources allocation of resources Apportionment of productive assets among different uses. The issue of resource allocation arises as societies seek to balance limited resources (capital, labour, land) against the various and often unlimited wants of their members. 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 Noun 1. straight-line method - (accounting) a method of calculating depreciation by taking an equal amount of the asset's cost as an expense for each year of the asset's useful life straight-line method of depreciation ; iii) non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. from real estate operations of Forest City Rental Properties Corporation, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Forest City Enterprises, Inc., for depreciation, amortization (including amortization of mortgage procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. costs) and deferred income taxes; iv) provision for decline in real estate (net of tax); v) extraordinary items (net of tax); and vi) cumulative effect of change in accounting principle (net of tax). Unlike the real estate segments, EBDT for the Nets segment equals net earnings of the equity method investment. EBDT is reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to net earnings, the most comparable financial measure calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. 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 de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. 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 Procuring, in general, is the act of acquiring goods or services, usually by contract. It may refer to:
adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. to its share of economic ownership. Under GAAP, the full consolidation method is used to report partnership assets and liabilities as consolidated at 100 percent if deemed to be under its control or if the Company is deemed to be the primary beneficiary beneficiary Person or entity (e.g., a charity or estate) that receives a benefit from something (e.g., a trust, life-insurance policy, or contract). A primary beneficiary receives proceeds from a trust or insurance policy before any other. of the variable interest entities ("VIE"), even if its economic 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Language Statements made in this news release that state the Company or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning 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 core markets, reliance on major tenants, the impact of terrorist acts, the Company's substantial leverage and the ability to service debt, guarantees under the Company's credit facility, changes in interest rates, continued availability of tax-exempt tax-ex·empt adj. 1. Not subject to taxation, as the capital or income of a philanthropic organization. 2. Producing interest that is exempt from income tax: tax-exempt bonds. n. government financing, the sustainability of substantial operations at the subsidiary level, significant geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. concentration, illiquidity of real estate investments, dependence on rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time from real property, conflicts of interest, competition, potential liability from syndicated properties, effects of uninsured loss, environmental liabilities, partnership risks, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. risks, risks associated with an investment in a professional sports The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. franchise, and other risk factors as disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). from time to time in the Company's SEC filings, including, but not limited to, the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended January January: see month. 31, 2006.
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2006 and 2005
(dollars in thousands, except per share data)
Three Months Ended
April 30, Increase (Decrease)
------------------------ -------------------
2006 2005 Amount Percent
------------------------ ----------- -------
Operating Results:
Earnings from continuing
operations $7,916 $23,350 $(15,434)
Discontinued operations,
net of tax and minority
interest (1) 45,342 (1,134) 46,476
------------------------ -----------
Net earnings $53,258 $22,216 $31,042
======================== ===========
Earnings Before
Depreciation,
Amortization and
Deferred Taxes (EBDT) (2) $63,339 $67,662 $(4,323) (6.4%)
======================== ===========
Reconciliation of Net
Earnings to Earnings
Before Depreciation,
Amortization and Deferred
Taxes (EBDT) (2):
Net Earnings $53,258 $22,216 $31,042
Depreciation and
amortization - Real
Estate Groups (4) 47,200 46,272 928
Amortization of mortgage
procurement costs -
Real Estate Groups (4) 2,909 2,731 178
Deferred income tax
expense - Real Estate
Groups (5) 36,430 7,984 28,446
Deferred income tax
expense - Non-Real
Estate Groups: (5)
Gain on disposition of
other investments - 178 (178)
Current income tax
expense on non-
operating earnings: (5)
Gain on disposition of
other investments - 62 (62)
Gain on disposition
included in
discontinued operations (29) - (29)
Gain on disposition
recorded on equity method - 8,114 (8,114)
Straight-line rent
adjustment (3) (1,131) (2,996) 1,865
Provision for decline in
real estate, net of
minority interest - 1,500 (1,500)
Provision for decline in
real estate recorded on
equity method - 704 (704)
Gain on disposition
recorded on equity method - (18,497) 18,497
Loss (gain) on disposition
of other investments - (606) 606
Discontinued operations: (1)
Gain on disposition of
rental properties (136,384) - (136,384)
Minority interest -
Gain on sale 61,086 - 61,086
------------------------ -----------
Earnings Before
Depreciation,
Amortization and
Deferred Taxes
(EBDT) (2) $63,339 $67,662 $(4,323) (6.4%)
======================== ===========
Diluted Earnings per
Common Share:
Earnings from continuing
operations $0.08 $0.23 $(0.15)
Discontinued operations,
net of tax and minority
interest (1) 0.44 (0.01) 0.45
------------------------ -----------
Net earnings $0.52 $0.22 $0.30
======================== ===========
Earnings Before
Depreciation,
Amortization and Deferred
Taxes (EBDT) (2) $0.61 $0.66 $(0.05) (7.6%)
======================== ===========
Operating earnings, net of
tax (a non-GAAP financial
measure) $0.11 $0.15 $(0.04)
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 1.04 0.11 0.93
Minority interest (0.63) (0.03) (0.60)
------------------------ -----------
Net earnings $0.52 $0.22 $0.30
======================== ===========
Diluted weighted average
shares outstanding 102,997,002 102,296,678 700,324
======================== ===========
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2006 and 2005
(dollars in thousands)
Three Months Ended
April 30, Increase (Decrease)
------------------ -------------------
2006 2005 Amount Percent
------------------ -------------------
Operating Earnings (a non-GAAP
financial measure) and
Reconciliation to Net Earnings:
Revenues from real estate
operations
Commercial Group $209,216 $209,320 $(104)
Residential Group 59,322 49,606 9,716
Land Development Group 20,816 35,654 (14,838)
Corporate Activities - - -
------------------ ------------
Total Revenues 289,354 294,580 (5,226) (1.8%)
Operating expenses (167,516)(165,461) (2,055)
Interest expense, including
early extinguishment of debt (71,220) (67,797) (3,423)
Amortization of mortgage
procurement costs (4) (3,019) (3,058) 39
Depreciation and
amortization (4) (43,617) (41,975) (1,642)
Interest and other income 14,962 6,902 8,060
Equity in earnings of
unconsolidated entities 379 20,036 (19,657)
Provision for decline in real
estate recorded on equity
method - 704 (704)
Gain on disposition recorded on
equity method - (18,497) 18,497
Revenues and interest income
from discontinued
operations (1) 6,268 14,790 (8,522)
Expenses from discontinued
operations (1) (7,876) (16,600) 8,724
------------------ ------------
Operating earnings (a non-GAAP
financial measure) 17,715 23,624 (5,909)
------------------ ------------
Income tax expense (5) (7,150) (16,151) 9,001
Income tax expense from
discontinued operations (1)(5) (28,554) 714 (29,268)
Income tax expense on non-
operating earnings items (see
below) 29,095 6,684 22,411
------------------ ------------
Operating earnings, net of tax
(a non-GAAP financial measure) 11,106 14,871 (3,765)
------------------ ------------
Provision for decline in real
estate - (1,500) 1,500
Provision for decline in real
estate recorded on equity
method - (704) 704
Gain on disposition recorded on
equity method - 18,497 (18,497)
Gain on disposition of other
investments - 606 (606)
Gain on disposition of rental
properties included in
discontinued operations (1) 136,384 - 136,384
Income tax benefit (expense) on
non-operating earnings: (5)
Provision for decline in
real estate - 872 (872)
Provision for decline in
real estate recorded on
equity method - - -
Gain on disposition of
other investments - (240) 240
Gain on disposition
recorded on equity method - (7,316) 7,316
Gain on disposition of
rental properties included
in discontinued operations (29,095) - (29,095)
------------------ ------------
Income tax expense on non-
operating earnings (see above) (29,095) (6,684) (22,411)
------------------ ------------
Minority interest in continuing
operations (4,257) (2,832) (1,425)
Minority interest in
discontinued operations: (1)
Operating earnings 206 (38) 244
Gain on disposition of
rental properties (61,086) - (61,086)
------------------ ------------
(60,880) (38) (60,842)
------------------ ------------
Minority interest (65,137) (2,870) (62,267)
------------------ ------------
Net earnings $53,258 $22,216 $31,042
================== ============
Forest City Enterprises, Inc. and Subsidiaries
Financial Highlights
Three Months Ended April 30, 2006 and 2005
(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 and a division which have been sold or 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) noncash charges from Forest City Rental
Properties Corporation, a wholly-owned subsidiary of Forest City
Enterprises, Inc., for depreciation, amortization (including
amortization of mortgage procurement costs) and deferred income
taxes; iv) provision for decline in real estate (net of tax); v)
extraordinary items (net of tax); and vi) cumulative effect of
change in accounting principle (net of tax). 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 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) The following table provides detail of depreciation and
amortization and amortization of mortgage procurement costs. The
Company's Real Estate Groups are owned by Forest City Rental
Properties Corporation, a wholly-owned subsidiary engaged in the
ownership, development, acquisition and management of real estate
projects, including apartment complexes, regional malls and retail
centers, hotels, office buildings and mixed-use facilities, as well
as large land development projects.
Depreciation and Amortization
-----------------------------
Three Months Ended April 30,
-----------------------------
2006 2005
-----------------------------
Full Consolidation $43,617 $41,975
Non-Real Estate Groups (349) (548)
-----------------------------
Real Estate Groups Full Consolidation 43,268 41,427
Real Estate Groups related to minority
interest (3,211) (4,569)
Real Estate Groups Equity Method 6,818 7,175
Real Estate Groups Discontinued
Operations 325 2,239
-----------------------------
Real Estate Groups Pro-Rata Consolidation $47,200 $46,272
=============================
Amortization of Mortgage
Procurement Costs
-----------------------------
Three Months Ended April 30,
-----------------------------
2006 2005
-----------------------------
Full Consolidation $3,019 $3,058
Non-Real Estate Groups (92) (68)
-----------------------------
Real Estate Groups Full Consolidation 2,927 2,990
Real Estate Groups related to minority
interest (331) (690)
Real Estate Groups Equity Method 289 299
Real Estate Groups Discontinued
Operations 24 132
-----------------------------
Real Estate Groups Pro-Rata Consolidation $2,909 $2,731
=============================
Three Months Ended
April 30,
--------------------
2006 2005
--------------------
(5) The following table provides detail of Income (in thousands)
Tax Expense (Benefit):
(A) Operating earnings
Current $(423) $(616)
Deferred 7,573 10,083
--------------------
7,150 9,467
--------------------
(B) Provision for decline in real estate
Deferred - (593)
Deferred - Equity method investment - (279)
--------------------
- (872)
--------------------
(C) Gain on disposition of other investments
Current - Non-Real Estate Groups - 62
Deferred - Non-Real Estate Groups - 178
--------------------
- 240
--------------------
(D) Gain on disposition recorded on equity method
Current - 8,114
Deferred - (798)
--------------------
- 7,316
--------------------
Subtotal (A) (B) (C) (D)
Current (423) 7,560
Deferred 7,573 8,591
--------------------
Income tax expense 7,150 16,151
--------------------
(E) Discontinued operations - Rental Properties
Operating earnings
Current (607) (1,282)
Deferred 66 568
--------------------
(541) (714)
Gain on disposition of rental properties
Current (29) -
Deferred 29,124 -
--------------------
29,095 -
--------------------
28,554 (714)
--------------------
Grand Total (A) (B) (C) (D) (E)
Current (1,059) 6,278
Deferred 36,763 9,159
--------------------
$35,704 $15,437
--------------------
Recap of Grand Total:
Real Estate Groups
Current 1,311 11,178
Deferred 36,430 7,984
--------------------
37,741 19,162
Non-Real Estate Groups
Current (2,370) (4,900)
Deferred 333 1,175
--------------------
(2,037) (3,725)
--------------------
Grand Total $35,704 $15,437
====================
Reconciliation of Net Operating Income (non-GAAP) to Net Earnings
(GAAP) (in thousands):
Three Months Ended April 30, 2006
---------------------------------------------
Plus
Unconsol- Plus
idated Discon-
Full Less Invest- tinued Pro-Rata
Consol- Minority ments at Opera- Consol-
idation Interest Pro-Rata tions idation
---------------------------------------------
Revenues from real
estate operations $289,354 $28,400 $69,777 $5,608 $336,339
Exclude straight-line
rent adjustment (1) (2,710) - - - (2,710)
---------------------------------------------
Adjusted revenues 286,644 28,400 69,777 5,608 333,629
Operating expenses 167,516 14,371 48,415 6,415 207,975
Add back depreciation
and amortization for
non-Real Estate
Groups (b) 349 - 6,190 - 6,539
Add back amortization of
mortgage procurement
costs for non-Real
Estate Groups (d) 92 - 147 - 239
Exclude straight-line
rent adjustment (2) (1,474) - - (105) (1,579)
---------------------------------------------
Adjusted operating
expenses 166,483 14,371 54,752 6,310 213,174
Add interest income and
other income 14,962 666 93 414 14,803
Add equity in earnings
of unconsolidated
entities 379 - 5,680 - 6,059
Remove gain on
disposition recorded on
equity method - - - - -
Add back provision for
decline recorded on
equity method - - - - -
Add back equity method
depreciation and
amortization expense
(see below) 7,107 - (7,107) - -
---------------------------------------------
Net Operating Income 142,609 14,695 13,691 (288) 141,317
Interest expense,
including early
extinguishment of debt (71,220) (6,896) (13,691) (660) (78,675)
Gain on disposition of
equity method rental
properties (e) - - - - -
Gain on disposition of
rental properties and
other investments - - - 75,298 75,298
Provision for decline in
real estate - - - - -
Provision for decline in
real estate of equity
method rental properties - - - - -
Depreciation and
amortization - Real
Estate Groups (a) (43,268) (3,211) (6,818) (325) (47,200)
Amortization of mortgage
procurement costs -
Real Estate Groups (c) (2,927) (331) (289) (24) (2,909)
Straight-line rent
adjustment (1) + (2) 1,236 - - (105) 1,131
Equity method
depreciation and
amortization expense
(see above) (7,107) - 7,107 - -
---------------------------------------------
Earnings before income
taxes 19,323 4,257 - 73,896 88,962
Income tax provision (7,150) - - (28,554) (35,704)
---------------------------------------------
Earnings before minority
interest and
discontinued operations 12,173 4,257 - 45,342 53,258
Minority Interest (4,257) (4,257) - - -
---------------------------------------------
Earnings from continuing
operations 7,916 - - 45,342 53,258
Discontinued operations,
net of tax and minority
interest:
Operating loss from
rental properties (861) - - 861 -
Gain on disposition
of rental
properties 46,203 - - (46,203) -
---------------------------------------------
45,342 - - (45,342) -
---------------------------------------------
Net earnings $53,258 $- $- $- $53,258
=============================================
(a) Depreciation and
amortization - Real
Estate Groups $43,268 $3,211 $6,818 $325 $47,200
(b) Depreciation and
amortization - Non-Real
Estate Groups 349 - 6,190 - 6,539
---------------------------------------------
Total depreciation
and amortization $43,617 $3,211 $13,008 $325 $53,739
=============================================
(c) Amortization of
mortgage procurement
costs - Real Estate
Groups $2,927 $331 $289 $24 $2,909
(d) Amortization of
mortgage procurement
costs - Non-Real Estate
Groups 92 - 147 - 239
---------------------------------------------
Total amortization
of mortgage
procurement costs $3,019 $331 $436 $24 $3,148
=============================================
(e) Properties accounted for on the equity method do not meet the
definition of a component of an entity under SFAS No. 144 and
therefore are reported in continuing operations when sold. For the
three months ended April 30, 2005, two equity method investments were
sold, Showcase and Colony Place, resulting in a pre-tax gain on
disposition of $18,497.
Three Months Ended April 30, 2005
---------------------------------------------
Plus
Unconsol- Plus
idated Discon-
Full Less Invest- tinued Pro-Rata
Consol- Minority ments at Opera- Consol-
idation Interest Pro-Rata tions idation
---------------------------------------------
Revenues from real
estate operations $294,580 $32,154 $75,425 $14,191 $352,042
Exclude straight-line
rent adjustment (1) (4,923) - - 1 (4,922)
---------------------------------------------
Adjusted revenues 289,657 32,154 75,425 14,192 347,120
Operating expenses 165,461 16,751 47,278 10,350 206,338
Add back depreciation
and amortization for
non-Real Estate
Groups (b) 548 - 7,578 - 8,126
Add back amortization of
mortgage procurement
costs for non-Real
Estate Groups (d) 68 - 90 - 158
Exclude straight-line
rent adjustment (2) (1,704) - - (222) (1,926)
---------------------------------------------
Adjusted operating
expenses 164,373 16,751 54,946 10,128 212,696
Add interest income and
other income 6,902 571 120 60 6,511
Add equity in earnings
of unconsolidated
entities 20,036 - (17,987) - 2,049
Remove gain on
disposition recorded on
equity method (18,497) - 18,497 - -
Add back provision for
decline recorded on
equity method 704 - (704) - -
Add back equity method
depreciation and
amortization expense
(see below) 7,474 - (7,474) - -
---------------------------------------------
Net Operating Income 141,903 15,974 12,931 4,124 142,984
Interest expense,
including early
extinguishment of debt (67,797) (7,883) (12,931) (3,378) (76,223)
Gain on disposition of
equity method rental
properties (e) 18,497 - - - 18,497
Gain on disposition of
rental properties and
other investments 606 - - - 606
Provision for decline in
real estate (1,500) - - - (1,500)
Provision for decline in
real estate of equity
method rental
properties (704) - - - (704)
Depreciation and
amortization - Real
Estate Groups (a) (41,427) (4,569) (7,175) (2,239) (46,272)
Amortization of mortgage
procurement costs -
Real Estate Groups (c) (2,990) (690) (299) (132) (2,731)
Straight-line rent
adjustment (1) + (2) 3,219 - - (223) 2,996
Equity method
depreciation and
amortization expense
(see above) (7,474) - 7,474 - -
---------------------------------------------
Earnings before income
taxes 42,333 2,832 - (1,848) 37,653
Income tax provision (16,151) - - 714 (15,437)
---------------------------------------------
Earnings before minority
interest and
discontinued operations 26,182 2,832 - (1,134) 22,216
Minority Interest (2,832) (2,832) - - -
---------------------------------------------
Earnings from continuing
operations 23,350 - - (1,134) 22,216
Discontinued operations,
net of tax and minority
interest:
Operating loss from
rental properties (1,134) - - 1,134 -
Gain on disposition
of rental properties - - - - -
---------------------------------------------
(1,134) - - 1,134 -
---------------------------------------------
Net earnings $22,216 $- $- $- $22,216
=============================================
(a) Depreciation and
amortization - Real
Estate Groups $41,427 $4,569 $7,175 $2,239 $46,272
(b) Depreciation and
amortization - Non-Real
Estate Groups 548 - 7,578 - 8,126
---------------------------------------------
Total depreciation
and amortization $41,975 $4,569 $14,753 $2,239 $54,398
=============================================
(c) Amortization of
mortgage procurement
costs - Real Estate
Groups $2,990 $690 $299 $132 $2,731
(d) Amortization of
mortgage procurement
costs - Non-Real Estate
Groups 68 - 90 - 158
---------------------------------------------
Total amortization
of mortgage
procurement costs $3,058 $690 $389 $132 $2,889
=============================================
(e) Properties accounted for on the equity method do not meet the
definition of a component of an entity under SFAS No. 144 and
therefore are reported in continuing operations when sold. For the
three months ended April 30, 2005, two equity method investments were
sold, Showcase and Colony Place, resulting in a pre-tax gain on
disposition of $18,497.
Forest City Enterprises, Inc. and Subsidiaries
Supplemental Operating Information
Net Operating Income (dollars in thousands)
----------------------------------------------
Three Months Ended April 30, 2006
----------------------------------------------
Plus
Unconsol- Plus
idated Discon-
Full Less Invest- tinued Pro-Rata
Consol- Minority ments at Opera- Consol-
idation Interest Pro-Rata tions idation
----------------------------------------------
Commercial Group
Retail
Comparable $46,490 $5,216 $2,949 $- $44,223
-------------------------------------------------------------------
Total 49,961 4,491 2,965 10 48,445
Office Buildings
Comparable 45,304 5,740 1,124 - 40,688
-------------------------------------------------------------------
Total 44,638 5,737 1,005 - 39,906
Hotels
Comparable 3,522 993 478 - 3,007
-------------------------------------------------------------------
Total 3,591 66 478 (481) 3,522
Earnings from
Commercial Land Sales 9,635 - - - 9,635
Development Fees 276 - - - 276
Other (3,743) 2,963 61 - (6,645)
-------------------------------------------------------------------
Total Commercial Group
Comparable 95,316 11,949 4,551 - 87,918
-------------------------------------------------------------------
Total 104,358 13,257 4,509 (471) 95,139
Residential Group
Apartments
Comparable 24,848 635 6,443 - 30,656
-------------------------------------------------------------------
Total 36,368 893 7,762 183 43,420
Total Real Estate Groups
Comparable 120,164 12,584 10,994 - 118,574
-------------------------------------------------------------------
Total 140,726 14,150 12,271 (288) 138,559
Land Development Group 18,185 545 384 - 18,024
The Nets (8,701) - 1,036 - (7,665)
Corporate Activities (7,601) - - - (7,601)
----------------------------------------------------------------------
Grand Total $142,609 $14,695 $13,691 $(288) $141,317
Net Operating Income (dollars in thousands)
----------------------------------------------------------
Three Months Ended April 30, 2005 % Change
----------------------------------------------------------
Plus
Unconsol- Plus
idated Discon-
Full Less Invest- tinued Pro-Rata Full Pro-Rata
Consol- Minority ments at Opera- Consol- Consol- Consol-
idation Interest Pro-Rata tions idation idation idation
----------------------------------------------------------
Commercial Group
Retail
Comparable $43,761 $5,404 $2,968 $- $41,325 6.2% 7.0%
-----------------------------------------------------
Total 45,073 4,226 3,002 32 43,881
Office Buildings
Comparable 43,856 5,372 1,187 - 39,671 3.3% 2.6%
-----------------------------------------------------
Total 43,073 5,919 1,054 - 38,208
Hotels
Comparable 2,112 382 517 - 2,247 66.8% 33.8%
-----------------------------------------------------
Total 2,139 (304) 517 2,018 4,978
Earnings from
Commercial
Land Sales 19,352 1,752 - - 17,600
Development
Fees 645 - - - 645
Other (1,443) 1,899 22 - (3,320)
------------------------------------------------------
Total Commercial Group
Comparable 89,729 11,158 4,672 - 83,243 6.2% 5.6%
-----------------------------------------------------
Total 108,839 13,492 4,595 2,050 101,992
Residential Group
Apartments
Comparable 23,130 542 6,121 - 28,709 7.4% 6.8%
-----------------------------------------------------
Total 24,411 1,038 7,562 2,074 33,009
Total Real Estate Groups
Comparable 112,859 11,700 10,793 - 111,952 6.5% 5.9%
-----------------------------------------------------
Total 133,250 14,530 12,157 4,124 135,001
Land Development
Group 26,448 1,444 105 - 25,109
The Nets (8,596) - 669 - (7,927)
Corporate
Activities (9,199) - - - (9,199)
-------------------------------------------------------
Grand Total $141,903 $15,974 $12,931 $4,124 $142,984
Development Pipeline
----------------------------------------------------------------------
April 30, 2006
2006 Openings and Acquisitions (5)
Cost at
FCE
Cost at Pro-
FCE Full Rata
Legal Pro- Consol- Share
Pro- Dev Owner- Rata ida- Total (Non- Gross
perty/ (D) Date ship% FCE% tion Cost GAAP) Sq. ft./ Leas-
Loca- Acq Opened/ (i) (i) (GAAP) at 100% (b) No. of able
tion (A) Acquired (1) (2) (a) (3) (2)X(3) Units Area
--------------------------------- ------------------------------------
(in millions)
---------------------
Retail Centers:
Metreon
(c)/
San
Francisco,
CA A Q1-06 50.0% 50.0% $0.0 $40.0 $20.0 290,000 290,000
Northfield
at
Staple-
ton Phase
II (l)/
Denver,
CO D Q1-06 95.0% 97.4% 9.1 9.1 8.9 86,000 86,000
------------------------------------
$9.1 $49.1 $28.9 376,000 376,000
---------------------===============
Office:
Resur-
rection
Health
Care/
Skokie, ------------------------------------
IL A Q1-06 100.0% 100.0% $4.6 $4.6 $4.6 40,000 40,000
---------------------===============
Residential:
Sky55/
Chicago,
IL D Q1-06 100.0% 100.0% $111.6 $111.6 $111.6 411
1251 S.
Michigan/
Chicago,
IL D Q1-06 100.0% 100.0% 16.6 16.6 16.6 91
-----------------------------
$128.2 $128.2 $128.2 502
---------------------========
---------------------
Total Openings (d) $141.9 $181.9 $161.7
=====================
---------------------------------------------------------------
Residential Opened in
Phased-In '06/Total
Units (c) (e): ------------
Woodgate/
Evergreen
Farms/
Olmsted
Township,
OH D 2004-07 33.0% 33.0% $0.0 $22.9 $7.6 24/348
Pine Ridge
Expansion/
Willoughby
Hills,
OH D 2005-06 50.0% 50.0% 0.0 16.4 8.2 9/162
Cobblestone
Court/
Painesville,
OH D 2006-08 50.0% 50.0% 0.0 24.6 12.3 24/304
-----------------------------
Total (f) $0.0 $63.9 $28.1 57/814
=============================
---------------------------------------------------------------
See attached 2006 footnotes.
Development Pipeline
----------------------------------------------------------------------
April 30, 2006
Under Construction or to be Acquired (18)
FCE Pro-
Dev Legal Rata
(D) Ownership FCE %
Acq Anticipated % (i)
Property/Location (A) Opening (i)(1) (2)
----------------------------------------------------------------------
Retail Centers:
San Francisco Centre - Emporium
(c)/San Francisco, CA D Q3-06 50.0% 50.0%
San Francisco Centre (c)/San
Francisco, CA A Q3-06 50.0% 50.0%
Northfield at Stapleton Phase III
(l)/Denver, CO D Q3-06 95.0% 97.4%
Promenade Bolingbrook/
Bolingbrook, IL D Q1-07 100.0% 100.0%
Orchard Town Center
(o)/Westminster, CO D 2006/2007/2008 100.0% 100.0%
Office:
Advent Solar (c)/Albuquerque, NM D Q2-06 50.0% 50.0%
Illinois Science and Technology
Park/Skokie, IL A/D Q3-06 100.0% 100.0%
Edgeworth Building/Richmond, VA D Q4-06 100.0% 100.0%
Stapleton Medical Office
Building/Denver, CO D Q4-06 90.0% 90.0%
New York Times (c)/Manhattan, NY D Q2-07 28.0% 40.0%
Johns Hopkins - 855 North Wolfe
Street/East Baltimore, MD D Q1-08 77.5% 77.5%
Residential:
Sterling Glen of Roslyn (g)/
Roslyn, NY D Q4-06 40.0% 100.0%
Ohana Military Communities
(c) (e)/Honolulu, HI D 2005-2008 10.0% 10.0%
Dallas Mercantile/Dallas, TX D Q2-07/Q2-08 100.0% 100.0%
Military Housing - Navy Midwest
(c)/Chicago, IL D Q1-09 25.0% 25.0%
Condominiums:
1100 Wilshire (c)/Los Angeles, CA D Q2-06 50.0% 50.0%
Cutters Ridge at Tobacco
Row/Richmond, VA D Q3-06 100.0% 100.0%
Mercury (c)/Los Angeles, CA D Q1-07 50.0% 50.0%
Total Under Construction (h)
LESS: Above properties to be sold
as condominiums
Under Construction less
Condominiums
----------------------------------------------------------------------
Residential Phased-In Units Under
Construction (c) (e):
Arbor Glen/Twinsburg, OH D 2004-07 50.0% 50.0%
Woodgate/Evergreen Farms/Olmsted
Township, OH D 2004-07 33.0% 33.0%
Pine Ridge Expansion/Willoughby
Hills, OH D 2005-06 50.0% 50.0%
Cobblestone Court/Painesville, OH D 2006-08 50.0% 50.0%
Total (m)
----------------------------------------------------------------------
See attached 2006 footnotes.
April 30, 2006
Under Construction or to be Acquired (18)
Cost at
FCE
Cost at Pro-Rata
Full Share
Consol- Total (Non- Total Pre-
idation Cost GAAP) Sq. ft./ Gross Lea-
(GAAP) at 100% (b) No. of Leasable sed
Property/Location (a) (3) (2) X (3) Units Area %
----------------------------------------------------------------------
(in millions)
-------------------------
Retail Centers:
San Francisco
Centre - Emporium
(c)/San
Francisco, CA $0.0 $436.2 $218.1 964,000 626,000 (k) 80%
San Francisco
Centre (c)/San
Francisco, CA 0.0 151.8 75.9 498,000 186,000 98%
Northfield at
Stapleton Phase
III (l)/Denver,
CO 136.3 136.3 132.8 637,000 532,000 (j) 44%
Promenade
Bolingbrook/
Bolingbrook, IL 129.5 129.5 129.5 743,000 417,000 (j) 43%
Orchard Town
Center (o)/
Westminster,
CO 131.9 131.9 131.9 972,000 558,000 (p) 1%
---------------------------------------------
$397.7 $985.7 $688.2 3,814,000 2,319,000
-------------------------====================
Office:
Advent Solar
(c)/Albuquerque,
NM $0.0 $8.9 $4.5 88,000 88,000 100%
Illinois Science
and Technology
Park/Skokie, IL 108.8 108.8 108.8 661,000 661,000 28%
Edgeworth
Building/
Richmond, VA 35.2 35.2 35.2 187,000 142,000 60%
Stapleton Medical
Office
Building/Denver,
CO 11.0 11.0 9.9 45,000 45,000 44%
New York Times
(c)/Manhattan, NY 0.0 426.5 170.6 732,000 732,000 (q) 13%
Johns Hopkins -
855 North Wolfe
Street/East
Baltimore, MD 103.1 103.1 79.9 279,000 279,000 36%
---------------------------------------------
$258.1 $693.5 $408.9 1,992,000 1,947,000
-------------------------====================
Residential:
Sterling Glen of
Roslyn (g)/
Roslyn, NY $75.6 $75.6 $75.6 158
Ohana Military
Communities
(c) (e)/
Honolulu, HI 0.0 316.5 31.7 1,952
Dallas Mercantile/
Dallas, TX 116.2 116.2 116.2 362 (n)
Military Housing -
Navy Midwest
(c)/Chicago, IL 0.0 264.7 66.2 1,658
-----------------------------------
$191.8 $773.0 $289.7 4,130
-------------------------==========
Condominiums: Pre-Sold %
----------
1100 Wilshire
(c)/Los Angeles,
CA $0.0 $121.0 $60.5 228 90%
Cutters Ridge at
Tobacco
Row/Richmond, VA 4.5 4.5 4.5 12 8%
Mercury (c)/Los
Angeles, CA 0.0 139.8 69.9 238 42%
-----------------------------------
$4.5 $265.3 $134.9 478
-------------------------==========
Total Under
Construction (h) $852.1 $2,717.5 $1,521.7
=========================
LESS: Above
properties to be
sold as
condominiums 4.5 265.3 134.9
-------------------------
Under Construction
less
Condominiums $847.6 $2,452.2 $1,386.8
=========================
-----------------------------------------------------
Residential
Phased-In Units
Under Under
Construction Const./
(c) (e): Total
----------
Arbor
Glen/Twinsburg,
OH $0.0 $18.4 $9.2 96/288
Woodgate/Evergreen
Farms/Olmsted
Township, OH 0.0 22.9 7.6 120/348
Pine Ridge
Expansion/
Willoughby Hills,
OH 0.0 16.4 8.2 84/162
Cobblestone Court/
Painesville, OH 0.0 24.6 12.3 280/304
-----------------------------------
Total (m) $0.0 $82.3 $37.3 580/1,102
===================================
-----------------------------------------------------
See attached 2006 footnotes.
Development Pipeline
----------------------------------------------------------------------
2006 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 amount (GAAP) of
$141.9 million of cost to the Company's pro-rata share (a non-
GAAP measure) of $161.7 million of cost consists of a reduction
to full consolidation for minority interest of $0.2 million of
cost and the addition of its share of cost for unconsolidated
investments of $20.0 million.
(e) Phased-in openings. Costs are representative of the total project.
(f) The difference between the full consolidation amount (GAAP) of
$0.0 million of cost to the Company's pro-rata share (a non-GAAP
measure) of $28.1 million of cost consists of the Company's share
of cost for unconsolidated investments of $28.1 million.
(g) Supported-living property.
(h) The difference between the full consolidation amount (GAAP) of
$852.1 million of cost to the Company's pro-rata share (a non-
GAAP measure) of $1,521.7 million of cost consists of a reduction
to full consolidation for minority interest of $27.8 million of
cost and the addition of its share of cost for unconsolidated
investments of $697.4 million.
(i) As is customary within the real estate industry, the Company
invests in certain real estate projects through joint ventures.
For some of these projects, the Company provides funding at
percentages that differ from the Company's legal ownership. The
Company consolidates its investments in these projects in
accordance with FIN No. 46(R) at a consolidation percentage that
is reflected in the Pro-Rata FCE % column.
(j) Includes 39,000 square feet of office space.
(k) Includes 235,000 square feet of office space.
(l) Phased opening: Phase I opened Q4-05, Phase II opened Q1-06, Phase
III is scheduled to open Q3-06.
(m) The difference between the full consolidation amount (GAAP) of
$0.0 million of cost to the Company's pro-rata share (a non-GAAP
measure) of $37.3 million of cost consists of Forest City's share
of cost for unconsolidated investments of $37.3 million.
(n) Project includes 18,000 square feet of retail space.
(o) Phased opening: Phase I opens Q3-06, Phase II opens Q3-07, and
Phase III opens Q1-08.
(p) Includes 177,000 square feet for Target and 97,000 square feet for
JC Penney opening in 2006, and 140,000 square feet for Macy's
opening in 2007.
(q) Includes 24,000 square feet of retail space.
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